How does IT Portfolio Management differ from Project Portfolio Management?

The META Group estimates that as little as 25% of the work of IT consists of projects. The rest is spent responding to support requests and maintaining the systems that run the business. Despite this, many organizations considering Portfolio Management don't look beyond the Project Portfolio either in terms of alignment or value contribution. 

IT projects are important investments for organizations. However, upon completion, every project turns into an application or infrastructure asset or component thereof. Business applications, infrastructure investments and the clients they serve require maintenance and support. If the ongoing investments in these systems are not continuously managed and considered during the portfolio planning process, not only is a large portion of the current budget potentially misaligned, but existing investments that act as critical business support systems are also at risk. Organizations that fail to consider both new project investments and existing application and infrastructure investments throughout the planning and health monitoring processes risk falling into the trap of the ‘align once' syndrome.

IT Portfolio Management takes a step beyond Project Portfolio Management by balancing the value and risk of the entire IT investment portfolio: projects, applications and infrastructure throughout planning and health monitoring processes.

IT Portfolio Management enables organizations to:

• Make more informed project investment decisions, considering the scope and state of existing investments
• Align all IT investments with business priorities and balance investment in new initiatives vs. upkeep or base work to manage risk and reward
• Eliminate redundancy in duplicate applications
• More accurately assess risk of investments through visibility into the health of

IT Portfolio Management goes beyond the initial alignment process. Organizations must continue to monitor the health, value and risk of portfolios throughout the period to ensure that they are aligned and continue to contribute value.

Project Portfolios consist of all new initiatives invested in by IT such as the deployment and development of new applications or infrastructure assets and upgrades or enhancements to existing systems.  These portfolios need to be continually monitored to ensure these new investments don't exceed expected costs, are delivered on time, the quality of project output is optimized to minimize maintenance costs and ensure business needs are fulfilled. Health monitoring also enables IT to understand how effectively they are estimating requirements, costs and timelines for projects and leverage that to continually improve processes and develop best practices.

Application Portfolios consist of all existing investments in software and hardware. Organizations need to categorize these portfolios based on their own business objectives, structure and processes and monitor health to ensure client satisfaction. Health monitoring of these portfolios enable IT to reduce costs, ensure critical systems are available and reliable, eliminate redundant systems and understand risks associated with out dated technologies or misaligned assets. 

By expanding Portfolio Management processes to include all IT investments, organizations make better investments decisions and are able to maximize the value of all IT spend.

To learn more about managing and aligning Application Portfolios, click here.