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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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Prior to embarking on IT portfolio management, metrics must be identified to demonstrate the effectiveness of the process. The scope and objectives are considered, along with the infrastructure and quality of the source data to identify baselines and targets for improvement. This is true of both value delivery metrics and process effectiveness metrics. These metrics must be built into the process so that at the end effectiveness can be determined and lessons learned can be supported.
For the discovery and project portfolios, reduction in project spending is an excellent metric to monitor. Generally, the historical IT project budget can be used as a baseline and adjusted for overall budget changes that often occur in lockstep with changes in the overall budget. Raw quantity of active projects is often an effective metric as well; it is common to see IT organizations working on more projects than the available resources can support. Thus, a reduction in concurrent projects is a valid metric. Coupled with improvements in metrics around project
54 CHAPTER 2 PLANNING FOR IT PORTFOLIO MANAGEMENT
effectiveness (e.g., budget to actual, customer satisfaction), a reduction in the quantity of active projects can tell a compelling story.
For the various IT asset portfolios, however, the metrics must often come from source systems such as corporate accounting systems, asset management systems, and human resource management systems. The data in these systems are often suspect. While the book data on IT assets are accurate for financial reporting systems, often total cost of ownership of IT assets is lost in the morass of IT operational expenses that are not directly costed back to the individual assets. It is common to see IT assets (e.g., hardware and software) depreciated using an accelerated approach. Once the IT assets are off the books or have a zero book value, costs are not associated with them in the financial system, and linkages from IT operational systems to financial systems have historically been weak. Regardless, improvement metrics must be obtained and compared against a baseline to truly demonstrate success of IT portfolio management when applied to IT assets. In the absence of precise metrics, metrics can be derived from agreement. By developing baseline estimates from key knowledgeable stakeholders and documenting these baseline metrics, the spirit of applying them to demonstrate IT portfolio management is achieved.
Metrics serve a vital gauge for the IT portfolio management process, demonstrating the value of the process and refining it for subsequent iterations. Identify metrics that associate back to realistic objectives so that attainment of these objectives is apparent. Build metrics capture into the IT portfolio management process to avoid an ex post facto scavenger hunt. Demonstrate value by demonstrating value. Chapter 5 contains further discussion regarding metrics and shows examples of metrics used in IT portfolio management.
CHARTERING THE EFFORT
A project charter is an agreement between all interested stakeholders (e.g., perform team, sponsors, subject matter experts, end users) regarding:
• Objectives
• What will be done
• How it will be done
• By whom
• Risks and mitigation strategies
• Assumptions
• Success criteria
COMMUNICATION PLANNING 55
Think of the charter as a contract between those sponsoring the initiative and those performing the initiative. It documents understanding to minimize the impact of such conditions endemic in organizations as selective memory. The project charter is a living, breathing document that is subject to change. However, changes must be understood and often signed off by key stakeholders. Second only to performing stakeholder analysis, an IT portfolio management charter is one of the most important items to create and the least frequently created in practice.
TASK PLANNING
While IT portfolio management is a process that should be adopted as a normal business practice, it should be managed as a project. Therefore, a task plan must be created and managed for each iteration of the IT portfolio management process. Previously, objectives were articulated. The tasks to populate the work plan will become apparent as you progress through this book. In general, however, objectives for doing IT portfolio management should drive the tasks performed and the deliverables created. If doing or creating something supports the objectives of IT portfolio management, then do it; if not, don’t!
Time is a scarce commodity for you and for those being asked to participate in the IT portfolio management process. Being judicious about what is produced, who is involved in the process, and what is expected of them is a key to success. Objectives drive the deliverables and tasks of the IT portfolio management process. If doing or creating something does not satisfy an objective as outlined previously, simply do not do it. Conversely, a task plan must be reconciled against the objectives to determine if the task(s) and deliverables being created do, in fact, satisfy objectives.
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