the IT Portfolio Management Grid

In a previous article I adressed the IT Provider view on the value added of the IT Services catalog.  In general we can subdivide the offerings of IT Service Providers in 3 major realms based on the IT Value Chain:



Next to the 'IT Supply view' there is also the management attention in 'the Business' on the added value of IT (IT Demand view). This attention is mainly focused of the question:

What is the IT contribution to the value creation in the Organization?

In this respect I distinguish between 3 groupings of IT Demand:

1. 'Business Support': all IT Services that are supporting the Business Processes. E.g. 'the delivery of laptops with a 'Personal Toolset' +  'Groupware' + business applications like;  'Financial applications', 'Warehouse management', 'Productionmanagement', 'HRM (Human Resource Management)', 'CRM (Customer Relationship Management)', and all 'ERP (Enterprise Resource Management Package)'. Value creation is limited to the realisation of 'cost effective' Business Processes.

2. 'IT based Offerings': all IT Services that are provided to the Customer of the Organization. E.g. Customer portals of Financial Institutions, the control software in assets sold (e.g. copying machines) or information about the 'installed base at the Customer site' when a complete production line has been delivered and that is the basis for the maintenance contracts. Value creation of these services has a direct impact on the bottom line results.

3. 'Mission Critical IT': all IT Services that are an absolute prerequisite for the existence of the Organization. E.g. the software supporting the dealing room of a Financial Institution, the security software for the 'IT based Offerings'. The content of the category can drastically change over time. When the company has a significant backlog in the Marketplace due to outdated software, a project for the replacement of this software can be 'Mission Critical' zijn, however after the delivery of this project, the IT Services will be in one of the other 2 categories. The impact on value creation is obvious here, such projeccts do not need a business case and such services are vital to Risk Management.

When we combine the IT Supply view and the IT Demand view on the IT Portfolio, we get a 3 x 3 grid that is the basis for decision making on the content of the IT Portfolio:

We use this grid to project the content of the IT Portfolio. By doing this we facilitate the dialog between IT Demand and IT Supply communities in an Organization. Mind you: the grid is usefull for both the IT Services Portfolio and the IT Project Portfolio.