Technology Portfolio Management (TPM) Best Practices

Overview

Technology portfolio investment decisions that are disconnected from the organization’s annual budget and planning cycle consistently fail to secure the resources they require. The budget cycle is the moment when organizational resources are committed to specific purposes, and technology portfolio investment — rationalization programs, modernization projects, license optimization initiatives, security remediation programs — competes for those resources against every other organizational priority. Technology portfolio governance that produces its rationalization recommendations after the budget is committed, or that produces them in a format that is not compatible with the budget planning process, produces recommendations without resources to execute them.

Best Practice

Align the technology portfolio governance cycle with the annual budget and planning cycle, ensuring that rationalization outputs, investment recommendations, and cost optimization opportunities are available in the budget planning process before resource commitments are made. The technology rationalization review should be timed to conclude approximately four to six weeks before the start of the budget planning process, producing the rationalization roadmap, the technology investment priorities, the wasted spend recovery opportunities, and the technology debt remediation plan that should inform technology budget requests. Present the technology portfolio financial health report to IT leadership and financial leadership at the start of the budget planning process as a foundational input to technology investment decision-making.

Benefit(s)

Aligning technology portfolio governance with the budget cycle converts rationalization recommendations from governance outputs that lack execution resources into budget-backed programs with committed funding. Technology investment priorities are established based on portfolio evidence rather than advocacy. Technology rationalization opportunities are funded through a planned process rather than deferred because no budget was available. And technology debt remediation receives the budget allocation it requires when its financial impact is presented to financial leadership at the moment they are making resource commitment decisions.