Week 06: Project Portfolio Management

For me, IT Portfolio Management is the most important one of the year.  Why?  Because this is where the organization turns from strategy to execution.   Up to this point, the business and IT have been able to talk about purpose and alignment, what an architecture should look like, how they are going to help the company.  Now its time to actually do something.  As Yogi Berra once said,

In theory there is no difference between theory and practice. In practice there is.

Portfolio management is where theory meets reality.

If a business is using portfolio management, it is probably being done by an IT Steering committee or similar body.  Senior business representives serving on the committee are essential. They must be able to examine projects from a corporate perspective so that decision are made on what is best for the company, not any particular interest.

The Gartner article asks five great questions that can serve as your guide to portfolio management.  Our discussion focused mainly on question #1 but the other four are also important.

1. Are we investing in the right things? – Key techniques here include value orientation,business alignment, standardized business cases, reviewing multiple projects at each meeting, etc.
2. Are we optimizing our capacity? – Key questions might be, do we have the right resources? Could we increase our capacity with selected outsourcing? Should we cancel an existing project to fund something new?
3. How well are we executing? – This same group needs to be monitoring how existing projects are running.  Are they on time? On scope? On budget? Quality good?
4. Can we absorb all the changes? – This is about the culture of the organization.  How much change can it handle?  Will people burn out?  Will we be confusing them with too many objectives?
5. Are we realizing the promised benefits? – This is the least answered of the five questions.  Remember that ISACA sees two types of benefits:
   1. Business benefits – which contribute directly to value for the business
   2. Intermediate benefits – which do not directly create value for the business but may be of value to some stakeholders in the business.
6. Usually IT has so much to do that it never stops to see if completed projects actually produce the anticipated value.  Unless a steering committee or senior executive is forcing the issue, value evaluation is not apt to happen.

Readings

1. What is the importance of having a target mix before starting to approve projects?
2. Why would you want all projects to be proposed in a uniform way?  What would you suggest as information that must be available for all projects?
3. Do you think most organizations compare their projects’ performance to that which was proposed by the project?  Why or why not?
4. How would you justify a project that shortens a company’s sales cycle or improves the yield of an production process.  What assumptions would you have to make?
5. How does your company make project funding decisions? How well does it work?

The MDCM Case

Work with your team to prepare project recommendations for the MDCM board.  Please come (in class or on the Webex) ready to present what you think MDCM’s strategic, business and IT goals ought to be.  Here is your assignment: