Showing posts with label ROI. Show all posts
Showing posts with label ROI. Show all posts

May 4, 2019

Getting The Biggest Bang For The Buck

So I had the opportunity to sit in on a colleague teaching a class in Performance Improvement. 

One tool that I really liked from the class was the Impact-Effort Matrix. 

To determine project worth doing, the matrix has the:

Impacts (Vertical) - Improved customer satisfaction, quality, delivery time, etc.

Effort (Horizontal) - Money, Time, etc. 

The best bang for the buck are the projects in upper left ("Quick Wins") that have a high impact or return for not a lot of effort. 

In contract, the projects that are the least desirable are in the lower right ("Thankless Tasks") that have a low impact or return but come at a high cost or lot of effort. 

This is simple to do and understand and yet really helps to prioritize projects and find the best choices among them. ;-)

(Source Graphic: Andy Blumenthal)
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May 3, 2019

What Are The Chances for IT Project Success?

So I was teaching a class in Enterprise Architecture and IT Governance this week. 

In one of the class exercises, one of the students presented something like this bell-shaped distribution curve in explaining a business case for an IT Project. 

The student took a nice business approach and utilized a bell-shaped curve distribution to explain to his executives the pros and cons of a project. 

Basically, depending on the projects success, the middle (1-2 standard deviations, between 68-95% chance), the project will yield a moderate level of efficiencies and cost-savings or not. 

Beyond that:

- To the left are the downside risks for significant losses--project failure, creating dysfunction, increased costs, and operational risks to the mission/business. 

- To the right is the upside potential for big gains--innovations, major process reengineering, automation gains, and competitive advantages. 

This curve is probably a fairly accurate representation based on the high IT project failure rate in most organizations (whether they want to admit it or not). 

I believe that with:
- More user-centric enterprise architecture planning on the front-end
- Better IT governance throughout
- Agile development and scrum management in execution 
that we can achieve ever higher project success rates along the big upside potential that comes with it!  

We still have a way to go to improve, but the bell-curve helps explains what organizations are most of the time getting from their investments. ;-)

(Source Graphic: Adapted by Andy Blumenthal from here)
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November 14, 2016

Beautiful Rise and Fall

Just wanted to share this beautiful Fall scene in Maryland.

While we are about to embark on a major infrastructure spending spree to make this country great again--and we need it to fix all the rot in our roads, bridges, trains, airports, marine ports, schools, utilities, and more--at the same time, we need to keep in mind the safeguarding of the beauty of our natural outdoor spaces and resources.

I heard President-elect Trump on 60 Minutes last night speak about the $6 trillion that we have spent in the Middle East fighting terrorism since 9/11, and that with that money, we could've rebuilt our infrastructure twice over.

While the amount is seen on the high end, the point is that while other nations are investing in their infrastructure, people, and future, we are wasting large sums of blood and treasure in a fight that in over 15 years, we haven't won, and many question whether we are significantly even any safer.

We need to fight smarter, spend more strategically, and take care of America first.

BTW, what did we get from the prior investment from the American Recovery and Reinvestment Act stimulus spending of $831 billion in 2009...where did all that money go (uh, down the special interest drain)?

While the beautiful outdoors needs to stay pristine, our country needs to seriously rebuild with clear project expectations and results and at the same time wipe out the terror threats against us--no more dabbling, PC, Mr. Nice Guy (of course, we need to be nice to those that are nice to us, but also we need to fight for this country like we mean it)!

That's a big agenda, but for under $6 trillion, we ought to be able to get some decent return on our investment please, ;-)

(Source Photo: Andy Blumenthal)
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March 4, 2013

Seasaw, Yeah It's For Kids


There is an interesting new crowdsourcing application called Seesaw.

And like a seesaw goes up and down, you can take a picture and crowdsource decisions--thumbs up or down for what you should do.

Food, clothes, movies, more--I could imagine people even going so far as to use this for dating--Go out with them or not? Keep 'em or dump 'em?

While the possibility of having others chime in on your everyday life decisions is somewhat intriguing, social and fun...it also seems a little shallow and superficial.

Do you really need to ask your friends about everything you do or can you make simple day-to-day decisions yourself?

And when it comes to big decisions, perhaps you need more than a picture with a thumbs up or down to give the decision context, evaluate pros and cons, think through complex issues, and make a truly thoughtful decision--perhaps some genuine dialogue would be helpful here? 

Finally, many decisions in life come at the spur of a moment--should I or shouldn't I--and you don't have the benefit of saying hold on "let me take a picture and get some of my friends opinions on this"--life waits for no one and timing is often everything!

It is good to get other people's opinions (i.e. the proverbial "second opinion") as well as to do what my father used to tell me which is to "sleep on it," because things look different over night and in the morning.

But while you should consider what others think--in a meaningful way--in the end, you need to trust your inner self and take responsibility for your own decisions. ;-)

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May 25, 2011

Apples or Oranges

There are lots of biases that can get in the way of sound decision-making.

An very good article in Harvard Business Review (June 2011) called "Before You Make That Big Decision" identifies a dozen of these biases that can throw leaders off course.

What I liked about this article is how it organized the subject into a schema for interrogating an issue to get to better decision-making.

Here are some of the major biases that leaders need to be aware of and inquire about when they are presented with an investment proposal:


1) Motivation Errors--do the people presenting a proposal have a self-interest in the outcome?

2) Groupthink--are dissenting opinions being actively solicited and fairly evaluated?

3) Salient Analogies--are analogies and examples being used really comparable?

4) Confirmation Bias--has other viable alternatives been duly considered?

5) Availability Bias--has all relevant information been considered?

6) Anchoring Bias--can the numbers be substantiated (i.e. where did they come from)?

7) Halo Effect--is success from one area automatically being translated to another?

8) Planning Fallacy--is the business case overly optimistic?

9) Disaster Neglect--is the worst-case scenario imagined really the worst?

10) Loss Aversion--is the team being overly cautious, conservative, and unimaginative?

11) Affect Heuristic--are we exaggerating or emphasizing the benefits and minimizing the risks?

12) Sunk-Cost Fallacy--are we basing future decision-making on past costs that have already been incurred and cannot be recovered?

To counter these biases, here are my top 10 questions for getting past the b.s. (applying enterprise architecture and governance):

1) What is the business requirement--justification--and use cases for the proposal being presented?

2) How does the proposal align to the strategic plan and enterprise architecture?

3) What is return on investment and what is the basis for the projections?

4) What alternatives were considered and what are the pros and cons of each?

5) What are the best practices and fundamental research in this area?

6) What are the critical success factors?

7) What are the primary risks and planned mitigations for each?

8) What assumptions have been made?

9) What dissenting opinions were there?

10) Who else has been successful implementing this type of investment and what were the lessons learned?

While no one can remove every personal or organizational bias that exists from the decision-making equation, it is critical for leaders to do get beyond the superficial to the "meat and potatoes" of the issues.

This can be accomplished by leaders interrogating the issues themselves and as well as by establishing appropriate functional governance boards with diverse personnel to fully vet the issues, solve problems, and move the organizations toward a decision and execution.
Whether the decision is apples or oranges, the wise leader gets beyond the peel.

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November 22, 2009

Personal Technology Trumps Work IT

The pendulum has definitely swung—our personal and home technology is now often better than what we are using in the office.

It wasn’t always that way. Early on, technology was mysterious to those not professionally engaged as system engineers or IT professionals. Technology was expensive and made sense for business purposes, but not for home use. IT was a professional enabler to get the job done, but consumer applications were scarce and not intuitive for anything but the office.

The world has turned upside down. Now as consumers, we are using the latest and greatest computers, smart phones, gaming devices, and software applications, including everything social media and e-Commerce, while in the office, we are running old operating systems, have nerdy phones, locked down computers, applications that aren’t web-enabled, and social media that is often blocked.

The Wall Street Journal (16 November 2009) summed up the situation this way:

“At the office, you’ve got a sluggish computer running aging software, and the email system routinely badgers you to delete message after you blow through the storage limits set by your IT department. Searching your company’s internal website feels like being transported back to the pre-Google era of irrelevant results…This is the double life many people lead: yesterday’s technology for work, today’s technology for everything else…The past decade has brought awesome innovations to the marketplace--Internet search, the iPhone, Twitter, and so on, but consumers, not companies, embrace them first and with the most gusto.”

What gives and why are we somehow loosing our technical edge in the workplace?

Rapid Pace of Change—We have been on technological tear for the last 20 years now; virtually nothing is the same—from the Internet to cloud computing, from cell phones and pagers to smart phones and iPhones, from email to social media, and so much more. From a consumer perspective, we are enamored with the latest gadgets and capabilities to make our life easier and more enjoyable though technology. But at work, executives are tiring from the pace of technological change and the large IT budgets that are needed to keep up with the Jones. This is especially the case, as financial markets have seized in the last few years, credit has tightened, revenue and profitability has been under extreme pressure, and many companies have laid off employees and others have even gone kaput.

Magnificent Technology Failures—Along with the rapid pace of change, has come huge IT project failure rates. The Standish group reported this year that 82% of IT projects are failing or seriously challenged. Why in the world would corporate executives want to invest more money, when their past and present IT investments have been flushed down the toilet? Executives have lost faith in IT’s ability to upgrade their legacy systems and fulfill the promises behind the slew of IT investments already made. Related to this is the question of true cost-benefit and total cost of ownership of all the new technologies and their associated investments—if we haven’t been able to achieve or show the return on investment on all the prior investments, why should we continue investing and investing? Is the payoff really there? Perhaps, we are better off putting the dollars into meeting core mission requirements and not overhead, like IT?

Security Risks Abound—With all the technology has come a whole new organizational risk set in terms of IT security. Organizations are hostage to cyber criminals, terrorists, and hostile nation states who can with a few keyboard strokes or mouse clicks disable the company transaction capability, wipe out its memory, steal its information, or otherwise neutralize it from functioning. And the more technology we add, the more the risk level seems to increase. For example, the thinking goes that we were safer when we ran everything in a locked down, tightly controlled, mainframe environment. The more we push the envelope on this and have moved to client server, the web, and now to even more transparency, information sharing, and collaboration—through social media, cloud computing, and World 2.0—the thinking is that we are potentially more open to local and global threats than ever before. Further, with the nation under virtually constant cyberattack and our capabilities to slow or stop these attacks seemingly not existent at this time, executives are reluctant to open up the technology vulnerability spigot any further.

While there are many other reasons slowing or impeding our technology adoption at work, we cannot stop our march of IT advancement and progress.

We are in a global competitive marketplace and the world waits for no one. The problems resulting from the speed and cost of change, the high IT project failure-rate, and the cybersecurity danger/challenges cannot be allowed to inhibit us from progress. We must address these issues head on: We have got to achieve efficiencies from technological advancement and plow the cost-savings into next generation technologies. We have got to drastically improve our IT project success rate though mature implementations of enterprise architecture, IT governance, project management, customer relationship management, and performance measurement (Reference: The CIO Support Services Framework). And we must invest heavily in IT security—with money, people, policy, training, new technology safeguards, and more.

Innovation, technological prowess, and information superiority is what gives us our edge—it is tip of our spear. So yes, we must carefully plan/architect, wisely invest, execute well, and secure our IT. But no, we cannot dismiss the evolving technologies outright nor jump in without proper controls. We must move rationally, but determined into the future.


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September 21, 2009

Testing EA in Virtual Reality

In enterprise architecture, we develop IT targets and plans for the organization, but these are usually not tested in any meaningful or significant way, since they are “future tense”.

Wouldn’t it be incredible to be able to actually test EA hypotheses, targets, and plans in a virtual environment before actually setting off the organization in a specific direction that can have huge implications for its ability to conduct business and achieve results?

MIT Technology Review, in an article entitled “The Fleecing of the Avatars” (Jan/Feb 2008) addresses how virtual reality is being used to a greater extent to mimic and test reality.

One example of the booming virtual world is Second Life, run by Linden Labs. It has 10,000,000 subscribers and “about 50,000 are online at any one time.” In this virtual world, subscribers playing roles as avatars “gather to role-play reenactments of obscure digital Star Trek cartoon episodes, build and buy digital homes and furniture, and hang out on digital beaches.”

However, more and more virtual worlds, like Second Life, are being used by real world mainstream businesses. For example, many companies are developing a presence in the virtual world, such as Dell with a sales office in Second Life, Reebok a store, and IBM maintains business centers in this virtual world. Further, “the World Bank presented a report in Second Life about business development.”

“But big companies like Sun, Reebok, and IBM don’t really do business in virtual worlds; they ‘tunnel’ into them. [In other words,] To close a deal, you need to step out of the ‘sim’ and into the traditional Sun or Reebok or IBM website.”

The development of company’s virtual presence online and their connection back to the real world is potentially a precursor to planning disciplines like EA testing out hypotheses of targets and plans in virtual reality and then actually implementing these back in the real organization.

Others are actually planning to use virtual worlds to test and conduct research. So there is precedent for other disciplines such as EA. For example, Cornell’s Robert Bloomfield, an experimental economist, “conducts lab research—allowing 20 students to make simulated stock trades using real money…and seeing how regulatory changes affect their behavior. He envisions a day when he can do larger studies by setting up parallel virtual worlds. ‘I could create two virtual worlds, one with legal structure, one with another, and compare them…I might lower the capital-gains tax in one and see how business responds. There are things I can’t do with 20 people in a classroom but I can do with 2,000 or 20,000 people in a virtual world.”

Could enterprise architecture do something similar in a virtual world? For example, could we test how business processes need to change when new technology is introduced or how information sharing improves with better architectures for discovering and exchanging data? How about testing people’s reactions and behavior to new systems in a broader virtual world instead of with a more limited number of customers in user acceptance testing? Another possibility is testing the effectiveness of new IT security in a virtual world of gamers and hackers?

Modeling and simulation (M&S) can improve enterprise architecture by testing plans before deploying them. We need to to hire and train people with knowledge, skills, and experience in the M&S discipline and with tools that support this. Then we can test hypothetical return on investment for new IT investments before we open our organizational wallets.


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August 21, 2009

Taking the Politics out of Enterprise Decision Making

Some people say power is primarily exerted through military might (“hard power”), others says it is through use of diplomacy—communications, economic assistance, and investing in the global good (“soft power”). Then, there is a new concept of employing the optimal mix of military might and diplomacy (“smart power”).

It’s interesting to me how the Department of Defense—military approach—and the Department of State—diplomatic approach—is as much alive and well in our enterprises as it is in the sphere of world politics to get what we want.

At work, for example, people vie—some more diplomatically and some more belligerently—for resources and influence to advance their agendas, programs, projects, and people. This is symptomatic of the organizational and functional silos that continue to predominate in our organizations. And as in the world of politics, there are often winners and losers, rather than winners and winners. Those who are the “experts” in the arts of diplomacy and war (i.e. in getting what they want) get the spoils, but often at the expense of what may be good for the organization as a whole.

Instead of power politics (hard, soft, or smart), organizations need to move to more deliberate, structured, and objective governance mechanisms. Good governance is defined more by quantifiable measures than by qualitative conjecture. Sound governance is driven by return on investment, risk mitigation, strategic business alignment, and technical compliance rather than I need, want, like, feel, and so forth. Facts need to rule over fiction. Governance should not be a game of power politics.

Henry Mintzberg, the well-known management scholar, identified three mechanisms for managers to exert influence in the organization (Wall Street Journal, 17 August 2009):

1. Managing action—“managers manage actions directly. They fight fires. They manage projects. They negotiate contracts.” They get things done.

2. Managing people—“managers deal with people who take the action, so thy motivate them and they build teams and they enhance the culture and train them and do things to get people to take more effective actions.”

3. Managing information—“managers manage information to drive people to tale action—through budgets and objectives and delegating tasks and designing organization structure.”

It is in the third item—managing information—that we have the choice of building sincere business cases and creating a genuine call to action or to devolve into power politics, exerting hard, soft, and smart influence to get what we want, when we want it, and how we want it.

When information is managed through the exertion of power, it can be skewed and distorted. Information can be manipulated, exaggerated, or even buried. Therefore, it is imperative to build governance mechanisms that set a level playing field for capturing, creating, calculating, and complying with a set of objective parameters that can be analyzed and evaluated in more absolute terms.

When we can develop decision support systems and governance mechanisms that take the gut, intuition, politics, and subjective management whim out of the process, we will make better and more productive decisions for the enterprise.


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November 3, 2008

A Postmodernist Approach to Enterprise Architecture

It’s a crazy world out there. Just about every argument a counter-argument, every theory a contrary theory, every point a counter-point: whether we are watching the Presidential debates, open session on Capitol Hill or at the United Nations, The Supreme Court or Court TV, bull or bear on the stock market, religious and philosophical beliefs, and more. Even what some deemed scientific “facts” or religious doctrine are now regularly debated and disputed. Some examples: Creation or “Big Bang,” global warming or cyclical changes in the Earth’s atmosphere, peak oil theory or ample supplies, right to life at conception or at some point of maturation, cloning and stem cells or not, criminal punishment or rehabilitation—it seems like there is no end to the argument.

So what are we to believe?

For those who are religious, the answer is simple, you believe what you have been taught and accept as the “word of G-d.” This is straightforward. However, the problem is that not everyone adheres to the same religious beliefs.

For those that believe in “following their hearts”, gut, intuition, then we have very subjective belief systems.

For those that only “believe what they see” or what is “proven”, then we are still left with lots of issues that can’t be proved beyond a doubt and are open to interpretation, critical thinking, teachings, or which side of the bed you woke up on that day.

Fortune Magazine, 27 October 2008, has an article on Saudi Arabia’s Aramco, “the state-owned national oil company…it’s daily profit is 21/2 times that of Exxon Mobil, the world’s most profitable publicly held company.” Aramco’s annual report contains details about “daily oil and natural gas production, the number of wells it drills, exports, refinery outputs, and more. The only problem: Since it contains no audited financial numbers, it’s hard to know what to believe.”

Similarly, “it warms readers not to listen to scaremongers spreading the ‘misperception’ that future supplies may not meet global demand. The world’s resources, it says are sufficient for well over a century—and when technological advances are factored in, for another 100 years after that.”

It’s hard to know who and what to believe, because usually those presenting “a side” have a vested interest in the outcome of a certain viewpoint. Hence all the lobbyists in Washington!

For example, Aramco and OPEC have a vested interest in everyone believing that there is plenty of oil to go around and stave off the research and development into alternatives energy sources. At the same time, those who preach peak oil theory, may have an interest in energy independence of this country or they may just be scared (or they may be right on!).

From an enterprise architecture perspective, I think the question of getting to the truth is essential to us being able to plan for our organizations and to make wise investment decisions. If we can’t tell the truth of a matter, how we can set a direction and determine what to do, invest in, how to proceed?

Of course, it’s easy to say trust but verify, validate from multiple sources, and so on, but as we saw earlier not everything is subject to verification at this point in time. We may be limited by science, technology, oppositional views, or our feeble brain matter (i.e. we just don’t know or can’t comprehend).

When it comes to IT governance, for example, project sponsors routinely come to the Enterprise Architecture to present their business cases for IT investments and to them, each investment idea is the greatest thing since Swiss cheese and of course, they have the return on investment projections, and subject matter expert to back them up. Yes, their mission will fail without an investment in X, Y, or Z and no one wants to be responsible for that, of course.

So what’s the truth? How do we determine truth?

Bring in the auditors? Comb through the ROI projections? Put the SMEs on the EA Board “witness stand” or take them to a back room and interrogate them. Perhaps, some water boarding will “make them talk”?

Many experts, for example, Jack Welch of GE and other high profile Fortune 500 execs, including the big Wall Street powerhouses (Bear Stearns, Lehman Brothers, AIG, Fannie/Freddie) call for asking lots of questions—tearing this way and that way at subordinates—until the truth be known. Well look at how many or most of these companies are doing these days. “The truth” was apparently a lot of lies. The likes of Enron, WorldCom, HealthSouth, and on and on.

So we can’t underestimate the challenge of getting to truth and planning and governing towards a future where argument and questions prevail.

Perhaps the answer is that truth is somewhat relative, and is anchored in the worldview, priorities, assumptions, and constraints of the viewer. From this perspective, the stock market crashes not necessarily or only because businesses are poorly run, but because investors believe that the bottom has fallen out and that their investments are worthless. Similarly, from an enterprise architecture perspective, the baseline/target may not be an objective set of “where we are” vs. “where we want to be,” but “how we perceive ourselves and are perceived by others now” vs. “how we want to be perceived in the future.”

This approach is not wholly new—this is the postmodern attitude toward the world that academics have been preaching for decades. What is unique is the application of postmodernism and relativism to the IT/business world and the recognition that sometimes to understand reality, we have to let go of our strict addiction to it.


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September 12, 2008

“Postmodern IT” and Enterprise Architecture

We all want to know where IT is going in the future, what the trends are, so we can meet our future in it head-on.

CIO Magazine, 1 May 2006, had an article called, “The Postmodern Manifesto”, predicting what the postmodern IT department will look like. 2+ years have passed (a long time in IT according to Moore’s Law), but these IT trends remain solid and true.

  • Business innovation—“IT will assume responsibility for business innovation across the company. IT has spent the better part of 40 years automating business processes…IT’s role in process innovation will only increase…’we’ve gone from being the engineers of new processes to being the movers of innovation across the company,’” says Judith Campbell CIO of New York Life.

This view is consistent with the Federal Enterprise Architecture Practice Guidance, November 2007 that states: “Results-oriented architecture is developed with the context of the Performance Improvement Lifecycle broken down into three-phases: ‘Architect’, ‘Invest’ and ‘Implement’. Each lifecycle phases is comprised of tightly integrated processes which combine to transform an agency’s top-down strategic goals and bottom-up system needs into a logical series of work products designed to help the agency achieve strategic results.”

Bottom line is the IT function and enterprise architecture in particular is viewed as the discipline for business process reengineering, improvement, and the introduction of new technologies, and the measure of success is results—cost-savings, cost-efficiencies, and performance improvements.

  • Federated governance—“IT governance will settle on the federated model and shared services…CIO’s have come to a consensus on the overall model for IT: a mix of centralized and local services known as the federated model, which is governed centrally by a small headquarters staff that gives varying degrees of autonomy to IT groups allied with different business units, functions or geographies.”

This is consistent with the need for IT organizations to be interoperable, secure, share information and services, and be cost effective, yet at the same time stay nimble and allow “unique resources to remain local.”

  • Return on Investment (ROI)—“IT ROI will become even more difficult to prove…Tacit IT is not about automation…Tacit IT is all about decision support, knowledge management, business intelligence and artificial intelligence…And the pressure will be on vendors to make technology think rather than automate.”

IT has always been challenged in measuring return on investment (or in the government return on mission), but it is especially difficult when it comes quantifying the return on an abstract called information.

This performance measurement challenge is manifest in the field of enterprise architecture as well.

At the 1105 Government Information Group Enterprise Architecture Conference in DC this past week, Keith Herrington of the Defense Intelligence Agency (DIA) presented the following:

“• Observation: Within the Federal government there is no observed link between the maturity of the enterprise architecture effort and the performance of the enterprise as a whole.”

I too have personally seen many agencies struggle to quantify the results of their IT and architecture programs and hence, anecdotal evidence, unfortunately continues to prevail as the default “measurement.”

  • Transformation—“CIOs will have to step up…’the concept of providing a secure, stable infrastructure is merely the price of admission,’ says Jeffrey Campbell, CIO of BNSF Railway. ‘[to survive], you have to be a transformational CIO.’”

So true! According to an article in Architecture and Governance Magazine, Volume 3, Issue, “Metrics that Matter”: “IT should measure three types of attributes in what is essentially a modified form of the Balanced Scorecard approach to measure performance and change management. Those three attributes are: strategic value, project management effectiveness, and operational effectiveness. Ironically, while the first two matter the most to executives in most cases, IT typically focuses on the third area, which executives only care about if the IT department has a history of failure and thus needs to be closely monitored on the basics.”

Yes, we need to make sure the IT computer and server “lights” stay on, the network is up and the communications are available, but more importantly we need to take IT to the next level, to strategically partner with the business to architect, govern, and achieve genuine, measureable ROI and transformation!


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May 12, 2008

IT Portfolio Management and Enterprise Architecture

“IT portfolio management is the application of systematic management to large classes of items managed by enterprise information technology (IT) capabilities. Examples of IT portfolios would be planned initiatives, projects, and ongoing IT services (such as application support). The promise of IT portfolio management is the quantification of previously mysterious IT efforts, enabling measurement and objective evaluation of investment scenarios.” (Wikipedial)

IT portfolio management is a way of categorizing IT investments and analyzing them to ensure sound IT investment decisions. IT portfolios are frequently evaluated in terms of their return, risk, alignment to strategy, technical merit, and diversification.

Why do we need IT portfolio management—why not just assess each project/investment on its own merit?

The added value of developing and evaluating IT portfolios is that you can ensure the diversification of your investments across applications and infrastructure; new systems/major enhancement to existing systems and operations and maintenance; new R&D, proof of concepts, prototypes, and pilots; between strategic, tactical, and operational needs, and across business functions.

ComputerWorld Magazine, 7 April 2008, reports that Hess Corp., a leading global independent energy company, developed creative IT portfolios based on three types of initiatives:

  1. Bs—“business applications or business process improvement effort that’s aimed at increasing revenue or generating cost savings.”
  2. Es—“enablers” or projects to support business applications such as business intelligence, analytical systems, master data management, systems integration.
  3. Ps—“process improvement within the IT organization itself” such as standardizing the approach to applications development (systems development life cycle), project management, performance management, IT governance, and so on.

From an enterprise architecture perspective, we develop the target architecture and transition plan and assess IT investments against that. Again, rather than develop targets and plans and conduct assessments based solely on individual investment alone, EA should look at the aggregate investments by IT portfolios to ensure that the EA plan and subsequent investments are properly diversified. An EA plan that is overweighted or underweighted in particular IT investment categories can have a negative to disastrous effect on the organization.

IT investments represent significant expenditures to organizations and IT is a strategic enabler to mission, so messing up the IT plan with poor investment targets and decisions is costly to the enterprise.


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