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1 Implementation of Project Portfolio Management - North Carolina State Government Overview Presentation.

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Presentation on theme: "1 Implementation of Project Portfolio Management - North Carolina State Government Overview Presentation."— Presentation transcript:

1 1 Implementation of Project Portfolio Management - North Carolina State Government Overview Presentation

2 2 Framework for Managing IT Investments I. Strategic Business and IT Planning and Investment Selection and Budgeting - Investment Portfolio Management (IPM) – Build, Buy, and/or Implement the Right Assets III. Investment Operation and Maintenance, and Renewal, Retirement, or Replacement - Applications Portfolio Management (APM) – Maintain, Operate, Renovate, and Retire Assets in the Right Ways and Times II. Project Implementation - Project Portfolio Management (PPM) – Build and Implement Assets in the Right Manner Life Cycle of IT Investments Identify investments that best: Enable governmental initiatives, agency missions and strategies, or compliance mandates Result in financial returns – revenue generation or cost savings Provide better constituent services or program effectiveness Fit technical architectures Satisfy budget, staffing, and other constraints Meet risk profiles Clarifying roles and responsibilities Providing appropriate oversight Ensuring they are well planned and thoroughly researched prior to starting Following management and development methodologies, best practices, and lessons learned Defining, tracking, and evaluating project progress frequently to achieve budget, schedule, scope, and quality expectations Completing them successfully so that business goals and objectives are realized and benefits accrue Manage projects by: Operate and maintain assets so that: Benefits/costs are optimized over their useful lives through astute and timely renovations, consolidations, or eliminations Services offered meet availability, reliability, security, quality, and recoverability expectations within acceptable budgets Retirements and replacements are effected when assets are no longer cost-justified or risk-acceptable

3 3 Overview of IT Portfolio Management Agency Missions and Vision and Business Goals and Objectives Statewide and Agency IT Plans Application Portfolio Management Project Portfolio Management Investment Portfolio Management Identify Problems and Opportunities Funded New Projects Manage Portfolio Analyze Portfolio Optimize Portfolio Build and Maintain Inventory Develop Business Drivers and Business Cases Analyze Candidate Investments Adjust Project Portfolio Assess Value of Projects and Portfolio Manage Portfolio Implement Projects Select and Plan Investments New or Renovated Applications Project Proposals for Applications Renovations, Retirements, or Replacements

4 4 Portfolio Management Portfolio management is: a strategic and dynamic decision-making process to assess value, prioritize actions, and allocate resources to meet key enterprise objectives. A portfolio is: a collection of items grouped together to facilitate efficient and effective management so that fiscal, staffing, and other scarce resources can be optimally allocated to provide the most benefits or greatest value for investments made. The objective of portfolio management is: to optimize the enterprise’s IT portfolios in order to contribute to the organization’s successful performance and its sustained viability, value, and growth. The major tasks of portfolio management are: inventory and classify items in the portfolios, identify problems and opportunities, develop viable options, determine relevant criteria and weights, evaluate alternatives using pertinent information, and make reasoned and appropriate decisions. The results of portfolio management are: fact-based, data-driven, and analytics-oriented management decisions, using a consistent and disciplined approach within a well-defined governance structure.

5 5 Portfolio Management Goals Investment Portfolio Management (IPM): Identify, evaluate, and prioritize candidate investment opportunities that meet strategic business goals and objectives in the most effective and productive manner by appropriately considering and weighing key factors, such as alignment with agency missions or governmental initiatives, satisfaction of compliance mandates, delivery of desired returns or public value, initial and life cycle costs, architectural fit, risk profiles, staffing availabilities, and the inter-relations among investments. Project Portfolio Management (PPM): Advance the management of IT implementation projects by assisting to clarify roles and responsibilities; provide for well- understood and comparable oversight; ensure they are planned well and researched thoroughly prior to starting; follow management and development methodologies, best practices, and lessons learned; facilitate the management and monitoring of them to achieve, budget, schedule, scope, and quality expectations; and complete them successfully so that proposed business goals and objectives are realized and anticipated benefits and value accrue.

6 6 Portfolio Management Goals (Cont’d) Inventory applications; assess them using a variety of criteria (such as agreement with agency business strategies or governmental priorities, benefits and value to agency missions or business processes, costs to maintain and operate, ability to meet current and future agency business requirements, operational performance, technical status, and risks; and develop a management strategy for continued investments in them to maximize value over their useful lives. This is done by: a) analyzing present and future status from business, financial, operational, technical, and risk perspectives; b) determining business-criticality of applications and risk-urgency of results from assessments; c) identifying areas of over- and under- investments and reallocating funds to give the most benefits or greatest value for monies spent; and d) developing the best approaches, priorities, and timeframes for enhancement, renovation, consolidation, elimination, or replacement. Assets should be retired when they no longer are cost-justified or risk-acceptable. Applications Portfolio Management (APM):

7 7 Why Lifetime Management of Applications is Important – Causes of Value Dissipation Asset Life Cycle Value Phase of Investment Life Cycle Potential or Expected Value SelectionImplementation Operation 100% Lose 10 – 15% Lose 5 – 10% Lose 20 – 25% Actual Value Realized 50-65% Lack of strategic business plan Not strategically aligned with business goals and objectives Business cases deficient in tenuous benefits, overly optimistic costs, too ambitious schedules, unrealistic staffing, optimistic risk assessments, and/or unachievable benefits/returns Poor architecture fit Inadequate investment evaluation, ranking, and selection processes (pick wrong investments) Lacking executive support Weak project manager Deficient project planning, monitoring, and reporting Insufficient or inadequate requirements definition; contracting; and management of risks, vendors, testing, training, scope, quality, change, data conversion, communications, etc. Failure to reengineer business processes Over-customizing COTS packages No or inadequate post implementation assessments (PIAs) Incomplete post implementation reviews without focus on value and benefits realization and change impacts (delivery on business case) Lacking service management best practice framework (e.g., ITIL) and not implementing associated good processes Inadequate asset management best practices – current and complete inventories; periodic assessments; management plans for useful lives; and business cases for renovations, replacements, or retirements Adopted from PMO Executive Council Research

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9 9 Policy Drivers and IT Management Expectations for Project Management Offer documents and administrative management capabilities that follow industry recognized best practices for system development life cycle and project management Provide a “gated” review approach to ensure each project has performed all preceding work acceptably and is in position to complete the succeeding phase successfully, and to verify that it is still viable (i.e., continuing to offer worthwhile benefits and value within satisfactory cost and timetable parameters at desired quality levels and presenting an acceptable risk profile) Provides a workflow process that encompasses project approvals, checkpoint reviews, and periodic status reporting at project, agency, and statewide levels Enable the productive and effective management of projects Employ governance to maximize the potential of project success Support the consistent, disciplined, effective, and efficient performance of project governance Legislative MandatesDrive IT Portfolio Management Use Provide stronger oversight of project management:  Improve performance in costs, scope, schedule, and quality  Increase reliability of achieving expected business results, projected benefits to citizens, and proposed value to the state  Guide and administer governance for project approvals and monitoring/status reporting  Prescribe information to be developed, maintained, and reported for programs and projects  Report program and project status and identify exception situations

10 10 Objectives of Project Portfolio Management Provide a framework for the governance process and disciplines associated with the approval and monitoring of projects at the agency and State CIO levels. Tie the schedules, budgets, and objectives of investments (projects) to the business strategies and goals of the business cases underlying the approved funding requests – ensure alignment of project tactical actions with strategic business intentions by establishing a clear and direct linkage to the investment portfolio management process. Provide a sustainable approach to access individual project and project portfolio status on a frequent (near continuous) basis in order to identify risks and problems early, take proactive and positive actions for remediation, and as warrented, restructure or stop under performing projects in timely manner. The ability of state IT organizations to implement investment projects successfully (within budget, on schedule, and with the desired business results) in a predictable and reliable manner is key factor for retaining the faith and support of its funding authorities and tax payers.

11 11 Project Portfolio Management – Combination of Software Development, Project Management, and Governance Disciplines and Concepts Provides a workflow process that encompasses project approvals, checkpoint reviews, and periodic (primarily monthly) status reporting at project, agency, and statewide levels Incorporates a “gated” review and approval approach at governance hierarchy levels to ensure past work is acceptable and project is in position to complete the succeeding phase successfully – due diligence path Offers administrative support for development sequencing and project management that follow industry recognized best practices for system development life cycle (IEEE) and project management (PMI)

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13 13 Project Portfolio Dashboard

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