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IT Portfolio management step by step - Maizlish B

Maizlish B, Handler R. IT Portfolio management step by step - John Wiley & Sons, 2005. - 401 p.
ISBN.: 978-0-471-64984-8
Download (direct link): itportfoliomanagement2005.pdf
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Matejcik, F. J. “TM 665 Project Planning & Control,” South Dakota School of Mines and Technology.
Meredith, J. R., Mantel, S. R., Jr. (2000). Project Management—A Managerial Approach, John Wiley & Sons.
Steele, L. W. (1988). “What We’ve Learned—Selecting R&D Programs and Objectives,” Research Technology Management, Mar.—Apr., pp. 17—36.
• Arbitrary setting of targets and performance zones results in poor performance management (not to mention the angst of those responsible for the performance)
• A systematic goal/question/metric approach focuses the balanced measures on essential performance management issues and results in better visibility
Exhibit 5.36 is a balanced scorecard for IT, with the goals, questions, and key metrics displayed.
An assessment report is created at the conclusion of this stage to compare the investment mix and results against the target and to show all gaps and residual risks. This report is shared with and approved by executive management and other key stakeholders. Approval of the final contents of the assessing stage also occurs by executive management (e.g., IT investment council) and key stakeholders (e.g., portfolio view owners). The elements of this stage should be communicated to all
STAGE 4: ASSESSING 245
EXHIBIT 5.36 BALANCED SCORECARD FOR IT
What IT value position is needed to support the company’s strategy?
Given a successful vision, how will the performance differ?
What are the critical success factors or key objectives?
What are the key measures that reflect the objectives/CSFs?
To Shareholders/ Board of Directors
Financial
Objectives/CSFs/
Initiatives
Financial Target Performance Measures
• EBITDA
• ROI
• Growth
• Market share
Strategic Plans
Strategic
Goals
To Customers With Internal
Management
Processes
î Î
Customer Process
Objectives/CSFs/ Objectives/CSFs/
Initiatives Initiatives
Î
Customer Target Process Target
Performance Performance
Measures Measures
Î
• Cycle time • Cycle time
• Quality • Defects
• Satisfaction • Productivity
• Price/value • Reuse
With Ability to Innovate and Learn
Innovation
Objectives/CSFs/
Initiatives
Innovation Target Performance Measures
• Rate of change
• New innovations
• Turnover
• Morale
key staff. Information and feedback from employees and customers will drive continuous change to assessment elements.
Gaps can usually be seen at this juncture of the process. Some of the gaps between the target and the current investment mix might show these areas need to be addressed:
• Current investments do not support achievement of future business and strategic objectives.
• Measurement and monitoring processes are insufficient to track progress of achieving critical success factors.
• Portmortem analysis of projects after they are inserted into operations is not sufficient.
• The mix of investment according to the categorization of investments does not align with future strategies.
• Too many projects are underway that are being supported by too few resources. The allocation of the company’s best resources are not targeted to the most important projects.
246 CHAPTER 5 BUILDING THE IT PORTFOLIO
• Intangible assets are not factored into the value of the portfolio.
• Cultural barriers are harder to overcome than originally estimated. Collaboration and communication among the portfolio team, the architecture teams, the enterprise program management teams, the requirements committee, the executive steering committee, and various functional areas and business units are not yet working efficiently or effectively.
• The results of assessing financial returns of investments do not support the growth story being told by executives.
The next stage evaluates these gaps and fine-tunes the portfolio to bring it closer to the target IT portfolio.
STAGE 5: BALANCING
Systems are supposed to tend toward equilibrium . . . but only in thermodynamics. The IT portfolio is by no means a thermodynamic system. It is a complex mix of new technologies, old technologies, people, projects, and ideas. Without a framework to rationalize the IT portfolio, it will probably decay. IT portfolio management provides this framework.
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