Portfolio management is a highly flexible concept. While it can be used to plan distant futures, it has practical near-term application as well. There are three dimensions to portfolio analysis:

▪ What data elements are collected and analyzed?
▪ Who makes decisions based on the collected data?
▪ What kinds of decisions are being made?

"We define IT portfolio management as planning, designing and executing multiple IT projects during a 12-month period," explains Mike Hugos, the bottom-line-focused CIO at Network Services Co., a Chicago-area distribution supply firm. "These projects range from upgrading IT infrastructure to enhancing existing systems and building entirely new systems. Each project has an ROI that is calculated by the finance department, and the steering committee picks a group of proposed projects for funding each year."

Portfolio management ranges from record-keeping to sophisticated risk reduction and from cost control to new value creation. Some form of portfolio management is practiced by both behind-the-curve CIOs (who are merely trying to stay on top of major initiatives) to those IT executives striving to transform business culture and create sustaining new value from IT. The majority of our survey respondents (67%) employ homegrown rather than purchased software tools for portfolio management tracking, and 66% describe those tools as "very basic," which means they mainly use Excel spreadsheets.