It Portfolio Managment

Federal CIO Council Best Practices Committee

Letter from the Co-Chairs March 2002 Washington, DC
In October 2001, the Federal Chief Information Officer Council was restructured to improve the coordination, integration, and operation of information management and technology practices across the Federal Government. The Council now includes three standing committees focusing on Workforce andHuman Capital for IT, Federal Architecture and Infrastructure, and Best Practices. As co-chairs of the newly formed Best Practices Committee, we are pleased to release our first report, entitled “A Summary of First Practices and Lessons Learned in Information Technology Portfolio Management.” This report is the first in a series of publications that will provide members of the Federal IT communitywith in-depth examples and practical guidance to successfully formulate, manage, and maintain their organizations' IT portfolio. The President’s FY 2003 Budget requests $52 billion for investments in Federal Agency information technology (IT) professionals, initiatives, and office operations. With the practice of sound capital planning and investment control, the investment in IT will continue tostreamline, transform, and significantly improve Government operations and the delivery of goods and services to the public. The primary objective of this document is to provide lessons learned and insights from leading IT portfolio management practitioners to Government officials, budget and planning specialists, program managers, and the Federal and contractor communities that help to executeGovernment functions. We believe that the information presented within this report can help organizations whose capital planning and investment control processes are in various stages of maturity. For the organization that is just starting out, the lessons learned and insights should help to focus efforts on the areas that are truly important and to avoid the problems and pitfalls that others haveexperienced. For the organization that has implemented, but not yet fully institutionalized their capital planning and investment control process, the report should help to further advance their approach and address specific issues that may be impeding their progress toward the effective management of their IT portfolio. And, finally, for the organization that has fully implemented andinstitutionalized their capital planning and portfolio management program, this report is intended to provide an assessment framework to help it fine tune its policies, processes, and practices. We would like to extend our gratitude to the Industry Advisory Council and Best Practices Committee volunteers, who were instrumental in putting this report together. In closing, we hope that you will find the reportto be informative and useful. Please let us know, as we very much welcome your comments. Debra Stouffer and Sue Rachlin Co-Chairs, Best Practices Committee Federal CIO Council

Table of Contents
Table of Contents .............................................................................................................i $52 Billion is A Lot of Money...........................................................................................1 Lesson 1. Understand the differences and the relationship between portfolio management and project management and manage each one accordingly....................7 Lesson 2. Gain and sustain the commitment of Agency officials and senior managers to make informed IT investment decisions at an enterprise level and to uphold them. ........8 Lesson 3.Establish and maintain an enterprise architecture to support and substantiate IT investment decisions. ................................................................................................10 Lesson 4. Integrate IT portfolio management with the organization’s planning and budgeting policies, processes, and practices. ...............................................................12...