At any given time, most Fortune 500 companies have dozens of information technology (IT) projects occurring simultaneously. In fact, Fortune 50 and large government organizations may have hundreds of IT initiatives taking place in a single calendar year. On average, companies spend approximately 5.5 percent of their total revenues on IT-related activities. For a billion-dollar company, this amounts to $55 million per year. Unfortunately, the majority of these companies do a very poor job of managing their IT assets.

Over the years, I have had the opportunity to perform more than a dozen data warehousing assessments. During these assessments, I always ask the client how much they spend on data warehousing. The majority of companies cannot give a relatively good estimate of their actual spending. In order to manage these costly IT initiatives, it is critical to measure each one of them. However, it is impossible to measure them when most companies do not understand them (see Figure 1). Enter IT portfolio management.

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