Presentation on theme: "Overview Presentation"— Presentation transcript:
1 Overview Presentation Implementation of Project Portfolio Management - North Carolina State GovernmentThank you for the opportunity to discuss with you the initiative for the implementation portfolio management to improve the planning, budgeting, and management of IT in NC state government. Although the title emphasizes application portfolio manage, which is the component currently being implemented, I will describe and bring you up-to-date on the entire project.Three months ago, George gave a high level overview of this initiative and described our progress and plans as of that time. I will build upon George’s presentation by giving a mid-level perspective of the concepts and practices of portfolio management and presenting a current status of the project.Before we start, I would like to explain the guiding philosophy covering this work. That is, the processes, software tool, disciplines, and techniques of portfolio management are being designed and implemented with the primary focus on providing the facilities and capabilities needed by the departments, agencies, and governmental programs to manage their IT investments. We have found that no additional data or unique processing (other than state-level analyses and reports) are necessary for the State CIO to meet his duties and responsibilities. In all cases, our experiences are if the state-level reviewers and approvers desire certain data or analyses, the departments, agencies, and programs need the same ones to satisfy their fiduciary and statutory requirements for the better management of IT.Overview Presentation
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 AssetsIII. Investment Operation and Maintenance, and Renewal, Retirement, or Replacement - Applications Portfolio Management (APM) – Maintain, Operate, Renovate, and Retire Assets in the Right Ways and TimesLife Cycle of IT InvestmentsIdentify investments that best:Enable governmental initiatives, agency missions and strategies, or compliance mandatesResult in financial returns – revenue generation or cost savingsProvide better constituent services or program effectivenessFit technical architecturesSatisfy budget, staffing, and other constraintsMeet risk profilesOperate and maintain assets so that:Benefits/costs are optimized over their useful lives through astute and timely renovations, consolidations, or eliminationsServices offered meet availability, reliability, security, quality, and recoverability expectations within acceptable budgetsRetirements and replacements are effected when assets are no longer cost-justified or risk-acceptableII. Project Implementation - Project Portfolio Management (PPM) – Build and Implement Assets in the Right MannerManage projects by:Clarifying roles and responsibilitiesProviding appropriate oversightEnsuring they are well planned and thoroughly researched prior to startingFollowing management and development methodologies, best practices, and lessons learnedDefining, tracking, and evaluating project progress frequently to achieve budget, schedule, scope, and quality expectationsCompleting them successfully so that business goals and objectives are realized and benefits accrue
3 Overview of IT Portfolio Management Agency Missions and Vision and Business Goals and ObjectivesDevelop Business Drivers and Business CasesInvestment Portfolio ManagementIdentify Problems and OpportunitiesStatewide and Agency IT PlansAnalyze Candidate InvestmentsProject Proposals for Applications Renovations, Retirements, or ReplacementsSelect and Plan InvestmentsFunded New ProjectsManage PortfolioAdjust Project PortfolioAs being implemented in NC state government, portfolio management is organized in the three major parts of the life cycle management of IT investments. This slide illustrates three points:It shows the first level breakdown from the three phase of the circular life cycle management concept to the corresponding activities of three components of portfolio management.It lists the major activities of each of the three components of portfolio management.It shows the high level interrelations of the three portfolio management components and the relations to strategic business and IT planning.Note, the joint cooperative nature of planning and the interfaces with portfolio management. This is a give-and-take process – not a top-down, bottom-up, or waterfall activity.Analyze PortfolioApplication Portfolio ManagementOptimize PortfolioAssess Value of Projects and PortfolioProject Portfolio ManagementManage PortfolioNew or Renovated ApplicationsImplement ProjectsBuild and Maintain Inventory
4 Portfolio ManagementPortfolio 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.Copious amounts of data, quantitative analyses, and useful and actionable information are not enough to produce right (versus wrong) and good (versus bad) decisions. They only start and enable the conversations.Executive perspectives, management expertise, and healthy decision-making cultures are essential ingredients. Political understandings, business sense, governmental program knowledge, technical awareness, and an honest open atmosphere for discussion are absolute prerequisites. This is a debate-and-decide; not a review-and-approve process.
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.Copious amounts of data, quantitative analyses, and useful and actionable information are not enough to produce right (versus wrong) and good (versus bad) decisions. They only start and enable the conversations.Executive perspectives, management expertise, and healthy decision-making cultures are essential ingredients. Political understandings, business sense, governmental program knowledge, technical awareness, and an honest open atmosphere for discussion are absolute prerequisites. This is a debate-and-decide; not a review-and-approve process.
6 Portfolio Management Goals (Cont’d) Applications Portfolio Management (APM):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.Copious amounts of data, quantitative analyses, and useful and actionable information are not enough to produce right (versus wrong) and good (versus bad) decisions. They only start and enable the conversations.Executive perspectives, management expertise, and healthy decision-making cultures are essential ingredients. Political understandings, business sense, governmental program knowledge, technical awareness, and an honest open atmosphere for discussion are absolute prerequisites. This is a debate-and-decide; not a review-and-approve process.
7 Why Lifetime Management of Applications is Important – Causes of Value Dissipation Lose 10 – 15%Lack of strategic business planNot strategically aligned with business goals and objectivesBusiness cases deficient in tenuous benefits, overly optimistic costs, too ambitious schedules, unrealistic staffing, optimistic risk assessments, and/or unachievable benefits/returnsPoor architecture fitInadequate investment evaluation, ranking, and selection processes (pick wrong investments)Lose 5 – 10%Lacking executive supportWeak project managerDeficient project planning, monitoring, and reportingInsufficient or inadequate requirements definition; contracting; and management of risks, vendors, testing, training, scope, quality, change, data conversion, communications, etc.Failure to reengineer business processesOver-customizing COTS packagesNo or inadequate post implementation assessments (PIAs)Lose 20 – 25%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 processesInadequate asset management best practices – current and complete inventories; periodic assessments; management plans for useful lives; and business cases for renovations, replacements, or retirementsAsset Life Cycle Value100%50-65%Phase of Investment Life CyclePotential or Expected ValueActual Value RealizedSelectionImplementationOperationAdopted from PMO Executive Council Research
9 Policy Drivers and IT Management Expectations for Project Management Legislative MandatesDrive IT Portfolio Management UseProvide stronger oversight of project management:Improve performance in costs, scope, schedule, and qualityIncrease reliability of achieving expected business results, projected benefits to citizens, and proposed value to the stateGuide and administer governance for project approvals and monitoring/status reportingPrescribe information to be developed, maintained, and reported for programs and projectsReport program and project status and identify exception situationsSupport the consistent, disciplined, effective, and efficient performance of project governanceProvides a workflow process that encompasses project approvals, checkpoint reviews, and periodic status reporting at project, agency, and statewide levelsProvide 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)Employ governance to maximize the potential of project successEnable the productive and effective management of projectsOffer documents and administrative management capabilities that follow industry recognized best practices for system development life cycle and project management
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 Project Portfolio Management – Combination of Software Development, Project Management, and Governance Disciplines and ConceptsProvides a workflow process that encompasses project approvals, checkpoint reviews, and periodic (primarily monthly) status reporting at project, agency, and statewide levelsIncorporates 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 pathOffers administrative support for development sequencing and project management that follow industry recognized best practices for system development life cycle (IEEE) and project management (PMI)The goal of project portfolio management is to advance the management of IT implementation projects by clarifying roles and responsibilities; providing for well understood and comparable oversight; ensuring they are planned well and researched thoroughly prior to starting; facilitating the management and monitoring of them to achieve budget, schedule, scope, and quality expectations; and completing them successfully so that business/program goals and objectives are realized.The objectives are to: 1) Automate the processes and analysis and reporting capabilities for internal agency and statewide reviews and approvals of IT implementation projects; and 2) Automate the monthly project status reporting and performance analysis for agency and statewide performance monitoring of IT implementation projects.The intent for all of the state’s major projects is to: 1) create and maintain an accurate inventory of them, 2) know where the they stand (status), 3) ensure they are managed consistently using best practices, 4) pre-empt failures and costly delays and overruns, and 5) enable the achievement of expected results and benefits.
12 This diagram shows how the tool accomplishes three key functions: 1) Provide workflow to manage governance – decision making process, with roles and responsibilities, and accountabilities . 2) Provide workflow and templates for SDLC – instructions for how to construct or build a system, such as what to do, when to do it, and how to do it (IEEE), and 3) Provide workflow and templates for project management – how to manage a project (PMBOK from PMI).The diagram on illustrates the major components for the project approval and reporting workflow. The following points may add to the understanding of the diagram. · The horizontal ‘swim lanes’ (one each for the agency project, agency approvals, and state level approvals, consisting of the SCIO, OSC, and OSBM) differentiate the organizational levels (governance) of the process.· The five vertical phases are the typical development life cycle phases for normal implementation projects.· The three state level review points (called gates) are positioned at exit Phase 1 and entry Phase 2, exit Phase 2 and entry Phase 3, exit Phase 3 and entry Phase 4. Each project is evaluated at these gates to determine that it 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, and presenting an acceptable risk profile). Projects cannot proceed to the following phase without obtaining all required approvals at project, agency, and state levels. As a general rule, re-baseline projects with major changes in scope, budget, or timetable must demonstrate that new objectives and results/outcomes have a high probability of successful achievement and that the investment still has benefit-cost or public value evaluations that justify continued funding after considering relations with other projects in the portfolio and budget and staffing limitations.· The documents (work papers) listed under each phase are created or updated in the phase. Those listed under State CIO (SCIO) are required to be reviewed at each state level gate. Others are optional for agency use, to be determined by each agency. These documents are found in industry accepted system development life cycle (SDLC) mythologies and Project Management Institute (PMI) approaches for managing projects.· The portfolio management software tool manages the workflow and collects and organizes the information in the documents as tabs (templates). The software tool allows for the use of other forms and documents (such as Word and Excel); therefore, projects and agencies may employ a broad diversity of other types of project related work papers, if they desire. The software tool also interfaces automatically with detailed project management software from a variety of vendors, so that each project can use the detailed capabilities of these tools in concert with the governance software tool.
13 Project Portfolio Dashboard This is the monthly summary project status report, called a dashboard. This report is similar to the dashboard in your car. It gives a point-in-time indicator of key factors (similar to driving speed, gas tank level, and oil pressure). It does not show trends, and it does not extrapolate to the future – it is an instantaneous indicator of the point-in-time condition of each project at a summary level.We call the indicators jelly beans, and they may have one of four colors. For the six detailed evaluation categories, the ratings are as follows. Green – OK, within acceptable tolerance or deviation levels. Yellow - potential problems, the variances are slightly beyond normal experienced tolerances or deviations. The project manager must address these. Red – serious problems, evaluation factors are excessively beyond expected tolerances or deviations. A written corrective action plan must be submitted by the agency to the Statewide EPMO by the next status report. Gray – there is insufficient information to make an assessment determination.For the overall category, Green is OK – no action is required. Yellow results in notification to the Statewide EPMO, the project manager, and the agency CIO. A corrective action plan must be submitted. Red results in notification to the State CIO and the agency head. It requires a corrective action plan from the agency to the State CIO. Gray indicator for one month in either the milestones, cost, or scope categories will result in a yellow overall category. For a second month, it will result in a red overall category.All indicators are set manually (based on quantitative and qualitative analyses), and there are specific, clearly defined, and well understood guidelines for each. The information submission, data analyses, and evaluation and reporting processes and rules are applied in a consistent , fair, and equal manner; thereby, minimizing misunderstandings in expectations and performance determinations and ratings.