Portfolio Management presentation
-
Upload
jacknickelson -
Category
Documents
-
view
3.452 -
download
0
Transcript of Portfolio Management presentation
How Does Iowa get to Value Based Portfolio Management?
Iowa Technology Governance Board
May 10, 2007
Mark A. Peterson – Managing PartnerCoeur Group – St. Louis
2© 2007 Coeur Business Group, St. Louis MO – USA :: CoeurGroup.com :: All materials are confidential and proprietary. Iowa TGB May, 2007
Pla
n >
In
vest
> G
overn
Managing Partner – Mark Peterson
Experienced Executive (SVP, CIO, CEO)
Methodology DeveloperOrganizational Agility
Business Value Alignment
Enterprise Portfolio Management
Innovation and Commercialization
Organizational Expertise
Technology Background (US Navy, Honeywell, Digital Equipment Corporation, QORE Business Solutions, Sentry Technology, META Group, EVP Partners)
Innovator in Cost Reductions and Value Mgt.
Experienced Practitioner, Local, State, Federal
Author – 3 Dimensional Portfolio Management (J. Ross Publishing , Fall 2007)
3© 2007 Coeur Business Group, St. Louis MO – USA :: CoeurGroup.com :: All materials are confidential and proprietary. Iowa TGB May, 2007
Pla
n >
In
vest
> G
overn
Technology Governance Board – Portfolio Futures
Building The States Asset Value
Portfolio Management (>Plan > Invest >Govern For Value And Alignment)
Constructing Portfolios
Realizing Maximum Value Accretion
4© 2007 Coeur Business Group, St. Louis MO – USA :: CoeurGroup.com :: All materials are confidential and proprietary. Iowa TGB May, 2007
Pla
n >
In
vest
> G
overn
TGB Key Questions to Ask
The Objectives Of Portfolio Management Are To Address These Questions.
The Objectives Of Portfolio Management Are To Address These Questions.
Are we selecting the right projects in order to best maximize business value?Are we deploying our resources appropriately? Are we developing the capacity to understand, and learn from, our project failures?What are we doing to increase the probability of achieving expected benefits from our projects?Do we have a framework for institutionalizing program and project management best practices?
5© 2007 Coeur Business Group, St. Louis MO – USA :: CoeurGroup.com :: All materials are confidential and proprietary. Iowa TGB May, 2007
Pla
n >
In
vest
> G
overn
What is TGB’s Real Role – Increasing Asset Value
What is the Agenda?•Invest for Modernization, Efficiency and Effectiveness of the State’s Business
•Oversee Increasing the States Technology Asset Value
•Select High Value Investments
•Build Portfolios for Value Accretion Management
•Oversee Investment Portfolio Performance
SOAArchitecture
Teams
PMOPMO
ArchitectureArchitectureReview BoardReview Board
ArchitectureArchitectureTeamTeam
TechnologyTechnologyGovernance BoardGovernance Board
Business & Technical
Project 1
Project 1
Project 1
Project 2
Project 2
Project 2
Project …
Project
Project ……
Coordination, not execution
Enterprise Portfolio Enterprise Portfolio ManagementManagement
(EPfMO)(EPfMO)
SOAArchitecture
Teams
PMOPMO
ArchitectureArchitectureReview BoardReview Board
ArchitectureArchitectureTeamTeam
TechnologyTechnologyGovernance BoardGovernance Board
Business & Technical
Project 1
Project 1
Project 1
Project 2
Project 2
Project 2
Project …
Project
Project ……
Coordination, not execution
Enterprise Portfolio Enterprise Portfolio ManagementManagement
(EPfMO)(EPfMO)
SOAArchitecture
Teams
PMOPMO
ArchitectureArchitectureReview BoardReview Board
ArchitectureArchitectureTeamTeam
TechnologyTechnologyGovernance BoardGovernance Board
Business & Technical
Project 1
Project 1
Project 1
Project 2
Project 2
Project 2
Project …
Project
Project ……
Coordination, not execution
Enterprise Portfolio Enterprise Portfolio ManagementManagement
(EPfMO)(EPfMO)
SOAArchitecture
Teams
PMOPMO
ArchitectureArchitectureReview BoardReview Board
ArchitectureArchitectureTeamTeam
TechnologyTechnologyGovernance BoardGovernance Board
Business & Technical
Project 1
Project 1
Project 1
Project 2
Project 2
Project 2
Project …
Project
Project ……
Coordination, not execution
Enterprise Portfolio Enterprise Portfolio ManagementManagement
(EPfMO)(EPfMO)
TGB Mission: “Facilitate information technology
decisions within the executive branch of Iowa State
Government, basing these decisions on business drivers
supporting customer requirements.”
6© 2007 Coeur Business Group, St. Louis MO – USA :: CoeurGroup.com :: All materials are confidential and proprietary. Iowa TGB May, 2007
Pla
n >
In
vest
> G
overn
Enterprise Architecture
Government Regulations
Business Information
Requirements
Business Drivers
Common Executive
Vision
Technology Architecture
Application Portfolio
Infrastructure
Environmental Trends
Vendors/Suppliers and Partners
Business Architecture
Governance
External Forces
Program Management
Staff and Organization
Operational Excellence Capabilities
IT Resource Management
CustomerCustomer
CustomerCustomer
’IT Governance and Investment Performance
TGB Vantage Point for Portfolio Management
7© 2007 Coeur Business Group, St. Louis MO – USA :: CoeurGroup.com :: All materials are confidential and proprietary. Iowa TGB May, 2007
Pla
n >
In
vest
> G
overn
Two Interacting Portfolios Must Be Managed For Value
Principal Process Focus: Generation of Business Value
Projects change the IT Assets Portfolio
Project attributes:Project attributes: Add assetAdd asset Modify assetModify asset Delete assetDelete asset
Project attributes:Project attributes: Add assetAdd asset Modify assetModify asset Delete assetDelete asset
Projects Portfolio
Business DataBusiness Data Business ApplicationsBusiness Applications Technical InfrastructureTechnical Infrastructure StaffStaff KnowledgeKnowledge Governing InfrastructureGoverning Infrastructure
Business DataBusiness Data Business ApplicationsBusiness Applications Technical InfrastructureTechnical Infrastructure StaffStaff KnowledgeKnowledge Governing InfrastructureGoverning Infrastructure
Assets Portfolio
Both Applications And Projects Must Be Managed Simultaneously For Maximum Value Accretion and Business Alignment
8© 2007 Coeur Business Group, St. Louis MO – USA :: CoeurGroup.com :: All materials are confidential and proprietary. Iowa TGB May, 2007
Pla
n >
In
vest
> G
overn
Portfolio Categorization Based on Business Stage Needs
High risk,hopefully high reward
TransformTransformThe BusinessThe Business
NPV – Net Present Value
Identify and size projects critical to established strategy
GrowGrowThe BusinessThe Business
ROI – Return on Investment
RunRunThe BusinessThe Business
BusinessContinuity
CostControl
AssetsAssetsAssetsAssets
Applic’sApplic’sApplic’sApplic’s
ProjectsProjectsProjectsProjects
AssetsAssetsAssetsAssets
Applic’sApplic’sApplic’sApplic’s
ProjectsProjectsProjectsProjects
AssetsAssetsAssetsAssets
Applic’sApplic’sApplic’sApplic’s
ProjectsProjectsProjectsProjects
9© 2007 Coeur Business Group, St. Louis MO – USA :: CoeurGroup.com :: All materials are confidential and proprietary. Iowa TGB May, 2007
Pla
n >
In
vest
> G
overn
Financial Views and Value Categorization
No
nd
iscr
etio
nar
y C
ost
s
Risk
Dis
cret
ion
ary
Pro
ject
s
Ris
ks
Val
ue/
Tim
ing
VentureVenture
GrowthGrowth
DiscretionaryDiscretionaryEnhancementsEnhancements
Non-Non-DiscretionaryDiscretionary
CoreCoreRTB
TTB
GTB
Developing the Financial Views of The Portfolios is Essential for Gaining Value and Aligning to the Departmental Business Needs. Results:
•10% to 35% Increase in Project Returns•10% to 20% Cost Avoidance•5% to 15% Improvement in Resource Utilization
What business stage?Run The BusinessGrow The BusinessTransform The Business
IT Investment Portfolios
10% To 25% Cost Reductions Overall Are
Fairly Normal For First Pass Portfolio Management
Implementations Source: Gartner Group
10© 2007 Coeur Business Group, St. Louis MO – USA :: CoeurGroup.com :: All materials are confidential and proprietary. Iowa TGB May, 2007
Pla
n >
In
vest
> G
overn
Building the 3 Dimensional Portfolios Everything maps back through the
business requirements• RTB, GTB, TTB
Start with business information and process requirements• Business units and processes• Technology Alignment Focus
Categorize current IT portfolios • Asset and Projects• Business stage (RTB, GTB, TTB)• Identify cost, risks, returns, and
timelines Determine what changes should be
made• Evaluate business information
requirements pain points and opportunities
The IT Portfolio Is Driven By The Business Requirements And Prioritized By The Investment Model (RTB, GTB, TTB)
Portfolio Mgt. Dimensions
GTB
TTB
RTB
Business PortfolioBusiness Portfolio
GTB
TTB
RTB
Business PortfolioBusiness Portfolio
11© 2007 Coeur Business Group, St. Louis MO – USA :: CoeurGroup.com :: All materials are confidential and proprietary. Iowa TGB May, 2007
Pla
n >
In
vest
> G
overn
An Iterative and Maturing Process – (Example Applications Portfolio)
Adhoc: No Portfolio Inventory or Management Process Foundational: Application/Project Inventory Performed Evaluation: Optimization and Rationalization Management: Application Portfolio Transformation Process Maturity: Application Portfolio Management is Implemented
Enterprise Wide
Source: UMT Consulting - Application Portfolio Maturity
Coeur Group’s Pf M Process High Level ViewPortfolio Portfolio
PlanPlanPortfolio Portfolio
PlanPlan
CategorizeCategorizeBusinessBusiness
Stage NeedsStage Needs
CategorizeCategorizeBusinessBusiness
Stage NeedsStage Needs
CreateCreateAsset/ProjectAsset/Project
PortfoliosPortfolios
CreateCreateAsset/ProjectAsset/Project
PortfoliosPortfolios
Assess Assess PortfoliosPortfoliosAssess Assess
PortfoliosPortfolios
ConsolidateConsolidateEliminateEliminateReinvestReinvest
ConsolidateConsolidateEliminateEliminateReinvestReinvest
MeasureMeasureValueValue
MeasureMeasureValueValue
Gov. &Gov. &Org.Org.
Gov. &Gov. &Org.Org.
DevelopDevelopFinancial Financial
ViewsViews
DevelopDevelopFinancial Financial
ViewsViews
13© 2007 Coeur Business Group, St. Louis MO – USA :: CoeurGroup.com :: All materials are confidential and proprietary. Iowa TGB May, 2007
Pla
n >
In
vest
> G
overn
Where do we need to be?
Are We Changing Our Investment DNA?
Developing Application and Project Portfolios as the Starting Point:
Offering agencies the opportunity for individual agency ratings (providing agency focus)
Offering state government focus (providing direction to meeting various Culver administration goals)
IT Portfolio Management is the methodology and associated processes that provide highly leveraged selection,
prioritization, implementation and measurement of Business/Technology
investments.
14© 2007 Coeur Business Group, St. Louis MO – USA :: CoeurGroup.com :: All materials are confidential and proprietary. Iowa TGB May, 2007
Pla
n >
In
vest
> G
overn
Maximizing Value Accretion with Portfolio Management
What’s the Problem?• Uncoordinated Value Management• Project, Application and Asset, replacement cost and business values
are unknown• Governance and measurement processes are rudimentary and
manual
What’s the Solution?1. Online Inventory Projects and Applications2. Select Groups for Portfolios based on Business Stage Needs3. Integrate Portfolio Management Automation4. Development of Project and Application Portfolios5. Develop Financial Views – (Core, Non-Discretionary, Discretionary, Growth and Venture Investment Portfolios)6. Prioritize and Cull Investments – a continuous process 7. Governance must include Measurements, Dashboards and Scorecards
15© 2007 Coeur Business Group, St. Louis MO – USA :: CoeurGroup.com :: All materials are confidential and proprietary. Iowa TGB May, 2007
Pla
n >
In
vest
> G
overn
Coeur Group - Recommended Steps
1. Analysis Of Iowa’s Current Portfolio Management Methods, Processes And Tool
2. Identify Critical Business Needs And Required Processes
3. Identify and Inventory Applications and Projects
Projects in Workbook
(Subline Level)Percent with ATP Updates
Percent with Project Status
Updates
Projects tied to IT Key Initiatives
(A0 Level)Percent with
Status Updates
Artz 514 100% 82% 21 43% Artz - eTRAK 73 100% 4% 11 91% Bott 226 100% 35% 10 90% Green 80% - 100%Bradley 8 100% 0% 1 0% Yellow 60% - 79%Fremont 239 100% 80% 12 58% Red Below 60%Gupta 95 100% 71% 9 78% Higgins 1 100% 0% 4 100% Thompson 19 100% 53% 4 100% Total 1175 100% 66% 72 69%
Use of PM Workbook (only ATP updates required currently)
Data as of 6/30/01 Data as of 8/8/01
Portfolio
Project Portfolio Status
Success = Simplicity and Limited Scope
Coeur Point: Develop one or two Portfolio’s, then develop processes and define business value with Key
Performance Indicators (KPI’s)
Identify Available Tools In The Market For “Portfolio Management” And “Investment Performance” Tracking
Select Vendor And Portfolio Management Application(s) That Meet Iowa’s Requirements
Develop Baseline Dashboard & Measures
16© 2007 Coeur Business Group, St. Louis MO – USA :: CoeurGroup.com :: All materials are confidential and proprietary. Iowa TGB May, 2007
Pla
n >
In
vest
> G
overn
Questions