IT Portfolio Management Prioritization and Execution Planning

Aligning Portfolio Establishment Activities to Business Drivers Is Key to Gaining Buy-in and Adoption

Where to Begin with IT Portfolio Management

To achieve strategic alignment and growth, as well as risk reduction and cost containment, many organizations recognize the value of applying portfolio management disciplines to strategic IT planning and enterprise architecture. However, it’s one thing to recognize this value and something else to put it into practice within a large enterprise where IT portfolios are complex. The asset classes to manage can be numerous, and the highly interconnected nature of the information can quickly turn a good idea into an unfocused data management nightmare. Consider what is typically found within IT portfolios today:

  • Business strategy, capability, and function definitions
  • Organizational structures
  • Business applications and processes
  • Technology standards, products, and reference architectures
  • Enterprise information concepts
  • Program and project portfolios
  • Infrastructure and physical asset deployment details
  • License agreements
  • Disaster recovery plans

IT portfolio establishment can be costly, requiring upfront investments in technology, integration, people, and governance practices. Answering “where do we start?” becomes a lot clearer when senior leadership provides support and direction from the start.

Align Portfolio Establishment Activities to Business Priorities

If market conditions are making the business be vigilant about cost containment and risk reduction, then portfolio activities aligned to support growth initiatives will need to be reprioritized. For example, the establishment of reference architectures designed to meet future-state IT demands may take a backseat to those elements in the portfolio that are focused on thoroughly understanding today’s run-the-business costs and risks. As such, establishing the current-state application landscape is an example of this.
Without input from leadership, establishment activities may start in earnest, but they will likely focus on areas that do not line up well with business priorities. Most organizations today are not willing to wait long periods of time before achieving ROI. Sequencing portfolio establishment activities and driving incremental adoption are critical when considering when to begin the process. Big-bang approaches that attempt to address all concerns will take too long to deliver valuable results and will run the risk of being shut down.

Enabling Value Networks

Value networks provide insight into how complex strategic IT planning activities are accomplished in large organizations. At a high level, we find four key planning value chains within the network:

  1. Business strategy planning: Assessing market impacts, aligning business needs, and road mapping strategic intent.
  2. Portfolio management: Identification and governance of tangible and intangible assets for the purpose of understanding impact, compliance, risk, etc.
  3. Demand to delivery: Management of ideas for transformation, project initiation, planning, resourcing, and execution.
  4. Financial management: Budgeting, forecasting, ongoing measurement, and reporting.

Define Touch Points between Planning Value Chains

It is important to identify and understand how various planning value chains are enabled and improved by elements in an IT portfolio. Demand-to-delivery processes—specifically, project ideation, planning, and delivery—are common areas of focus in today’s business environments. Organizations are looking for their IT portfolios to both identify and support project activities focused on cost take out, rationalization, and technology risk reduction. For example, a common area of focus that illustrates this is the application portfolio, which is a subset of the overall IT portfolio. Application portfolios that are well aligned with demand management activities allow you to:

  • Identify and recommend cost-saving and rationalization ideas to project planners.
  • Provide the enterprise context needed to help planners accurately scope and assess the risk of changes.
  • Allow organizations to put major system update demands on the radar early, eliminating rogue efforts that might engage IT and project management too late.
  • Enable bills of material leveraged in new projects to have a better chance of adhering to established technology standards and best practices.

Smart organizations are putting plans in place to leverage the extended visibility and context provided by their portfolios and establishing clear outlines of the benefits they expect to deliver over time. It is imperative that all participants are aligned under commonly understood business drivers since these plans often require ongoing input and participation from many stakeholders across many lines of business. As organizations plan and prioritize IT portfolio efforts, the broader set of planning activities must show direct benefits. As an organization assesses the value of its portfolios, a key metric will be the degree to which they support and enable the overall planning value network. Some key questions that will help keep efforts focused include:

  • Is the information we are gathering in direct support of well-defined business initiatives?
  • Are other groups aware of the work we are doing and why we are doing it?
  • Are we focused on delivering tangible results at regular intervals?
  • Has the current scope been well defined?
  • Is the work we are doing only benefiting IT?
  • Do we have a well-defined plan for how and when portfolio elements will actually be used within the broader set of planning activities?
  • Focus Current and Past Efforts and Socialize Priorities

Portfolio establishment efforts are complicated by the fact that redundant portfolios may already exist. In many cases, they are established organically at a departmental level to answer specific questions or concerns. Different departments are typically at varying levels of maturity in how they capture, govern, and disseminate information in their respective portfolios. They often have strong views about how their work should be repurposed to the broader community. In many cases, the same information is being managed, in slightly different ways, across multiple business areas. Organizations should resist the temptation to allow a well-structured portfolio from one line of business dictate the direction of a portfolio establishment program for the entire enterprise. Without clear direction from the top, the loudest voice in the room will often prevail.

It is not uncommon to find IT portfolio management activities delegated to enterprise architecture teams. As a discipline, enterprise architecture has suffered from a myopic focus on framework adoption and practices that place disproportionately high value on productivity gains for IT: If only EA teams could synthesize information faster, or predict and dictate the future state architecture concerns better, they would satisfy the needs of the broader community. The rates at which EA programs are being shut down are a testimony to how these approaches are not working; Gartner research predicts, “55 percent of EA programs will be stopped due to economic pressures and the lack of perceived value” and “80 percent of organizations will have abandoned the use of standard EA frameworks.” There is little chance for success if teams responsible for IT portfolio management practices cannot answer the fundamental questions of what portfolio elements are needed to support the most critical concerns facing their businesses today and how this information will be leveraged within planning activities.

It is important to have well-defined socialization plans in place to help set expectations on why various IT portfolio items are being selected for immediate focus and how and when other items might be accommodated. The plan should clearly define the touch points between the portfolio items and relevant planning activities, such as demand to delivery. It is important to engage with business areas that have established their own portfolios; being careful not to allow their specific content to dictate initial focus, unless appropriate. You should evaluate lessons learned and understand how these business areas have:

  • Classified portfolio items.
  • Driven data quality metrics.
  • Driven data stewardship.
  • Managed demand for information.
  • Developed governance practices.
  • Established relationships with content owners.
  • Shared information with the broader community.
  • Integrated with operational systems.

No matter where the organization chooses to focus, these are key items to consider for its portfolio establishment efforts.


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