Agency executives are turning to portfolio management to help them match information technology investments with agency goals. Many describe portfolio management as a journey, but the immediate payoffs can also be great, its proponents say. The following are frequently asked questions and answers from experts covering the basics of portfolio management.

What is portfolio management?

With IT portfolio management, senior managers can evaluate a collection of projects to see how they are performing, measure how well projects fit the organization's overall strategic plan and determine return on investment and risk level.

IT portfolio management involves the processes organization officials use "to maximize the return on every dollar they spend on IT," said John Cimral, chief executive officer of ProSight, which sells portfolio management software. It helps senior managers do more with less and make intelligent decisions about investments, which is especially important as agencies face shrinking IT budgets.

The approach is similar to managing a personal portfolio of investments to include a mix of stocks and bonds and other options, said Rich Dougherty, CEO of Expert Choice, a portfolio management software vendor. Ultimately, "we have to make investments that will balance our risk" and provide the best return on investment, Dougherty said.

Why is portfolio management important to government IT executives?

Portfolio management allows executives to survey IT investments across the entire organization. It shows them a systems inventory, redundant systems, investments in systems, investment risk and the progression of projects within the portfolio, said Wei Tang, director of portfolio management at Robbins-Gioia.

Organizations embark on portfolio management because they "don't have a comprehensive picture of expenditures," said Mike Metcalf, vice president of U.S. strategic marketing at software provider Artemis. "They don't have visibility of allocation, of how much is spent in certain areas."

Portfolio management goes beyond traditional capital planning and investment processes because it allows senior executives to "consider groups of systems together," said Paul Tibbits, director of the Defense Department's Business Management and Systems Integration. It allows them to see whether the groups of systems fit with one another and whether they help meet the department's overall objectives.