Portugal

IT Portfolio Management:From Chaos to Transparency to Improvements

Dr. Hans SassenburgSoftware economist

SBO / SEI

2012-07-06, Coimbra

22

For Nienke!

33

44

Contents

Step 1: Investigate

Step 2: Create Transparency

Step 3: Establish Improvements

55

First Orientation: CTO Perspective

Frequent schedule and

budget overruns

Low impact onbusiness value

HighFailurerates

66

First Orientation: PM Perspective

Badproject

prioritization

Too many small, low-value projects

Poor data on projects and

portfolio

77

First Orientation: Consultant Perspective

Badproject

prioritization

Immature management

process

Lack of qualified

resources

Too many small,

low-value projects

Poor data on projects and

portfolio

Low impact on

business value

Frequent schedule and

budget overruns

HighFailurerates

SymptomsRoot Causes Consequences

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Contents

Step 1: Investigate

Step 2: Create Transparency

Step 3: Establish Improvements

99

Farming in the Swiss Alps …

1010

Livestock Management

Breed

Buy

Farm out

Meat

Milk

Eggs

Market

Pricing

Regulations

Acute diseases

Chronic diseases

Food

Medicine

Veterinary surgeon

Labour

1111

Dimension 1: Type

Breed

Buy

Farm out

Meat

Milk

Eggs

Market

Pricing

Regulations

Acute diseases

Chronic diseases

Food

Medicine

Veterinary surgeon

Labour

1212

Dimension 2: Value

Breed

Buy

Farm out

Meat

Milk

Eggs

Market

Pricing

Regulations

Acute diseases

Chronic diseases

Food

Medicine

Veterinary surgeon

Labour

1313

Dimension 3: Risk

Breed

Buy

Farm out

Meat

Milk

Eggs

Market

Pricing

Regulations

Acute diseases

Chronic diseases

Food

Medicine

Veterinary surgeon

Labour

1414

Dimension 4: Health

Breed

Buy

Farm out

Meat

Milk

Eggs

Market

Pricing

Regulations

Acute diseases

Chronic diseases

Food

Medicine

Veterinary surgeon

Labour

1515

Dimension 5: Cost

Breed

Buy

Farm out

Meat

Milk

Eggs

Market

Pricing

Regulations

Acute diseases

Chronic diseases

Food

Medicine

Veterinary surgeon

Labour

1616

In Summary

For livestock management a set of 5 dimensions can be distinguished:- Type- Value- Risk- Health- Cost

Questions:1. Can this be applied to IT Portfolio Management?2. If yes, how can it be visualized in a powerful way?

1717

Question 1:Can IT Portfolio Management learn from

livestock management?

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Yes!

Livestock management IT Portfolio Management

Type (buy, breed, farm out) Asset type (make, buy, outsource)

Value (meat, milk, eggs) Value (to the business)

Risk (market, pricing, regulations) Risk (market, pricing, regulations)

Health (acute, chronic diseases) Quality (reliability, maintainability)

Cost (food, vet, medicine, labour) Cost (infra, helpdesk, labour)

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Question 2:How can transparency be visualized?

Any creative ideas how to picture a portfolio with each element characterized by 5 dimensions?

2020

What about this?

Dimension Visualization

Asset type Name: M(ake), B(uy), O(utsource)

Value Y-axis

Risk X-axis

Quality Colour: Green -> Orange -> Red

Cost Size

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Example “Status Quo”

M1valu

e

risk

O1

M2

M3O2

B1

B2

M4

Question:What would be the ideal case?

O3

2222

Challenge …

The most unknown dimension is probably quality, in this case being the reliability and maintainability of each IT-asset

Strangely enough, it is the dimension that can be calculated in an automated way, using the appropriate technology

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Tiobe Software BV (www.tiobe.com)

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Contents

Step 1: Investigate

Step 2: Create Transparency

Step 3: Establish Improvements

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Roadmap Development

1. Assess current IT portfolio (5 dimensions)2. Choose approach

– Fixed budget– Desired/required business value

3. Establish strategy for next 3-5 years4. Identify measures for each asset5. Develop operational plan for coming year6. GIG

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Possible Measures

Measure Clarification

Keep Asset has value and performs well, no changes needed

Improve Asset has value, but needs improvement(s) like higher quality, lower risk and/or reduced cost

Phase-out Asset has no value, phase it out

Replace Asset has value but cost and/or quality are so high that replacement is a better option than improvement

Invest Asset has value, which can even be increased

Tra

nsfe

r:A

sset

has

val

ue, b

ut o

wne

rshi

p m

ust b

e tr

ansf

erre

d

2727

Example “Roadmap”

2012 2015

Strategic goals:- Remove low value- Reduce high risk- Improve low quality- Reduce high cost

Avoided area

Avo

ide

d a

rea

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Example “Operational Plan 2013”

M1valu

e

risk

O1

M2

M3O2

B1

B2

M4

O3

Invest

Phase-out

Improve

Transfer + Improve

Replace…

…

…

…

2929

Implementation … Remember …

The only one who likes change is a wet baby ...

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Finally: Leadership Required …

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For Hans!