msha portfolio management€¦ · support the portfolio planning and optimization process. results...
TRANSCRIPT
Speed to Valuein
Portfolio Management
Presentation Objectives
Creating an environment where IT becomes viewed as a strategy enabler and value driver for the organization
Ensuring investments are strategically aligned with both business strategy and the organization's resources to deliver successfully
Building an imperative for change that drives focus and adoption
Setting up a governance structure that clearly articulates strategic objectives, translates them to business drivers for project prioritization, and maintains focus to ensure benefits are realized by the organization
Attendees will learn about:
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Agenda
MSHA Background – Paul Merrywell CIO, MSHA
Challenges
Objectives
Results
Benefits
Gaining Alignment
The PPM Process
Portfolio Optimization Workshop
Resource Capacity Analysis
Technology Enablement (Microsoft Project Server 2010)
Looking Ahead
Value Proposition of PPM
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MSHA Background
Mountain States Health Alliance (MSHA) is a not-for-profit healthcare organization based in Johnson City, Tennessee
Operates a family of hospitals serving Northeast Tennessee, Southwest Virginia, Southeastern Kentucky, and Western North Carolina
Employ 9,000 staff; 1,300 Physicians; 2,700 Volunteers; 1000 Medical Students
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Challenges
Increased demand on IT Resources supporting business needs
Overlying pressure to do more with less
Lack of visibility into resource and financial needs
IT enabled projects not prioritized in alignment with strategy
Healthcare reform creates substantial need for IT investment
Operational needs balanced with new IT requirements
Overstretched IT resources compromised delivery
All of the above required changes in how IT operates to support the dynamic requirements of technology in
Health Care.
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Objectives
Improve resource demand and capacity planning
Improve the project intake process
Balance resources and investments based on strategy
Create a “level playing field” for differentiating projects based on strategic or financial return
Optimize investments for new capabilities once Safety, Regulatory, and Replacement “must do” projects are identified
Instill a disciplined governance process that supports prioritization based on value to the organization
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Results
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Cross-business oversight and control of IT Enabled portfolio:
Visibility of ALL IT enabled investments
Prioritization of ALL IT enabled investments Strategic value
Financial value
Business Risk
Optimal alignment of IT resources
Annual portfolio planning process
Ongoing intake and governance structure to guide ITGC engagement in monthly portfolio delivery oversight by ITGC Sub-committee
Transparent decisions based on facts within an established governance framework
Results
Cross Organizational Collaboration
Project ManagersPMs involved to drive development of the Business Cases and engage Business Owners
Business OwnersBusiness Owners made accountable for the articulating the business description and benefits in the Business Case
Subject Matter ExpertsSME’s are enthusiastically involved to validate Business Cases prior to ITGC review
Enterprise Perspective
Driving a broader perspective of investment value
Elevated focus on agreed strategic initiatives
Allowed us to determine high value work for MSHA
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Benefits to MSHA
Transitioned from a non-managed project portfolio to a managed project portfolio aligned with MSHA strategy (6 mos)
IT projects are now aligned with strategy with consideration of resource demand and capacity
Investment decisions are made considering the needs of all business requirements – not just IT enabled projects
Instilled a consistent business case process that enables the differentiation of proposed projects by their value to MSHA
Standardized criteria for determining the “right” projects
Improved delivery success by enabling a focus on the most valuable projects
“Speed to Value”Portfolio Management Delivered in 6 months
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Gaining Alignment
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The means to implement a framework for prioritizing, selecting, and governing the portfolio of IT enabled projects and programs.
This includes the development of a portfolio intake and governance framework based on best practices to ensure we achieve our strategy.
Continuous project intake
Lack of prioritization
Resource demand vs. capacity
Dependency awareness
Lack of benefits realization
Alignment with the organizational strategy
Continuing challenge to do more with less
What is It? “Why do we Need This?”
Gaining Alignment (con’t.)
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• Projects not aligned with strategy
• Managing too many of the wrong projects
• Unable to prioritize critical projects or kill the unnecessary ones
• No defined processes for reviewing ideas and business cases
• Senior executives driving personal agendas
• Attempting too many projects simultaneously
• No benefits realization process
• Lack of overall visibility of risks, issues, and conflicts
• Inability to proactively manage the portfolio
• Lack of dependency awareness
• Lack of visibility into project overlaps
Gaining Alignment (con’t.)
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Selecting and Prioritizing Capital InvestmentsMandated Improvements
Regulatory Compliance
Quality Safety
Sustaining the Business
Replacing systems – reducing risk to the business.
New CapabilitiesIntroducing new ways to
drive the business
Responding to a Safety eventMaintaining/Improving Quality Standards
Gaining Alignment (Con’t.)
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A small number of projects that are critical to the organization: High visibility Strong business case data High strategic value alignment
Major Investments with high implementation costs (new technology, facilities, etc.)
Many small & midsize projects: Less visible No consistent prioritization approach Value unknown Limited funding available for new/key
capability projects
Limited visibility and varied value measures of small &
midsize projects potentially diverts focus, capital & resources from areas of
highest value
Numerous Active projects and requests No understanding of financial value No understanding of alignment No feel for resource achievability
The PPM Process
Defined Process (ensure adoption)
Strategic Drivers and Rankings
Governance Structure
Project Categorization
Project Intake Analysis
Qualification Criteria & Impact Analysis
Portfolio Prioritization and Optimization
Prioritization Workshop
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Process Overview
Engaged the organization to achieve strategies.
Cross-business involvement.
Senior executive direction & executive leadership of portfolio delivery.
Corporate Constraints
Stakeholder Engagement & Communications
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Define “Right Level” of Process Rigor
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Burdensome process constrains responsiveness & leads to disengagement
The IS organization or IS PMO cannot own the process
With this in mind, the approach is designed to:• Position ITGC Sub Committee as the owner
and driver of portfolio intake and governance.
• Leverage appropriate forums for communications and stakeholder engagement.
Right Data Right People
Right Decisions
Strategic Business Drivers
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Collaboratively defined Strategic Business Drivers (Senior executive team).
Defined evaluation criteria and validation approach for each Business Driver (for use during strategic impact assessment).
Established Business Driver weightings.
Driver Weightings incorporate leaderships input on Priorities
Driver Weightings
Governance Structure
Organizing for Success
Engaged Executives
Established Governance Organization
• Cross-business Representation
• Roles & Responsibilities
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Governance Structure (con’t.)
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Vis
ion
& D
irec
tio
nP
rio
riti
zati
on
& A
lign
men
t
ITGC Sub-Committee
ITGC ExecutiveCommittee
An
nu
alO
ngo
ing
Project Categorization
2020
Mandatory legal, safety,
environmental or other regulatory
requirements. May include
compliance with internal policies.
The minimum amount of spend to
maintain current operations
No Capital Projects
Adding or improving capability
that generates long term
competitive advantage
Risk Mitigation
DiscretionaryNon-Discretionary
REDUCE COST & OPERATE
EFFICIENTLY
REDUCE RISK & ENHANCE ASSETS
COMPLY WITH LAW & CORPORATE
POLICY
INCREASE COMPETITIVE ADVANTAGE
Clearly defined spend categories enable optimized allocation of funding and resources across the portfolio
and allow external benchmarking.
Portfolio Intake Analysis
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Compiled portfolio inventory
Rolled out Business Case template
Estimated cost, resources, benefits, timing constraints and related dependencies
Conducted assessment of inflight and proposed requests
Project Intake Analysis (con’t.)
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Defined process with built in checks and balances ensures the best portfolio
Discretionary Projects Impact on
Weighted Strategic Drivers:
Selected Portfolio
Portfolio
Optimization
Review
Strategic
ValueFinancial
Value
Regulatory,
Compliance &
Safety
Sustain
(Replacement)
New Capabilities
Yes
“Force in”
to portfolio
“Force in”
to portfolio
Driver 1
Driver 2
Driver 3Low
Impact
Extreme
ImpactS
core
Strong
Impact
Yes
No
Risk Score Indicates High Impact, High Probability?
Regulatory & Compliance:
Specific Regulation? Not Deferrable?
Safety:
Meets specific criteria?
C
Lo
cal
Go
ver
na
nce
& A
pp
rov
als
Inv
estm
ent
Str
ate
gy
Ro
ad
Ma
ps
No
Co
nst
rain
ts &
Str
ate
gy
Qualification and Impact Analysis
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Project X Company A has acquired a medical center. The intent of this project is to
standardize the corporate systems and eliminate legacy systems.
Operational Efficiency. Measured in
reduction of Annual Operating
Expense
This migration would allow the elimination of duplicate systems allowing
the ability to save annual system maintenance costs.
Driver Mapping
Impact Scale
Op. Efficiency- Driver
Measure None Low Moderate Strong Extreme
Annual OPEX Savings
0 -
<= $99,999
$100,000 -
<= $499,999
$500,000 -
<= $999,999
$1,000,000 -
<= $1,999,999
$2,000,000 +
Projects may impact more than one driver. In such an instance a project would be scored against all
impacted drivers to assess value contribution
Portfolio Prioritization/Optimization
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Enterprise Strategy
Driver 8
Driver 4
Driver 6
Driver 7
Driver 5
Business Drivers:
Driver 1
Driver 3
Driver 2
Sample
Discrete, Measurable Drivers DriverWeightings
Pai
r-W
ise
Co
mp
aris
on
s
%
%
%
%
%
%
%
%
Executive involvement is critical in selecting and weighting the relative importance of the strategic drivers against which projects should be assessed for alignment to business strategy.
Strong Extreme
None None
Moderate None
Extreme None
None Moderate
None None
None Strong
None None
Project 1 Project 2
Impact EvaluationBy Owner
YX
Strategic AlignmentScore
Ide
nti
fy S
trat
egi
c D
rive
rs
Use enterprise strategy
Prioritization Workshop
Regulatory(Forced-In)
Safety(Forced-In)
Compliance(Forced-In)
Regulatory
Compliance
Safety
New Capabilities
Sustain
Active Carryover
1 2 3
IT Enabled Portfolio
1 Review Active Carryover Projects
2 Review Regulatory, Compliance, & Safety projects
3 Review Sustain Projects
4 Review New Capabilities Projects
5 Review Preliminary Strategic Portfolio
6 Refine Portfolio
Approach
Sustain(Forced-In)
NewCapability
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All projects were evaluated using a common framework allowing consistent view of the entire portfolio.
Business Cases provided foundational information reinforced and validated by knowledge of ITGC Sub-committee members.
Prioritization Workshop (con’t)
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IT Enabled Portfolio
Composition Optimized and balanced portfolio of investments and delivery plan.
ITGC Sub Committee enabled for collaborative and objective investment decisions
Visibility of portfolio composition (e.g., breakdown of projects by classification)
Resource capacity and demand awareness
Dependency awareness
Budget and IT resource constraints balanced to achieve the most value to the organization – Investments aligned with organizational strategy
Outcomes:
Prioritization Workshop (con’t.)
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53 Projects
Preliminary IT Enabled Portfolio Going Into the Workshop
49 Projects
Final ITGC-recommended IT Enabled Portfolio
Safety Regulatory, Compliance
Reduced from 17 to 6
Sustain
Validated Business Risk
New Capabilities
Increased from 27 to 31
Summary
Reduced the number of projects that need to be Forced In from 26 to 18.
Increased Sustain projects from 9 to 12 -- validated Business Risk of each Sustain project
Increased New Capabilities, providing the ITGC with additional flexibility on when and if to proceed with a selected project based on their strategic value, budget, resources, and other priorities.
Prioritization Workshop (con’t.)
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Engaged Non-IT Executives• Established and sustained non-IT
operational ownership – a critical element of sustaining change.
• Established a portfolio delivery organizational structure that facilitates effective cross-business ownership and accountability
Drove the ChangeIdentified and communicated targeted changes and lead the shifts necessary to evolve portfolio delivery capabilities.
Communicated the case for change (why) and the path (how)• Socialized the value proposition
• Set and Managed expectations
Target Benefits and Communicate SuccessesDemonstrate measurable and incremental improvements in the IT Governance environment and communicate them to the enterprise.
Resource Capacity Analysis
Resource estimates validated.
Initial analysis of IT Resource capacity against the selected project portfolio was conducted to determine the resource actions required to deliver the portfolio. Specific resource analysis conducted from two perspectives: • Projects
• Roles
Addition capacity vs. demand scenario analyses were conducted to support selection of optimal scenario and provide real data for resource discussions by IT leadership.
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Resource Capacity Analysis (con’t.)
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Multiple views to support IT resource management
Resource availability
Demand
Portfolio Visibility
Holistic look at organizational resources by generic roleResource Visibility (Deficit & Surplus)
Project RequirementsGeneric role demand at the project level
Enhanced Visibility & Control of Resources*
Technology Enablement (MSP 2010)
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Created a PDP to capture essential Business Case information to support the portfolio planning and optimization process.
Results loaded into Project Server 2010 to enable portfolio analysis.
Leveraged Project Server 2010 technology to accelerate results (e.g., what-if analysis, resource capacity vs. demand, budget, timing, dependencies.)
Portfolio Management Roadmap
Build an Improvement RoadmapPortfolio intake and governance requires a comprehensive improvement roadmap with many integrated parts:
• It is not a onetime event – effective governance is part of overall IT delivery capability evolution
• IT governance should be addressed from both top down and a bottom up
• Clearly defined roles, ownership, and accountability is essential for success
Plan and deliver incremental value to the organization Creating a more effective and sustainable IT governance environment and portfolio delivery organization requires time and investment to deliver incremental value (quick wins) and to build and sustain
Balance Improvement ActivitiesIT governance requires three pillars to succeed:
Leadership, organization and people
Consistent, but scalable and flexible policies and processes
Enabling technologies
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Taking Steps to Avoid Pitfalls
Think Long-term Delivery of Benefits Treat the implementation initiative as a long-term improvement program with a series of phases with timetables and clearly defined benefits to the organization
Ensure Non-IT Executives are part of the process and committedEstablished and sustained non-IT operational ownership – essential for success.
Lead the Change and TransitionImplementation requires leading behavioral shifts, supported by:
• Marketing the value proposition
• Managing change and transformation
• Manage expectations
• Organizational structure that facilitates effective ownership and accountability
Target Benefits and Communicate SuccessesDemonstrate measurable and incremental improvements in the IT Governance environment and communicate them to the enterprise
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Value Proposition
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“Firms with mature Portfolio Management and IT Governance had 20% higher profits
than companies with poor Governance given the same strategic objectives.”
Dr. Peter Weill, Director of the Center for Information Research , MIT (Based on a recent study of 250 enterprises in 23 countries)
Contact
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Questions? Please contact
sean.o’brien@pcubedTel. 1(720) 289-3534
with any questions for Sean or Paul Merrywell