Make no mistake: many business
units are less than satisfied with the
value produced from their Information Technology departments.
The solution? Better alignment of IT
assets with business objectives.
“That’s something that most business
executives want to believe their company
is doing,” says Richard Mitschke, a project
manager with Avvantica Consulting LLC.
“In reality, many organizations simply do
not have the right structures and/or strategies in place to optimize IT value.”
Project portfolio management (PPM) can
improve the business value delivered by IT,
Mitschke claims. “A strong PPM approach
will help align your IT portfolio such that it
supports your business strategy.”
Smart Business talked to Mitschke
about how to get the most out of IT assets
through PPM disciplines.
What exactly is IT PPM?
It is the art and science of optimizing all IT
resources — people, capital and knowledge,
among others — to support and enable your
business strategy. PPM entails prioritizing
and executing new initiatives as well as managing all existing IT assets and processes.
A lot of people think of PPM as a set of
processes surrounding the evaluation of
potential new projects. Although it starts
during strategic planning and idea inception, it doesn’t stop there. It also includes
managing current IT projects as well as
normal support operations.
The key to a strategic PPM approach is a
holistic evaluation of your IT portfolio and
alignment of its assets with business objectives. IT PPM aims to maximize return by
understanding investment opportunities,
selecting investments with the highest
potential value, and managing those investments throughout their lifecycle.
What does an organization gain from IT
PPM?
By managing projects and operational
support as a portfolio — as opposed to separate efforts — organizations are better able to focus their limited resources on the
most value-added initiatives.
This is achieved by defining and executing standard processes for project selection and execution, as well as ‘keep-the-lights-burning’ operational support.
Once you select the right projects and
support operations, you must manage
them in a systematic and holistic manner,
and adding a central program management
office can help assure quality.
With IT PPM, organizations can expect
greater return on investment; enhanced
ability to manage distributed resources;
ability to quickly adapt to change; improved
quality of execution; and greater capability
to manage expenses.
Don’t IT departments already do this?
While most executives nod their head at the
need to align business strategy and IT, many
organizations do not have mature processes,
structures and tools in place. That includes
implementation methodologies, project
budgets and a program management office.
In fact, in the average company many IT
operational processes are broken. For
example, META Group estimates more
than 80 percent of companies do not develop and review business cases for technology projects. These and other companies
tend to evaluate IT projects individually
when they should be managing the portfolio more holistically. If they plan and manage at the individual project level, they will
continue to be reactive and remain a step
behind the business.
What processes and tools are needed?
Several focused software packages
enable project evaluation, project lifecycle
management, resource management and
finance/budget management.
These tools automate the process of collecting, evaluating and approving project
proposals; capturing and reporting real-time status of initiatives; and monitoring
project performance against objectives.
What are the critical success factors in
implementing project portfolio management?
- Establish governance and clear accountabilities.
- Allocate sufficient resources with the
necessary skills to support the ongoing
PPM process. - Ensure that the process is disciplined
and sustained. - Develop an objective prioritization
framework. - Maintain communication and cross-functional awareness.
- Support decision making with tools.
A strong IT project portfolio management
approach will help ensure an IT portfolio is
properly aligned with business strategies
to deliver optimal value.
RICHARD MITSCHKE is a manager in Avvantica Consulting
LLC’s Consulting Practice. Reach him at (214) 379-7925 or
[email protected].
