Portfolio Management Maturity

These pages describe the different stages or levels of process maturity associated with IT Portfolio Managment. The levels correspond to the widely accepted five-step Capability Maturity Model (CMM).

At the Level Zero stage, organizations make decisions about IT investments in a very uncoordinated way (i.e. there is no identifiable, consistent procedures or best practices. There is no visibility of existing IT assets (i.e. applications and infrastructure), and no central repository of pending and current projects.

At the Level One (Initial) stage, management recognizes that processes need to be standardized. Decisions are still based on individual initative, and oversight approaches are applied on a case-by-case basis. Work is starting to increase visibility of existing IT assets and the project 'pipeline'. Building of the portfolio components begins with senior management support.

At the Level Two (Repeatable) stage, the 'supply' (i.e. assets and resources) and 'demand' components of the portfolio are captured in a central, visible and accessible "repository". Consistent organization-wide processes are introduced to maintain the integrity of the portfolio database. Active management/oversight of the portfolio is initiated with the development of a standardized prioritization model and investment approval processes. Awareness and understanding of portfolio management is introduced across the organization.

At Level Three (Defined), there is a well-defined scheme for screening, categorizing and prioritizing projects using financial metrics and alignment with business priorities. A portfolio management approach (i.e. risk allocation/diversification) is utilized to rank competing IT project investments. A process to weed out underperforming initatives is in place.

At Level Four (Managed), there are formalized processes in place to measure and monitor investment performance. The portfolio is managed to eliminate legacy, orphaned programs, redundant and duplicate systems. Resource allocation is actively managed. There are clear processes for how technology solutions enter (i.e. are acquired), create value, and exits the enterprise.

Level Five (Optimized) represents a refinement of best practice into world-class advanced processes. Automation and continuous improvement and adaptability capabilities are embedded in the culture. Regular external benchmarking, maturity modeling comparisons, and independent audits provide assurance to management.