Your IT Portfolio Could Be Bleeding Money - InformationWeek

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Software // Information Management
Commentary
7/12/2007
08:18 AM
Mark Smith
Mark Smith
Commentary
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Your IT Portfolio Could Be Bleeding Money

As CIOs and IT management come under pressure to invest in the future, they're finding they need an even more thorough knowledge of their existing IT portfolios, what they can do, where they fall short and their worth to the company. Yet I find that many IT managers do not have enough information - about what technologies they actually have, how well they are performing and how much they cost - to make wise decisions about budget allocations.

As we consider the issue of IT budgets and the competition for funding between the tasks necessary to keep the lights on and investments for innovation and improvement, we start to appreciate the bind CIOs and IT managers find themselves in. The sheer mass of technology required to keep organizations operating has grown significantly in the last decade, and so have the maintenance demands to keep everything running.

As CIOs and IT management come under pressure to invest in the future, they're finding they need an even more thorough knowledge of their existing IT portfolios, what they can do, where they fall short and their worth to the company. Yet I find that many IT managers do not have enough information - about what technologies they actually have, how well they are performing and how much they cost - to make wise decisions about budget allocations. What is sad about this situation is that portfolio management applications like those from HP and PlanView have been readily available for many years.We all hear about the vendor consolidation that is ongoing in enterprise IT. It's important to realize that the acquiring companies are seeking not only customers but the stream of maintenance dollars you pay to keep these applications operating. If your organization is one of those customers, you will likely conclude that you need to put pressure on your suppliers to ensure not only that you get the most value from the applications but also that you are paying appropriate amounts for maintenance.

I have spoken to organizations that are spending many dollars on maintenance contracts for technology that was purchased but never fully deployed. What should you do in such a case? Renegotiate, obviously. But the first step is to know your IT portfolio and assets, both software and hardware, and make sure each is linked to some tangible business activity or IT operation. For any that is not, look at decommissioning it. This can go a long way to freeing up your budget for forward-looking investments.

Let me know your thoughts.As CIOs and IT management come under pressure to invest in the future, they're finding they need an even more thorough knowledge of their existing IT portfolios, what they can do, where they fall short and their worth to the company. Yet I find that many IT managers do not have enough information - about what technologies they actually have, how well they are performing and how much they cost - to make wise decisions about budget allocations.

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