Quantitative and qualitative risk in IT portfolio management
Alexander Holland, Madjid Fathi · 2007
The key point of this paper is the proactive management of the whole risk of an IT project portfolio. A portfolio is collection of projects and every project implicates its own risk. Project risks describes how uncertainty and risk are identified, analyzed and cumulated for a single project. The most attention is paid to the quantification of risk that is based on fundamental decision theory. IT project portfolio management clarifies the sense and the benefit of a portfolio for IT projects. Especially topics like implementation of a portfolio and measurement criteria are fundamental discussion points. Portfolio management including risk as measurement tries to figure out how the whole risk for a portfolio could be made up of the single project risks. Especially inter-dependencies and correlations across the projects are considered. Also addressed is the issue of how to minimize the whole risk of an IT project portfolio by diversification. Proactive risk management and mitigation discusses all opportunities for risk mitigation, that includes reduction of the probability that a risk will materialize or reduction of the impact on the business of a risk event if it does occur.