Expert urges managing IT like share portfolio

21 Feb 2007

Business IT should be managed as a portfolio of investments, an internet expert and author has said.

Michiel Boreel, group chief technology officer of Sogeti, urged companies to create closer ties between their spending on technology and the results it produces. “You have companies that spend relatively a lot on IT and have wonderful results but you also have those who spend a lot on IT and have terrible results,” he said. “There’s not always a correlation.”

By managing IT investments like a portfolio of stock market investments, organisations stand a better chance of matching spend with returns, Boreel said. “If you look at it in a portfolio way, they’re bound to be much more successful at getting value from IT,” he added.

Boreel heads a research group within Sogeti called VINT, which produces books based on analysis of new technology and how these will affect the work of CIOs. It takes soundings from other business leaders, universities and other research groups as part of its work. One of the trends the group has identified is a shift away from cost cutting to creating value from IT and one of the conclusions was the need to look at the performance of IT – from which emerged the need for a “portfolio management” approach.

The group also made an interesting discovery when it began researching open source for a separate book. “We asked CIOs about it and to our astonishment they said nothing; they weren’t interested in it,” Boreel remarked. Instead, the group looked at how businesses can apply the principles of open source to innovate.

In the same way that open source software is developed by a community, Boreel pointed out that businesses can use the internet to harness diverse groups of people from outside the company to help them to innovate. This kind of approach, which has been dubbed “crowdsourcing”, is used in a variety of organisations such as Lego, Boeing and Procter & Gamble.

Sogeti is the local professional services division of the Capgemini Group, which provides information technology services for businesses. Core services in Ireland will include application development (including Java and .NET); ERP (enterprise resource planning with SAP and Microsoft) and software testing. The company employs almost 70 people in Dublin and has taken over Capgemini’s former business in Ireland.

By Gordon Smith