Editor’s note: The online community of worldwide IT executive members meet often to trade tips, tactics and best practices. In this monthly Exchange column, we will showcase some of their ideas and experiences, along with what’s top of mind and what’s not. To learn more, visit exchange.cio.com.
TOP of MIND
THE COMMUNITY HAS BEEN JAWING ABOUT . . .
Six Sigma in IT: When can I start?
IT audits: A necessary evil
Utility computing: Yawn
VoIP: Ready for prime time?
Maintenance fees: The horror!
YESTERDAY’S NEWS
Using published IT headcount benchmarks as a basis for hiring:
Don’t bother!
Portfolio Management:
Dos and Dont’s
There’s a nagging question that lurks within the consciousness of most CIOs: How do I know I’m working on the right projects?
PORTFOLIO MANAGEMENT, a method of aligning IT with business goals by prioritising IT projects as you would a financial portfolio, can provide answers to that question. However, like most ideas in IT, portfolio management sounds great in concept but is tough in execution. “Portfolio management is like Olympic mud wrestling,” says Dave Clarke, VP of enterprise technology services at the American Red Cross, who has 10 years’ experience managing portfolios at WL Gore & Associates and General Motors. “It’s nasty, difficult and high-spirited even in the nicest of organisations. But it’s well worth it in the end, for the discipline and clarity it can produce.”
Going on the theory that it is better to learn from someone else’s mistakes than to make your own, we asked CIO Best Practice Exchange members to share lessons learned from the front lines of portfolio management.
1. Start simple. The more features the better, right? Not necessarily, says Jeff Chasney, executive VP and CIO of CKE Restaurants. “Don’t look for a fancy portfolio management system with lots of bells and whistles. Spreadsheets work great.”
2. Be willing to cancel projects. “Constantly review the merit and utility of your projects based on current information,” says Chasney. “Just because a project is placed on a docket doesn’t mean that its efficacy remains constant across time.”
3. Make sure your portfolio indicates which investments did not make the cut. “The chief value of a portfolio is that it represents critical decisions about investments,” says American Red Cross’s Clarke. “The portfolio should clearly show what is currently approved for spending and what is not, but might be at a later date.”
4. Have a rational and transparent prioritisation scheme. At GM, Clarke used one that looked something like this:
- Mandatory or legal
- Fix major operational risk areas
- Major strategic projects (note that this is third on the list!)
- Projects with significant business returns
- Nice to have
In addition, a time line is a smart way to prioritise your projects. “If you compare all projects on a common time line horizon,” says CKE’s Chasney, “you can determine how much is gained by each project and when you will begin to realise the gains. You then compare the gain amount and time line against your company’s financial objectives to develop a reasonable course.”
5. Set a corporate strategy — and incentivise others to stay the course. Dade Behring, a medical device company, focuses on “just a handful of initiatives”, says CIO David Edelstein. “The company’s IT governance council succeeds,” he says, because “each member of the executive leadership team works hard to ensure our respective organisations are supporting these initiatives. Everyone’s individual performance objectives, from the CEO to the guy on the shop floor, are explicitly linked to one or more of the company initiatives. It becomes relatively easy to link IT investments to the company initiatives because everyone is moving in the same direction.”
6. Ensure the IT staff does more than just speak for IT. Portfolio management relies on a strong partnership between the business and IT — at all levels. “IT workers should be active members of several functional leadership teams in the company, and they should have leadership roles on the business-related tasks of importance to those teams,” says Edelstein.
Can’t Get Started?
If you’re having a tough time getting portfolio management off the ground, these next two tips are for you.
Find the pain, and focus on it. When building the business case for your portfolio management implementation, begin where the organisation is hurting the most, suggests Ron Kifer, VP of program and solutions management at DHL Worldwide Express. “Use industry case studies to identify business benefits and then quantify those benefits against your organisation’s current situation,” he advises.
Don’t go it alone. Use gurus, enterprise leaders and senior-level colleagues to support your business case, notes Kifer. “Do not rely solely on your own influence and credibility within the organisation to sell portfolio management,” he says. “Cite examples of success in other organisations and, if possible, bring in an acknowledged leader in the field to support your position in a formal presentation to your senior leadership.”
EXPERIENCE BASE
Setting Up a Project Management Office
Jack Ott, VP of IT and CIO at Allianz Canada, talks about what works
Our first attempt at starting a PMO [project management office] ended in failure. We underestimated the training aspect. All the handbooks and templates in the world are not much use if project leaders do not know how to apply them. But since then, we have been able to establish an effective PMO function. There is no set formula for success, but if I could give just one piece of advice, it would be this: Get control of the project initiation process before you do anything else.
“In most PMO-less companies, projects start up all over the place, and for the strangest reasons. The inbound queue is always full beyond capacity, and any attempt to get discipline around project execution is doomed. (Some of you may remember the I Love Lucy episode where Lucy and Ethel are working on the cookie assembly line. It keeps going faster and faster as quality of execution goes downhill.)
“To start the PMO you need to get control of what you do before you can start improving how you do it. We started with a simple Project Planning Pipeline report that categorised projects into Active, Next to Start and Proposed. With a few simple rules around how to ‘activate’ a project, our customers quickly got used to the fact that we are doing fewer concurrent projects, but we were going to execute them well. This set the stage for adding project management methodologies, training, tools, support and all the good things that PMOs do to improve execution.”
By Martha Heller, Director CIO Best Practice Exchange
PEER COUNSEL
Wireless Communications Policy
?Q: As our organisation has grown, our number of mobile phones has grown sixfold, and our usage is skyrocketing. Now the CEO wants BlackBerry devices. Before we move ahead, I feel the organisation needs a wireless communications policy to govern the use of these and future devices. Does anyone have insight on this subject?
— VP AND CIO OF AN ASSISTED LIVING FACILITY
! A: We insist that all metered wireless devices are purchased and administered by IT but paid for by the requesting cost-centre owner. IT sets standards, negotiates rates and ensures folks are on the right plans. (We even provide guidelines for use.) But the business pays for the cost of the devices and the monthly fees. We have a device-request process that includes cost-centre owner approval of any request. This approach allows us to manage the contracts and standards but puts the onus on the business to manage proliferation by making them accountable for managing cost.
— ROBERT URWILER, VP AND CIO OF MACROMEDIA
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