Describe the process of portfolio analysis. In what situations is this evaluation method useful?

What will be an ideal response?

Portfolio analysis inventories all of the organization's information systems projects and assets, including infrastructure, outsourcing contracts, and licenses. Each project can be described as having a profile of risk and benefit to the firm, similar to the financial portfolio. In a portfolio analysis, you would list the various systems projects and rate them according to their potential risks and benefits. You would use the portfolio analysis to determine which potential projects should be pursued and which should be modified or abandoned. High-risk, low-benefit projects should be avoided, while low-risk, high-benefit projects would be at the top of the list. High-benefit, high-risk projects and low-risk, low-benefit projects would be reexamined to see if they could be modified to better fit with the company's strategic plans. A mix of profiles could also be defined as acceptable in terms of the company's overall plans, much as is done with a financial portfolio.