1 implementation of application portfolio management background and planned approach september 26...

1

Implementation of Application Portfolio Management

Background and Planned Approach

September 26 and 27, 2005

2

Presentation Objectives• Review key concepts of portfolio management.

• Highlight progress made in implementing the portfolio management software tool in state government.

• Outline next steps for completing the implementation of the software tool – management of legacy applications.

• Introduce plans for IT biennial budget requests.

• Answer questions.

3

Mission Statement for the Portfolio Management Initiative - 1

Assist state government agencies to improve the management of IT investments by: (1) providing contemporary software tools that incorporate proven theories and methodologies, and (2) following best practice approaches and disciplines to:

• Identify, rank, and justify investments that are synchronized with governmental initiatives, agency strategies, and business goals; are achievable within personnel and budgetary limitations; offer acceptable risk profiles; maximize financial returns and/or societal benefits; satisfy project interdependencies; fit technical architectures; and meet security, privacy, and recoverability requirements.

4

Mission Statement for the Portfolio Management Initiative - 2

• Advance the management of IT investment implementation projects by: clarifying roles and responsibilities; providing for well understood and comparable oversight; ensuring that 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 goals and objectives are realized.

• Improve the management of software applications to assist in: a) determining the best approaches, priorities, and timeframes for enhancement, remediation, and/or retirement/replacement in order to optimize benefits/costs over their operational life cycles; b) ensuring they provide reliable, secure, and recoverable services; c) estimating associated costs; and d) performing other planning work.

5

Framework for Managing IT Investments

I. Strategic I. Strategic Business and IT Business and IT

Planning and Planning and Investment Investment

Selection and Selection and BudgetingBudgeting

(Linking IT Investments (Linking IT Investments to Agency Missions and to Agency Missions and Business/Program Goals Business/Program Goals

and Objectives, and and Objectives, and Investment Portfolio Investment Portfolio

ManagementManagement))

III. Investment III. Investment Operation and Operation and

Maintenance, and Maintenance, and Renewal, Renewal,

Retirement, or Retirement, or Replacement Replacement (IT (IT Service Management; Service Management;

Enhancement, Renovation, Enhancement, Renovation, or Termination; IT Asset or Termination; IT Asset

Management; and Management; and Applications Portfolio Applications Portfolio

ManagementManagement))

II. Project Implementation II. Project Implementation (Acquisition (Acquisition of Products and Services, System Development of Products and Services, System Development

Life Cycle Methodology, Project Management Life Cycle Methodology, Project Management Methodology, Agency and Statewide Governance, Methodology, Agency and Statewide Governance,

and and Project Portfolio ManagementProject Portfolio Management))

Life Cycle of IT

Investments

6


I. Strategic Business I. Strategic Business and IT Planning and and IT Planning and Investment Selection Investment Selection

and Budgetingand Budgeting(Linking IT Investments to (Linking IT Investments to

Agency Missions and Agency Missions and Business/Program Goals and Business/Program Goals and Objectives, and Objectives, and Investment Investment

Portfolio ManagementPortfolio Management))


Maintenance, and Maintenance, and Renewal, Retirement, Renewal, Retirement,

or Replacementor Replacement (IT Service (IT Service Management; Enhancement, Management; Enhancement,

Renovation, or Termination; IT Renovation, or Termination; IT Asset Management; and Asset Management; and

Applications Portfolio Applications Portfolio ManagementManagement))

II. Project ImplementationII. Project Implementation (Acquisition of (Acquisition of Products and Services, System Development Life Cycle Products and Services, System Development Life Cycle

Methodology, Project Management Methodology, Agency and Methodology, Project Management Methodology, Agency and Statewide Governance, and Statewide Governance, and Project Portfolio ManagementProject Portfolio Management))

Life Cycle of IT

Investments

Portfolio Management – Investment Portfolio ManagementInvestment Evaluation and Funding Recommendation

7

Policy Drivers and IT Management Expectations for Strategic Business and IT

Planning

Collaboration and transparency between IT/non-IT execs via an integrated process and better manage activities, resources, costs throughout the enterprise

Requires high quality business cases that increase probability of successful outcomes (on budget, within schedule, and meet user and stakeholder expectations)

Identifies a pool of IT investments that best support core mission functions and prioritized business needs, best fit with approved architectures, have acceptable risks, and are accomplishable within fiscal and personnel limitations

Focus on common needs that can promote sharing of information and IT resources across organizational lines

Use IT project business cases that cover cost, expected benefit realization, schedule, and risks

Demonstrate technology spending is focused on improving agency and program performance

Legislative Mandates Drive IT Portfolio Management UsePlan and budget for future funding more effectively: Encourage the use of shared technical infrastructure, common technical services, and like applications Minimize duplicate and unnecessary expenditures Maximize returns and benefits from investments

Decisions to support strategic directions and governmental priorities

Selecting the best mix of projects to deliver maximum value to the agency or state

Ensuring applications are matched to business needs

8

Consistent and Clear Criteria toPrioritize and Decide on Investments

Financial — Revenue Generation and Cost Savings

0.25

SampleWeight

Business Impact — Public Self Service and Unified Services

0.35

Risk — Probability of Success/Failure 0.25

Architectural Fit — Principles Adherence 0.15

1.00

PROJECT BUSINESS CASES

Strategic alignment, mix

and optimization – balance risk and

reward

Optimized Finance

Optimized Risk

Optimized Strategic Portfolio

$

$

$

IT Portfolio

Operationalefficiency

CostsHead countTransformationPolicy objectivesPrivate partnerships Process reengineering

Greater participationClosing the digital divideEconomic impactGreater transparencyGreater accountability More-effective policy making

Politicalreturn

Constituentservice

Constituent valueLower constituent costGreater availabilityConstituent centricityEffective interactionsSingle point of contact

Public Value?

9

Overview of IT Investment Portfolio Management in State Government

Overview of IT Investment Portfolio Management in State Government

Department Business StrategyDepartment Business Strategy

Department Business Architecture

(Business Service Models)

Department Business Architecture

(Business Service Models)

• Business/Program Goals and Objectives• Processing and Information Flows• Organization Charts• Business Reengineering Opportunities

• Department Mission• Statutory Mandates• Governmental Initiatives

Application Portfolio Management

New ProjectsAsset Infrastructure Management

• Retirements • Replacements• Modernizations• Maintenance

IT Investment Portfolio Management •Identify potential investments and evaluate candidates against defined criteria•Prioritize projects based on analysis results (relative weighted scores)•Balance staffing and fiscal resources•Determine disposition – invest, adjust, or sunset

•Refreshment Cycles•Security/Reliability Upgrades

•New Applications•Infrastructure Additions/Upgrades

Current IT Project Portfolio

•Status of all projects (schedule, budget, business objectives, etc.)

•Projects no longer relevant or with lower priorities

•Projects with higher priorities or increased urgency

Other Plans and Strategies

•State CIO IT Plan•Statewide IT Initiatives•Department & Statewide Tech. Architectures

•Department IT Plan

Funding Requests and Project Approvals

10













Life Cycle of IT

Investments

Portfolio Management – Project Portfolio Management

Project Approval

Project Tracking and Reporting and Post Implementation Assessment

11

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 Mandates Drive IT Portfolio Management UseProvide 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

12

Governance and Management for Project Implementation

13

Portfolio DashboardPortfolio Dashboard

14








or Replacementor Replacement(IT Service Management; (IT Service Management;

Enhancement, Renovation, or Enhancement, Renovation, or Termination; IT Asset Termination; IT Asset

Management; and Management; and Applications Applications Portfolio ManagementPortfolio Management))

II. Project Implementation II. Project Implementation (Acquisition of Products and Services, System (Acquisition of Products and Services, System Development Life Cycle Methodology, Project Development Life Cycle Methodology, Project

Management Methodology, Agency and Statewide Management Methodology, Agency and Statewide Governance, and Governance, and Project Portfolio ManagementProject Portfolio Management))

Life Cycle of IT

Investments

Purchasing Process

15

Position of Purchasing in Project Portfolio Management Workflow

Exit and Re-Entry Point for RFP Process

Draft RFP (Using Results From Work in Phase 1)

Issue RFP and Receive Vendor Proposals

Evaluate Proposals and Recommend Award

16













Life Cycle of IT

Investments

Portfolio Management – Applications Portfolio ManagementOptimize maintenance costs and benefits over useful lives and retire or replace at best times

17

Policy Drivers and IT Management Expectations for Applications Portfolio

Management

Collect and analyze cost, benefit, and strategic value information to evaluate the TCOs of retention, enhancement, or replacement alternatives for maximizing long-term worth to the organization

Review operational assets on an appropriate recurring basis to determine whether they are cost-effective to operate and maintain, align with strategic business and architectural directions, are recoverable and security acceptable, and are risk justified

Demonstrate that normal maintenance and necessary enhancements are planned and conducted in a manner that optimizes costs and benefits over the useful lives of assets

Legislative Mandates Drive IT Portfolio Management Use Increase capabilities for inventorying assets and analyzing them, including infrastructure hardware, software, communications equipment, and legacy (in place) applications Determine the right times and best approaches for renovating, retiring, or replacing assets Develop and submit annual disaster recovery plans

Evaluation of the inventory of the current application stock for architectural fit, for suitability to the business needs, and for the prospective costs and risks of various application investment or retirement strategies

Evaluate assets by determining business and technical status; developing remediation, retirement, or replacement approach; and ascertaining priority and timeframe for action

Estimate the state’s 5-year cost liability for applications maintenance, renovation, and replacement

Develop cost estimates for asset modernization, and retirement (with and without replacement) and total statewide

Provide information for developing business impact analyses (BIAs) and resulting continuity plans (BCPs) for key applications

Identify vulnerabilities, criticalities, return-to-service needs, dependent business processes, public services, etc.

18

Seems to run forever, but ultimately has a finite business, economic,

and/or technical life

Sources of Risks

Issues Surrounding Systems ObsolescenceOver time, sustainability of applications becomes questionable due to age and

technology advances, combined with changed business needs. They no longer:a) support business goals and objectives, b) are cost-effective to operate or maintain, and/or c) are risk-acceptable by presenting too great a likelihood of failure with

cataclysmic consequences.Business Issues

Impediment to the implementation of new and more cost-effective service delivery models – unable to respond to demands for new functionality, support business processes, or provide adequate and secure information access

Becomes a constraint in meeting regulatory requirements

Staffing issues - Unavailability of Skills Unavailability of staff skills or expertise to maintain Unavailability of third party vendors Dependency on individual contractors

Technology issues Expired warranties, with no vendor support Can not handle increased usage or volumes of data Does not run anymore on available platforms Inefficient IT resource utilization Used beyond original intent, and cannot be enhanced Cannot meet security, privacy, or confidentiality requirements Are not easily recoverable for disaster recovery and business continuity System can fail, with untraceable error Inconsistent or inadequate information and data quality

19

Why the Management of Legacy Applications is Important

1. Risks

2. Costs

3. Funding opportunities

4. Benefit/Cost optimization

5. Fiscal liability

6. Performance and capacity

7. Disaster recovery and business continuity

Ongoing and long-term management of:

20

Why the Management of Legacy Applications is Important – Risk Management

December 24, 2004 – Comair’s 18-year-old flight crew management system failed:– All 1,100 flights cancelled Christmas day– Comair did not return to full schedule until December 29 – total of 3,900

flights cancelled or delayed– Nearly 200,000 passengers stranded - Cost $20 million– Highly regarded image and reputation tarnished – key executives

resigned or replaced• No backup system - Plans for replacement had been in works for 7 years

prior to failure – but no implementation for a variety of reasons, events, and circumstances (no valid excuses)

• System had a critical flaw that was not known – could handle only 32,000 crew changes per month – snow storm hit Ohio Valley December 22 through 24, requiring many transactions, so that the ‘magic number’ hit on Christmas Eve

Source: CIO Magazine, May 1, 2005

21

Lessons from Comair – Considerations for use in Business Cases for Replacing Legacy Applications

• Cost of failure (cost of not mitigating crash) – Potential for jeopardizing organization’s image, brand, and reputation, and loss of revenue and increase in operating costs.

• Possible advantages of replacement:– Lower operating and maintenance costs.– Better customer or constituent services.– Increased integration and adaptability.

• Better to move strategically (proactively) to replace legacy system than to have to respond tactically (reactively) to application failure.

Source: CIO Magazine, May 1, 2005

22

Why the Management of Legacy Applications is Important – Cost Management

Definitions

• Maintenance – Defect repair and other changes that don’t affect application function. Changes are ‘mandatory” in type, and projects are less than 2-weeks in duration.

• Enhancements – Projects that add, change, or delete functionality.“Rules of Thumb”

Source: Gartner, Inc.

1. Annual maintenance cost is 11 cents for every $1 dollar of application development cost.

2. Annual enhancement cost is 17 cents for every $1 dollar of application development cost.

Therefore, an order-of-magnitude estimate of total annual ongoing costs of applications is 30% of their development costs.

The average age of applications is a little over 8 years (national, not NC number); therefore, the total cost of ownership is $3.40 for every $1 of development cost – over the life of an application, its maintenance and enhancement costs can exceed its development cost by over a factor of 2 (twice as much)

23

Why the Management of Legacy Applications is Important – Funding Management

Expenditure TypePercent of Total IT

SpendingBusiness Value of

Investment1. Infrastructure to run

the business and maintenance of legacy applications

47% Low

2. New Applications:

Utility

Enhancement

Frontier

Total

53%

21%

21%

11%

100%

Low

Medium

High

Source: Gartner, Inc.

Two-thirds of spending (infrastructure and utility applications) gives one-third of business value – need to reverse this ratio (reduce percents on these and increase percents on enhancement and frontier applications) as much as possible. Equally important, the funding source for new applications can come from the better management of legacy ones.

24

Why the Management of Legacy Applications is Important – Benefit/Cost Optimization

Management

Benefits/Costs

TimeImplementation of Application

Growth in initial benefits with steady maintenance costs

Major enhancement performed

Period of stable benefits and costs

Period of stable benefits and costs

Growth in benefits from enhancement with stable maintenance costs

Period of deferred maintenance and declining benefits (e.g., foregone benefits from not meeting emerging business needs)

Mandatory Decision Point – retire, replace, or renovate?

Operational (Business and Technical) Risks

Risk Acceptability Limit

Minimum acceptable benefits/costs

Opportunity time to act before reaching mandatory decision point

25

Why the Management of Legacy Applications is

Important – Fiscal Liability Management

Future Cost Liabilities – Annual Costs and Growth Rates

Time

Legacy Applications – Future annual projections and long-term spending patterns are unknown

???

Today

State Business Infrastructure Program Funding (SBIP) - $20 M

Comparison Cost Types: Medicaid, Employee Health Care, Public Education, etc. – spending pattern is generally linear with long-term compounded annual growth rates of 3% to 10% per year.

Program Cost CGR

Medicaid $2.3 B 10%

Education $9.1 B 3%

26

Why the Management of Legacy Applications is Important

– Performance and Capacity ManagementPerformance Considerations Capacity Considerations

Usability – Ease of use (intuitive).

Reliability – ability to keep operating over time.

Availability – length of time between failures.

Security – ability to resist unauthorized attempts for access.

Adaptability – ability to be changed quickly and economically to meet evolving business requirements.

Functionality – ability to do the work for which it was/is intended.

Portability – ability to run under different computing environments.

Recoverability – resiliency to human-initiated or natural disasters.

Arrival rate – rate at which transactions arrive into the application.

Service rate – rate at which transactions are processed by the system.

Utilization – ratio of arrival rate to service rate. If greater than 1 (100%), the transactions arrive faster than they can be processed (called saturation).

Response time – total time for one transaction to be processed.

Latency – time required for an operation to complete. Response times are usually the total of many latencies.

Scalability – the ability of an application to meet increased business transaction demand.

27

Why the Management of Legacy Applications is

Important – Disaster Recovery and Business Continuity

Applications Portfolio Management Database

• Name and other identifying information

• Business processes supported and users served

• Importance to agency missions and criticality to operations (strategic fit)

• Technical/architecture, infrastructure used, and interfaces with other applications/uses

• Operational performance, risks, and other data

Business Impact Analysis (BIA)

• Vulnerabilities to human-originated and natural disasters

• Interdependencies and priorities of business processes and return to service objectives and strategies

• Recovery requirements – personnel, IT, paper records, business facilities, etc.

Business Continuity Plan (BCP)

Provide Information

For

Provide Information

For

• Protective measures and actions to mitigate potential disasters, especially those with high probability and high impact

• Prerequisites for recovery – technical, IT, business, alternate facilities, staffing, etc.

• What to recover (priorities and timetables)

• How to recover (processes and procedures for recovery/continuity)

Recovery StrategyImplementation of Recovery Strategy

28

Summary of Findings of Legacy Applications Study – December 2004

• In the portfolio of approximately 900 applications: 40% are considered critical for department mission/strategy; 17% are enterprise (statewide) applications; and 75 of the applications processed by the state data center require 1-day return-to-service capability.• The statewide portfolio is relatively young, with an average age of 7.5 years – since 1997, from 70 to 90 new or replacement applications have been added each year to bring down the average age.• Health status is: 23% presenting functional, technical, or both problems; 50% with some problems, but manageable; and 27% healthy, with a prescription for continuing on-going operations and maintenance.• Remediation timeframes are: 11% require action immediately (within next two years), 35% require action in the near term (2 to 4 years), and 54% require action in the long term (4 to 6 years).• Although the immediate needs of the portfolio appear to be manageable, projections of its future status, if no remediation actions are taken, indicate an increasingly deteriorating condition as the applications age.

29

Business

Technology Financial

Application Portfolio Application Portfolio Analysis PerspectivesAnalysis Perspectives

• Do we have the right capabilities in place?

• Are they aligned with business priorities?

• Where are potential synergies?

• Are there duplications?

• Are applications sustainable?

• Do they fit in the desired architecture?

• What is the technical migration road-map?

• Are they risk-acceptable?

• Do they present security, privacy, or disaster recovery vulnerabilities?

• How do we maximize overall value?

• Can costs be optimized across the organization?

• To what extent can innovation and new applications be funded by cost savings?

• Do they cost too much to operate or maintain?

Key Concepts: Analysis PerspectivesBusiness, technology, and financial perspectives are combined to determine the posture of the application, indicate the appropriate remediation strategy, and to provide recommendations for managing the application portfolio over time

30

Application Portfolio Management -Approach for Assessing Applications

Question #1

No

Yes

Question #2

ContinueRegularSupport & Mainte-

nance

Create Inventory in UMT Portfolio

Management Software Tool

Assess Overall Posture of Application

Business Status?

Technical Status?

Determine if Remediation (Other

Than Regular Ongoing Support and Maintenance)

Required

Evaluate Business Importance and

Criticality of Problems - Prioritize & Specify Timeframe for Action

Question #3

RemediationRequired?

Incorporate Results

in Business and IT

Planning Processes

Next Steps

Data Collection, Analysis, and Decision-Making Process

31

Expensive to operate or maintain None or decreasing vendor support for major components Insufficient or decreasing availability of staff support Architecture not allow enhancements for new business

requirements Inefficient IT resource utilization Inadequate data access and quality Vulnerable security Recoverability difficult or suspect

Cost-effective to operate and maintain Adequate vendor support for major components Adequate availability of staff support Architecture allows enhancements for new

business requirements Efficient IT resource utilization Adequate data access and quality Adequate security protection Resilient to human-induced or natural disasters

Meets present service delivery needs Meets anticipated needs for new services,

business process reengineering initiatives, and information access

Protective of individual privacy and data confidentiality

Creates inefficient and less effective service delivery processes

Constraint on implementation of new services, expanded citizen benefits, and/or more efficient business processes

Individual privacy and data confidentialityat risk

Business Perspective

Low High

High

High Attention Zone – Both

Business and Technical Risks

Safe Zone

Warning Zone – Not Making Best Use of In-Place Technology

to Meet Business Needs

Warning Zone – High Technical

Risks

Application Portfolio Management - Determining the Posture of Applications

Technical Perspective

Safe Zone

Generic criteria are defined to assess applications from a business and technology perspective

Bad

Good

GoodBad

32

Application Portfolio Management - Remediation Approaches

Replace, if possible, with Commercial or Government Package:• Low value probably doesn’t justify custom code

No Reengineering:• Re-host candidate• Functional enhancement

Low Priority Reengineering:• Low maintenance and support costs• Provides value as is• Regular support and maintenance

Technical Perspective

Business Perspective

Good Reengineering Candidates:• High business value means quicker ROI• Renovation will improve support and maintenance costs

High/Good

High/Good

Low/Bad

Low/Bad

33

Application Portfolio Management - Investment Selection and Prioritization

•“Critical/At Risk” are highest priority were level of risks drive (broader) remediation activities

• “Limited Risk/Critical” applications are second priority compared to critical/at risk

• “At Risk/Non Critical” applications are also second priority for remediation, especially if risks can be mitigated

• “Limited Risk/Non Critical” applications should be reviewed to minimize technology investments and look for opportunities to consolidate or substitute for better solutions

Overall Importance

Low High

High

Selectively

Second Priority

Business/Technology Risk or Urgency

Second Priority

First Priority

At Risk / Critical

Limited Risk / Non Critical

Limited Risk / Critical

At Risk / Less Critical

Prioritization and timeframe for action is driven by overall importance as well as risks.

In addition prioritization is driven by:

– Specific business initiatives, programs, and/or funding streams available

– Overall risk issues, interrelationships between applications, and the general need for modernization of legacy systems

Low

34








or Replacementor Replacement(IT Service Management; (IT Service Management;

Enhancement, Renovation, or Enhancement, Renovation, or Termination; IT Asset Termination; IT Asset

Management; and Management; and Applications Applications Portfolio ManagementPortfolio Management))

II. Project Implementation II. Project Implementation (Acquisition of Products and Services, System (Acquisition of Products and Services, System Development Life Cycle Methodology, Project Development Life Cycle Methodology, Project

Management Methodology, Agency and Statewide Management Methodology, Agency and Statewide Governance, and Governance, and Project Portfolio ManagementProject Portfolio Management))

Life Cycle of IT Investments

Investment Identification, Evaluation, and Justification Process

Applications requiring immediate and near term remediation or replacement

Transition from APM to IPM

Fund

ed P

rojec

ts fo

r

Applic

ation

Rem

ediat

ion

or R

eplac

emen

t

35

Position of Investment Identification, Evaluation, and Justification in Project Portfolio Management Workflow

Entry Point From Applications Portfolio Management (APM)

Exit Point from Investment Portfolio Management (IPM) To Expansion Budget Submission or Other Funding Request Process

NotePerform the work tasks and complete the tabs in Phase 1of Project Portfolio Management (PPM) - determine goals and objectives, scope, costs, benefits, staffing, investment priority, implementation approach, technology, risks, procurement requirements, and other information necessary to define, plan, and justify legacy applications remediation or replacement project.

Note

36

Two Near-Term Concurrent Paths for Application Portfolio Management

Review Agency Responses for 90 Immediate-Attention Applications from Legacy Study and Take Appropriate Action

Begin Design and Development Activities for Implementing Application Portfolio Management using Software Tool

Legacy Applications Study Performed Last Year

Spreadsheet Listing of 90 Applications by Agency

Implementation Effort for Applications Portfolio Management

37

Overview of Work on Applications Portfolio Management – Fall 2005

Task/Deliverable Timeframe1. Develop draft worksheets (called tabs in software tool)

2. Configure tabs

3. Review tabs (including sample data) with agency-level advisory committee

4. Finalize tab configurations and load applicable inventory data to UMT tool

5. Develop rollout plan, including training for optimizer and planner modules for expansion budget preparation –ongoing and recurring approach for application and investment portfolio management.

Mid Sep – End Sep

First Oct – Mid Oct

First Nov – Mid Nov

Mid Oct – End Oct

Mid Nov – End Nov

38

Timeline for Implementation and Use of Application and Investment Portfolio Management Capabilities

Jun 2005

Jan 2008

Jan 2006

Mar 2006

Jun 2006

Jan 2007

Jun 2007

Aug/Sep 2006

Sep 2005

2005 –2007 Biennial Budget 2007 –2009 Biennial Budget

APM Configuration and Agency Rollout Plan Development

APM and IPM Rollout to Agencies

Agencies Perform Legacy Assessments, Develop IT Plans, and Prepare Expansion Budget Requests

SCIO Review Agency Expansion Budget Requests, Prepare Statewide Legacy Assessment, and Write SCIO IT Plan

Agency Submissions to SCIO: 1) Legacy Assessments, 2) Agency IT Plans, and 3) Expansion Budget Requests Submissions to

General Assembly:

• Governor’s Budget Package

•SCIO – 1) Statewide Legacy Assessment, and 2) Statewide IT Plan

SCIO Deliver Interim Legacy Assessment Report to General Assembly for 90 Projects Needing Immediate Attention

Agencies Assess Study Findings for 90 Immediate Attention Applications and Report Status, Remediation Approach, and Needs for Assistance

Today

APM – Applications portfolio management

IPM – Investment portfolio management

SCIO – State CIO

Legend

Next Year

Four Months Five Months

Implement APM and IPM Use APM and IPM

Apr 2006

39

IT Portfolio Management Maturity Framework

Source: IT Portfolio Management: Step-By-Step, Bryan Maizlish and Robert Handler, 2005 and modified by NC Strategic Initiatives

1. Admitting

2. Communicating

3. Governing

4. Managing

5. Optimizing

• Basic data collection (identification, purpose, owner) for IT projects, applications and infrastructure

• As-is planning, funding, and selection processes are defined

Enterprise and unit IT views

More refined portfolio decisions

Mechanisms and metrics

Sense and respond

• Aggregating and interrelating projects using standard data elements• Business value, technical condition, process supported and affected units are

identified• Infrastructure and applications assets compared to architecture technical standards• All sub-portfolios are documented and key interrelationships highlighted

• Synchronized governance structure exists involving project, program, and portfolio managers with executive steering committee direction

• Policies and defined processes for decisions exist; periodic review of application and infrastructure portfolios utilizing asset management

• Project, application, and infrastructure interdependencies are recognized and factored into decisions

• Cost and benefit realization metrics governing projects• Solid metrics to track use and effects of governance processes and mechanisms• Applications, and infrastructure are defined, captured, and used to manage

the portfolios as assets rather than tracked expenses.

• Complete processes with supporting metrics • Projects and programs provide reliable, accurate information and are

supported by excellence in project management and execution• Balancing of project, application, and infrastructure portfolios using

key asset information

There must be a better way…

1 implementation of application portfolio management background and planned approach september 26...

Documents

asset management

project management methodology

service management enhancement

investment selection

investment operation

business goals

agency missions

businessprogram goals