Technology Portfolio Management (TPM) Best Practices

Overview

The technology portfolio data that TPM governance produces — the financial profile, the strategic health assessment, the risk quantification, the rationalization roadmap, the capability gap analysis — is not only governance documentation. It is enterprise intelligence that is directly relevant to the most consequential investment and transformation decisions that IT leadership and executive leadership make. Digital transformation programs that are not grounded in technology portfolio intelligence consistently encounter the technology debt, integration complexity, and skill gaps that portfolio intelligence would have surfaced in the planning stage. Strategic investments in new business capabilities that are not connected to the technology portfolio direction consistently create technology divergence that must eventually be resolved at significant additional cost.

Best Practice

Position the TPM program as a required input to the enterprise investment and transformation decision process, and establish the governance connection between the technology portfolio governance cycle and the enterprise strategic planning and investment planning cycles. The technology portfolio financial and strategic health report should be a standing input to the annual strategic planning process. The technology capability gap analysis should be a required input to any significant business capability investment decision. The technology portfolio rationalization roadmap should be a required input to any digital transformation program planning process. And the technology risk register should be a standing input to the enterprise risk committee’s technology risk assessment. The TPM program produces this intelligence as a natural output of its governance cycle; the governance connection ensures that the intelligence is consumed by the decision processes it is designed to inform rather than remaining within the TPM program.

Benefit(s)

Using technology portfolio data to drive enterprise investment and transformation decisions produces organizational outcomes that neither technology governance alone nor business strategy alone can produce. Business strategy is grounded in a realistic assessment of the technology portfolio’s current capability, its trajectory, and the investment required to develop the capabilities the strategy requires. Technology governance is directed by the strategic priorities that determine which technology investments produce the greatest business value. And the enterprise develops the integrated business-technology decision-making capability that consistently differentiates the organizations that use technology most effectively as a strategic asset from those that manage it primarily as an operational cost.