How ill is your IT Portfolio? : Measuring Criticality in IT Portfolios Using Epidemiology

peer reviewedIT project portfolios, consisting of IT projects, also interact with the entire IT landscape. In case of a failure of only one element, existing dependencies can lead to a cascade failure, which can cause high losses. Despite the present effects of systemic risk, research into IT portfolio management lacks suitable methods to quantitatively assess systemic risk. We follow the design science research paradigm to develop and evaluate our ‘on track’ or ‘in difficulty’ (TD) method by applying the SI model, representing a recognized network diffusion model in epidemiology, in an IT portfolio context. We evaluate our method using a real-world dataset. We introduce a criticality measure for diffusion models in IT portfolios and compare the TD method’s results and the alpha centrality to human judgment as a benchmark. From our evaluation, we conclude that the TD method outperforms alpha centrality and is a suitable risk measure in IT portfolio management