Information Technology Portfolio Management: A Meta-Heuristic Optimization Approach

Information Technology Portfolio Management: A Meta-Heuristic Optimization Approach

Vassilis Syrris (Aristotle University of Thessaloniki, Greece)
Copyright: © 2009 |Pages: 32
DOI: 10.4018/978-1-59904-687-7.ch007

Abstract

This study involves the exploration of Information Technology Portfolio Management (ITPM) in conjecture with Modern Portfolio Theory (MPT). The ITPM constitutes an indispensable part of the Strategic Information System which is an integrated multi-functional structure having its origin in works of Anthony (1965) and Gibson & Nolan (1974). ITPM attempts to resolve the project selection problem concerning the majority of project-centric organizations. Roughly speaking, projects must compete for the scarce resources which are only available for the fittest ones. Although a large proportion of portfolio selection decisions are taken on a qualitative basis, quantitative approaches to selection such as MPT or its variants are beginning to gain wide application. Yet, the standard MPT has proved incapable of representing the complexities of real-world situations. This issue generates the present work which focuses on the project portfolio optimization problem through a meta-heuristic approach, that is, application of algorithmic methods able to find near-optimal solutions in a reasonable amount of computation time. The ultimate goal is the enhancement of IT portfolio management which has become a significant factor in the planning and operation of information-based organizations, thus, offering a competitive advantage.
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Strategic Information Systems And It Governance

A Strategic Information System (SIS) is a system which manages information in respect to company strategy and its operational planning. It assists decision making, adds value and ensures business viability through its alignment with the strategic goals5. Such a system responds faster to environmental changes and thus provides a competitive advantage.

The main components of a SIS is: a) The Information System (IS), that is, the means by which the information is collected, codified, stored, organized in computational structures and processed, with a final aim, to be exploited and disseminated, b) The Information Technology (IT) which provides the integrated platform (hardware, software, networking, protocols) upon which the IS can operate consistently, quickly and robustly.

The information is a major capital asset, and are the systems that support it. SISs improve the internal operational procedures, facilitate the executive management, support and control the creation of new innovative and enhanced products and services, refine the relationship between company and customers/suppliers, open new markets (through Internet), advance the human resources (by on/off line e-learning programs) and improve productivity and effectiveness. Moreover, there is evidence, that, in some organizations, IT strategic planning functions as drive to corporate planning, and that IT can actively assist in the creation of business opportunities, rather than just support them (Oesterle, 1991).

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