UMT survey finds lack of portfolio management processes at global 500 companies could be short-circuiting technology objectives

57% of Global Companies Have Nonexistent or Manual Processes, Survey Finds

NEW YORK, NY, Jan. 5, 2005 -- Global information technology (IT) executives have a compelling vision for IT portfolio management, but are unsure of how to best implement enterprise portfolio management platforms, develop effective methodologies and processes, and create/collect objective metrics, finds a new survey from UMT.

As part of its recent series of thought leadership webinars, UMT, the global portfolio management software leader, and Dr. Howard Rubin, META Group EVP, have conducted interactive polls on portfolio management from IT leadership at Global 500 companies. For 2004, UMT's research focused on goals, perceived obstacles, and near-term priorities for portfolio management.

"With technology spending in the doldrums, there is a new dynamic for IT economics," according to Dr. Howard Rubin. "It's no longer just about providing value. Global technology leaders must prove that their investments support business strategy and one of the key ways to do this is with effective portfolio management tools and processes."

Global IT leaders appear to understand the potential and value of portfolio management, IT financial management and related financial processes, and program/project management offices. This is indicated by their level of commitment and spending in these areas -- which will rise to about 1.5% of total IT spending for 2005, according to META Group. When asked what benefits they expected from portfolio management, respondents to the UMT survey cited the following top five objectives:

1. Improving IT alignment with business strategy

2. Rationalizing IT portfolio selection and management

3. Increasing organizational understanding of value, risk, and cost tradeoffs

4. Delivering increased value with the same budget

5. Reducing cost and minimizing waste

However, executives may be short-circuiting the potential of portfolio management by using an ad-hoc approach to implementing tools. While 62% of companies are now using portfolio management tools according to META Group, most companies have pieced together a set of tools that may not provide true visibility, mathematically optimized budget and resource allocation, analytical capabilities, and decision-support across the enterprise. When asked what tools they used for portfolio management, global IT executives responded:

-- Manual processes (42%)

-- Internal tools (23%)

-- Not performing portfolio management (15%)

-- Project management tools only (14%)

-- Using vendor platforms (6%)

While IT budget shortfalls may be contributing to executives' decision to rely on internal tools, they run the risk of failing to deliver the holistic view of technology investments their business counterparts require. When asked what impediments they faced implementing portfolio management, respondents offered the following four major obstacles:

1. Creating a credible project valuation methodology

2. Measuring the value of portfolio decisions

3. Implementing disciplined process and governance

4. Overcoming a lack of organizational consensus

As a consequence, global IT executives' immediate goals for portfolio management remain modest in scope. When asked about their near-term objectives, respondents cited the top three priorities:

1. Valuing and prioritizing projects

2. Resource planning

3. Portfolio tracking

As companies make key organizational changes - securing senior level sponsorship, creating an effective governance structure, and developing rigorous valuation processes - IT leaders will be able to maximize the effectiveness of portfolio management tools and extend their use to all technology investment decision-making. That window of opportunity is closing, however, as business executives lose patience with underperforming initiatives that don't support strategic objectives.

In its survey, UMT found that IT and business executives currently partner in budgeting and managing technology portfolios, with 54% of respondents citing IT as the lead partner, and 37% citing business management as the lead for IT decision making, the rest citing equal partnerships. Those percentages could easily reverse, however, if IT organizations can't provide their business counterparts with the clarity they need around IT results. IT organizations need to implement best-in-class tools and operationalize the key processes and structures that will provide business and finance executives with the clarity, metrics, and strategic support they seek.

"The only way to maximize value is to understand tradeoffs between return, cost, risk, and resource utilization. UMT provides the best portfolio management tools in the space, empowering clients to optimize their project and application portfolios," says META Group's Dr. Howard Rubin.

About UMT (

UMT, the global leader in Project and Application Portfolio Management, has the most advanced and complete software and consulting offerings available today. Founded in 1989, UMT's portfolio management software provides companies with increased transparency, business-IT alignment, budget and resource optimization, and workflow functionality, allowing Global 1000 enterprises to select optimal portfolios, increase earnings, drive business value, and reduce waste. The company is headquartered in New York City, with international offices in London and Bucharest.

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