How CIOs Take Control of IT Investments with Integrated Portfolio Management

Complete Perspective. Smart Decisions.

www.UMT360.com

@UMT360

LinkedIn.com/company/umt360/

How CIOs Take Control of IT Investments with Integrated Portfolio Management

Key Issues Shaping CIO Investment StrategiesMike Gruia, UMT360 CEO


The Key to Growth – Go DigitalLabor Productivity

Technology is a gift of God. After the gift of life it is perhaps the greatest of God's gifts. It is the mother of civilizations, of arts and of sciences." — Freeman Dyson

1st Imperative:

Overcome Growth Capacity Gaps

Gartner

RUN THE BUSINESS CONSUMES IT SPENDING

Sources of Innovation:

1. Top - down

2. Bottom - up

3. Middle - core

2nd Imperative: Strike & Maintain the Right Innovation Balance


Strike & Maintain the Right Innovation Balance:Where does most of the innovation comes from in your organization?

Poll 1

Complete Perspective. Smart Decisions.The Statistics Are AlarmingTraditional PPM is Failing to Deliver Anticipated Results

33%of projects fail to get completed or implemented

of completed projects experience cost overruns

54%46%Unrealized Business

ValueRealized

Business Value

43%of all projects are delivered late or over budget

Standish Group

Standish Group PMI

33%of projects do not meet their goals or business intent

Gartner

18%

UMT360

Gartner


IT Investment Management Roadblocks

• IT investment management under-performance is largely due to a breakdown in five factors.

• The company should evaluate performance and ask: ”How well does our company execute against these five variables?”


Overcome IT Investment Roadblocks: Which factors are the most important?

Poll 2


Unlocking Digital Investment Best Practices

1Digitalize IT Portfolios

2Digitalize EPM Scenarios

3Shifting from project to product based thinking

4Agile investments and resource allocation

5Performance measurements at all levels


Play #1: Digitalize IT Portfolios


Play #2: Digitalize EPM Scenarios

Technology Modernization

Project & Program Inventory

Application Portfolio Catalog

Budgeting, Annual

Planning & Funding

Integrated Portfolio

Analysis & Decisions

IT Service Portfolio Catalog

Cost Tracking, Chargebacks & Showbacks

Benefits Realization &

Cost Take-outs

for IT

Demand Management & Roadmaps

Dynamic re-planning &

re-allocation of funds

Project & Program

Tracking & Execution

GovernanceRisk &

ComplianceBusiness Moments

Essential Processes


Play #3: Shift From Project To Product Based Thinking

Innovation

Business case analysis

Selection

Budgeting

Planning

Funding

Project management

Tracking

Benefits realization

Measurement


Releases New Requests

Sanction Process

Re-directs

New

Revised SAC Sanctioned

Budget

Releases always

ApprovedRe-Directs

Yes

No

Approved?

“Accelerates momentum and agility because it never stops”

Play #4: Adopt Agile Resource Allocation


Play #5: Performance Management at All Levels

Cost RONA

Applications Plan ActualVarianc

e

Plan

ActualVarianc

e

CRM 210 250 19% 0.15 0.1 -33%

CRM DX 300 325 8% 0.17 0.1 -41%

Sales Force 125 100 -20% 0.22 0.05 -77%

ACUSOFT 45 150 233% 0.07 0.1 43%

PRTY Aux 75 25 -67% 0.25 0.3 20%

ERP DXO 100 125 25% 0.07 0.1 43%

Oracle DB 35 56 60% 0.1 0.05 -50%

Asset Level – Applications performance

Year 1 Year 2 Year 3$0

$250,000,000

$500,000,000

$365,000,000 $350,000,000 $330,000,000

$135,000,000 $150,000,000 $170,000,000

Run Grow & Transform

73%70%

66%

Portfolio Level - IT Budget by Run, Grow & Transform


Digital Investment Strategy:Which factors are most important?

Poll 3


Let Benefits Drive Decisions

Effectiveness - Improve the investment decisions Reduce Run Investment by 4% per annum

Efficiency - Increase investment operational efficiency

Reduction in admin cost thru automated reporting

Reduce cycle times through improved decision support

Reduce unnecessary portfolio governance meetings

Baseline Variables

Total IT Budget $500mm

Project Budget $125mm

Run Spend Ratio 75%

UMT360 Total 3 Year Cost $900k (based on 500 user licenses and $300k of implementation services)

UMT360 (3 year Results)

100% Realized 50% Realized 10% Realized

ROI * 9900% 4900% 900%

Total Run Investment Savings ($) $45.00mm $22.50mm $4.50mm

Avg. Yearly Savings ($) $15.00mm $7.50mm $1.50mm

Cost of Postponing (per month) $1.25mm $625k $125k

Tip: PPM Is Not Enough

WHAT IS THE DIFFERENCE BETWEEN PPM AND EPMIT DECISION EPM relative

contributionPM relative contribution

INVESTMENT STRATEGY• Business drivers and portfolio mix High Medium• Prioritization Medium High• Resource Allocation High LowPLANNING• Innovation – creating investment opportunities High Low• Enterprise Transformation – apps, infrastructure & projects High Low• Projects planning Low High FINANCIAL

• Cost estimation, budgeting and tracking High Low• Benefits estimation, planning, tracking and realization High Low• Funding and dynamic allocation High LowEXECUTION• Controls – manage variance High Medium• Measurement – cost, benefits, timing and risk High Medium• Change management High LowGOVERNANCE• Risk assessment and management High Low• Accountability and approvals High Low• Audit and compliance Medium Low


IT Leaders Are No Longer in the Driving Seat

Median Percentage of Total Budget for IT Controlled Through Central IT Department (2010, 2011 and 2012)

Total technology spend directed by non-IT is close to 40%

Gartner


Take Control!

Invest

ASSET LEVEL DECISION: SALESFORCE-DX

HoldRenovateRetire

Fund

PROJECT FUNDING - METRO

DelayDon’t Fund Increase

TRACKING PROJECT-DXO

DelayReduceCancel

IT INVESTMENTS


www.UMT360.com

@UMT360

LinkedIn.com/company/umt360/

Thank You!See us next week at the Gartner PPM & IT Governance Summit, Booth 310

Mike Gruia, UMT360 CEO

How CIOs Take Control of IT Investments with Integrated Portfolio Management

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