Strategic IT Portfolio Management for Development of Innovative Competences

Strategic IT Portfolio Management for Development of Innovative Competences

Dejan Petrovic (University of Belgrade, Serbia), Marko Mihic (University of Belgrade, Serbia) and Biljana Stošic (University of Belgrade, Serbia)
Copyright: © 2009 |Pages: 20
DOI: 10.4018/978-1-59904-687-7.ch008
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Abstract

This chapter presents the concept of strategic information technology portfolio management for development of innovation competences in a project-oriented company. It is a specific type of portfolio management, called project portfolio management. The chapter begins with a strategic basis of projectoriented company, links it to the modern portfolio theory and then expands it into the IT project portfolio management (IT PPM). The role of the IT PPM is to ensure that the group of IT projects supports the achievement of the goals of the corporate strategy. The chapter takes into consideration the key aspects of IT - innovation relationship, and introduces the organizational support to the IT PPM – the Portfolio Management Office. An established PMO that is actively supported at the executive level can help solve problems with project auditing and initiative approval.
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Background: Strategic Basis Of Project-Oriented Company

Generally, strategy is defined as a means to achieve individual or organizational goals (Grant, 2007). In this definition, means is defined as a plan or policy determining concrete actions. Ansoff (2007) finds that, regardless of the complexity of the managerial problem, it is possible to identify a number of strategic variables that will determine the solution to this problem. According to him, strategy means a set of decision rules as well as guide to achieve organizational goals in the future (Ansoff, 1987). On the other hand, Porter (1996) maintains that the essence of the strategy is a clever selection of varied sets of activities that will ensure a unique combination of values for the organization. In other words, the basis of the strategy is a difference in comparison to the competitors. Chandler (1962) defines strategy as a process of determining the long-term goals of the company, defining the direction of activities and allocating resources necessary in achieving these goals. The definition is supported by Grant’s (1991) attitude that strategy is the choice the organization makes between the resources and competence on one hand and opportunities and differences in the environment, on the other.

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