Keynote: IT Portfolio Management: From Chaos to Transparency to Improvements - Dr. Hans Sassenburg (SBO / SEI)

1. Portugal
IT Portfolio Management:
From Chaos to Transparency to Improvements
Dr. Hans Sassenburg
Software economist
SBO / SEI
2012-07-06, Coimbra

2. For Nienke!
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4. Contents
Step 1: Investigate
Step 2: Create Transparency
Step 3: Establish Improvements
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5. First Orientation: CTO Perspective
Low impact on High
business value Failure
rates
Frequent
schedule and
budget overruns
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6. First Orientation: PM Perspective
Too many small, Poor data on
low-value projects and
projects portfolio
Bad
project
prioritization
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7. First Orientation: Consultant Perspective
Root Causes Symptoms Consequences
Too many Low impact
small, on
low-value business
Lack of projects value
qualified
resources
Frequent
Bad
schedule and
project
budget
prioritization
overruns
Immature
management
process
Poor data on High
projects and Failure
portfolio rates
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8. Contents
Step 1: Investigate
Step 2: Create Transparency
Step 3: Establish Improvements
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9. Farming in the Swiss Alps …
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10. Livestock Management
Food Market
Veterinary
Breed surgeon
Acute Meat
diseases
Milk
Pricing Buy
Medicine
Eggs
Farm out
Chronic
Regulations Labour diseases
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11. Dimension 1: Type
Food Market
Veterinary
Breed surgeon
Acute Meat
diseases
Milk
Pricing Buy
Medicine
Eggs
Farm out
Chronic
Regulations Labour diseases
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12. Dimension 2: Value
Food Market
Veterinary
Breed surgeon
Acute Meat
diseases
Milk
Pricing Buy
Medicine
Eggs
Farm out
Chronic
Regulations Labour diseases
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13. Dimension 3: Risk
Food Market
Veterinary
Breed surgeon
Acute Meat
diseases
Milk
Pricing Buy
Medicine
Eggs
Farm out
Chronic
Regulations Labour diseases
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14. Dimension 4: Health
Food Market
Veterinary
Breed surgeon
Acute Meat
diseases
Milk
Pricing Buy
Medicine
Eggs
Farm out
Chronic
Regulations Labour diseases
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15. Dimension 5: Cost
Food Market
Veterinary
Breed surgeon
Acute Meat
diseases
Milk
Pricing Buy
Medicine
Eggs
Farm out
Chronic
Regulations Labour diseases
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16. 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?
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17. Question 1:
Can IT Portfolio Management learn from
livestock management?
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18. 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)
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19. Question 2:
How can transparency be visualized?
Any creative ideas how to picture a portfolio with each
element characterized by 5 dimensions?
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20. 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
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21. Example “Status Quo”
Question:
value What would be the ideal case?
M1 B1
M2
B2
M4
M3
O2
O1
O3
risk
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22. 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
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23. Tiobe Software BV (www.tiobe.com)
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24. Contents
Step 1: Investigate
Step 2: Create Transparency
Step 3: Establish Improvements
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25. 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 years
4. Identify measures for each asset
5. Develop operational plan for coming year
6. GIG
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26. Possible Measures
Measure Clarification
Keep Asset has value and performs well, no changes needed
Asset has value, but ownership must be transferred
Improve Asset has value, but needs improvement(s) like higher
quality, lower risk and/or reduced cost
Transfer:
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
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27. Example “Roadmap”
Strategic goals:
- Remove low value
- Reduce high risk
- Improve low quality
- Reduce high cost
2012 2015
Avoided area
Avoided area
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28. Example “Operational Plan 2013”
value
Invest Transfer + Improve
M1 B1
Replace
…
Improve
M2
B2 …
M4 … Phase-out
… M3
O2
O1
O3
risk
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29. Implementation … Remember …
The only one who likes change is a wet baby ...
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30. Finally: Leadership Required …
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31. For Hans!
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