IT Investment Management Overview

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  • Emphasis here is that ITIM is the foundation and was established in the CTM Policy adopted by the ITIB in 2004. The ITIB, ITSP process, and RTIP process are all ITIM processes.
  • On the first three bullets: Explain investments are often not linked to a specific long term business strategic goal, they are more than likely a reactive type investment linked to daily operations. Talk about how, after having made an investment decision, is that investment controlled an maintained. Explain that in general investments are made in isolation, in traditional stovepipes. Explain as identified in the Commonwealth’s Strategic Plan for Information Technology that a high-level standardized view of investments will allow the Commonwealth and agencies to identify like investments and leverage one another for the greater good. Explain that in leveraging investments and identifying commonality there is a great potential at all levels (agency and Commonwealth) to release capital that would otherwise be allocated to a potential duplicate effort. The blue box: Explain that ITIM is a methodology employed by the business to select, control and evaluate I.T. investments. It produces investments that are aligned to the strategic direction of the business. Through the use of portfolios and portfolio management it provides views of investments from multiple levels. (i.e. Program, agency, Commonwealth etc.) What is in it for Me? Why would I implement ITIM? Well, you may need ITIM if: your project has gotten down to user acceptance testing and you can’t get users to participate you are trying to get someone in your organization to prioritize all of your agency’s projects and you can’t find anyone who is willing to do it you know your organization is spending 9 million dollars a year on IT but you don’t know on what you ordered a Corolla and got a Cadillac or better yet, you ordered a Corolla and got a Schwinn you don’t understand on a day to day basis what to work on
  • Quote is from the CTM Policy adopted by the ITIB in 2004. Emphasis here is that ITIM is the foundation.
  • As the slide is revealed, explain the sequence in which the elements of the Performance Leadership model have been established over the past several years starting with the establishment of the Council on Virginia’s Future in 2003. Council is composed of representatives from GA, Governor, Cabinet, and private citizens. Its purpose is to provide the Commonwealth perspective . Commonwealth Strategic Planning Process was revised with the long term objective of moving to performance based budget ing. The IT strategic plan is now a part of the business plan. Commonwealth Strategic Plan for Information Technology is based upon stakeholder input and provides the strategic direction for IT from a Commonwealth perspective. These three elements comprise the Commonwealth Strategic Planning Process – a concept which will be referred to later on in the presentation. ITIM is the next component/building block or piece of the puzzle, in Performance Management. The fundamental principals of investment management support the concept of ‘Efficiency and Effectiveness’. What does the Commonwealth get from performance leadership? A number of substantial benefits. (see right hand side of slide)
  • Investment Views: Investment management gives the ability to create views of investments at different levels within the organization. These views roll up from the bottom or drill down from the top. Analyze Investments Are there investment opportunities within my portfolio? Once the investment picture has been developed, investments can be analyzed for commonality to determine enterprise or collaboration opportunities. The ability to identify and release potential internal capital will occur at all levels. Leverage Investments As in the potential identification and release of internal capital, understanding the alignment of investments to strategic direction at multiple levels will also provide the ability to ensure investments are contributing to a common goals and the ability to leverage that circumstance. The objective is to do the right things at the right time. Where do I want to invest my IT dollars?
  • Remember the Commonwealth Strategic Planning Process discussed earlier on in the presentation? This slide explains how this process interfaces with the ITIM process. The Commonwealth Strategic Planning Process feeds business plans and needs into the ITIM process. The ITIM process answers the questions listed on this diagram and returns a solution set of investment results to the Commonwealth Strategic Planning Process. Mention that ITIM information is housed in a tool of some sort. ProSight is the tool of choice for the Commonwealth.
  • Why ITIM, Why Now? Recall the Secretary of Technology’s presentation at the COVF meeting (Oct. 30, 2006). These are three slides taken from his presentation. Slide 1: The Commonwealth must find ways to meet increasing demands. Cost savings was one of the solutions offered up. Through the sound analysts and selection of new investments potential cost savings can be found. Slide 2: The ability to lower operation costs was also targeted. Through ITIM/Portfolio management comes the ability to analyze on-going operational investments to reconsider their viability and contribution to the organizations direction. This analysis has the potential to lower costs and cheaper alternatives are found and redundant investments retired. Slide 3: As demonstrated in the third slide some of the best performers are innovators, as Alan Greenspan pointed out increases in productivity can be directly attributed to the incorporation of innovative technology, then it follows that the ability for an organization to have a standard consistent and innovative method for handling I.T. investments is essential.
  • ITIM is not a silver bullet. It is a cultural change focused on the business side of the organization. That is why ITIM comes with a maturity model. It takes time. It doesn’t happen overnight. At COVITS this past Fall, AARP gave a presentation about their experiences with investment management , in particular enterprise portfolio management. This slide is from that presentation and reinforces the fact that this is an evolutionary process and not without challenges.
  • How the tool unifies the investment portfolio components - assets, projects, procurements, services, and the Commonwealth Strategic Planning Process – with the ITIM process. “ ITIM is the basis for the Commonwealth’s approach to technology management” ProSight is the enabling technology that ties together all the components of the CTM Policy.
  • First bullet. VITA, under the direction of the state CIO will be establishing Customer Advisory Groups for each of its directorates. Second bullet. These groups will consist of appropriate state agency executive leaders based upon the function of the directorate. Some Customer Advisory Groups may consist of predominantly IT people, while others may consist of predominantly business people, and again another group may have a mix. Third bullet. The role of the groups will be as customers to advise their respective VITA divisions on day to day operational issues/schedules and in the development and implementation of Commonwealth initiatives. Forth bullet. One of the first Commonwealth initiatives do be addressed by the Customer Advisory Group for the IT Investment and Enterprise Solutions directorate will be the implementation of ITIM. This Customer Advisory Group will be made up of predominantly business people.
  • Explain that the first level in maturity is to ensure that everyone has a level of knowledge and awareness of ITIM. Therefore the first step to achieve level 1 maturity is an education campaign on the methodology, its benefits, its tie to performance leadership and how it will be implemented. Explain the necessity and benefits of the portfolio management tool. Explain the standards and guidelines. How the standard is the frame with minimum requirements and the guideline is a suggested way an entity may want to implement the methodology.
  • IT Investment Management Overview

    1. 1. Commonwealth of Virginia I nformation T echnology Sponsored By Administered By I nvestment M anagement Overview
    2. 2. Commonwealth of Virginia ITIM Purpose To provide a general understanding of the ITIM concept and how it is implemented in the Commonwealth at the enterprise level
    3. 3. <ul><li>How are investments in information technology controlled at an agency and Commonwealth level ? </li></ul>Commonwealth of Virginia ITIM <ul><li>How can these investments be leveraged? </li></ul><ul><li>How can leveraging generate ‘internal capital’? </li></ul><ul><li>Leadership Questions </li></ul>Information Technology Investment Management (ITIM) <ul><li>A business investment methodology </li></ul><ul><li>A comprehensive view of investments from multiple levels </li></ul><ul><li>Investments aligned to strategic direction </li></ul>
    4. 4. Commonwealth of Virginia ITIM ITIM Defined A management process that provides for the identification (pre-selection), selection, control, and evaluation of (business driven) IT investments across the investment lifecycle. ITIM uses structured processes to minimize risks and maximize return on investments. ITIM is the basis for the Commonwealth’s approach to technology management as approved by the ITIB in the Commonwealth Technology Policy
    5. 5. <ul><li>ITIM within the Performance Leadership Model (PLM) </li></ul>Performance Leadership Virginia Maintains AAA Bond Rating Efficiency & Effectiveness Commonwealth of Virginia ITIM Benefits Best Managed State in the Nation Virginia: Best State for Businesses Commonwealth Information Technology Investment Management (ITIM) Long-Term Objectives Service Area Plans I.T. Strategic Plans Agency Strategic Plans Council on Virginia’s Future 2003 Commonwealth Strategic Planning Process 2005 Commonwealth Strategic Plan for Information Technology 2006
    6. 6. <ul><li>Managing & Leveraging Investments within the PLM </li></ul>Create a picture of investments Analyze investments and identify opportunities Leverage investment Alignment Investment Views Commonwealth of Virginia ITIM COV I.T. Strategic Plan (Collaboration) Agency Investments Agency Investments Agency Investments Secretariat Investments Secretariat Investments Commonwealth Investments Agency Priorities Governor’s Priorities & Strategic Initiatives
    7. 7. <ul><li>ITIM Process Overview (Framework for Commonwealth ITIM) </li></ul>Commonwealth of Virginia ITIM Pre-Select Control Business Plans & Needs Evaluate IT Investment Portfolio Management Tool Commonwealth Strategic Planning Process Select Investment Results Are the selected IT investments performing as planned? What proposed IT investments potentially solve business needs? Did the selected IT investments deliver the expected business value? Which IT investments best meet the business needs?
    8. 8. <ul><li>The Commonwealth must be innovative in the way in which it invests in I.T. </li></ul><ul><li>Why ITIM </li></ul><ul><li>Commonwealth goal of continuous improvement </li></ul><ul><li>The Commonwealth must find ways to meet increasing demands through cost savings and increased productivity </li></ul>“ Expand constituent impact through lower operation costs ” <ul><li>Investment management can contribute to lower operating costs and the generation of internal capital </li></ul>“ We must pursue more aggressive, transparent goals” Governor Tim Kaine Commonwealth of Virginia ITIM
    9. 9. Commonwealth of Virginia ITIM <ul><li>Maturity Levels </li></ul>
    10. 10. Commonwealth of Virginia ITIM ITIM Information Overview (Current and Future) IT Investment Portfolio (ProSight) ITIM Processes Commonwealth Strategic Planning Process Procurements Services (Future) Assets (Future) Projects
    11. 11. <ul><li>We decide we need a family car </li></ul><ul><ul><li>To go to work </li></ul></ul><ul><ul><li>To shop </li></ul></ul><ul><ul><li>For recreation </li></ul></ul><ul><ul><li>To travel </li></ul></ul><ul><ul><li>To be cool </li></ul></ul>Commonwealth of Virginia ITIM Pre-Select: A Simple Example – Buying a Car
    12. 12. <ul><li>Select among </li></ul><ul><ul><li>Price </li></ul></ul><ul><ul><li>Dependability </li></ul></ul><ul><ul><li>Safety </li></ul></ul><ul><ul><li>Gas Mileage </li></ul></ul><ul><ul><li>Sound System </li></ul></ul>Commonwealth of Virginia ITIM Select: A Simple Example – Buying a Car How do I choose? Which one is most important?
    13. 13. Commonwealth of Virginia ITIM Select cont’d: A Simple Example – Buying a Car $24,000 3 $22,000 4 $30,000 1 $27,000 2 Price Score Sound System Mileage Dependability Safety Car 13 3 30 MPG 3 YES 2 YES 2 Camry 10 2 22 MPG 2 NO 0 YES 2 Chevy 7 4 18 MPG 1 So So .5 So So .5 Voyager 9 1 35 MPG 4 YES 2 NO 0 Miata
    14. 14. <ul><li>Develop a purchase plan </li></ul><ul><li>Arrange financing </li></ul><ul><li>Drive carefully during the break-in period </li></ul><ul><li>Return to dealer for adjustments </li></ul>Commonwealth of Virginia ITIM Control: A Simple Example – Buying a Car
    15. 15. <ul><li>Monitor expenses </li></ul><ul><li>Perform routine maintenance </li></ul><ul><li>Are we satisfied with the car? </li></ul><ul><li>What would be do differently next time? </li></ul>Commonwealth of Virginia ITIM Evaluate: A Simple Example – Buying a Car
    16. 16. <ul><li>Customer Councils </li></ul><ul><li>VITA to establish Directorate level Customer Councils </li></ul><ul><li>Groups will consist of appropriate agency executive leadership representation. </li></ul><ul><li>Groups will work in a collaborative manner, to advise on day to day operational issues and the development and implementation of Commonwealth initiatives. </li></ul>Commonwealth of Virginia ITIM <ul><li>ITIM Customer Council to be established to guide future ITIM implementation. </li></ul>
    17. 17. <ul><li>Next Steps in ITIM Maturity </li></ul>Education and awareness campaign Roll out investment portfolio management tool Implement standards and guidelines for the use of ITIM (Future) Commonwealth of Virginia ITIM
    18. 18. Questions ? Commonwealth of Virginia ITIM Contact Information Constance Scott Supervisor, IT Investment Management IT Investment and Enterprise Solutions Virginia Information Technologies Agency 804-416-6179 [email_address]

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