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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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• Risk profile (security, disaster recovery, vendor viability, regulatory compliance, IT HR risk, privacy, information risk)
• User information (customer satisfaction)
• Support and dependencies of other portfolios as well as of other applications
• Business value (supporting business and strategic objectives, revenue, quality,
time, regulatory compliance, cross-selling opportunities, controlling costs)
• Business processes that are enabled (e.g., problem management, service-
request management, service-based cross-selling)
The information collected regarding the application is assessed against the business process gap analysis. The business value and technology assessment provides information for migration strategies and trade-offs for application portfolio decisions. Possible alternative investments are considered if the gap analysis does not close with the existing application.
STAGE 5: BALANCING 253
The portfolio manager acts as a fund manager, balancing the risks and benefits of IT initiatives to manage IT investments. Scenario planning is an important capability that decision makers use in developing multiple alternatives and assessing the viability and achievability of each alternative. Each scenario is mapped, and impacts on the scorecard are evaluated based on value, risk, balance, alignment, and capacity. The mapping of scenario planning and migration patterns can occur over many years as shown in Exhibit 5.39.
EXHIBIT 5.39 APPLICATION PORTFOLIO MIGRATION PATTERNS
Excellent
oO
New Development'
04-
Phase Out
Ree valuate/ 0
Reposition, t
0
(
Maintain/
JZJ Evolve
/ °
/ Reengineer
Phase Out/ Infrastructure
Replace
Replace
Redevelopment
-ξ ρ/ ξ
Business Value
High
Year 3
Retire
Phase out/replace: low business value, low technical condition: these applications are candidates for replacement/retirement, although many may be legacy or back-office systems that may not justify replacement due to replacement costs or the limited business value to be added. Value alternatives include
¦ Retire
¦ Outsource
¦ Replace
¦ Delegate to another entity
Reevaluate/reposition: low business value, excellent technical condition: these applications typically have been implemented in the near past following architectural guidelines but with such a limited scope or silo-oriented design that significant business value is not achieved. The key is to identify and analyze opportunities for reuse of these applications or their components across the enterprise. Value alternatives include:
¦ Productize
¦ Focus
¦ Innovate
Reengineer/modernize: high business value, poor technical condition: these applications serve the business well but create significant problems when there is a need to share information or integrate with other applications. A more adaptive application infrastructure (component-based, event-driven, n-tier, with message-based interfaces) is the prescription. Value alternatives include:
¦ Wrapper — leave core untouched, add surrounding flexibility
¦ Restructure
¦ Centralize
¦ Rehost
Maintain/evolve: high business value, excellent technical condition: these applications deliver value and have been architected for adaptability. Care must be taken to ensure high business value and excellent technical condition are attained when optimizing the application portfolio to accommodate change. Value alternatives include:
¦ Partner
¦ Streamline
¦ Collaborate
¦ Fix/repair
254 CHAPTER 5 BUILDING THE IT PORTFOLIO
In the Exhibit 5.39, a simple application portfolio is phased over a multiyear period. This graphic, however, may be one of many to facilitate the selection of the optimal set of actions against the application portfolio. Companies use a variety of portfolio optimization views, including:
• Arthur D. Little life cycle approach: assesses an industry’s life cycle (i.e., embryonic, growth, maturity, and aging) against competitive positions (i.e., dominant, strong, favorable, tenable, weak). Companies assess the life cycle of an investment versus the strategic position in the marketplace. Also, investment categories are compared against the industry life cycle, providing very useful analysis.14
• Boston Consulting Group’s growth share matrix: a quadrant chart comparing relative market share versus market growth rate. Categories are:
• Question mark: low relative market share, high market growth rate
• Rising star: high relative market share, high market growth rate
• Cash cow: high relative market share, low market growth rate
• Dying dog: low relative market share, low market growth rate15
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