Finally, a way to put your Internet portfolio in order

Eager to capitalize on the Internet's potential, many companies have allowed scores of on-line projects to bubble up throughout their organizations. The result? More harm than good, as companies find themselves confusing customers, aggravating employees, and wasting bushels of money. In this article, consultant Anthony Tjan explains how companies can do better. By adapting classical portfolio strategy to the digital age, executives can coordinate their Internet initiatives to avoid the needless headaches and spending, he says. Much of the market and industry data that underpin traditional portfolio analysis is unavailable for the Internet space, so Tjan replaces the two criteria used in traditional portfolio analysis--market position and industry attractiveness--with business viability and business fit. Viability captures the available quantitative data about an investment's likely payoff. Fit is qualitative; it measures the degree to which an investment dovetails with a company's existing processes, capabilities, and culture. Using viability and fit to assess their online initiatives, companies can then plot these efforts onto a simple matrix, called an Internet portfolio map. Their location on the matrix will suggest whether each initiative should be invested in, redesigned, sold or spun out, or killed. As Tjan notes, the process of organizing and evaluating new investment options against coherent, meaningful criteria isn't new. In the digital era, what is new are the tools you use. Internet portfolio planning is one such tool.