Technology Portfolio Management (TPM) Best Practices

Overview

A technology portfolio that is governed for its current state without reference to where the business is going accumulates strategic misalignment at the same rate that the business strategy evolves. Technologies that are sound investments for the current business model may be poor investments for the business model the organization is moving toward. Technologies that are adequate for the current scale of operations may be inadequate for the scale the business is planning to reach. And technologies that are aligned with the current enterprise architecture may be misaligned with the target state architecture that strategic planning is driving toward. Strategic technology planning is the discipline that prevents this accumulation of strategic misalignment by connecting the technology portfolio governance framework to the business strategy that the portfolio exists to support.

Best Practice

Establish a formal connection between the TPM governance framework and the enterprise strategic planning process through three specific integration points. Strategy input to technology governance: at the beginning of each strategic planning cycle, the TPM governance function should receive the strategic priorities, business capability investment areas, and enterprise architecture target state updates that will drive technology portfolio decisions in the planning horizon. These inputs should trigger a review of the Strategic Dispositions assigned to technologies whose role in the portfolio will be affected by the strategic direction. Technology input to strategic planning: the technology portfolio rationalization map, the technology debt financial quantification, and the technology capability gap analysis should be available to the strategic planning process as inputs that inform the feasibility, sequencing, and investment requirements of business capability initiatives. Technology capabilities that the business strategy requires but that the current portfolio does not provide represent capability gaps that strategic planning must account for in its roadmap and investment plan. Technology roadmap alignment to strategic milestones: the technology portfolio roadmap should be developed in direct reference to the strategic milestone timeline, ensuring that the technology capabilities required to enable each strategic milestone are planned to be available before, rather than after, the milestone date.

Benefit(s)

Connecting TPM to enterprise strategic planning produces technology investment decisions that are grounded in organizational strategy rather than in technology-centric priorities that may or may not align with the business direction. Strategic initiatives are supported by technology capabilities that are ready when the initiatives require them rather than constrained by technology gaps that strategic planning did not anticipate. Technology debt and rationalization programs are sequenced to clear the path for strategic technology investments rather than competing with them for the same organizational capacity. And the technology portfolio evolves in the direction the business is moving rather than accumulating strategic misalignment that must eventually be addressed through a costly realignment program.