If analyst interest is any indication of the significance of a topic, then IT portfolio management is something to start paying attention to.
It may follow a different nomenclature – Gartner calls it “Integrated IT Portfolio Analysis Applications” (IIPA) and its Magic Quadrant (MQ) report on vendors in this space is in the 7th year of publication.
At Forrester it is called “Strategic Portfolio Management,” as documented by a Forrester Wave new vendor assessment in its first year of publication, but which has been developing over the course of several years of enterprise architecture (EA), portfolio management and strategic planning market scrutiny. In Wikipedia it is listed under “IT Portfolio Management,” which is the term I’ll use here on in.
But a rose by any other name would smell as sweet, as Shakespeare’s Juliet says. So, whatever people are calling it, the driver for IT portfolio management remains the same across the board – digitalization. It’s clear that, if it is the business that’s being changed (which is what digitalization is), then the connection and entwined view of business strategy and IT investment is crucial. The Gartner report states, “IIPA was initially pursued as a type of sophisticated self-management of assets and applications. However, it is now being leveraged by CIOs and their delegates, as well as business executives, to transform businesses in response to the effects digitalization, the algorithmic economy and digital ecosystems will have on them.”
Just as important as the alignment of IT strategy with business strategy is speed of IT delivery. This is essential if a company wants to compete in the digital business world. One of the first starting points for a lot of our customers for portfolio management is application portfolio rationalization. At first glance this may not seem to be a very cutting edge activity but it is a critical first step towards digitalization. Speedy delivery requires agile IT – what you get with application rationalization (besides lots of freed up IT ops budget to be used for innovation projects).
Funnily enough, when the Alfabet product from Software AG hit the market (in 2005 it was called “planningIT” and it was from the company “Alfabet”), the basic concept of the product was the same as it is now but, because there was no analyst category (or vendor evaluation) for “IT Portfolio Management,” we cast our lot with the EA analysts. It was either them or the Project Portfolio Management crowd, but EA – as the foundation for portfolio management – was back then a better fit. And low and behold, what do we read here in the Gartner MQ for IIPA? “Identifying the points of intersection between elements in these portfolios and ‘desired state’ models created from enterprise architecture (EA) helps IT align the decisions it makes in any IT portfolio with current IT strategy.”
With that, I don’t want to say that we’ve come full circle because that would suggest that the EA/IT Portfolio Management isn’t moving forward. It is – and at a brisk pace. And it has to – digitalization depends on it to.
So take a look at these reports The Forrester Wave™: Strategic Portfolio Management Tools, Q3 2017 and Gartner Magic Quadrant for Enterprise Architecture Tools and then take a look at Alfabet for EA, IT portfolio management, and strategic IT planning. You’ll see what makes a leader a leader – no matter what the name.