Many organizations face the challenge of deciding what projects/programs have the highest business value and therefore miss the mark in selecting the right initiatives to deliver at the right time. One major function of portfolio management is to help organizations make this determination. Having a solid portfolio with ranked and prioritized projects/programs also answers many other questions around resource demand and usage. IT project prioritization should be based on business strategy rather than spurious cost savings.
IT work prioritization should be a top down approach with 4 levels - Business Strategy, Product Strategy, IT Strategy, and IT projects. A good example of this is illustrated below:
Business Strategy - Decrease the number of calls into our customer service center therefore reducting the cost of operating our customer service department.
Product Strategy - Partner with our internal IT delivery team and external vendors to add web based and interactive voice response capabilities to service our customers.
IT Strategy - Upgrade software platform that allows for robust performance and integration of enhanced and new features including new portal.
IT Projects - Enhance our existing Web based customer service and IVR applications with functionality to handle additional transactions.
Using this approach ensures focus and delivery of the right product to satisfy the business need.
Regina Williams, Author
Reference: "Prioritizing IT Projects Based on Business Strategy", CIO 7/15/2006
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