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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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The discovery phase, sometimes called the fuzzy front end, is comprised of a series of stages and gates for assessing, evaluating, and funding new opportunities, ideas, and concepts.6 Assessing and evaluating new investments in the discovery phase is often difficult due to a high level of uncertainty created by incomplete data and a myriad of unsupported assumptions. Therefore, adhering to strict measures of return on investment and quantification of risks and benefits can be challenging. In the early stages of the IT discovery phase, the IT discovery portfolio relies on qualitative inputs to prioritize and rank IT investments.7 At later stages, both quantitative and qualitative information and data are assessed.
The IT project phase is comprised of well-defined stages and gates for assessing, evaluating, and funding projects. Scoping and preliminary analysis determines
112 CHAPTER 4 IT PORTFOLIOS AND THEIR CONTENT IN CONTEXT
the fit of the proposed IT investment with the strategic direction. The business case establishes the degree to which this alignment occurs, assuring minimum criteria are met. After completion of the business case in stage 2, rigorous financial and nonfinancial data and information are assessed in the IT portfolio framework. Stages 3, 4, and 5 are for the development, test and validation, and launch and implementation of the IT investment. During these stages the IT portfolio is assessed at each gate, monitoring the progress, performance, and priorities of these investments. Exhibit 4.3 shows the similarities and differences between the IT discovery phase and the IT project phase.
Last, the IT asset phase is comprised of a series of stages and gates for postimplementation launch status reviews, continuously assessing the value and life cycle of existing IT investments (e.g., hardware, infrastructure, applications). The IT asset portfolio also includes the human capital, information and data, and process portfolios.
The IT asset portfolio captures the age, utility, and total cost of ownership of investments in the IT asset phase and assesses and analyzes these inputs against possible alternative investments. Costs related to maintenance and support, enhancements, upgrades, and management are all factored into the total cost of ownership. The IT asset portfolio maps the business value against the technical quality of IT investments, assesses other factors, and recommends maintaining, reengineering, retiring, or reevaluating IT investments.
Commonality among the IT Subportfolios
There are many areas of commonality among the three IT subportfolios. First, all three portfolios must support the achievement of business and strategic objectives. This assumes business and strategic objectives are known, agreed to, measurable, prioritized, and achievable. This is not always the case. All investments in each of the three subportfolios should have a business case that shows the degree to which this alignment occurs. The objective is to assure that the right projects are assigned to the right resources focusing on the right areas within a company. The result is a sharper focus of resources combined with the elimination of low value-added investments. The ensuing savings are plowed back into the budget to fund priority investments. Managers must be held accountable to assure that these savings are realized and reinvested to fund additional projects.
As shown in Exhibit 4.4, through the use of its eBusiness Value Dial, Intel Corporation created a very effective thread showing the interface between business objectives (e.g., cash cycle, efficiencies, opening markets, satisfaction), value, metrics, descriptions, and specific applications. The x in the exhibit boxes indicates the intersection between value categories and applications.
INTRODUCTION 113
EXHIBIT 4.3 SIMILARITIES AND DIFFERENCES BETWEEN THE IT DISCOVERY AND IT PROJECT PHASES
Discovery Phase Project Phase
Work Experimental, often chaotic; Disciplined and goal oriented with a
“Eureka” moments; can schedule project plan
work but not invention
Commercialization Date Unpredictable High degree of certainty
Funding Depends; in the beginning stages Budgeted
many projects may be “bootlegged”
Portfolio Type Discovery portfolio Project portfolio
Revenue Expectation Often uncertain with a great deal of Believable with increasing certainty
speculation as the release date gets closer
Activity Individual or team emphasis in Multifunction product/process
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