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Why is Enterprise Portfolio Management Important?

Why is Enterprise Portfolio Management Important?. The Commonwealth must find ways to meet increasing demands through cost savings and increased productivity. Investment management can contribute to lower operating costs and the generation of internal capital.

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Why is Enterprise Portfolio Management Important?

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  1. Why is Enterprise Portfolio Management Important? • The Commonwealth must find ways to meet increasing demands through cost savings and increased productivity. • Investment management can contribute to lower operating costs and the generation of internal capital. • Portfolio management provides the ability to analyze on-going operational investments to re-evaluate viability and contribution to strategic direction. • Cheaper alternatives may be found and redundant investments can be retired.

  2. The Investment Business Case, as required for project planning and development approval, provides information necessary to evaluate a potential IT investment’s value and risk. In the Commonwealth, Investment Business Cases are evaluated for: Strategic Alignment Technical Feasibility Benefits to the Commonwealth How are Business Cases Evaluated? • Risk • Funding Requirements • Agency Past Performance

  3. A Balanced Scorecard Approach • In order to determine a potential investment’s overall value, a number of perspectives are analyzed. • The balanced scorecard determines whether an effective business case has been made to go forward with development.

  4. The Cost-Benefit analysis assists agencies in thinking through how solution options might avoid costs in the future or generate cost savings Internally generated revenue is key in increasing return on investment A mechanism to measure productivity gains should be explored in the future (not currently in place today) Financial Perspective - Cost-Benefit Analysis

  5. Commonwealth Return on Investment (ROI) • ROI for the Active project portfolio (by Secretariat and by Project Category) is measured quarterly Discussion Points • Why do smaller projects tend to have larger ROI and better chance at success? • How can Agencies/Secretariats balance their individuals portfolios between high ROI projects and projects necessary due to mandates or other business requirements?

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