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How Portfolio Management Can Maximize CIO Contribution to Shareholder Value

How Portfolio Management Can Maximize CIO Contribution to Shareholder Value

ZDNet recently ran a piece entitled, “5 Reasons the CIO Can Be a Corporate Sustainability Hero.” Interesting and true, but I felt like they buried the lead as journalists like to say. Sustainability is crucial to this story, but far more powerful when considered in conjunction with the CIO’s impact on his or her company’s brands. So in the dual contexts of brands and sustainability, let’s consider one of the most important components of many CIOs’ project portfolios: IT projects for product development and delivery.

A few months ago the CIO of a well-known consumer electronics company helped me document that nearly half of all his IT projects fell into that category. Prioritization of those projects is often sub-optimized in portfolio management since, as another CIO so aptly put it, “a big driver of IT priorities is which business unit’s GM screams at IT the loudest.” This obviously sub-optimizes the CIO’s contribution to shareholder value creation.

Taking a page from the product portfolio management playbook can trump those politics. Consider that the most strategically sound approach to prioritizing new products/features is based on the combination of (1) alignment with drivers of brand choice (how customers decide between offerings — i.e., attributes that define ideal customer experience) and (2) competitive impact. As it has become increasingly impossible to manage a brand without proactively managing sustainability, now a third element is required: how sustainably can those products or features be developed and delivered? These three considerations — ideal customer experience alignment, competitive impact, and sustainability — when evaluated along with resource requirements and risks, provide as useful a foundation for prioritizing product development-related IT projects as for actual product development projects.

The ZDNet piece had this right: IT touches every division, CIO’s know how to work across silos, and they know how to think sustainably — accustomed to projects with large capital requirements that can no longer be cost-justified without sustainability costs and benefits integrated into ROI analyses. Let’s leverage that knowledge by combining it with what their internal clients know: what end customers want and what competitors fear. Tying that all together and then back to product-enabling IT projects is a powerful lens through which to manage CIO portfolio optimization for brand impact and value creation. All of which, when integrated with early evaluation of likely environmental impacts of IT projects, makes the CIO not only a sustainability hero as ZDNet suggested, but a total brand hero as well.

Customers, shareholders, and employees all share in the CIO’s triumph when the voice of the companies’ customers is injected into IT portfolio management in a more disciplined way. Your comments welcome on whether or not — and why — ideal customer experience, competitive imperatives, and sustainability are driving CIO portfolio priorities in your organization. Or how you’re handling those screaming GM’s.

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Steven Cristol
Written By

Steven Cristol is founder and managing partner of Strategic Harmony® Partners, an innovation and brand strategy consulting firm that has pioneered the integration of product strategy and brand strategy. During 30-plus years of consulting and corporate experience, he has helped some of the world’s most innovative companies — from Global 100 to Silicon Valley startups — build and manage brand equity and optimize product development portfolios. He is also a recognized thought leader on simplifying the customer experience and, as a Free Press and McGraw-Hill business author, his books have been published in eleven languages. Steven has devoted the past decade to creating a disciplined and more effective process to align innovation with the most compelling value propositions and increase customer satisfaction, competitive impact, and resource efficiency.