|
Page 4 of 5
Meeting The Challenges
An IT portfolio management capability brings with it a significant degree of change for IT and the business alike. Change brings about challenges such as the following:
Budget Tracking
One challenge of including application maintenance and support in IT portfolios is that IT budgets tend not to track these efforts at a sufficient level of granularity for effective financial tracking. Here, the IT portfolio management discipline acts as a change driver, forcing a more robust cost tracking process for these activities (and helping both IT and general management to see these more in a true profit and loss context.)
Customers
Projects are often driven and defined by customers who set the milestones, schedules, and so on. This leads to difficulty in defining what a project is internally as each case may be different. In some industries, such as defense and aeronautics, there tends to be a monopolistic customer which will dictate the kind of projects and timings, which can be decades long. It is clear that in the use of IT portfolio management, a planning tool can be affected by customer prioritization. The other end of the spectrum is a three to four month project timescale (e.g. mobile sector or financial markets). Here, companies using a portfolio management process perceive the product lifecycle to be too short to use this process.
Cultural
There is a big brother perspective that can be associated with IT portfolio management. This discipline makes it difficult to hide mistakes and poor decisions, and increases transparency around key decisions. Manipulating the project process (something senior managers may already be used to) becomes much more difficult. There is an issue of trust: if certain project are left out of the IT portfolio—in other words, if they are set to be "above" the portfolio management process—then key business managers will eventually discover this and lose confidence in the process, asking "what other things are IT resources working on, and where is that extra money being spent?"
But project managers themselves have not been blameless here. Many among us have raised risks or issues only at the last moment (as their effects are about to materialize), or during a weekly or monthly status report. A good portfolio management process makes it much more difficult to control and filter information in this manner by making the reporting of slippage, scope change, risks, issues, and dependencies much more transparent. Moreover, to provide effective portfolio-level information and reporting to senior stakeholders and decision-makers (and there will be a multitude of report requests once the process and system are up and running), a granular level of project detail must be present. Project managers may not be used to providing this detail unless mandated. The group responsible for oversight of the portfolio management process must be prepared to set and enforce minimum data provision standards.
advertisement
Finally, there will also be a significant training and learning curve, even for organizations that have achieved process maturity. Portfolio management means an entirely new way of looking at, recording, tracking, and reporting projects and the cultural changes this will bring should not be underestimated. And it is human nature that, given the chance, some people will blame the portfolio management tool for information that they view as incorrect or negative. Use a recurring training and communications effort to introduce the process and supporting tools and teach both IT and key business contacts about what they need to know. Likewise, the governing body of the portfolio process must make sure that complaints of tool inaccuracies are investigated, resolved, and communicated.
Staffing
IT portfolio management requires skill sets beyond traditional technology and even project management skills. The process must be guided by an individual or group that understands enough about both the business and technology to help manage the portfolio. If the organization already has an IT alignment team, staff from here may be good candidates to do this.
Finance
If the financial measurements attached to an IT project are to be accepted throughout the company, then an authoritative representative from the finance department needs to support the method, as well as the ROI calculation. There is no better approach for getting the finance group to support the ROI of a proposed IT project than to work closely with the financial organization in determining a project's ROI potential. Where a committee has been put into place to govern the IT project portfolio, the finance department must be represented.
Flexibility
With an IT portfolio management process—as with any centrally enforced discipline—there is less flexibility for individual project managers in how they track and report their project status. But it is counterproductive to be enslaved to any methodology when it comes to actually managing projects—and at times, selecting them. There are too many interdependencies between projects and the intangible benefits attached to each IT project are very difficult to quantify. Any process or formulaic approach to evaluating projects will miss some good projects and allow some bad ones. The same holds true for managing projects—individual project managers need to be given enough support to be able to manage their projects, each with its own unique mix of business objectives, technology challenges, sponsors, staff, risks, and so on.
Start with Process
As with any business process re-engineering initiative (and this of course is what introducing an IT portfolio management process entails), there will be a temptation to start with a software solution. Although software (particularly if based upon portfolio management standards) can help to roll out and enforce a new process, you should make sure that this is the process that best adds value to your organization. There is no harm (and in fact there is benefit) in looking into vendor tool capabilities while pondering the right portfolio management process. But it is better to start by looking at that process in the context of your IT and business process maturity and governance before selecting a tool.
Next: Conclusion
|
