Unifying for successThe UK & Ireland Customer Conference

How to rationalise your project portfolios & reduce IT complexityKeith RackleyDirector, Solutions ConsultingBearingPoint, LTD

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Unifying for successThe UK & Ireland Customer Conference

Set the stage…

What are portfolios?What do we mean by

complexity in this context?What are the interactions

between the two?What do we mean when we say

rationalize?

Unifying for successThe UK & Ireland Customer Conference

The Project Challenge

• Poor success rates • Inconsistent management

information (metrics, success criteria)

• Distributed information repositories

• Ineffective governance

IT organizations are seriously challenged with improving the efficiency of individual projects and the effectiveness of the project portfolio.

SuccessfulSuccessful

FailedFailed

ChallengedChallenged

Challenged: Over time, over budget, and/or didn’t meet requirements.Failed: Project cancelled

Project Success RatesStandish Group CHAOS Study 2004

51%51%

15%15%

Unifying for successThe UK & Ireland Customer Conference

Identifying the Issues

Management Domain Questions

Project Management• Does your firm have inconsistent project

execution?• Does you firm have incomplete project

baselines and metrics?

Portfolio Management• Does your firm have difficulty rationalizing

resource usage supporting project and service delivery?

• Does your firm have difficulty performing “air traffic control”?

Program Governance• Does your firm have difficulty evaluating

alternative portfolio strategies?• Does your firm have difficulty relating project

deliverables to achieving firm strategy?

People - Organization and Governance• Does your firm have accountability

problems for IT project issues?• Does your firm have ineffective business-

driven project investment prioritization?

Process - IT Process• Is your firm’s project delivery unacceptable

with labor costs higher than the competition?

• Are metrics and life-cycles missing to support continuous process improvement?

Technology - IT Process Automation• Does your firm have technology

implementations which do not meet value expectations?

• Does your firm have more than one tool or incomplete tool implementations for a given space?

Maturity Questions

If you answer “yes” to any of these questions, you may have a need…

Unifying for successThe UK & Ireland Customer Conference

Project Portfolio ManagementMaximum Business ValueMaximum Business Value

Project Management

Portfolio Management

Program Governance

Maximize the efficiency of each project

Maximize efficiency across projects

Maximize effectiveness of investment planning

Unifying for successThe UK & Ireland Customer Conference

Project Portfolio Management (PPM) provides a set of IT Management capabilities that helps IT organize and govern their projects as a unified program to improve project success rates and ensure investments are going to the highest value initiatives.

Alignment

Integration

Maturity

Project Portfolio Management (PPM)

Understand your

Projects (Project

Management)

Organize your projects

(Portfolio Management)

Maximize value of your investments

(Program Governance)

Common Metrics/Methods

Improved Success Rates

Comprehensive Management Information

Business Value

Solution Approach

Create a baseline Assess current state Create a heat map Develop the target state Perform a gap analysis Create the transition plan Execute the plan

Assess the business requirements Create a project taxonomy Create a data schema Create the enterprise portfolio Organize project data in a common repository Create management visualizations and scenarios Integrate/automate processes and workflows

Establish the governance framework Review business goals and strategy Assess investment and resource plans Establish policies and high level processes for project proposals/approvals Baseline the enterprise portfolio Continually evaluate and adjust

Unifying for successThe UK & Ireland Customer Conference

Conduct project inventory.

Create the baseline.(work with LOB to create understanding)

Create high level policies and selection criteria

Assess planning and performance.

Organize projects.Create common policies,methodologies,PLC and metrics

Manage the portfolio tomaximize value to the business

RRII

B

Request Management

Integration, e.g.,resource & financial management

Automation

Constructing/Managing the Portfolio

A life cycle evolves for the portfolio itself as maturity increases.

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Business Driver LinkageKey Initiatives

• CRM• Single View of Customer• Customer Service Improvement• New products & service development• Channel Consolidations• Online & Wireless initiatives• External Portal• xxxxxxx

• Business Process Improvements• IT Cost-Take Outs• Workflow and Collaborations• Procurement• Asset Management• Internal Portal, Knowledge Mngt.• Employee Self Service, Training• Shared Services • Regulatory Compliance• xxxxxxxx

• Business Process Re-engineering• Decision Support• xxxxxxx

Metrics

• Revenue/customer• Customer Retention Rate• Avg. Products/Cust.• Market Penetration• Revenue/Channel• Revenue/employee• Revenue growth rate• xxxxxxx

• Process Cost• Cost to acquire customers• Cost/employee• Employee Retention• SG&A as% of Sale• Operating income/Net Sale• Productivity/Employee• Efficiency Ratios• IT cost / Revenue• IT cost/ employee• xxxxxxxxx

• Cash to Cash Cycle• Infrastructure improvement• Time to Service & Develop• Maintenance Reduction• xxxxxxx

Customer AcquisitionCustomer Retention

Cross-Sell

Products & Services

Market ShareGeographical ReachDelivery Channels

Distribution & Delivery

Information Technology

Sales and Marketing

Staffing

General Administration

Capital Lockup

Infrastructure Related

Process Improvement

Research& Development

Business Drivers

Revenue Increase

Cost Reduction

Working Capital Reduction

Inc

om

e S

tate

me

nt

Ba

lan

ce

Sh

ee

t

Shareholder Value

Annual Benefit

• ROI• IRR• P/E

EPS Impact

One Time Benefit

SAMPLE

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Portfolio Analysis E

ase

of I

mpl

emen

tatio

n

RiskHigh Low

High

Bubble size: represents relative savings amountLow

Data Center Consolidation

Telco Rates Optimization

StorageConsoli-dation

Out-source Email

WirelessLANs

Consolidate Backup

7 DigitDialing

Helpdesk to India

Application Server

Consolidation

Outsource Application

Maint.

Common ApplicationSoftware Platforms

FileServer

Consolidation

StandardMS Server

Configuration

EliminateEffort

Duplication

DeskSide to

ITS

SharedServices

GDC 70/70/70

Consolidate GDCAgreements

StreamlineOrganization

InterBusiness

Bandwidth

SAMPLE

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Sources

Sources

Activities

Activities

Key Deliverables

Key Deliverables

Information Gathering

Current State Review &

Benchmarking

Target State Development

GAPAnalysis

Business Case

Questionnaires& Surveys

Existing Documentation

BE & ITIL “Best Practices”

Tech. Research& Industry Trends

ROI Research

“Current State” Assessment- Operating Model - Processes- Technology- Organization- Facilities

Current State Survey

TemplatesFuture State- Vision- Principles- Architecture- Technology

Business Case- Scope- GAP Addressed - Requirements- Benefits- Deliverables- Risk Analysis- Return On Investment

GAP Analysis- Implementation Maturity Roadmap

- Target Maturity- GAP Analysis

- Process- Technology- Organization- Facilities

TransitionPlanning

Strategic Roadmap- Scope- Plateau Definitions- Implementation Plan- Dependencies- Timeline/Resources

Past Implementations& Research

Getting Started: Strategy AssessmentThe results of the assessment describe specific ways in which value is created

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• Better planning and scoping• Improved alignment to business goals and strategy• Consistent policies and selection of projects • Holistic, easier, more accurate investment planning• Improved communications: project sponsors, stakeholders, managers, staff• Optimal resource utilization and productivity• On-demand availability of management information• Increased transparency of financials and performance

PPM Results• Reduced Reduced

ComplexityComplexity

• RationalizeRationalized Portfoliod Portfolio

• Dramatically Dramatically improved improved success ratessuccess rates

• Maximum value Maximum value from from investmentsinvestments

Unifying for successThe UK & Ireland Customer Conference

Q&AKeith RackleyDirector, Solutions ConsultingBearingPoint, LTD

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