IT (information technology) portfolio management is a management structure a company uses to control the technology it uses in its operations. IT activities generally fall into one of three categories: planned future initiatives, current projects and continual service from the IT department. IT portfolio management often has three separate groups: applications, infrastructure and project management. Companies typically group their IT activities in these groups to properly manage them and ensure each project meets the company’s standards.
The first part of IT portfolio management, applications, contains all the established IT items the company uses. Companies will group these items together since they represent an ongoing application commonly used by the company to complete tasks and activities. Owners and managers may use IT portfolio management to group applications by age. As technology changes quite frequently in the business environment, companies need to group items by age so they can easily determine which ones are in primary need of replacement.
The second part of IT portfolio management represents the infrastructure of a company’s IT system. Infrastructure is often the hardware component of the company’s technology systems. Servers, personal computers, cables and other items needed to run the software applications fall into this category. Keeping this information separate allows the company to determine what it uses to run systems and when it should consider upgrading to newer equipment. Changes to current equipment can be from either internal or external forces, such as requests by current IT personnel or changes to a client’s application system.
The infrastructure part of portfolio management also measures the costs, personnel and human resource policies associated with the IT department. Many companies have strict standards for this department, as a rogue employee can cripple the company’s ability to leverage technology into higher profits. IT portfolio management allows accountants to review the infrastructure and ensure that costs are within budgetary limits created by owners and managers.
The third part of IT portfolio management focuses on IT projects. These projects may be the result from future changes to the company’s operating environment or one-time projects. Each project faces measurements, such as the return on investment. Accountants will help measure all projects in the portfolio to ensure each one adds value to company without creating a drag on profits. IT personnel often work in tandem with accountants or other analysts to ensure each project will add value to the firm.