"As Global 2000 enterprises examine the impact of current economic conditions on their operations, accelerated by the 11 September terror attacks on the US, many discover that a portfolio management approach to IT investments can consistently lower IT expenses by 20% - 30% without a noticeable sacrifice in quality or functionality." This is the message that will be delivered by keynote speakers at the Computer Society of South Africa`s Annual President`s Banquet on 8 November 2001.
The keynote address will be presented by Willie Appel, Vice President International - Enterprise Architecture Strategies and Jeffrey Mann, Vice President International - Electronic Business Strategies at Meta Group Inc, a Stamford-based Research Organisation.
According to Meta Group, although the current climate is a stimulus for adopting a portfolio management approach, there have always been myriad business and technology factors that shift priority allocation across the IT investment portfolio. Indeed, changes in technology, the competitive landscape, and government legislation, regulation, or leadership can each trigger re-examination of priorities and investments. To respond effectively, enterprises must have a joint, dynamic, and continuous business and technology planning process that links strategy and implementation. Successful IT organisations must establish an asset portfolio framework to understand, manage, and implement the IT response to change.
Managing IT projects and services as assets in a portfolio indicates executive-level awareness of the risk/reward potential these assets impose on business performance, for example, front-office revenue generation, back-office cost reduction, and government compliance. This approach indicates a broader understanding by management of IT`s value beyond simple cost reduction.
Meta Group research indicates that a disproportionate number of enterprises that have had the largest IT expenditures, for example as a percentage of annual revenue, have realised higher (equity) valuations versus peer companies. This investment approach has also removed IT as a first, blanket cost-cutting target. Where IT portfolio practices are in use, visibility of risk/reward potential has enabled evolution beyond simple classification of assets as either strategic or tactical.
Critical to such dynamic business and technology planning are the process disciplines of joint business and IT strategic planning, enterprise architecture, enterprise program management, risk management, asset management, and human capital management. Key issues to be explored include:
* Developing an awareness of the entire portfolio of assets (hard and soft) and investment options (new projects, acquisitions, innovations, systems, and technology).
* Implementing process disciplines to enable balance among cost, benefit, and risk/impact.
* Understanding the value contributions of enterprise planning and strategy, enterprise architecture, and enterprise program management to the portfolio approach.
* Identifying roles and responsibilities for effective enterprise portfolio management
The 2001 Annual CSSA President`s Banquet, sponsored by IBM, Telkom and Meta Group, takes place on 8 November 2001 at the Sandton Convention Centre and plays host to the IT Personality of the Year and CIO Of The Year Awards. To book your table at this prestigious event, contact the CSSA Secretariat on tel (011) 315 1319 or e-mail secriat@cssa.org.za
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