Improving IT Governance - Page 2

Sep 1, 2004

Fumiko Kondo

It is common to undertake large-scale projects in phases. Let's say you're about to begin the third phase of a project that entailed the deployment of a resource management application in the first phase, and a performance management system in the second. The next phase involves integrating the two applications.

Now is a good time to assess costs and benefits: Is the project still in alignment with your company's strategic objectives? How risky or costly will the third phase be? Perhaps you've received enough return out of deploying the two applications, and the benefit from integrating them won't be worth the cost?

Depending on your assessment, you might be well advised to abandon that third phase. In short, projects do not justify themselves simply by being underway; all should be reassessed periodically.

The PM Process

Portfolio management typically involves four procedural steps: collect, analyze, balance, and implement.

In the first step, the task is to collect, or list, project attributes and business priorities. Project attributes the specific definitions your organization uses to define a project or application.

The next task is to analyze the effectiveness of your investments. That is, assess their relevance to your business' goals for IT. But first, you may need to spend some time consolidating and standardizing the attributes and this may require extensive workshopping and negotiation.

For example, the trading arm of a corporation will have its own set of project attributes, the research and development division another set, and human resources yet another. It is necessary to standardize these attributes and consolidate them to a manageable number to facilitate effective analysis.

The analysis will then involve an assessment of your strategic goals in terms of your technology needs. What types of technology should you be running? Which areas of your business stand to gain the most from utilizing technology? Which business processes should get higher or lower allocations? ... and so on.

In the third step, you balance the entire portfolio. This will enable you to prioritize your projects and technologies. At this stage it is important to integrate the portfolio management process with the made up of some of the most senior executives in the organization.

Importantly, balancing the portfolio does not require expensive, complicated software. It can be done with an office spreadsheet application by simply listing attributes across the top and projects/applications down the left-hand column. Collecting the information manually and reviewing the results often provides great insight.

The Final Step

After you've made your decisions, you then have to implement them. This is often very difficult and may initially require a lot of change management effort. Typical implementation tasks may include; the adjustment of budgets according to revised project/technology priorities, the development of project milestones to ensure that timeframes are acceptable, and the re-allocation of resources to ensure that the right people are on the right projects.

The portfolio management process can now be used to drive the adoption of IT governance by continually assessing the performance of the portfolio. This can only be done when the information contained in the portfolio management system is accurate and up to date.

In general, most of this information can be collected from existing systems (i.e. financials, project management, resource management, etc.) or direct manager input. Realistically, however, this will involve the integration of a portfolio management tool into these other systems.

Portfolio management improves IT governance by providing a strategic overview of projects, outlining a process for controlling them, and aligning your IT expenditure with business objectives. Rational decisions about adopting and continuing the deployment of specific technologies will give you a boost toward defining accountabilities and maximizing efficiencies within your organization.

Fumiko Kondo is the managing director of consulting firm Intellilink Solutions. Her areas of focus include IT governance, process redesign & systems implementation. She can be reached at

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