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Managing Technology Investment Decisions

Managing a technology landscape is similar to managing a project portfolio. Technology leaders must focus on re-balancing their technology portfolio in ways that will deliver the highest business return. Technology landscapes consist of several building blocks: systems that service commoditized information technology functions, software applications that fill emerging business needs, product platforms, networks, infrastructure, user devices, and telephony systems. The overarching themes when evaluating the trade-offs are: business value, cost, risk and security. These decisions have long shelf lives and incrementally create more issues as technologies age and are less competitive. Managing the evolution of the technology landscape from legacy to competitive solutions is one of the key challenges for technology leaders. As landscapes become more complex, the challenge can seem overwhelming. The Growth-Share Matrix is one of the best ways to organize the decision-making process.

The Boston Consulting Group engineered The Growth-Share Matrix which facilitates resource allocation decisions when managing business and product portfolios. A similar technique is helpful when making technology landscape investment decisions: invest, replace or shut down. The Growth-Share Matrix has four quadrants: Cash Cows, Dogs, Question Marks and Stars.

  1. Cash Cows - Cash Cows are technology solutions that deliver significant business value but require little investment. Cash Cows should always be invested in while their residual return is significant. At the same time, cash cow technology investments tend to be investments in aging technologies. Consequently, technology leaders must actively plan for the migration off that technology solution when the need arises.
  2. Dogs - Dogs are technology solutions that generate comparatively less business value and require a greater investment to maintain their business edge. Dogs are strong candidates for replacement or shut down.
  3. Questions Marks - Question Marks are technology solutions that address areas of high growth business value but currently provide low levels of business return. The Question Mark portion of the technology portfolio must be managed as a unique category with similar characteristics to managing a startup business.
  4. Stars - Stars are technology solutions that generate high business value in high growth business value areas. Stars must be managed with the best mix of oversight and agility. Typically, these technology areas require the most capable oversight in order to effectively manage the complexity of maintaining the increasing business returns of these high value, high growth solutions.

Mapping out the investments in your software, hardware and network assets facilitates the decision to invest, replace or shut down each of these investments. The goal is to ensure that while a significant portion of your technology investment is focused on maintaining your current level of business return; the portion of your technology investment that is focused on high growth-high value business return is allocated to the right software, hardware, and network solutions.

Copyright © Devon Manelski