Many IT executives are keen on the notion of using a portfolio management approach to help gauge the value of technology investments with a more discerning eye. But those who try to do so often run into start-up problems like getting buy-in from business units.
IT managers also fear that making information about the financial value of investments readily available could make them seem like IT police in the eyes of business managers who fund projects. They also cited concerns that the data might not be fully accurate.
Meta Group has released research showing companies are heading towards using a portfolio management approach to cope with intense cost pressures.
Meta executive vice president Howard Rubin said it provides financial breakdowns of existing IT investments as well as those in the pipeline, but warned such disclosures can pose a problem for IT managers.
IT portfolio management tools vendor Pacific Edge Software marketing VP Mike Metcalf said portfolio visibility can be threatening to some IT managers.
"They feel the data they have isn't as accurate as it should be, and they're being asked to share this information at a very high level."
IT portfolio management isn't new to big financial services firms like Merrill Lynch, which has adopted the precepts from its investment banking groups. The concept has been discussed in academic circles since the 1980s and began making its way into corporate IT departments a few years ago.
However, for many companies, it's not part of projects. At any given time, Western Australia-based Bunnings Building Supplies runs some 30 projects with budgets between $150,000 and more than $14 million, according to Bunnings' executive director of IT, Mark Ridley.
While Bunnings' IT projects are "approved and controlled" by its board of directors, Ridley said a formalised methodology to measure the value of technology investments has not been a requirement. Part of the reason is cultural, he says. "We don't have too much clutter as we're fairly lean in the way we spend our money.
"We try to be as entrepreneurial and as fast on our feet as we can. Also, we're very strong on our own measurement disciplines and we analyse the benefits of IT projects mainly by measuring productivity improvements."