Description
Among all the attributes in the IT Portfolio Management (ITPM) context, we find that the key concept of efficient frontier is the most applicable illustration to assist the senior executives in managing IT resources as multiple heterogeneous IT project portfolios. Therefore, this research aims to provide a new model, which we term the IT Portfolio Efficient Frontier Model. Our findings show that the IT portfolio efficient frontiers from both the Even Distribution IT Portfolio and the Uneven Distribution IT Portfolio indicate that IT portfolio risk has a positive linear relationship with IT portfolio return. Moreover, the IT portfolio efficient frontier from the Dominant type IT Portfolio resembles a concave curve. Thus, if IT investments are similar to the Dominant set IT Portfolio, it would be advisable for senior executives to consider a more conservative investment strategy.
Recommended Citation
Huang, Yu-Hsiang (John); Shaw, Michael; Subramanyam, Ramanath; and Tu, Yu-Ju, "How Can a Firm Select the Most Qualified IT Portfolio Under Various Risk Tolerance Levels?" (2015). AMCIS 2015 Proceedings. 29.
https://aisel.aisnet.org/amcis2015/e-Biz/GeneralPresentations/29
How Can a Firm Select the Most Qualified IT Portfolio Under Various Risk Tolerance Levels?
Among all the attributes in the IT Portfolio Management (ITPM) context, we find that the key concept of efficient frontier is the most applicable illustration to assist the senior executives in managing IT resources as multiple heterogeneous IT project portfolios. Therefore, this research aims to provide a new model, which we term the IT Portfolio Efficient Frontier Model. Our findings show that the IT portfolio efficient frontiers from both the Even Distribution IT Portfolio and the Uneven Distribution IT Portfolio indicate that IT portfolio risk has a positive linear relationship with IT portfolio return. Moreover, the IT portfolio efficient frontier from the Dominant type IT Portfolio resembles a concave curve. Thus, if IT investments are similar to the Dominant set IT Portfolio, it would be advisable for senior executives to consider a more conservative investment strategy.