We face an environment that is rich in need, complexity and opportunity. No single opportunity can dominate our attention or define the path forward. Technology's use has become widespread. It facilitates our collaboration. Our success in using technology has made technology strategy and prioritization more challenging and more essential, requiring a framework for making choices and a discipline for making technology investments.
Portfolio management is the application of systematic management of information technology initiatives, projects, and ongoing services. Portfolio management is the quantification of efforts, enabling measurement and objective evaluation of investments.
We advise our clients to use a portfolio management approach that includes the following metrics to evaluate and prioritize investments and initiatives. Further evaluation is done after performing high level prioritization.
- Return On Investment - Estimated Return On Investment calculating 3 year payback or return/benefit: 1) >100%; 2) 100%-75%; 3) 75%-50%; 4) 50%-25%; 5) 25%-0%
- Time - Estimated time the project would require: 1) <100hrs, 2) 100-499hrs, 3) 500-1999hrs, 4) High 2000-5000hrs and 5) >5000hrs
- Impact - Estimated number of customers impacted: 1) All users; 2) Most users; 3) 3 or more departments; 4) one or two departments and 5) few users
- Service Value - Estimated Service Value (customer orientation) not measured in ROI 1) High Value - 5) Low Value
- Compliance – State, Federal and Industry Legal and Regulatory Compliance: 1) Yes or 5) No
These values are multiplied to calculate a Relative Prioritization Number (RPN).
This approach aids planning efforts and diffuses conflict, because leaders understand you are spending limited resources to best support organizational priorities.