1. Case Study: Enterprise Portfolio Management and Budgeting
Global Pharma CIO Transforms IT
Organization into Accountable,
Low Risk Business Partner
Capitalizes on new enterprise IT portfolio investment and
spend management process and governance framework
CHALLENGE
A global pharmaceutical company hired a new CEO to restructure the organization
after their industry ranking and market share fell dramatically from first to seventh
place in a relatively short period of time. Among the initial goals introduced by the
CEO was a long-term, cost-cutting target of $4 billion within five years. This strat-
egy included restructuring the global IT organization, whose yearly budget was ap-
proximately $1.5 billion. A new CIO was appointed and tasked with:
• Aligning the IT department to the new corporate strategy;
• Restructuring 10 separate divisions and consolidating to half the amount;
• Reducing spend across the board by 15%; and
• Instilling a new company culture focused on delegation and accountability.
To achieve these objectives, the new CIO had to overcome challenges in the
following areas:
• Once a year planning occurred with little contingency.
• A lack of consistency across divisions in terms of technology platforms
and process:
• Definition including spending categories, tracking criteria, gover-
nance, and roles made it;
• Difficulty consolidating and analyzing information to drive the IT
transformation.
• Lack of clarity as to ownership, funding, and management responsibility
of investments within IT divisions and across Business and IT units.
• Unclear investment alignment to corporate strategy – investments
decisions were made using siloed division objectives only.
Create Portfolio
Select Portfolio
Plan Portfolio
Manage Portfolio
Contributors:
CIO and IT Leadership Team,
Strategy and Planning team,
Divisional Portfolio Managers
Time to Success:
1 year: Design, Pilot and Full
Deployment
Deliverables:
• Portfolio process and tool
framework
• Comprehensive project
repository
• Integration of portfolio and
financial planning and tracking
• Roles and responsibilities of
stakeholders
Key Benefits:
• Common cost structure
• Innovation pipeline
• Budget planning and tracking
Software:
Microsoft Enterprise Project
Management Solution
www.umt.com

2. Solution
UMT Consulting was brought in to help the company
achieve its restructuring goals. The recommendation
was to design and roll out a portfolio management
framework across divisions globally to bridge the gaps
across the divisions and units, and harmonize processes
and roles. The framework is based on years of experi-
ence that UMT Consulting brings and which takes into
account the company’s capability to absorb change and
successfully implement key components of a new
process and enhanced governance. Microsoft Office
Project Portfolio Server was chosen as the preferred tool
given the challenges facing the organization. Socializa-
tion and adoption plans to assist with change manage-
ment aspects were defined in conjunction.
The solution was articulated around three integrated
constructs:
Cost Structure Management: A unified classification of
projects in three major types of spend, each with differ-
ent roles, rules, and lifecycle governance coupled with
unified cost categories and list of funding sources en-
abled consolidation of investment information in a con-
sistent manner across divisions. It provided project and
program managers with clear data requirements and
touch-points with governing bodies. As a result, portfo-
lio reports complement traditional financial plans to en-
able the IT Leadership team to understand cost and
value opportunities.
Budget Planning and Review: Instead of the previous
detailed yearly planning exercise, the budget is now
prepared and updated at a higher level using programs
as allocation vehicles. The new ongoing process to
manage demand and review the portfolio quarterly
helps avoid planning fire-drills that historically paralyzed
parts of the organization for weeks. The portfolio is now
seen as a dynamic innovation pipeline. This allows
project managers to focus on planning a smaller number
of relevant projects at a time, resulting in sounder
budget and more accurate resource estimates.
Project and Portfolio Tracking: Common qualitative
and quantitative tracking indicators were defined based
on the unified project classification and cost categories.
On a monthly basis, Project Managers track active
project forecasts and statuses that roll up to provide
program and division portfolio health. This monthly
tracking process is integrated with the ongoing
planning and quarterly reviews.
Results
The resulting solution provided executives and their
management teams with a number of capabilities to
help transform the IT organization and manage it as
a business:
• Capture 100% of the IT spend in several discre-
tionary and non-discretionary classes.
• Facilitate governance and exercise oversight using
a common Portfolio calendar
• Develop business cases and track projects using
standardized roles and guidelines
• Combine the dynamic pipeline and active perspec-
tives of the portfolio to reconcile with financial
systems
• Quickly identify execution risks and research under-
lying causes to take necessary actions
• More efficiently prepare and maintain an accurate
budget plan while keeping the flexibility for un-
planned demand
As a Project Sponsor reflected, "It is amazing how we
now talk with 100% more confidence about the visibility
into our budgeting plan numbers, using allocation and
appropriation reports."
ABOUT UMT CONSULTING
UMT is a recognized provider of Project
Portfolio & Integrated Portfolio Manage-
ment solutions and management consulting
best practices. For over two decades UMT
has helped Global 2000 companies gain
transparency across their business and
technology asset portfolios, rationalize
costs, collaborate to make smarter invest-
ment decisions, and maximize ROI. UMT is
Microsoft's Worldwide PPM Partner of the
Year 2013 and has been twice named a
Gartner Cool Vendor in PPM and is posi-
tioned as a Visionary in Gartner's Integrated
IT Portfolio Analysis Magic Quadrant.
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