Meta Group’s Rubin on IT portfolio management

As IT managers struggle to wring all the value they can from their technology investments, the concept of treating an organization’s IT assets like stock market investments with a buy/hold/sell approach is beginning to gain momentum.

According to an informal survey of 219 IT professionals conducted by Meta Group Inc. and released Monday, 56 percent of those polled said their organizations have either adopted an IT portfolio management approach or plan to by the end of 2004. But IT managers who expect to succeed will have to avoid making some of the classic mistakes that have dogged early adopters, said Howard Rubin, executive vice president at Stamford, Conn.-based Meta Group. Computerworld caught up with Rubin after his keynote speech on the topic with Meta Group Chairman Dale Kutnick at the research firm’s Metamorphosis conference here.

The survey was sent to 500 registered Metamorphosis attendees before the event began.

CW: What jumps out at you about the survey results?

Rubin: This is very encouraging. Two years ago, only one out of 12 companies had adopted an IT portfolio management practice. Now, more than half plan to, though for some firms this is aspirational, and we’re not sure how many will actually end up doing it.

CW: What are some of the classic mistakes that IT managers make when they implement an IT portfolio management methodology?

Rubin: There are three common mistakes. First, they don’t focus on the right metrics. CIOs might look at system availability but not the value side of the equation. Second, they fail to manage their IT investments as a distributed portfolio. Third, they often don’t use the right tools and techniques to measure these investments. IT portfolio management isn’t about using a bunch of Excel spreadsheets. It’s like running ERP [enterprise resource planning] for IT, only not as complex as it would be to run ERP for a business.

CW: You conducted an informal poll of the 500-plus attendees and asked how many people were using electronic probes to monitor their IT assets. It didn’t seem like very many people responded.

Rubin: If the sample was representative, less than a third indicated they were using electronic probes to track their assets, and practically no one is using probes to gauge their business processes. But the upside to this is that there’s tremendous opportunity out there for organizations to do this and get value from it.

CW: You said during your keynote speech that the integration of cross-business processes is “where the new value is” for IT organizations. What are the top challenges CIOs face in pulling this off?

Rubin: Getting cooperation from the business side, which has largely viewed IT as a cost centre. Who wants to sit across the table to discuss value with someone whose organization is viewed as a cost?

CW: So what can CIOs do to work through these issues?

Rubin: You have to enhance communications with business leaders, market your message effectively to them and prove the value of these investments.