The problem with good old-fashioned ROI modeling is that "you're asked to develop the business case before you have all the facts," says Julie Kapsch, an IT vice president of strategic services at CBS/Viacom. "With the investment-portfolio approach, you're saying we think this will be the payoff, but if you give us three more months to assess, we'll give you a more detailed model."
Urged on by Meta, CBS/Viacom started measuring IT investments this way about three years ago, Kapsch says, about the time Viacom and CBS were merging and executives were adamant about analyzing all capital investments. Most projects are reviewed monthly, using grades of green, yellow and red to show whether they're "on time, on scope, on budget and on value," Kapsch says.
Periodic Re-Examination
Perhaps most important, the investment-portfolio approach calls for sponsorship and collaboration among departments and disciplines. This way, there are fewer blind spots--and there are more people to hold accountable. "Program management, program planning, IT and business management have to do the benefits analysis together," Rubin says.
It doesn't replace ROI analysis. Rather, it adds a discipline of periodic re-examination. "At every phase of an initiative, one of the exit criteria is making sure the asset is still performing," says Giga Information Group analyst Alistair Stewart. "The challenge is to ensure that, month to month, quarter to quarter, you're making the necessary course adjustments."
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