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STAGE 1: GAME PLAN 191 EXHIBIT 5.9 GROUP CREDIBILITY AND DEPENDENCY MATRIX
Business Perception of IT Credibility
of the people in IT have never even been on a live set.” Research indicates that 75% of IT operations groups do not understand business strategies and have not allocated resources to tackle business issues. IT management is usually focused on reducing costs, as well as providing maintenance and enhancements. In order for IT portfolio management to be successful, it must understand key business processes and business performance indicators and be able to respond to these indicators. Examples include:
• Financial/cost-reduction measures
• Customer service efficiency and effectiveness measures
• People productivity measures
• Marketing effectiveness indicators (e.g., time to market)
• Quality measures (e.g., defect rates)
• Regulatory and compliance metrics (e.g., government/legal risk avoidance)
For business and IT, value can best be driven by:
• Knowing value at all times and evaluating IT continuously.
• Approaching strategy from the customer’s perspective.
• Making IT relevant and tangible.
192 CHAPTER 5 BUILDING THE IT PORTFOLIO
• Creating a value taxonomy for business and IT. Focus on how value relates to:
• Business issues
• Revenue (cash inflow)
• Value drivers/mission statements
• Reinforcing continuous improvement.
• Knowing customers needs and values better than the competition.
Assess IT Portfolio Management Maturity
The IT portfolio management maturity model, which is addressed in detail in Chapter 2, enables readers to determine their current and targeted profile for IT portfolio management. The model is based on practices the authors have noted within many companies—some based on ad hoc, random approaches and others on precision in optimizing portfolios. The model shows five maturity levels (from level 0, admitting, through level 4, optimizing) of the projects and assets subportfolios (i.e., applications, infrastructure, processes, and information). The overall IT portfolio is also assigned a maturity level. The discovery portfolio is often a chaotic process; therefore, trying to determine IT portfolio management maturity levels for this subportfolio is not included in the maturity model.
Portfolio maturity starts at the basic level of the model as a communication vehicle, evolves to the intermediate level of managing the portfolio within views, and graduates to the advanced level of holistically managing the entire set of IT investments as one portfolio. Managing the business and IT portfolios as one holistic portfolio achieves world-class performance. Research indicates that less than 5% of the Global 2000 companies currently apply the world-class best practice of managing business and IT investments as one portfolio.
To assess IT portfolio management maturity, each subportfolio represented by the columns in Exhibit 5.10 must be reviewed. The model helps to spot inconsistencies between subportfolios. For instance, it is possible to be at level 3 for projects and level 0 for applications. However, if the project subportfolio is at a vastly greater level of maturity than the people portfolio, it is likely being measured optimistically; it is difficult to have an optimized project subportfolio when those working on projects are not being managed optimally. Likewise, if the application subportfolio rates at a substantially higher level than the information subportfolio, the quality of application effectiveness is suspect. In addition, the portfolio management maturity model identifies weaknesses within the IT life cycle by surfacing areas devoid of governance, defined processes, role accountability, and feedback metrics.
The maturity model provides an excellent balancing mechanism for determining optimal readiness and advancing the portfolio management process. Each iteration
STAGE 1: GAME PLAN 193
EXHIBIT 5.10 IT PORTFOLIO MANAGEMENT MATURITY LEVELS
Projects Applications Infrastructure People Process Information Overall IT
Level 0 Collecting data Collecting data Collecting Collecting Determining Identifying Recognition of
Admitting on projects on applications data on information on processes and primitive need for an IT
infrastructure people and owners entities portfolio
Level 1 Aggregated and Listing of all Listing of all Listing of all IT All processes Listing of key All sub