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Managing Your IT Portfolio


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A presentation on practical application of a portfolio based approach to IT investments and Enterprise Architecture.

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Managing Your IT Portfolio

  1. 1. IT Portfolio Management and the Integrated Enterprise Bill Wimsatt, Wells Landers Group
  2. 2. Agenda <ul><li>Introductions </li></ul><ul><li>Business Case: Complexity of the Integrated Enterprise </li></ul><ul><li>Portfolio Analysis Framework </li></ul><ul><li>Close </li></ul>
  3. 3. <ul><li>We are a professional services firm HQ’d in McLean, VA </li></ul><ul><ul><li>Federal and Commercial customer base </li></ul></ul><ul><ul><li>Sister company TVAR Solutions </li></ul></ul>Business Architecture & Analysis <ul><li>Strategic Planning </li></ul><ul><li>Actionable Metrics Derivation </li></ul><ul><li>Business Requirements </li></ul>Technical Architecture & Analysis <ul><li>Enterprise & Tech Architecture </li></ul><ul><li>Data Warehouse Design </li></ul><ul><li>Data Mart Design </li></ul><ul><li>ETL Planning & Deployment </li></ul><ul><li>System Integration (Storage, Network, SOA) </li></ul>Deployment <ul><li>Security Infrastructure </li></ul><ul><li>Storage Management </li></ul><ul><li>Services Architecture </li></ul>
  4. 4. Integrating EA Value <ul><li>Use the Design, Decide and Inform methodology to make decisions based on federated data, communicate the state of Enterprise Architecture across the organization and ensure compliance with documentation requirements. </li></ul>
  5. 5. Framework of Architectural Principals Design Decide Inform Architecture System Architect Visio PowerDesigner Portfolio Analysis Focal Point Prosight ChangePoint Business Intelligence Rational Insight Cognos Pentaho Business Objects
  6. 6. Emphasis and Objectives
  7. 7. A Few EA Observations <ul><li>There is no single approach to establishing an effective Enterprise Architecture program </li></ul><ul><li>When done correctly, EA is a manifestation of an organization’s mission, and the IT strategy which enables the mission </li></ul><ul><li>The true measure of the effectiveness of EA is the extent to which it changes day-to-day behavior and decision making </li></ul><ul><li>Many EA efforts fail because they attempt to be all encompassing and drive for perfection </li></ul><ul><li>Enterprise Architecture is a process not a project . It must on-going and organic </li></ul><ul><li>Producing EA artifacts is not enough. Too many EA teams focus on producing frameworks, diagrams, domain architectures, etc. And when they are done they declare victory. </li></ul>
  8. 8. The Problem with many EA Initiatives <ul><li>Many EA Initiatives Lack Clear Business Goals & Drivers (Gartner) </li></ul><ul><li>Result : From “Business” Perspective, EA doesn’t deliver Any Value </li></ul><ul><li>Thus , EA Initiatives are difficult to sponsor and fund </li></ul><ul><li>Or, EA results are mandated, but efforts are not supported by key stakeholders </li></ul><ul><ul><li>You must measure value and success of all Enterprise Architecture projects – </li></ul></ul>
  9. 9. Start with the Big Picture An Enterprise View is Required for Enterprise Planning <ul><li>Link, consolidate and analyze IT architecture information in blueprints </li></ul><ul><ul><li>Strategies, goals and organization </li></ul></ul><ul><ul><li>Applications, services and data </li></ul></ul><ul><ul><li>Systems, networks and components </li></ul></ul><ul><li>Simplified modeling with robust support for standards </li></ul><ul><ul><li>Create a common and consistent information resource to guide enterprise planning </li></ul></ul><ul><ul><li>Multiple modeling standards in one tool </li></ul></ul><ul><ul><li>Changes are propagated throughout the data blueprint, simplifying maintenance </li></ul></ul>Enterprise blueprinting with interactive visualization and analysis Enterprise Architecture identifies corporate systems, their key properties, and their interrelationships, and plans for and guides the evolution of the enterprise systems to support and enable the evolution of the enterprise in its pursuit of strategic advantage.
  10. 10. Technology Homogeneity and Conformance
  11. 11. Actionable Architecture Business and Technology Impact Resources and costs Business Strategy Harvest Enterprise Information Architect the Enterprise Link Business / IT Perspective Consolidation Planning Cost Cutting Enterprise Reporting / Impact Analysis Solution Planning Opportunities and Solutions Solution Implementation and Governance Architecture Vision Business and IT Architectures Optimized Solution / IT Planning Change / Transformation Implementation
  12. 12. Integrated Enterprise Planning
  13. 13. Enterprise Architecture: Who benefits Results! Prioritize IT investments to support business goals Maximize budget and resources with business-IT collaboration Turn strategy into execution and measure the results Efficiently deliver solutions that keep pace with the business plan Improve risk management of organizational transformation Plan and execute change faster and with better insight Make faster, better-informed strategic and tactical decisions Enterprise blueprinting with interactive visualization and analysis “ Our enterprise planning helped us recover £10M in costs by optimizing IT landscapes & processes” “ We have seen a 33% reduction in IT end-user costs based on implementation of enterprise architecture” “ We saved $20M by finding and avoiding risk in the implementation of a new merchandising system.” “ Our global insurance company saved $10.5M in the first year by better aligning IT resources to business processes”
  14. 14. Step Approach <ul><li>Inventory (Build and Maintain Inventory) </li></ul><ul><ul><li>Application identity and basic information </li></ul></ul><ul><li>Financial (Analyze and Manage Portfolio) </li></ul><ul><li>Detailed application-level costs and cost-effectiveness analyses </li></ul><ul><li>Assessment (Analyze and Manage Portfolio) </li></ul><ul><li>Risk, Operational Performance, Architectural Fit </li></ul><ul><li>Alignment (Optimize Portfolio) </li></ul><ul><ul><li>Process Inventory, contribution, function association </li></ul></ul><ul><ul><li>Core Business Drivers, priorities, process contribution </li></ul></ul>Level I (Step 1) Level II (Steps 2 and 3) Level III (Steps 2 and 3) Level IV (Step 4) Initial Deployment Focus
  15. 15. Applications Portfolio Management Process Tool Assisted Decisions Subjective Business Decisions Transition to Executive Decision Making Process Step 1 – Level I Collect, Validate, and Maintain Data (Build and Maintain Inventory) Step 2 – Levels II & III Perform Assessments (Analyze Portfolio) Step 3 – Levels II & III Determine Dispositions and Life Span Transition Roadmap (Manage Portfolio) Step 4 – Level IV Determine Priorities, Timeframes, Costs, and Benefits (Optimize Portfolio) Funding Requests Investment Portfolio Management (IPM) Process <ul><li>One-Time Work </li></ul><ul><li>Perform initial collection and validation of remaining data </li></ul><ul><li>Ongoing Work </li></ul><ul><li>Perform data changes and validations as they occur </li></ul><ul><li>Collect and validate data for implementation projects transitioning to applications assets </li></ul><ul><li>Major Data Elements </li></ul><ul><li>ID </li></ul><ul><li>Costs </li></ul><ul><li>Business criticality </li></ul><ul><li>Business processes enabled or supported </li></ul><ul><li>Functional quality </li></ul><ul><li>Technical quality </li></ul><ul><li>Risk profile </li></ul><ul><li>Identify </li></ul><ul><li>Business problems/issues </li></ul><ul><li>Technical problems/issues </li></ul><ul><li>Risk vulnerabilities, probabilities, and impacts </li></ul><ul><li>Other problems/issues </li></ul><ul><li>Evaluate </li></ul><ul><li>Status/Health (Good, Bad, Moderate) </li></ul><ul><li>Value to organization (High, Moderate, Low) </li></ul><ul><li>Risk of unrecoverable failure (High, Medium, Low) </li></ul><ul><li>Consider </li></ul><ul><li>Cost-effectiveness </li></ul><ul><li>Risk acceptability – status of </li></ul><ul><li>Identify </li></ul><ul><li>Problems/opportunities </li></ul><ul><li>Alternative approaches </li></ul><ul><li>Best actions for managing application over expected life spans </li></ul><ul><li>Mission criticality/importance to agency </li></ul><ul><li>Determine Whether To </li></ul><ul><li>Invest additional funds (technical or functional enhancement or replacement) </li></ul><ul><li>Sunset/eliminate </li></ul><ul><li>Consolidate </li></ul><ul><li>Replace and consolidate as part of an agency wide or state wide initiative </li></ul><ul><li>Continue maintenance </li></ul><ul><li>Identify </li></ul><ul><li>Dependencies on other applications and projects </li></ul><ul><li>Costs/fiscal requirements </li></ul><ul><li>Technical infrastructure requirements </li></ul><ul><li>Benefits/value to accrue </li></ul><ul><li>Alignment with state/agency priorities </li></ul><ul><li>Confirm and/or Develop </li></ul><ul><li>Implementation approach </li></ul><ul><li>Determine Priorities and Timeframes </li></ul><ul><li>Select priority for action (High, Medium, Low) </li></ul><ul><li>Select timeframe for action (Immediate, Near-Term, Long-Term) </li></ul><ul><li>Potential Benefits for Selected Actions </li></ul><ul><li>Cost savings from consolidate/eliminate applications </li></ul><ul><li>Improvements in public service, reliability, recoverability, and security resulting from functional/technical renovation or replacement </li></ul>
  16. 16. System Architect as the integrated repository of architecture data / artifacts supporting IT investment decisions
  17. 17. Integrated Enterprise Analysis EA and Application Portfolio Metric Analysis, Scorecards, Dashboards Integrated ODS WL SARGE Project Mgmt Project Schedule, Resources Metric Analysis, Scorecards, Dashboards Project Portfolio Analysis Other Sources: Capital Planning, HR, Assessments WL Courier Wells Landers Group ~ Proprietary Information WL FoRGE System Architect Enterprise Modeling PPM/ITPM Project Portfolio & Analysis
  18. 18. Decision Axes How well the investment will use or enhance the existing infrastructure (Y Axis) The corporate impact of an investment on business strategy and priorities. (X Axis) The financial aspects of the investment including level of investment required, cost/benefit ratio, and net present value. (Z Axis) Business Value IT Efficiency Financial Attractiveness
  19. 19. Evaluating the Investment Rankings
  20. 20. Measuring the Efficiency of the Business Architecture <ul><li>Multiple Dimensions of Measurement </li></ul><ul><li>Architectural Analysis based on Qualitative and Quantitative measures </li></ul>Analytics in Rational System Architect
  21. 21. Business Viewpoint (Decide/Inform)
  22. 22. Portfolio Decisions Cost is size of Bubble Intangibles: Risk Confidence of Success Quality
  23. 23. Prioritizing via Intangibles <ul><li>Pairwise Comparisons provide a unique and powerful for </li></ul><ul><li>maximizing Stakeholder Communication, </li></ul><ul><li>assigning </li></ul><ul><li>Relative Rank, providing </li></ul><ul><li>Measurable Results, as well as </li></ul><ul><li>Consistency and Discrepancies which provides clearer definitions and results. </li></ul><ul><li>Confidence of Success </li></ul><ul><li>Confidence in Quality </li></ul><ul><li>Customer Satisfaction </li></ul>Example Intangible Criteria &quot;Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted&quot; - Albert Einstein
  24. 24. Time is Money
  25. 25. Effective Arch. and Portfolio Measurement <ul><li>- not point-in-time, but how well you do over time. You should be able to ask questions such as: </li></ul><ul><li>“ How is value tracking overtime versus efficiency and risk?” </li></ul>
  26. 26. EA Analysis and Advanced Reporting The Instrument Panel for Business Transformation <ul><li>Quickly see critical issues and rapidly correct them. </li></ul><ul><li>Consolidate information across functions—programs, operations, HR, finance—to gain a better view of overall performance. </li></ul><ul><li>Manage personnel skills requirements and inventories to more effectively deploy resources, identify skill gaps and anticipate when to outsource services. </li></ul><ul><li>Provide staff with an easy-to-use interface to see and analyze the same information as well as understand the strategy and their roles in executing it. </li></ul><ul><li>Eliminate “best-guess” project milestones through predictable planning and better communication with citizens, administrators and staff. </li></ul>
  27. 28. <ul><li>Area </li></ul><ul><li>Category </li></ul><ul><li>Grouping </li></ul><ul><li>Indicator </li></ul>
  28. 30. <ul><li>Analysis Function </li></ul><ul><ul><li>How is the Client allocating and spending IT dollars against Mission priorities </li></ul></ul><ul><ul><li>How is the Client CIO spending money within his defined organizational to support his overall IT mission goals. Are the sub-organizations allocating monies towards Client CIO’s priorities? </li></ul></ul><ul><li>Example Analysis </li></ul><ul><ul><li>The majority of our dollars are budgeted against our highest rank performance measures. </li></ul></ul><ul><ul><li>We have an oddity in our 5th ranked performance measures are receiving more money than the 2nd and 3rd ranked performance measures. </li></ul></ul><ul><ul><li>We have 1 new system coming on line supporting 1st ranked performance measures that will have a 1% increase in the budget. </li></ul></ul><ul><ul><li>We 3 new systems coming on line supporting the 3rd ranked performance measures that have 9% increase in the budget. </li></ul></ul><ul><ul><li>~1/3 of budget has not been mapped to a performance measure. </li></ul></ul><ul><ul><li>The higher ranked performance measures generally have more budget. The exception is the 5th ranked performance measures. </li></ul></ul><ul><ul><li>Of the mapped systems, as 60% of the performance measures have a greater percentage of dollars (budget) that percentage of systems. Different metrics can be built (i.e., # of BRM mappings compared to budget dollars). </li></ul></ul>Business Alignment Analysis
  29. 31. Technical Analysis
  30. 34. Technology Analysis <ul><li>Analysis Function </li></ul><ul><ul><li>Focus Client IT resources and Client IT procurement personnel to develop enterprise license agreements </li></ul></ul><ul><ul><li>Focus Client IT resources on areas of technology consolidation to minimize that number of vendors and support contracts for database technologies. </li></ul></ul><ul><ul><li>Realize cost saving through enterprise license agreements </li></ul></ul><ul><ul><li>Reduce database technology complexity. </li></ul></ul><ul><ul><li>Reduce the need for specialized help desk and system administration needs </li></ul></ul><ul><ul><li>Increase data sharing and access through use of enterprise database solutions </li></ul></ul><ul><ul><li>Identify and retire legacy database technologies </li></ul></ul><ul><ul><li>Support an enterprise IT storefront concept with database standards, bulk procurement, and standard configurations </li></ul></ul><ul><li>Example Analysis </li></ul><ul><ul><li>The biggest impact to license consolidation may come from the database technology area. </li></ul></ul><ul><ul><li>This tell us that Oracle Database technology is the most frequently mapped to the enterprise systems within the enterprise </li></ul></ul><ul><ul><li>Shows us that a lot of systems use Microsoft Access as database technology which may or may not be a performance issue based on what the system requirements. Furthermore, these systems may be candidates for a consolidated data center with enterprise class database processing and storage. </li></ul></ul><ul><ul><li>A place to mine for enterprise licenses opportunities with the more frequently used technologies </li></ul></ul>
  31. 35. Benefits to the Enterprise <ul><li>Common understanding across community stakeholders, staff and executives of key challenges and desired changes </li></ul><ul><li>Standard skill sets from staff – no new training required </li></ul><ul><li>Selection, ranking and prioritization of the right initiatives that result in highest value and outcomes </li></ul><ul><li>A clear roadmap to manage the impact, deployment, and change incurred by simultaneous projects, assuring they are delivered on time, and within budget. </li></ul><ul><li>Clear reporting on usage of technology, funds and overall program status </li></ul>Transparency and Accountability Throughout Project Lifecycle