Saturday, November 05, 2005


Enterprise Architecture and Modern Portfolio Theory

The notion of application portfolio management done by enterprise architecture teams is starting to gain ground in corporate America and is followed by savage worst practices of those project manager types who have made a mess out of project portfolio management practices. I figured that I would help get my fellow enterprise architect peers thinking about portfolio management correctly by using the analogy of where the term originated which was in the financial sector.

I have always been of the belief that enterprise architecture is not something one does simply at work but is part of one's daily life. Many of my peers attempt to manage large IT portfolios at work while the management of their own financial portfolio is fundamentally screwed. I figured that maybe one of the things that folks should think about is what does a good portfolio look like in terms of the stock market and that they may apply whatever they learn from the discussion to a work context.

Let's start with my own work portfolio in order to establish a point of reference. I happen to be a fan of Jim Kramer's and listen to him on the radio every night. Once a week on his radio show, he asks the question "Am I diversified". While I have never called him up to prove out my own portfolio, I know that I can rationalize every investment decision I make.

Here are my top five holdings for my investment portfolio:

Likewise, here are the top five holdings for my retirement IRA:

You may have noticed a common theme in my portfolio in that I respect brand, I do not engage in ceremonial strategies for investing and I respect keeping costs low by purchasing only exchange traded funds. These same practices can be applied to the discipline of enterprise architecture. Keep in mind, what may be a good portfolio for me, may not be for you...

Next week, I will continue this blog entry by bringing additional insight into how enterprise architecture and portfolio management should occur in large enterprises...

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