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12 February 2008

Governance or portfolio management?

By Andrew Clifford

What do "governance" and "portfolio management" mean, and which should we use when?

A few years ago we needed a name for the method that we were developing. The method involves structured, high-level assessment of IT to identify and justify improvements in risk, cost and quality.

We chose the name "system governance".

We chose the word "system" because the method considers IT holistically. It is not just concerned with application software, or hardware, or support, but how all these come together to form a meaningful whole.

We chose the word "governance" because the method sits logically above day-to-day management. It is a way of controlling and enabling more detailed management work.

The name "system governance" has served us well. It has let us build up a distinctive brand. It places what we do within overall IT governance, and plays particularly well to an audit and control audience.

But the name has problems too.

Some managers see "governance" as unwelcome imposition, that disrupts their day-to-day work. However much we argue that system governance supports day-to-day work, I know some people will misunderstand.

Some governance specialists dismiss system governance because "we already do governance" or "it doesn't follow our standards". By placing the method under a governance umbrella, we risk that our distinctive message is misunderstood.

We have been considering whether we need a different name.

When we started we had considered the name "system portfolio management". Our method refers to the "system portfolio", and our main report is a "system portfolio review report".

System portfolio management is an accurate description. "System" conveys the holistic nature of the method. "Portfolio" certainly applies: systems are significant business assets. "Management" has no overtones of imposition.

Project portfolio management (PPM) is accepted as a part of governance and as a management tool. Using the similar name "system portfolio management" would convey the aim of the method accurately.

When we started we did not use "system portfolio management" because we did not want to be confused as another PPM wannabe. Our message and method are distinct from PPM. We also did not want to discourage using the method for just a small number of systems.

We are now reconsidering our decision. On balance, "system portfolio management" is as good a name. Adopting the name "system portfolio management" would allow us to expand the method to include business functionality, business value and some work planning, which would be good.

We have four options.

  • Keep the name "system governance". We have established the meaning of the term. We will just have to keep fighting against the negative view of governance and make sure that we present the method as distinct from other parts of governance.
  • Change the name to "system portfolio management". Generally a good name, but we do risk alienating some of the audit and control audience, or those who want to apply the method to only a few systems.
  • Use both names. Use "system governance" as we have up until now, and introduce "system portfolio management" as a more outgoing, business-value lead variant of system governance.
  • Come up with a totally new name.

What do you think? What do these words mean to you? What would you do?

Next: Standards - consensus or competition?

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