PSGS 013: Book Review: IT Portfolio Management Step-By-Step


"IT Portfolio Management Step-by-Step" is a must-have for portfolio management practitioners. The book is grouped into four parts: an overview and background of what’s included in the material, the foundational elements of portfolio management, building a step-by-step plan and implementation guide, and PPM best practices. In the pages of this book, you will find information on the best practice approach for aligning, rationalizing, prioritizing, selecting, optimizing, tracking, monitoring and managing your organization's IT portfolio investments. The book also covers the three primary areas of IT portfolio management which are the development of processes and frameworks, the implications of tools for data collection, costs, risks, benefits, requirement analysis, and business drivers alignment. You will also discover information on corporate investments and a common taxonomy and governance approach for communicating principles, policies, and guidelines to enable a consistent cadence for your portfolio process.

What I learned:

The need for IT Portfolio Management can be understood against the backdrop of the following statistics:

  • 84% of companies do not use a business case for their IT project investments
  • 83% of companies only adjust their budgets once or twice a year
  • 67% of IT organizations are not able to adjust to market trends when needed
  • 57% of companies believe they have a balanced IT budget

There are eight basic stages to portfolio management that organizations are encouraged to use. They are:

  1. Developing an IT portfolio management game plan 
  2. Planning the IT portfolio 
  3. Creating the IT portfolio 
  4. Assessing the IT portfolio 
  5. Balancing the IT portfolio 
  6. Communicating the IT portfolio 
  7. Developing and evolving the IT portfolio organization
  8. Assessing IT portfolio management processes and execution

One of the key aspects of IT portfolio management that many organizations may overlook is its people. The IT portfolio should be updated on a quarterly basis, not only looking at project data but also by focusing on the availability of resources allocated to execute the portfolio. Organizations should work with their management staff and project management practitioners to determine whether their portfolio of projects is performing according to best practices in alignment to corporate strategy.

A key goal of IT portfolio management is to optimize the investment risk and reward trade-offs in the allocation of limited resources in support of executing the organization's strategic objectives and goals.
IT portfolio management maturity levels are also critical to the application of resources. IT portfolio management step-by-step levels of maturity are:

  • Level 0 – Admitting
  • Level 1 – Communicating
  • Level 2 – Governing
  • Level 3 – Managing
  • Level 4 – Optimizing

These maturity levels are important to consider when implementing your IT portfolio management process and when determining the level you are trying to achieve within your organization.
Another key concept and best practice of IT portfolio management are the concepts of optimizing capacity and demand against a selected and approved set of strategic criteria against a backdrop of organizational constraints. In other words, using limited resources to accomplish tasks in the most optimal manner while taking into consideration the limited resources of the organization is critical to organizational success with portfolio management.


In summary, the best ideas I gleaned from "IT Portfolio Management Step-by-Step" is the concept of dividing an organization’s portfolio into Run the business, Grow the business and Transform the business categorization for project investments. This concept is endorsed by Gartner as the best practice for portfolio management allocation of projects. Overall, this is an excellent book for IT portfolio manager practitioners and should frequently be used. The book is full of great content and practical insights that can be used to mature an organization's IT portfolio management process.

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