Transparency in spending corporate funds has been - until recently - "nice to have." The change from "nice to have" to "need to have now" has been well publicized, on the heels of fraud cases like those involving Enron and Worldcom, and it has crystallized in the form of the Sarbanes-Oxley Act of 2002. Yet the ability to create transparency has been elusive and is still challenging to achieve for most Wall Street firms.
Why is this the case? Generally, companies lack the governance and decision-making tools to handle the complexity around investment decisions. Managers fill the vacuum with intuition and informal decision-making processes - rather than embracing transparency, they actively seek to avoid it without fear of being called to account for their actions.
Of particular interest is IT-project portfolio spending (close to $800 billion a year in the United States alone). IT-project investment decision-making tends to be an inconsistent, complex and often-intuitive process at many companies. As such, it is hard to precisely pin down when and why IT-project decisions are made. The discipline of IT project portfolio management (PPM) is the framework that helps bridge this gap.
Yet PPM-technology solutions tend to provide only a bottom-up view of IT-project information that does not typically help from an overall IT-governance viewpoint. This is largely because standardization of detailed project plans across dozens - even hundreds - of projects of all sizes is neither efficient nor necessarily useful. Understanding the barriers to achieving IT-portfolio-spending transparency requires a review of two key decision-making dimensions in PPM: the organizational structure within which the decisions are being made and the projects about which the decisions are being made.