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<p>Program Managers (PMs) throughout the Department of Defense (DoD) were  directed by the DoD Chief Information Officer to manage information technology (IT)  investments as portfolios (to include Mission Areas, Subportfolios, and Components)  within the DoD Enterprise. Managing portfolios of capabilities aligns IT with the overall  needs of the warfighter, as well as the intelligence and business activities which support  the warfighter. This thesis provides the detailed steps that PMs and Program Executive  Officers (PEOs) should follow to closely manage their IT portfolios using the concepts  described within Harry Markowitz' Modern Portfolio Theory. The first section will  provide a demonstration of allocating revenue generated by a fictitious large corporation  to the various sub-corporate levels and then applying Knowledge Value Added (KVA) in  order to calculate a Return on Investment (ROI). The foundation of KVA analysis is that  each subprocess output must be represented in common units of change; a price per unit  of output is generated to allocate both cost and revenue at the subprocess level. The final  section will apply a similar KVA analysis to the Naval Cryptologic Carry On Program  (CCOP) systems to provide a public sector example.
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<br>Subjects: Information technology; Management; Rate of return</div>
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VanOrden, Marc A.</div>
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