PMI Virtual Library© 2007 Project Management Institute    IBMs Transformation from    Project to Program and    Portfolio ...
ucts and internal applications would become                       engagements staffed from the PDMthe foundation to addres...
With the addition of a tool to track               process transformation executives (PTEs) wereadherence to BTMS, the lev...
levels, and adherence to corporate standards             a highly reliable delivery organization. Withsuch as security, pr...
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Britton final 112607

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IBM's Transformation from Project to Program and Portfolio Management Member Content
- by William C. Britton, PMP
IBM Certified Executive Project Manager
To succeed, a number of project management processes, policies, and organizational constructs were established or reinforced to ensure consistent excellence in service delivery.

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Britton final 112607

  1. 1. PMI Virtual Library© 2007 Project Management Institute IBMs Transformation from Project to Program and Portfolio Management To succeed, a number of project management processes, policies and organizational constructs were established or reinforced to ensure consistent excellence in service delivery. By William C. Britton, PMP IBM Certified Executive Project Manager BM in the early 1990s was a much different base across major corporations, government I company than it is today. Primarily an IT hardware and software company, IBM con- sisted of a number of fairly independent prod- agencies and institutions had responded well in the past to IBMs leadership in the industry cou- pled with a sales force designed to cover their uct lines and geographies, each with its own IT complete line of hardware and software prod- staff and capabilities. In fact, IBM peaked in ucts. A more mature IT community, along with 1992 with 128 distinct chief information offi- a broadening of the market to small and medi- cers, 155 host data centers and 80 web hosting um size businesses as well as individual con- centers through- sumers, however, out the individual was quickly divisions and demonstrating a countries. Due to split in demand. the dispersed Relatively low nature of IT serv- value products ices, their reliabil- were increasingly ity and effective- considered more ness were varied like commodities and recognized as with low margins an opportunity requiring more area for improve- efficient sales and ment across the Figure 1: IBM product positioning over distribution chan- a diverging market demand corporation. In nels. Meanwhile, a addition, skills growing recogni- were limited in the new but rapidly growing tion of the value of services required focused importance of the internet, which could be used technical or industry-specific skills. for the benefit of sharing consistent skills Senior management recognized the across the units. major shifts required to realign IBM with the The IT market was also rapidly changing new IT markets. The core competence and during this period. IBMs traditional customer skills that developed and supported IBM prod-
  2. 2. ucts and internal applications would become engagements staffed from the PDMthe foundation to address the high-value end of organization.the market. To make this transition, these Service Delivery centers which consolidatedskills would need to be formalized and organ- and standardized the hosting environmentsized to support customer engagements. to provide efficiencies and economies of A service engagement model was required scale for both clients and IBM.that would enable the quick assembly of special- With IT now consolidated in one organi-ized skills to meet a clients requirements. To sup- zation, a formal client-service provider relation-port this model, virtually all IT service profession- ship within IBM was defined to further refineals (excluding the software development labs) the service engagement model. IBM was nowwere reorganized into, at the time, a separate IBMs largest client, referred to as the IBMsubsidiary, Integrated Systems Solution Global Account. A formal IT management sys-“ By reducing their efforts on traditional project management over- sight, the business management teams could elevate their focus toward improved alignment of IT plans with business strategy “ along with cross-program and portfolio management activities.Corporation, which would later become IBM tem was established, the BusinessGlobal Services. With this reorganization, a num- Transformation Management System (BTMS).ber of components were established to include: Similar to other components of the new IT Formalized skills with career roadmaps, model, this was based on the processes estab- education and certification. This includ- lished to control IBM product development. ed project management certification BTMS defined specific processes to align IT based on attaining PMIs Project with business strategy, beginning in the trans- Management Professional (PMP®) certi- formation roadmap phase through identifying fication, along with specified additional specific IT programs for funding during initia- education and experience requirements, tive definition. It also includes management and a formal certification review board. controls of development from concept phase Standardized project management and through rollout phase along with ongoing oper- service delivery processes within the ations management. IBM Global Services method, based on IBM, similar to many project focused years of best practices across the corpo- companies in the industry (Crawford, Hobbs, & ration and the industry, with procedures Turner, 2006), also defined project categories to ensure continuous improvement. within BTMS. These project categories, based A Project Management Office, the IBM on project technology (e.g., web based), risk, Project Management Center of cost and duration, defined specific technical Excellence, with the mission to stan- and management reviews required throughout dardize and continuously improve the the development cycle. project management tools, processes and Through this combination of organization, skills across IBM. processes and policies, IBM achieved high relia- A matrixed organization model that pro- bility and efficiencies in the delivery of IT con- vided direct management of specialized sulting and services for both IBM clients and the skills within the Professional IBM Global Account. Within IBM, hosting cen- Development Management (PDM) ters were reduced from 235 to 7 with one corpo- organization along with Business Area rate Chief Information Officer. And IT consulting Managers responsible for specific and services now make up 37% of IBM revenues. PMI Virtual Library | www.PMI.org |© 2007 Project Management Institute 2
  3. 3. With the addition of a tool to track process transformation executives (PTEs) wereadherence to BTMS, the level of reliability appointed to define process capability require-achieved could now be demonstrated. A review ments that span business units and geogra-of the management system in 2005 acknowl- phies. The PTEs are now key directors in theedged that due to the maturity of the IT deliv- management of the IT investment portfolio.ery organization, reduction in management The shift to program and portfolio man-controls was warranted. This would allow for agement at IBM evolved from independent var-the continued increase in efficiency through ied approaches to standard approaches acrossreduction in management oversight without the corporation. Clear identification of businesssignificant risk to the reliability of delivery. strategy during the transformation roadmap phase identifies required new or enhanced ITA Shift Toward Portfolio Management—And capabilities. During initiative definition, theseStrategy Alignment capabilities were then aligned with major ini-In fact, by reducing their efforts on traditional tiatives, or programs, that consist of multipleproject management oversight, the business development projects. The portfolio of proposedmanagement teams could elevate their focus initiatives was then evaluated and prioritizedtoward improved alignment of IT plans with based on the traditional business case as wellbusiness strategy along with cross-program and as a standard questionnaire that rates initia-portfolio management activities. Project man- tives in the areas of strategic fit, risk and busi-agement teams could now be relied on to ness value. In addition to the selection and pri-"Ensure We Do Things Right" without major oritization conducted by PTEs and unit execu-management oversight, allowing for business tives, a portion of the planned IT investmentteams to increase their focus on "Defining the has been reserved for key cross-enterprise ini-Right Things to Do." tiatives allocated by an executive committee of IBM is further transforming from a PTEs and unit executives led by the CIO.multinational corporation consisting of fairly Each funded initiative is also requiredindependent lines of business and geographies to provide key deliverables along with clearto a truly globally integrated enterprise. This metrics that will validate the attainment of thetransformation is supported by a major effort submitted business case. Initiatives providethat was performed to identify and decompose management oversight across the individualbusiness processes across IBM, the enterprise development projects as well as the integrationprocess framework (EPF). Once defined, of costs, schedules and resources toward the realization of the over- all benefit statement. Standardization within portfolio man- agement also includes the collection of consis- tent financial cost data, metrics and other key characteristics across the worldwide applica- tion portfolio. A world- wide application portfo- lio database, originally established during the Year 2000 prepara- tions, includes the iden- tification of mission- critical applications, Figure 2: IBMs continuous improvement in service reliability and efficiency through maintenance service organization, programs and policies with varying levels of management controls PMI Virtual Library | www.PMI.org |© 2007 Project Management Institute 3
  4. 4. levels, and adherence to corporate standards a highly reliable delivery organization. Withsuch as security, privacy, accessibility and that base in place, IBM has now enhanced thetechnical architecture. This centralized infor- management of IT investments through themation provides visibility to operational invest- consistent worldwide application of programment requirements such as upgrades to achieve and portfolio management.compliance to new standards. It also enablesthe analysis of cost reduction opportunities Referencessuch as a moratorium on development funding Crawford, L., Hobbs, B., & Turner J.R.for non-critical, non-strategic applications. (2006). Aligning Capability with Strategy: Applications were also mapped against Categorizing Projects to Do the Right Projectsthe EPF, identifying potential redundancies and to Do Them Right. Project Managementacross the multiple business units and geogra- Journal, 37(2), 38-50.phies. PTEs and corporate staff thus now havethe tools and information to optimize IT invest- About the Authorments by identifying new capabilities required One of the primary architects of IBMs trans-against the worldwide portfolio in support of formation to Program & Portfolio Management,process transformation and business opportuni- Mr. Britton is currently a program managerties, along with operational enhancements and within IBMs CIO office and is an IBMconsolidations. Certified Executive Project Manager. Having held a number of management and projectConclusion management positions throughout IBM, he hasIn response to shifts in the IT marketplace, over 20 years of experience in project and pro-IBM transformed itself from a primarily hard- gram management. Mr. Britton is a graduate ofware and software company to include a major the U.S. Military Academy at West Point andfocus on providing high quality IT services. By received his MBA from The Wharton School ofrecognizing and building on core IT skills, IBM the University of Pennsylvania. He has previ-has successfully capitalized on the growing IT ously been licensed as a Professional Engineerconsulting and services market. in the Commonwealth of Virginia, Certified in To succeed, a number of project manage- Production & Inventory Management (CPIM)ment processes, policies and organizational by the American Production & Inventoryconstructs were established or reinforced to Control Society, and is certified as a Projectensure consistent excellence in service delivery. Management Professional (PMP) by the ProjectFirst, a focus on the fundamentals established Management Institute. PMI Virtual Library | www.PMI.org |© 2007 Project Management Institute 4

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