Welcome back. Welcome to the IS/IT Governance course. This is the third module. In this module, we will continue to evaluate IT investments. In this module, I have two main goals: evaluate a portfolio of IT investments and IT chargeback. So, this lesson will focus on evaluating a portfolio of IT investments. In this lesson, I have three videos. The first video will define the IT investment portfolio, the second video will describe the characteristics of different IT asset classes, and the third video will focus on the strategic orientation and IT investment portfolio management. So, let's start with the definition of IT investment portfolio. The main idea is that any large company will not do just one IT project in a given year, they will do a collection of IT projects in a given year. So, IT portfolio management is about selecting the right set of IT projects that are aligned with the organization's strategy and improve returns on IT investments, that is, we want to not only do projects right, but select and do the right projects. Flawless project execution is meaningless if the right projects are not being tackled. So, here, there is a difference between project management and portfolio management. Project management ensures that projects are done right whereas portfolio management ensures that right projects are done. So, in portfolio management, we take a unified view of all the IT projects together, that is, we look at all the projects in unison. The IT investment portfolio consists of four elements: firm wide infrastructure, transactional systems, informational systems, and strategic systems. I'm going to illustrate each of these elements using examples from the airline industry. Firm wide infrastructure. Firm wide infrastructure is the foundation of network, computing, and database services on which IT applications run. The goal of firm wide infrastructure is integration, that is, allow different applications to be integrated, flexibility, that is, provide the flexibility so that applications can be developed and implemented faster, and finally, reduced IT cost through standardization of different elements of the infrastructure. Transactional systems. Transactional systems process basic business transactions cost effectively. So, for an airline, reservations, ticketing, checking-in, aircraft and crew scheduling, and aircraft maintenance, these are transactions that happen repeatedly. An airline may perform infinite number of these transactions. So, the goal of transactional systems is to process basic transactions cost effectively, that is, reduce costs through increased throughput. Informational systems provide aggregated information, that is, information aggregated from transactional systems to monitor and control the performance of the organization. For example, for an airline, applications that identify which routes have high occupancy and need more flights versus which routes have low occupancy and need fewer flights is an example of an informational system. So, the goal of informational system is better information, increased control, and improved quality. Finally, strategic systems are applications that provide a competitive advantage. They either provide a competitive advantage, or they reduce a competitive disadvantage. For an airline, applications to identify valuable customers so that they can be provided with differentiated service to improve their loyalty is an example of strategic systems. So, the goal of strategic systems is to increase sales, improve competitive advantage, or reduce competitive disadvantage, that is, improve the market positioning of the firm. So, to summarize, the IT investment portfolio consists of four elements that have different goals. Thank you.