Thursday, July 28, 2005

IT Portfolio Management

Bryan Maizlish and Robert Handler have written IT Portfolio Management: Unlocking the Business Value of Technology.

I haven't read this book. I've only looked at the sample portion that's posted on Based on that short segment, I edited a few interesting and informative remarks which I've excerpted below.

  • IT can have a significant impact on the quality of services and the performance of a company

  • IT investments represent a profound hole within companies -- there are no other investments within a company that occupy such a large and growing expenditure yet lack disciplined management, processes, and performance measurements

  • The primary focus on IT investments is on short-term projects and priorities with near-term benefits -- delaying and in many cases eliminating long-term strategic investments

  • Concurrent with cutbacks in IT spending:

    • IT's role has been expanded from internally focused to customer facing applications -- customers are demanding more rapid, real-time, customized solutions

    • regulators are requiring new levels of accountability and traceability of corporate behavior (e.g., Sarbanes-Oxley Act)

  • IT is responding to cutbacks by:

    • simplifying, migrating, retiring, and/or consolidating legacy systems to decrease operations and maintenance costs and increase flexibility and agility

    • standardizing, reengineering, and utilizing commercial off-the-shelf technologies and open standards

    • externalizing processes through outsourcing and establishing value-network partner ecosystems and shared services

  • Many companies are hemorrhaging in IT spending due to:

    • a prevalence of pet projects
    • a reluctance to kill projects and/or retire assets
    • too many active projects and a huge backlog of projects
    • a myopic focus on exotic and cool technologies
    • a lack of a detailed cataloged, organized, and aggregated view of critical versus immaterial assets
    • inconsistent and incomplete criteria to assess IT investments
    • underestimation of the total cost of ownership
    • inadequate governance
    • ad hoc program management process

  • Many business and IT managers are unaware of the reason why IT investments were initiated or the criteria used to approve IT investments

  • Hiding IT costs associated with pet projects, political power plays that override strategic objectives, and implementation and execution of rogue systems is easy and commonplace

  • It is not unusual that accountability to initial assumptions made in IT investments is nearly impossible to trace, since roles, responsibilities, and ownership are vaguely defined

  • It is impossible to effectively and efficiently manage IT resources without awareness and a detailed catalog of all IT investments, identifying who is accountable, and relevant metrics

  • The ability to extend, migrate, refurbish, or retire systems or applications is very difficult as key dependencies, support, and constraints with other applications and systems are often unknown

  • It is not surprising to find multiple and redundant enterprise resource planning, supply chain management, portals, customer relationship management, middleware, and operating systems consisting of undocumented ad hoc upgrades and patches analogous to a "spaghetti" architecture

  • Technical, business, operating, system, logical, and physical views of the architecture are typically outdated or nonexistent

  • Misalignment between IT and the strategic intent, inability to establish a common IT architecture, and a highly redundant and undocumented as-is architecture will result in high operations and maintenance costs

72% of IT projects are late, overbudget, lacking in functionality, or never delivered


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