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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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In their book The Discipline of Market Leaders,4 Treacy and Wiersma maintain that there are only three real strategies: customer intimacy, operational efficiency, and product excellence. They assert that you must be excellent at one and good at the other two. In the absence of defined strategy, the Treacy and Wiersma hypothesis may be leveraged. Annual reports, internal communications, strategic intent, and interviews with key stakeholders are effective means to unearth and uncover business strategy. Beyond the shortfalls of not having a business strategy, there are other blind spots as shown in Exhibit 5.1 that can derail the IT portfolio management effort.
As previously indicated, the primary reasons IT portfolio management processes are not executed successfully are due to people aspects. At its bear essence, IT portfolio management is a people process—it is about gaining consensus and effecting change. Achieving the highest level of IT portfolio management maturity requires
178 CHAPTER 5 BUILDING THE IT PORTFOLIO
EXHIBIT 5.1 AREAS THAT HAVE DERAILED PORTFOLIO MANAGEMENT EFFORTS
• Lack of support and failure of buy-in from key stakeholders and gatekeepers
• Inability to modify behaviors—people naturally resist change. Employees feel most confident when the status quo is being met. Changes such as new systems, measurement, and data visibility may not be readily accepted.
• Methods too complex. Users afraid to use them.
• Little to no education about the model given to users, who misinterpret its meaning and function.
• False sense of accuracy. IT portfolio management can only be as accurate as its estimates are.
• Too much reliability on the IT portfolio management output. IT portfolio management output should not be a substitute for strategic analysis and optimization discussions or common sense.
• Few in the company who truly understand how to use the IT portfolio management methods.
• Hard to acquire data and information (e.g., resource constraints).
• Models used in IT portfolio management are inadequate to fit the nature of the investments. This might originate from the wrong definition of model needs or from a changed environment that makes the models obsolete.
• People still try and game the system; therefore, IT portfolio management is used for political maneuvering.
Sources: Adapted from:
Archer N. P., and Ghasemzadeh F. (1996). “Project Portfolio Selection Techniques: A Review and a Suggested Integration Approach,” Innovation Research Working Group Working Paper No. 46, McMaster University.
Felli J. C., Kochevar R. E., and Gritton B. R. (2000). “Rethinking Project Selection at the Monterey Bay Aquarium,” Interfaces, 30/6, pp. 49—63.
Jackson B. (1983). “Decision Methods for Selecting a Portfolio of R&D Projects,” Research Management, Sept.—Oct., pp. 21—26.
Lee J., Lee S., and Bae Z. (1986). “R&D Project Selection: Behavior and Practice in a Newly Industrializing Country,” IEEE Transactions on Engineering Management, EM-33/3, pp. 141—147.
Levine, H. A. (1999). “Project Portfolio Management: A Song Without Words?” PM Network, 13/7, pp. 25-27.
Loch C. H., Pich M. T., Terwiesch C., and Urbschat M. (2001). “Selecting R&D Projects at BMW: A Case Study of Adopting Mathematical Programming Models,” IEEE Transactions on Engineering Management, 48/1, pp. 70-80.
Martikainen, Juha (2002).“Portfolio Management of Strategic Investment in the Metal Industry,” master’s thesis, Helsinki University of Technology, January.
Steele L. W. (1988). “What We’ve Learned—Selecting R&D Programs and Objectives,” Research Technology Management, Mar.-Apr., pp. 17-36.
INTRODUCTION
179
a new mindset that is not pervasive in the majority of companies we have studied. The new mindset requires IT to run as a business, defining and widely communicating business strategies, providing measurable returns, and delivering business value and results.5 In this chapter, the major steps in building and optimizing the IT portfolio are identified. Effectively building and applying IT portfolio management is discussed. The objectives for this chapter are to enable the reader to:
• Identify the business climate and major capabilities that must be in place to establish an IT portfolio management framework
• Present a high-level step-by-step road map of how to build and sustain an IT portfolio management framework, quantifying business value and risks
• Show how to assess the current as-is state, discuss the to-be state, and identify resulting gaps in each major phase of IT portfolio management
• Demonstrate processes, tools, practices, approaches, and metrics for each stage of IT portfolio management
• Discuss where to begin applying or improving IT portfolio management
Building the IT portfolio should result in:
• Institutionalized management processes that are defined, documented, and easily accessible for creating, assessing, and balancing the portfolio. These processes can be repeated and are consistent.
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