Portfolio management is poised to go "retro." As organizations are preparing to come out of the recession, they are thinking more broadly about the \n\ntypes of investments that will be required to support business growth. As a result, some organizations are revisiting the idea of portfolio management as a \n\nway to organize and evaluate.When portfolio management was a hot topic in the middle part of the last decade, it was driven in part by some good management thinking from \n\npeople like Peter Weill at MIT CISR and Dr. Howard Rubin and in part by some software tool vendors. At the time, most companies added some kind of portfolio thinking \n\nor at least dabbled with it. As my partner Jim Quick and I \n\nrecently discussed, most of the fanfare was confined to the IT organization, but some of the more pioneering organizations actually drove portfolio \n\nthinking higher in the organization. In fact, this is where it belongs, where a complete view of a business investment can be calculated and evaluated.Many organizations likely found portfolio management too complex, too heavy on overhead, or too theoretical and, thus, they were unable to find \n\nvalue in it. So why would it come back into fashion now?One of Diamond's financial services clients historically drove its \n\ninvestment planning at the business unit level (and the company had three major business units). But ultimately, senior management realized the firm's \n\ncustomer-facing systems had so diverged that they were developing software using three different technology stacks. At that point, a new CIO took \n\nover and quickly diagnosed the need for a single view of the projects with special emphasis on cross-business sharing of investment dollars, projects, \n\nand software assets. The CIO turned to portfolio management as a technique for organizing his thinking. The first step was to determine the starting \n\nportfolios, which should then be discussed in terms of business capabilities and goals.To put it simply, the organization needs to ask two questions when designing a portfolio management approach: which budget, and which types of \n\ninvestments?The IT budget is the typical scope of an organization's portfolio management, but some have successfully applied the principles across all \n\ninvestments, business-wide. Leading companies focus on strategic ideas early in their lifecycles and utilize portfolio management principles to screen, \n\nevaluate, and calculate the total cost of investment\u2014business activities, application development, architecture, infrastructure, and some ongoing \n\ncosts. It is important to keep this process and governance as simple as possible because over-engineering can result in people reverting back to \n\nspreadsheet tracking and one-off discussions.The second question concerns what types of investments an organization will track within the budget. For example, "holy grail" would be to track the \n\ntotal investment made in the billing function\u2014including items such as labor, hardware, software, paper, and telecom. This requires access to all of \n\nthe spend data at a sufficiently granular level to be able to allocate it to a business function, as well as a way to assign the cost of shared services. \n\nUnfortunately, many organizations do not have this data readily available and instead look only at project-driven investments.Start with ProjectsProjects, as investments, are ready-made for portfolio management. This is because the planning process usually includes the basic information \n\nneeded to categorize and evaluate them (cost, duration, benefits, estimated return, risk)\u2014the elements of a standard business case. Most mature \n\norganizations have a robust project proposal and estimating process. To begin effective portfolio reviews and analysis, IT leaders need three kinds of \n\nproject data:1. Business Impact: Which capabilities required by the business over the next 12, 18, 24 months are built or enhanced by the project?2. Financial Case: For the proposed costs, what type of return is projected? Is it a straight-forward ROI business case, an earlier stage \n\npilot to learn more, or an investment needed to remain at competitive parity? The financial cases for different types of investments can be vastly different. \n\nFor example, a risky, early-stage investment may have no immediate return, but can gather data to drive a more realistic business case.3. Risk Profile: How hard will it be to pull off the project? Does the organization have the necessary skills, experience, and leadership? If \n\nthere is a delay, what will be the impact on the business? Are there any external risk factors such as customer satisfaction or regulation?With these types of data in hand for each proposed project, an organization can then start to evaluate the mix across various dimensions, such as \n\nbusiness capabilities and risk\/return. The next steps will involve adding information about in-flight projects and to measure actual investment returns upon \n\nproject completion.Chris Curran is Diamond Management & Technology Consultants' chief technology officer and managing partner of the firm's technology \n\npractice. He writes the CIO Dashboard blog at www.ciodashboard.com, and can be \n\nreached at Chris.Curran@diamondconsultants.com or @cbcurran on \n\nTwitter. Follow everything from CIO.com on Twitter @CIOonline.