Using a Mark-to-Market Valuation Technique to Objectively Measure IT Portfolio Value Creation

Enterprise executives frequently face the challenge of making decisions under conditions of significant uncertainty when dealing with IT investments, IT project management and realization of intangible organizational benefits enabled by IT. A suitable methodology for accurately estimating the current financial standing of each project in a portfolio of IT projects over the full project lifecycle is useful for IT managers to understand IT value creation and manage the IT projects across the portfolio. In line with this perspective, we propose a Mark-to-Market valuation technique that enables a standardized approach across diverse IT projects that comprise the IT portfolio. Three main contributions may be drawn from this study: 1) the Mark-to-Market approach is a useful valuation technique in the context of IT projects; 2) practitioners may leverage the technique to assess project value and the performance of the IT portfolio over the lifecycle of such projects; and 3) the consistent treatment of each project allows aggregation and applications of standard portfolio management techniques to the practice of IT portfolio management.