Defining IT Portfolio Management

Business cases for IT investments are now the norm rather than the exception. However, projects are still considered individually as discrete investments. Likewise, there is often a segmentation between new application spending, the realm of project portfolio management (PPM), existing application maintenance, the realm of application portfolio management (APM), and infrastructure investment. As of yet, few, if any, organizations are looking holistically at the entire IT budget as a unified suite of investments. IT organizations can apply many of the same tools the financial community uses to build and manage financial portfolios to maximize benefits, mitigate risks, and better meet the needs of its constituent customers. Although the science of IT portfolio management is in its infancy, understanding the concepts and laying the groundwork now will allow for quicker adoption later as the tools and tenets become better defined over the coming years. The ultimate goal is delivering to the organization predictable and higher returns at the appropriate level of risk. Following, Forrester lays out the basic concepts and definition of IT portfolio management, its relationship to other management processes, and Forrester's research agenda for coverage of these areas.