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Project Portfolio Management Drives More Effective IT Governance

When economic conditions get tough, CIOs must focus on two simple priorities: how to produce value and how to cut cost. Pushed by economic and competitive pressures, IT organizations need to organize their project and application lists as an aggregate collection of expense buckets that they then attempt to balance against priorities, budgets, and available resources.

This process is often referred to as IT Governance or Project Portfolio Management (PPM). Regardless of what you call it, it’s recognized by successful CIOs like Mykolas Rambus at Forbes as a business imperative to effectively navigate both lean and growth times. Says Rambus, “PPM is an essential function in how we create value for our organization; with PPM we’re better able to ensure our IT organization is working on the most important things for Forbes that either save money or make money.”

IT governance is all about ensuring that IT produces the maximum possible value for the business. That means aligning IT with business, optimizing resources, and mitigating risk. While Project and Portfolio Management (PPM) alone is not enough to meet all the requirements of IT governance, it is one of the most critical ingredients for a successful IT Governance strategy that both produces value and manages risk.

The aim of PPM is to measure available resources, such as time and money, against all the proposed projects, and apply a consistent methodology to align them with the goals of the business. PPM drives more effective IT governance because it enables organizations to:

  • Prioritize the IT portfolio of projects and applications according to business objectives and expected benefits
  • Respond to changing conditions and new opportunities by being able to rapidly reallocate resources with a full understanding of the impact
  • Know exactly what projects people are working on, enabling them to make clear business decisions on what the priorities are and how well resources are utilized
  • Ensure that projects are delivered on time, on budget, and on quality

It’s a fact that companies can get lost trying to implement overly complex IT governance, and unfortunately, in the process, end up creating large bureaucracies and complex metrics that contribute little value to the organization. Many companies have made rapid progress in their IT governance initiatives by starting with a PPM implementation focused on a simple and pragmatic approach. These companies have been able to make measurable impact on the business while implementing reasonable controls, adding layers of further sophistication only when and where they were really needed.

“When we implemented our IT Governance process, we were actively working on 20 projects, and we identified 60 additional projects that our three business units wanted us to accomplish. So we needed to establish an effective prioritization process,” said Jerry Hodge, Sr. Director of Information Services, Hamilton Beach Brands. “With Innotas (www.innotas.com) on-demand PPM as the core of our IT Governance process, we have complete visibility into all of our active and potential projects, and we can easily prioritize them and focus on the projects that add the most value to the business.”

If you’re thinking about leveraging PPM to help drive your IT governance strategy, first evaluate four key areas:

  • Alignment – assess whether you’re focusing on projects that provide the best value for the organization
  • Value – prioritizing the IT portfolio is an on-going process – standardized approval and review processes can provide baselines so you can adjust to shifting priorities
  • Resource Optimization – keeping the right resources focused on the projects that have the biggest impact is paramount; PPM provides visibility into how time is actually spent vs. ROI
  • Risk Mitigation – risks and unknowns associated with each project may be very different and should be factored in the prioritization process for better planning

Alignment – A Single IT System of Record
Are we doing the right things? Is what we are doing going to produce the best value for the organization?

These are fairly basic questions, but answering them with confidence requires IT to take several steps toward creating a single IT system of record.

First, take an inventory of all current projects and applications. After taking a project inventory, companies often discover they are working on twice the number of projects they thought were in their project inventory. Then, create a standardized business case for project requests — developing consistent metrics for expected value, cost, and risk allows an apples-to-apples comparison.

Finally, understand business objectives: know the organization’s priorities, how they are measured and how those projects contribute to those objectives.

Value
Is enabling a new proposed service more important than any of the projects we are already doing? What would be the impact of merging with Company Y. What do we have to put on the back burner to get that done?

Effective IT governance requires that IT leaders look for great ideas and quickly assess how these ideas score against what is already on the plate and on the waiting list. This needs to be done in partnership with the business.

A simple stage-gate approach supported by a PPM solution is critical to implementing a standard process with established review and approval steps to filter out ideas that may be good, but do not match the objectives of the business.

Then the fun begins — sorting out where in the stack of priorities a new proposal belongs based on priority, budget, and resource availability.

Resource Optimization
Do we have the resources with the right skills to get this project done? When will they be available? What kind of people do we need to hire based on future plans? Should we outsource part of a project?

In the end it all boils down to people – getting and keeping the right people, and focusing them on the projects that allow them to make the best use of their time and have the biggest impact on the business.

PPM provides a clear understanding of where time is actually spent. Think of the typical scenario in which somebody from a business unit complains that IT is not doing enough for that particular business unit.

That conversation will take a dramatically different tone when IT is able to show a PPM dashboard based on real-time data illustrating what percentage of allotted IT resources are spent on repair/fix projects, versus projects that actually drive value to the organization.

Risk Mitigation
Great idea, but do we have the infrastructure to pull it off? We can build it, but will they come? How reliable is the new vendor we need for this project?

Two projects may have the same potential value and both may be well-aligned with business objectives, but the risks and unknowns associated with each may be very different and should be factored in the prioritization process and made clearly visible to the stakeholders. It is also important to plan for the potential risks involved in a project and have a mitigation plan ready.

Then there are the operational risks: monitoring the execution of the project to ensure that it is on schedule, making sure that all planned resources are still available and not impacted by delays in other projects; tracking spending against budget; and closely managing requests for scope change.

Finally, the part nobody wants to talk about: did the project actually produce the value to the business that was expected? This is the ultimate risk from a business perspective, and tracking it results in much better future business cases and planning.

IT Governance for Business Value and Compliance
Lots of companies have successfully implemented IT governance strategies without overwhelming the people involved or bringing IT to a standstill.

Moreover, it’s possible to both ensure that IT produces the best value for the business and that IT meets internal and regulatory compliance requirements. By making Project Portfolio Management a key element of your IT governance strategy you will provide the right level of visibility and processes for managing the IT portfolio, its resources, and risks.

 


 

Keith Carlson is CEO of Innotas (www.innotas.com), provider of the only on-demand Project Portfolio Management (PPM) solution specifically designed to meet the needs of IT and IT Services organizations. He brings to the position a strong track record for building high-growth, high-value businesses in the technology and consulting sectors. Prior to joining Innotas, Keith held executive positions at Traiana, an enterprise software company focused on automating the buy and sell side of complex trading relationships; Mercury, the global leader in business technology optimization; Kintana, an IT governance software company acquired by Mercury; DigitalThink, an on-demand provider of e-learning solutions; and Accenture, a global management consulting firm.

Meeting Challenge with Confidence

The business world is a demanding one, filled with daily challenges. The business professional must be able to: understand and develop people; extract the right information; comprehend numbers; facilitate, negotiate and manage change; make key business decisions; and, seek and leverage opportunities. All of this while maintaining sanity. In order to achieve business success, the professional must meet challenge with confidence.

There are no quick fixes for acquiring confidence, but there are manageable steps that can help build confidence. Here are some jumpstart ideas:

  • Get the facts, Jack! Ask questions, get feedback and the information needed, analyze it, and draw business conclusions. Present information that supports the business point of view.
  • Leverage what you know and believe in what you are recommending. Trust that you have what you need and move forward with it. If you believe it, so will others. Just be clear.
  • Be patient! Stop tapping your foot at every meeting while you are watching other people process information. Things happen in other people’s time, not in your time. Believe that it is not if but when it will happen. Focus your confidence energy on the overall goals and outcomes required.
  • Recognize that there will be times when confidence drops – in you, the people around you and in the work which you are involved in. This is normal in business. Regain your focus through stepping back, sitting down with your people and discussing confidence and self-confidence. Find breakthrough thinking and opportunities. Imagine a call for confidence (COC) and confidence will start growing.
  • Acknowledge what you don’t know. There is nothing worse than talking to someone who clearly does not know the answer to a question or problem but will not admit it. Don’t be that person. Look straight into your audience’s eyes and say “I don’t know but I will find out”. You don’t have to know everything, but you do need to facilitate answers.
  • Learn it! Yes, confidence can be learned. Set a plan to build your confidence. Become aware of your body language, the way you speak, what you say and how you say it. Practice your presentations in front of a mirror. See how you interact in the environment you are in. Are you the stick in the mud or are you the can do person? Build your journey; develop your own SWOT (strengths weaknesses, opportunities and threats). Set your goals, build the knowledge and experiences and, as your confidence grows, find ways to accelerate your development.

Once you demonstrate confidence, you will inspire confidence in others – be it in employees, bosses, neighbours, or in the audience you must address. Do not be afraid to embrace the importance of confidence in your leadership and professional life; it is the bridging force between you, the people you work with and the business in which you are engaged.

 


Richard A. Lannon partners with business and technology organizations to help clarify their goals and objectives and train their leadership and professionals on how to achieve them. He provides the blueprint for you and your organization to be SET (structured, engaged and trained). That is why his clients call him the SETability Expert. Voice: 403-476-8853 Email: [email protected] Web: www.braveworld.ca 02/09

Taking Bearings

After a recent speaking engagement, someone from the audience came to ask me a couple of questions, one of which went like this: “It is a little bit of an enigma for me, but how do you, as a consultant, generate ideas and suggestions that make perfect sense having spent so little time with the organization? I don’t expect much from full-time managers I hire in their first three months.”

Today, many readers may find themselves moving around more than ever, finding new employment or getting involved in new projects in unfamiliar settings. I thought it would be helpful to discuss some of the skills that I find critical for familiarizing with the environment and generating valuable results quickly. Here are the top three:

Listening, Questioning, Framing

Not surprisingly, one of the most important skills is one’s ability to listen carefully and ask the right questions at the right time. Your goal is to gain as much clarity on the problem or project at hand as possible. You will ask questions to frame it; that is to isolate important information from the mess of unstructured data. You will probe people’s assertions until they can substantiate them with objective facts. You will gently stop people when they try to give you information that is not important, such as the history of the world.

I have witnessed many a time in many organizations how new hires are given stacks of documents to read without much guidance from anyone on what to pay attention to and what to disregard. Having spent a week in this paper morass, they are none the wiser and confused. What a waste of time. I can compress that week to one hour.

Business Acumen

Having business education and experience is an incredibly powerful tool. First, it allows one to do some homework by analyzing the state of the industry and, often, the state of the organization you are joining. The simplest of things, the ability to read and interpret financial statements, often provides sufficient insight into the potential issues and pressures in the organization, even before you join it.

The ability to use correct business language enables one to effectively communicate with decision makers and extract the requisite information. Understanding key business activities and processes, and their variations, permits one to identify anomalies and deviations, potential problems and inconsistencies.

Patterns and Perspective

Never ever in my consulting career have I come across these two things: an organization that did not claim to be a “fast-paced environment” and a client who did not think that his or her project or problem was unique. Having the business knowledge and experience makes one realize that, while different industries and business environments provide for different content, key processes and typical issues remain roughly the same.

The ability to identify patterns is, therefore, critical for taking one’s bearing in new surroundings and is akin to knowing what a wheel looks like vs. inventing one. Application of patterns is something we all use in our everyday lives, most often subconsciously. When presented with a problem, our brain applies prior experiences, adds new variables and arrives at a solution. This is natural for all of us.

What is not natural is the ability to constantly question one’s thinking and the validity of applying past patterns in a particular situation. In fact, less experienced individuals in any profession often claim to “have seen it all” and fail when the issue happens to be more complex than it appeared.

Such awareness of the potential vulnerability of one’s patterns and models is not a weakness but a great strength which provides for viable, high quality recommendations and ideas.

I could continue with the list, but this is a good start. In fact, this is a start with no finish because there is no end to learning. Ever!


Ilya Bogorad is the Principal of Bizvortex Consulting Group Inc, a management consulting company located in Toronto, Canada. Ilya specializes in building better IT organizations and can be reached at [email protected] or (905) 278 4753. 02/09

Everything old will be new again

Toronto – Just as a great mechanic can extend the life of an older car, a project consultant could be the Mr. Goodwrench of a systems upgrade.

More than one-quarter (26 per cent) of chief financial officers (CFOs) recently interviewed said financial systems upgrades top their list of projects for which they are likely to bring in financial consultants over the next three years.

The survey was developed by Robert Half Management Resources, the premier provider of senior-level accounting and finance professionals to supplement companies’ project and interim staffing needs. It was conducted by an independent research firm and is based on interviews with more than 270 CFOs across Canada.

CFOs were asked, “In which one of the following areas are businesses most likely to bring in financial consultants or project professionals over the next three years?”

Their responses:

  • Financial systems upgrades ………. 26%
  • Corporate governance ………………. 13%
  • Mergers and acquisitions ……………….9%
  • Business process re-engineering …….8%
  • Turnaround management ……………… .5%
  • None ……………………………………………4%
  • Don’t know/no answer …………………. 35%

“Even during this current economic climate, many companies continue to replace or modify outdated financial systems to improve efficiency,” said David King, executive vice president of Robert Half Management Resources. “To help implement these initiatives, firms need highly skilled and experienced financial professionals for only a finite period of time.”

King added that the use of consultants to augment staff can result in less need for continual layoffs and rehiring due to business fluctuations. “Using project professionals is a cost-effective staffing strategy that can offer flexibility and savings as well as increased productivity, profitability and morale among existing staff.”

The national study was developed by Robert Half Management Resources. It was conducted by an independent research firm and is based on more than 270 telephone interviews with CFOs from across Canada.

Innotas Releases Latest Update to its On-Demand PPM Platform

San Francisco, CA – Innotas (www.innotas.com) has announced the availability of the latest release of its On-Demand PPM Platform, including enhancements to application portfolio management and Web Services APIs.  Ideal for IT departments of almost any size, this latest update of Innotas On-Demand PPM (http://www.innotas.com/solutions/index.html) enables more dynamic creation and maintenance of portfolios; powerful roll-ups of data at the portfolio level; and extended flexibility in modeling portfolios with unlimited hierarchy levels.

With the newly enhanced Application Portfolio Management (http://www.innotas.com/capabilities/apm.html), managers can now capture budget and spend against projects and applications, hugely critical for determining ROI and evaluating which projects and resources are most critical to the success of the organization. Additionally, projects can be linked to portfolios directly from a project, enabling managers to see which portfolios a project is linked to (including allocation % and other portfolio details) directly from the project.

Innotas On-Demand PPM (http://www.innotas.com/capabilities/index.html) provides both senior management and day-to-day team contributors with tools to manage and monitor projects, resources and portfolios. The new release expands these capabilities for a vastly improved user experience. For reporting, dashboards and searches for projects and resources, the project filter has been enhanced to allow projects to be filtered based on the portfolios to which the project is linked. For example, you can filter resources in the Capacity and Demand screens (based on all projects in a portfolio), or define filters to generate project lists based on portfolios.

“Based on our initial expectations of the Software-as-a-Service model, and the concept of shared application code, we’ve been surprised with how easy it was to configure Innotas and gain the “custom” configuration and visibility we required, said Douglas Badger, CGA CISA CGEIT, director, IT Portfolio Management & Systems Assurance, Office of the CIO, University of Guelph.

Continued Badger, “For example, we look at configuration in three tiers: “self-serve” (i.e. changes a customer can make for him/herself), changes that require assistance from support (i.e. our Customer Success Manager), and changes which may or may not be made by the application developers. In years past, this kind of deep configuration would have required a very expensive, installed solution that would have taken months to deploy plus a huge learning curve for our users. Instead of relying on a “typical” project management office, with Innotas On-Demand PPM we can build, manage and gain greater visibility into a higher-level portfolio structure, which we can then break down into IT Assets and IT Demand.”