IT Portfolio Management PfM

1

• IT Portfolio Management (PfM)
• PMI HR Chapter
• Jenine Serviolo, PMP
• Savvee Consulting, Inc
• March 1, 2006

2
Goals

• Answer the questions
• What is IT Portfolio Management (PfM)
• What does IT PfM mean to us as Project Managers?
• Promote shared vision between Project Managers
  and IT Project Managers
• Encourage Project Managers to Think
  Strategically, Act Tactically as we manage our
  projects

3
Agenda

• Define IT Governance
• Define IT Portfolio Management
• Discuss Strategic Plans
• Review the Drivers that push for IT PfM
• Highlight the Benefits of practicing IT PfM
• Describe an IT PfM Scenario

• Identify the PM Role in IT PfM
• Discuss Challenges of IT PfM
• Identify Market Indicators
• Review Recommendations
• Highlight Resources
• Take Questions

4
IT Governance

• What is IT Governance?
• Specifying the decision rights and accountability
  framework to encourage desirable behavior in the
  use of IT. Weill, April 2002 Dont Just Lead
  Govern
• Define Who decides and How decisions are made in
  five critical IT Domains

5
IT Governance

• Who?
• IT Leaders
• Business Unit Leaders
• Corporate Leaders (CEO, CFO, VPs, etc)
• How?
• IT Standards, IT Architectures, etc
• IT Investment Approval Boards
• Cross-sectional Committees

• Five IT Domains
• IT Principles
• IT Architecture
• IT Infrastructure
• Business Application Needs
• IT Investment and Prioritization

6
IT Governance

• IT Decision Domains
• IT Principles
• Vision for how IT is going to be used in a firm
  or organization
• IT Infrastructure
• IT foundation for organization, e.g.,
• Network, help desk, shared applications, etc.
• Enterprise wide vs. business unit wide
• IT Architecture
• Technical choices to guide the organization
• Standards and guidelines for use of data, design
  of applications, change management, etc

7
IT Governance

• IT Decision Domains
• Business Application Needs
• Specifying the business application need for IT
  solutions
• Investment and Prioritization
• Covers whole decision making process of IT
  Investment

8
IT PfM IT Portfolios

• IT Governance
• IT Decision Domains
• IT Investment Prioritization
• IT Portfolio Management
• IT Portfolio

9
IT Portfolios

• What is a Portfolio?
• A group of investments that support a plan
• Provides the ability to look across investments
  and compare
• Can modify to balance potential return and risk

• What is an IT Portfolio?
• A group of IT investments that support a plan
• Provides the ability to look across IT
  investments and compare
• Can modify to balance potential return and risk

10
IT Portfolio Management (PfM)

• Project Management is about
• Doing the Project Right
• Portfolio Management is about
• Doing the Right Project

11
IT Portfolio Management (PfM)

• What is IT PfM?
• Process used to analyze, select, control and
  evaluate IT Investments
• Results in an IT Portfolio consisting of new IT
  project proposals, ongoing IT projects and
  operational IT activities
• The process by which IT Investments get
  prioritized and align with the budget
• Ensures Projects support Strategic Plan

12
The Strategic Plan

• What is the Strategic Plan?
• Mission
• Vision
• Strategic Direction
• Goal 1
• Goal 2
• Tiered Mapping and Accountability
• Point of convergence among IT and Non-IT
  organizational units

• Why you do what you do the organization's reason
  for being, its purpose.

"To give ordinary folk the chance to buy the same
thing as rich people." Wal Mart
13
The Strategic Plan

• What is the Strategic Plan?
• Mission
• Vision
• Strategic Direction
• Goal 1
• Goal 2
• Tiered Mapping and Accountability
• Point of convergence among IT and Non-IT
  organizational units

• A vision is a statement about what your
  organization wants to become.

"Year after year, Westin and its people will be
regarded as the best and most sought after hotel
and resort management group in North America."
14
The Strategic Plan

• What is the Strategic Plan?
• Mission
• Vision
• Strategic Direction
• Goal 1
• Goal 2
• Tiered Mapping and Accountability
• Point of convergence among IT and Non-IT
  organizational units

• Goals and action plans usually flow from each
  strategy.

• A Human Resources department devised strategies
  to develop a superior workforce.
• eliminating poor performers
• hiring from several choices of excellent
  candidates, not just "settling" on a candidate
• developing succession planning
• increasing training and cross-training
  opportunities.

15
The Strategic Plan

• What is the Strategic Plan?
• Mission
• Vision
• Strategic Direction
• Goal 1
• Goal 2
• Tiered Mapping and Accountability
• Point of convergence among IT and Non-IT
  organizational units

16
The Strategic Plan

• What is the Strategic Plan?
• Mission
• Vision
• Strategic Direction
• Goal 1
• Goal 2
• Tiered Mapping and Accountability
• Point of convergence among IT and Non-IT
  organizational units

17
IT PfM Drivers

• Mandates for Government Agencies
• Clinger Cohen Act (CCA)
• Presidents Management Agenda (PMA)
• Office of Management and Budget (OMB)
• OMB Circular A-11
• Commercial Organizations
• Increase Bottom Line
• Decrease IT spending
• Increase Market Share
• Increase Stock Value

18
Benefits of IT PfM

• Improves vertical and horizontal communication
  and collaboration across the enterprise providing
  visibility into all IT investments competing for
  funding
• Diminishes redundant IT solutions
• Helps avoid budget, resource and scheduling
  conflicts due to inconsistent, conflicting
  priorities
• Eliminates arbitrary across the board spending
  cuts
• Provides insight into future budget requirements
• Improves ability to
• Help ailing IT projects
• Eradicate failing IT projects

19
Benefits of IT PfM

• Institutionalizes business line involvement and
  backing
• Mitigates risk of working the wrong project
• Mitigates risk of having incomplete or inaccurate
  requirements
• Encourages repeatable/ industry standard process
  and procedures
• Heightens project status data integrity
• Enables benefits to be quantified/qualified in a
  standard fashion
• Evaluates risk and provides Cost-Benefit Analysis
• Heighten confidence in reporting
• Heightens team buy-in and individual job
  satisfaction by linking work to Organizations
  Mission, Vision, and Goals
• Helps keeps government agencies in compliance
  with the Anti-Deficiency Act (ADA)

20
What does IT PfM look like?

• Its a process
• Policy, procedures, guidelines, automated tools,
  templates
• Has decision making body
• Decision boards, committees, etc
• Identifies responsibilities
• Data reporting, standards, etc
• Leverage new tools
• PfM Software, spreadsheets, collaboration tools,
  etc

• Prioritizes IT Investments
• Prioritization Factors
• Risk
• Mandates
• ROI, etc
• Prioritization Methods
• Project by Project
• Strategic grouping
• Infrastructure
• RD
• New Markets
• Customer Satisfaction
• Employee Retention

21
Scenario for MyIT Inc. PfM Process

• IT Investment Board made up of IT group, led by
  CIO
• Based on cost, risk threshold proposal may go to
  a Business Council for approval, with CIO
  representing IT Group
• IT Investment Board Approval Phases include,
  Proposal, BCA, Implementation
• Prioritization done by IT Investment Board on an
  annual basis and reviewed when new projects
  approved
• Once a project is in Implementation Phase, on a
  regular basis health data will be provided by
  the Project Manager to the IT Investment Board in
  a standard format

22
New Project Proposal Representative
MyIT PfM Process
BCA Phase
No

• Prepare BCA Package
• Project Charter
• Alternatives Analysis
• Risk Identification Mitigation Plan
• Funding (full-life cycle development,
  acquisition, maintenance, etc.)
• Resource Plan (people, funds, etc.)
• Work Breakdown Structure (initiation,
  planning, execution,
  control, closeout)

Gather requested data
Enough Info?
Approved?
Proposal Phase
Yes
Yes
Initial IT Board Review
No

• Submit Proposal Package
• Project Description
• Align to SP
• ROM for BCA

Project End
IT Board Review for Implementation
Business Council Review with CIO Representation
Approved?
BC Review?
Yes
Yes
Yes

• Forward IT Board
• Recommendation
• Forward all
• Documents

No
No
Project End
Approved?
Yes

• Ongoing Report Data
• Risks
• Cost
• Schedule
• Performance Measures

Implementation Phase
IT Board Review Ongoing Reviews
Sanctioned Project in IT Portfolio
Project End
No
23
The PM Role in IT PfM

• Be engaged in your organizations
• IT Governance Structure
• IT Investment and Prioritization Process
• Understand your projects Business Promise
• Leverage the Strategic Plan
• Understand the Business Case Analysis (BCA)
• Use Performance Measures
• Provide IT PfM Decision Support Data

24
The PM Role in IT PfM

• Business Promise
• Understand the business reasons that your project
  was funded
• What was supposed to be gained by the business?
• What returns are expected?
• Include the business promise in the Project
  Vision, Project Requirements Document, Scope
  Document, Testing, etc so that it remains in
  view during all project phases
• Define tests linked to the business promise and
  include in Requirements Traceability Matrix
• Document Risk if project starts going off the
  course of meeting the business promise

25
The PM Role in IT PfM

• Strategic Plan
• Know which Strategic Plan is relevant to your
  project
• i.e., Strategic plan of the organization for
  which you are delivering or acquiring/requesting
  an IT solution.
• Be able to articulate the Mission, Vision and
  Goals that your project supports
• Revalidate the link between your project and the
  Strategic Plan when there are major changes in
  your projects scope, schedule, cost, performance
  metrics, risk, etc or when there are updates to
  the Strategic Plan
• Communicate the links between your project and
  the Strategic Plan to your team

26
The PM Role in IT PfM

• Business Case Analysis
• Ensure you are able to understand and produce
  BCAs
• Leverage your current expertise in Project
  Scheduling, Cost Control and Risk Management, etc
• Gain familiarity, knowledge, expertise in key
  Cost-Benefit Analysis terminology, calculations
  and formulas, i.e., Return on Investment (ROI)
• Leverage your familiarity with business promise
  and Strategic Plan mapping
• Understand Performance Measures related to
  Business Objectives

27
The PM Role in IT PfM

• Performance Measures
• Gain familiarity, knowledge, expertise in
  understanding/defining Performance Measures
  linked to business objectives
• Know the Performance Measures Identified for your
  project. These may be defined by
• Business Units
• IT Investment Control Board
• Person completing BCA
• Communicate the Performance Measures to your team
• As part of Project Closeout and Lessons Learned
  document how your project delivered on
  Performance Measures.

28
The PM Role in IT PfM

• Decision Support Data
• Provide accurate, timely data to support control
  and evaluation of projects in the IT Portfolio
• Risk
• Scope
• Schedule
• Cost
• Performance Measures

29
Challenges

• Challenges of incorporating IT PfM
• Organizational
• Harmonizing IT PfM structure, decision making
  authority and business goals
• Depending on existing organizational maturity
  studies indicate it takes 1-3 years to
  institutionalize processes such as IT PfM
• Project Managers
• Suffering through Organizational Challenges of
  incorporating IT PfM
• Adding new skill sets to an already full
  repertoire
• Lack of training resources for new skills
• Increased responsibility and deliverables
• Gaining access to business entities and decision
  makers
• Lacking positional authority to ensure project
  alignment with Strategic Goals

30
Market Indicators
Do we see IT Portfolio Management in the
marketplace?

• Market Research
• Gartner
• Publications and Press
• CIO Magazine
• PMI
• Books
• Educational Opportunities
• ESI
• Boston University
• Software Tools
• Microsoft
• Primavera
• Flashline
• ProSight

• Government Directives
• Case Studies of Companies establishing IT
  Governance
• JP Morgan Chase
• State Street Corporation
• UNICEF
• Pfizer
• USAA
• UPS
• FeEx
• Dupont

31
Recommendations

• Perfect standard Project Management practices
• Learn more about IT Governance and IT PfM
• Identify elements of IT PfM within your
  organization and help others connect the dots
• Be an early advocate of IT PfM
• Allows you to be a shaping force in the adoption
  of IT PfM
• Support Ongoing Process Improvement
• Let your voice be heard
• Recommend Solutions
• Focus on value and repeatability
• Identify training needs
• Inventory the skills of you and your team and
  identify gaps
• Develop Training Plans to include skills that
  will support IT PfM

32
Resources and References

• Jenine Serviolo, Savvee Consulting, Inc
• jenine.serviolo_at_savvee.biz
• 757.615.6865
• Performance Measures-
• http//esi-intl.com/public/publications/HTML/2005
  1201HorizonsArticle2.asp
• Articles
• CIO Magazine Articles on IT PfM
• http//www.cio.com/archive/091502/powers_sidebar_2
  .html
• http//www.cio.com/archive/091502/powers.html
• http//www.cio.com/archive/101503/exchange.html
• PMI Articles on Project Portfolio Management
• PM Network August 2005, Multiplicity p. 28
• PMI Research Translating Corporate Strategy into
  Project Strategy
• https//secure.pmi.org/memberapp/code/premium_con
  tent/research/index.asp
• Knowledge Wisdom Center - Project Portfolio
  Management Basics https//secure.pmi.org/memberapp
  /code/premium_content/kwc/KWCtopic_ppm.asp

33
Resources and References

• Training in Portfolio Management
• ESI
• Aligning Project Management With Corporate
  Strategy
• http//www.esi-intl.com/Register/course.asp?course
  codePMC-DDN
• 4PM
• Managing Complex Projects
• http//www.4pm.com/classes/mcp.htm
• Boston University
• Strategic Alignment of the Project Portfolio
• http//www.butrain.com/share/scedesc.asp?CID4190
  
• IT PfM in action
• State of Washington
• http//isb.wa.gov/tools/pmframework/checklist.aspx
  projectstatement
• Book Titles
• IT Governance How Top Performers Manage IT
  Decision Rights for Superior Results
• Managing IT as a Business A Survival Guide for
  CEOs
• IT Portfolio Management Unlocking the Business
  Value of Technology

34
Resources

• Relevant Government Mandates
• BMMP
• http//www.dod.mil/bmmp/
• DoN IM/IT Strategic Plan http//www.doncio.navy.mi
  l/FY06StratPlan/
• ACNO IT
• https//ucso2.hq.navy.mil/n098/WebBas01.nsf/(vwWeb
  Page)/Webbase.htm?OpenDocument
• Office of Management and Budget
• http//www.whitehouse.gov/omb/egov/

35
Questions
Jenine Serviolo, Savvee Consulting, Inc