Portfolio Management: How Lowe's Grows

By Cindy Waxer
Thu, December 01, 2005

CIO

When Lowe’s developed a new cobranded credit card offering for its customers, CIO Steve Stone knew the project would call for a reconfiguration of the company’s payment acceptance and processing systems. Not as obvious was where Lowe’s would find the necessary internal manpower and skills to complete the project. That is, until Stone turned to Lowe’s enterprise portfolio management (EPM) system for answers. By providing a companywide view of the company’s IT activities, EPM helped Stone identify the necessary resources in other business units and reallocate them to support the North Carolina–based retail giant’s new credit card program.

Using portfolio management to get a better handle on resources such as human capital may seem ambitious, but it’s all part of Lowe’s plan to push the envelope on this mature, but still somewhat underutilized, technology. Rather than simply using portfolio management to prioritize IT initiatives as many companies do, Lowe’s is leveraging EPM to perform business-critical tasks including anticipating labor shortages, planning operations expansions into Canada and gauging the effect of new systems such as self-checkout programs on how IT adds value to the business. Unlike earlier versions, which merely aggregated IT projects, today’s EPM solutions are enabling businesses such as Lowe’s to make both IT and non-IT decisions in accordance with a company’s operating model, strategic direction and growth potential.

"What EPM allowed us to do with regards to [expanding store operations into] Canada is to understand what activities we had and where our resources would be available," Stone says. "EPM allows us to comparatively look at the value of IT efforts and to look at resource loads to better understand when we can execute a project. It allows us to be more flexible to the business than we’ve ever been before, and that’s something that’s hugely valuable to us."

The Misuse of Portfolio Management

While Lowe’s is still in the process of fully realizing EPM’s full potential, the company is still a step ahead of many of today’s portfolio management users, according to analysts who track the systems. Although U.S. IT spending is expected to grow 7 percent this year, Info-Tech Research Group says 95 percent of IT groups are not delivering some projects on time or to the full satisfaction of business executives. Many companies have not even taken the first step in making the most of portfolio management; instead they continue to keep track of ongoing projects with Excel spreadsheets—an outdated tool that doesn’t allow for frequent updates or collaborative input.

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