Lifecycle

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A Lifecycle Approach to Portfolio Management

Portfolio management considers the integrated management of the IT assets of an organization and of the projects that produce and modify these assets. In particular, it is focused on making investment decisions in such a way that the portfolio as a whole conforms to the short-term and long-term strategy and goals of the organization. In order to make well-founded decisions about the replacement or maintenance of enterprise applications, organizations need insight into the current and future business value, technical quality, maintenance costs, and replacement costs of these applications, and in particular, how these develop over time: a lifecycle approach. This article describes our first steps towards the ultimate goal, a portfolio dashboard that indicates the current and future value of applications, and the benefits, costs, and risks associated with changing or replacing them. The method for supporting lifecycle decisions on information systems is on the one hand based on cost predictions from benchmark data and on the other hand on architecture analysis of these systems. The approach is the synthesis of three elements: future cost predictions, portfolio valuation, and modifiability analysis.