1. Jonathan Walsh
Reshaping the Business of the
IT enterprise PMO at Merck
Shifting to value-based portfolio investing
Jonathan Walsh
Merck & Co., Inc.
2015 NA PPM & IT Governance Summit
Dallas, TX
June 1, 2015

2. 2
Jonathan Walsh
Merck & Co., Inc. Profile
Global healthcare company
• ~ 70,000 employees
• Headquarters in Kenilworth, NJ
Pharmaceuticals
Animal Health
Vaccines
• 2014 Revenue $42 billion
Global IT organization
Clark Golestani – global CIO, EVP
Hubs in Branchburg, Prague,
Singapore
Global ePMO within OCIO
• Governs IT investment portfolio
• IT Benchmarking
• Technology Business Mgmt.

3. 3
Jonathan Walsh
• Large global organization
operating on divisional islands
• Need to plan and execute a
portfolio in the same way
• Adopt PPM Toolset (time,
money, people)
2011-12
2015+
Standardizing PPM
Becoming investors
• Adopt a common $ vocabulary
• Strategy and Value to drive
investments
• Cost Transparency and Value
Showback (TBM)
Realizing Value
• Measuring success (KPIs)
• Becoming more nimble
• Going beyond IT
2013-14
Reshaping an IT organization

4. 4
Jonathan Walsh
Before 2011, 7 IT divisions operated autonomously.
No easy answers at the aggregate level:
• How much do we spend on Portfolio and Operations?
• How many projects?
• How are we performing?
Merck, in partnership with UMT, established a vision
to “federate” their IT divisions to bring about:
• Visibility into 100% of the portfolio demand and budget
• Streamline and standardize planning and execution
• Unify Project Scheduling, Resource Management, and
Financial Management
• Microsoft Project Server + UMT Project Essentials
(One instance globally)
Standardizing the Portfolio Approach
“One source of
the truth”
Data Completeness, then Data Quality…
Adoption was everything

5. 5
Jonathan Walsh
New questions to answer easier and consistently:
• Are we investing our IT dollars the right way?
• Executing on the strategy? value driving the portfolio?
• Are the investments we make successful? (improving
business performance? ROI?)
• Do we have full line of sight to our total IT budget?
• Are we making information-based decisions?
• What data do you need? How to categorize it? How to calculate
costs?
• KPIs? Benchmarks?
Where we started in 2013:
Becoming Investors…and a business
• 25% of our IT programs had business cases
• 6% of our business cases show fully-loaded cost
• Only 8% of IT Programs had measurable KPIs
documented in a business case
• 3% of our IT programs had tracked and verified
value back to the company

6. 6
Jonathan Walsh
Anchored in the IT
Strategy and IT
Economic Model…
...using a common portfolio
investment process
...decisions being made
at the right levels…
Enabled by the adoption of ….
-A consistent prioritization mechanism for all demand
-Standardized business cases to express value and drive portfolio selection
-Cost transparency and benchmarking
-Encapsulated in our Enterprise Program and Project Management toolset
Revised vision in 2013: Value-based IT
Toolsets
were key to
making it real

7. 7
Jonathan Walsh
Strategy Planning
Investment and
Operations
Planning
Budgeting &
Prioritization
Program
Management
Execution
Operations and
Value Realization
Roadmaps and
Investment Plans
Portfolio and
Business Cases
Prioritized Portfolios
and Budgets
Program
Delivered
Measured Value and
Strategy Realized
IT Economic Model
• Strategy driving
investment prospects
• Value (business cases)
driving investment
selection
• Common investment
language with the IT
Economic Model
• Transparency into the
whole IT budget (TBM)
• Consistent execution
• Decisions and
Transactions are the
right altitudes
• Measure Value realized
Standardize portfolio investment process
IT Economic Cycle

8. 8
Jonathan Walsh
PPM Capability model and roadmap
A capability Maturity Analysis in 2013 resulted in the creation of a 2-year roadmap
for Merck.
First focus on planning and prioritization, and resource management. Then improve
program execution beyond 2014.
Maximizing
utilization
Managing resource
assignments and
overcoming conflicts
Understanding
resource
demand
Resource ManagementPlanning & Prioritization
Standard
Business
Case
Accountability
and
traceability
Prioritization
Model
Data
collection

9. 9
Jonathan Walsh
Outcomes to Date
Right-sized Portfolio Function
• One PPM toolset
• One portfolio process
• Collapsed divisional PMOs into one ePMO
• Data-driven decisions making replaced manual reports
Visibility into IT Portfolio and Budget
• Everyone can see everything
• Cost transparency with TBM (data quality improving)
• ~100% investments with business cases, fully-loaded costs, value metrics
Governance and People
• Decision rights at the right level
• Engaged sponsors
• One prioritization framework
• Operating at the right altitudes
• Thinking and talking value now
Forecasting and Performance
• Ability to forecast resource demand and capacity
• Consistent financial mgmt.
• Consistent scheduling and milestone tracking

10. 10
Jonathan Walsh
Continue to measure actual benefits vs. projected (Finance
is driving this)
Aspire to expand capabilities beyond IT and help drive
standardization of value realization leveraging Microsoft
Project Server 2013 and UMT 360
Realizing Value and beyond

11. 11
Jonathan Walsh
Human Success Factors
Conviction of Leadership
Adoption from the beginning
Make them Famous
Don’t over engineer
Data completeness
Active sponsorship
If it won’t stick then do it
differently
Make your most difficult
opponents part of the team
Not too stringent
It will evolve. Work fast.
Data quality as the
organization matures