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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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Each gate contains a set of criteria that evaluate a project’s performance from the previous stage, which should remain consistent for all IT investments. The criteria evaluated within each phase generally do not change to a great extent, but the inputs from projects assessed against the criteria should provide increasing
INTRODUCTION 109 EXHIBIT 4.1 STAGES AND GATES IN THE PROJECT PHASES
Source: Adapted from Robert G. Cooper, Winning at New Products, 3rd edition, Perseus Publishing, 2001.
levels of detail and accuracy at later gates. There are three common quality issues that should be evaluated at every gate:
1. Quality of execution: Have the steps in the previous stage been executed in a quality fashion? Have the project leader and the team done their jobs well?
2. Business rationale: Does the investment (continue to) look like an attractive one from an economic and business standpoint?
3. Action plan: Are the proposed action plan and resource requests reasonable and sound?3
Stages and gates are typically customized by companies with specific inputs, processes, and outputs. However, requirements for effective gates include:
110 CHAPTER 4 IT PORTFOLIOS AND THEIR CONTENT IN CONTEXT
• Each decision point (gate) is only a tentative commitment in a sequential and condition process. Gate decisions can be viewed as a series of option decisions.
• The gating procedure must maintain a reasonable balance between errors of acceptance and errors of rejection. Weak procedures produce evaluations that never cancel IT investments; procedures that are too strict never enable funding for innovations.
• Evaluation is characterized by uncertainty of information and the absence of solid financial data. This is particularly applicable in the IT discovery portfolio where early gates must accept both quantitative and qualitative data points.
• Evaluation involves multiple objectives and therefore multiple decision criteria. Corporate and business unit priorities, as discussed in Chapter 3, can differ. The criteria for evaluation should be developed by the key decision makers, and they must converge on these differences and reach consensus. Criteria should include both must-have and nice-to-have criteria.
• The evaluation method must be realistic and easy to use. The taxonomy must be understood by all participants, and the tools must be user-friendly. The ability to create and evaluate what-if and scenario planning must be simple to input, analyze, and view.4
The Stage-Gate® process has traditionally been applied to new product development. However, some companies are adding a discovery stage which occurs prior to the new product development.5 As shown in Exhibit 4.2, the traditional application of Stage-Gate® can be extended to include the IT discovery phase and the IT asset phase.
Exhibit 4.2 shows the IT life cycle and associated stages and gates in a sequential manner. In reality, many of these stages and gates within a phase, particularly the IT discovery phase, occur concurrently, nonsequentially, and nonlinearly. In addition, depending on the technical, market, and business maturity, there are multiple points of entry to the IT life cycle. The IT life cycle is a closed-loop process, whereby now projects can be created based on input from the IT asset portfolio (i.e., the costs and limited features and functionality of legacy and heritage systems accelerate the need for new net- and network-centric alternative solutions. Exhibit 4.2 is not a single best practice approach as strategies, priorities, metrics, budgets, time, labor, financial, manufacturing and production, and other dependencies, constraints, and core competencies will vary from company to company and industry to industry. However, Exhibit 4.2 offers a viable starting point for companies to consider architecting their end-to-end holistic view of the IT life cycle, phases, stages and gates, and IT portfolio.
INTRODUCTION 111
EXHIBIT 4.2 IT LIFE CYCLE
Enterprise Strategic Intent
Enterprise Architecture
Enterprise Business Objectives
Critical Success Factors
J»—Requirements
Business/Competitive
Intelligence
___________________I—Key Performance Indicators
Business Unit Objectives/Requirements j—Balanced Scorecard IT Plan (IT Policies, Principles, Roadmap, etc.
Stage 1 Opportunity Generation, Capture & Analysis
IT
Discovery
Phase
Stage 2 Ideation
IT Discovery and IT project phases adapted from Robert G. Cooper, Scott J. Edgett, and Elko J. Klein-schmidt, “Optimizing the Stage-Gate® Process: What Best-Practice Companies Do—I,” Research-Technology Management, Sept.—Oct. 2002; Peter Koen, “Understanding the Front End of Innovation— A Common Language and Structured Picture,” Front End of Innovation Conference, May 2004.
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