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
88
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?
1818
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)
1919
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
2121
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
2424
Contents
Step 1: Investigate
Step 2: Create Transparency
Step 3: Establish Improvements
2525
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
2626
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
2828
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 ...
3030
Finally: Leadership Required …
3131
For Hans!
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