Managing IT Portfolios

Culling the technologies to keep should be job one.

When a mutual fund manager is doing the job, he or she is managing a portfolio of stocks for the good of the funds shareholders. This consists of acquiring stocks with promise, making judgment calls on those that are on the borderline and dumping the dogs. The role of the IT manager is similar. The best managers acquire the technologies that hold the most promise for business advantage, outsource the necessary but not distinctive technologies, and dump the products and services that dont live up to expectations.

As the economy slowly recovers, the categories into which different technologies and services fall are changing.

Into the acquire category, Id put an entirely new set of administrative and management tools that are coming onto the market. Their purpose is to give you a view into your companys IT operations that was previously unobtainable. The products, from Computer Associates, IBM and Hewlett-Packard, are all due for major upgrades over the coming months. The offerings from these administration stalwarts are being joined by new products from companies such as Vieo that promise easier, less intrusive administration at a lower cost. Using these tools should enable you to run more efficient operations and should be worth the investment.

Grid computing and open-source development also fall into the acquire category, although perhaps not for every company. Even if you determine that neither the grid nor the open-source alternative is right for your organization, you need to reach that conclusion after thoughtful investigation.

Outsourcing is a controversial but necessary part of the IT investment portfolio. Outsourcing, if used intelligently, can give you dollar savings in one area that you can apply to other more strategic areas. Outsourcing used as a club to cut costs indiscriminately will provide some short-term bottom-line benefits but leave your technology portfolio short of winners.

The scope of technologies that can be outsourced is increasing. New candidates are patch management and security. Patch management has become a burden that features an endless cycle of patches, bug fixes and service-pack upgrades. Even Microsoft seems ready to admit that patching cannot be the answer to security. Patches eat up bandwidth at a prodigious rate—pity the poor remote worker on a dial-up connection trying to download megabytes worth of fixes. Until the patch problem is resolved—and that will take a long time—using an outsourcer to patch far-flung users makes sense. That is what Federal Express did when it signed up Everdream to manage its patch network.

Whether or not to outsource security is a tougher call. You need to protect yourself from the latest threat, and you want to be able to adjust your network to the level of security your company requires. During a recent trip to visit Internet Security Systems in Atlanta, it was clear that the companys strategy to offer outsourced services as well as an integrated security appliance makes sense. In security, managing the portfolio in a flexible manner is best. Its logical to use a product to manage security issues locally, while leaving something like spam blocking to an outsourcer.

Candidates for being tossed out of the portfolio vary by company, but here are some to consider. The first choice is that big project that has been churning on for years without any prospect of finishing. The big customer resource management project that has outlived the management that mandated it is the most obvious. Less obvious are those reliable old applications that are undocumented and rely on a couple of employees who understand what makes them tick. Its better to deal with the end of life of those applications now than when the employees who know how to make them work walk out the door. Other candidates are those projects that were begun because they seemed hip and fun at the time. Ill bet there are a few wireless projects out there that fit that description.

Taking a portfolio approach to your IT operations is the first step to gaining control of IT operations and making them pay off for your company—your IT shareholder.

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Editor in Chief Eric Lundquist can be reached at