What is IT Portfolio Management about?,
What does this Portfolio contain?,
What exactly does IT deliver to the organization?
Is it 'Apps', 'Applications', 'Systems', 'Software', 'IT services', 'Webservices', 'Functionality', 'Projects', 'Capabilities', 'Technology', 'Hardware', 'Desktops', 'personal computers', 'Laptops', 'Tablets', 'Handhelds', 'Smartphones', 'Mainframes', 'Clients', 'Servers' ??
This terminology is frequently, however, do we all mean the same when we use these words? and are we familiar with the relationships between these terms? So I first want to propose a sort of definition based on how I use this terminology, before we can dive into Portfolio and Performance Management.
Functionality: a description of a part of an Information Provisioning process. Such a description is derived from the requirements of a particular Business Process. This Functionality on the other hand, is also a vital resource for the Business Process.
IT Capability: a construction of Hardware, Software and Services that provides the Business Process with a particular Functionality.
Software: control statements that instruct Hardware. Software comes in layers based on the role of the Software in the IT Architecture.
Hardware: the physical components of the IT Infrastructure.
a. clients: 'desktops', 'personal computers', 'laptops', 'tablets', 'handhelds', 'smartphones'
b. servers: 'mainframes', 'network components', 'data storage components' and other 'servers'.
Application = App = Webservice: a bundling of Functionality arranged by the provider of the software in such a way that the software is sellable. Usually this bundling is based on frequently occuring 'general' Business Process. One specific property of an application is that it provides Functionality to the End User.
System: this kan mean anything depending on the context in which it is used, that's why I try to avoid using this term as much as possible.
IT Service: a measurable, repeatable activity with a pre-defined result, which is offered and delivered by an IT Service Provider. In this case it makes no difference whether we have to deal with an internal or an external Service Provider. All of the above terminology is used when developing and deploying an IT Service.
Project: a finite activity that results in the introduction of new IT Services in an organisation.
IT portfolio management manages all IT Services and (IT) Projects in an organization.
In IT Service Provisioning we distinguish between:
a. IT Service Delivery Processes, which provide for the actual service.
b. New Service Introduction Processes, which implement changes in IT Service Provisioning.
The IT Service Delivery Processes are managed by means of the IT Service Portfolio.
The New Service Introduction Processes are managed by means of the (IT) Project Portfolio.
Usually 80% of the IT Spend is in the IT Service Portfolio and 20% in the IT Project Portfolio, management attention however is usually the other way around.
In the next serie of articles I will address both the IT Service Portfolio and the IT Project Portfolio as one IT Portfolio.