Assessing the Health of an Information Systems Applications Portfolio: An Example From Process Manufacturing1

Abstract

This paper presents a model of the IS applications portfolio and illustrates how its "health" can be assessed through an example from process manufacturing. The health assessment is based on an evaluation by senior managers of a business unit's portfolio of information systems. This assessment is made on five separate, but related, attributes of each system in the portfolio: importance, investment, technical quality, use, and management value. The "Health Grid" is introduced as a way of representing the IS applications portfolio in order to facilitate the assessment and interpretation of its health. One of the advantages of using the grid is to make such an assessment explicit, transparent, and discussible. In an example, the Health Grid is used to assess and interpret the IS applications portfolio of the most profitable business unit in a large process manufacturing firm. The applications portfolio, consisting of 18 systems, was generally assessed as requiring attention. For example, there was no evidence of any relationship between the investment in a given system and its management value. The paper includes a suggested approach for using the Health Grid and an analysis of the strengths and weaknesses of the approach. A description of the changes made to the IS portfolio in the example firm after the initial data collection completes the paper.

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