it project portfolio management march 25 th 2014
TRANSCRIPT
► Executive Director of EY TMT (technology, media and telecom) industry performance improvement team in Hong Kong
► 15 years of consulting experiences in market strategy, operating model transformation, IT strategy and complex program management
► Advised clients in Asia Pacific, Europe and US.
► Master degree in Computer Science and Information Systems from The University of Hong Kong
Stanley Yung
How IT is Managed
EnablementGovernance & Alignment
Management & Delivery
Business Strategy
IT Capability
Drive• IT Blueprint• Portfolio Investment
Approach• Project Selection
Approach• Business Case
Enable• Capability
Development• Innovation• Portfolio Performance
Metrics
What guides IT decisions
CIO / the “Strategy” unit
Blueprint to direct investment for maximum value
Annual plan to pace with market, priority and organizational changes
Architecture view and initiatives management
Agreed PrioritiesThe IT blueprint will be developed and updated annually based on business priorities agreed with business leaders and endorsed by steering committee.
Short-term (12-18 months) Longer-term (18-36 months)Core Business Needs
• Complete 3G voice network
• Offer mobile data services• Customer service hotline• Enable mobile number
portability
• Capacity upgrade to accommodate new users
• Integrate with fix-line
Other Needs • Strengthen risk management
• Launch new 4G products• Test TD-SCDMA• Implement mobile anti-
virus scanning
• CRM and predictive churn model
Different models of project selection
Tightly Controlled Holding CompanyIntegrated Model
$ $ $ $ $
BU 1 BU 2$ $
$ $ $ $
BU 1 BU 2 $ $$ $
IT investment is centralized at enterprise level.
Minimal IT investment and spending at the BU levels.
Distributed investment.
Investment in common IT at enterprise level.
Investment in specific business applications at BU level.
Heavier investment at the smaller bank or BU level.
Investment in a few common areas at enterprise level.
$ $
Subsidiary 1 Subsidiary 2$ $
IT Spending is Tracked
DiscretionaryCAPEX
Non-Discretionary
OPEX
DiscretionaryCAPEX
Non-Discretionary
OPEX
Company Benchmark
Discretionary expenditure refers to investment for business value creation.
ERP Solution CRM Platform eCommerce
Non-discretionary expenditure refers to expenses on operations, and must-do IT spending.
Data Center Operation Helpdesk Operation
Business Case Driven Project Selection
Business cases must be developed before any investment can be made in IT.
The business case must be owned by a business leader and monitored to real value the investment delivers.
Business cases is usually evaluated based on urgency, value, risk and dependencies.
Business Case
Key Components – Current State, Purpose, Scope / Time, Cost of capital, Capital investment / start up costs, Useful life, Operating expenses, Benefits to be realized
Right Metrics – ROI, Payback periods
Users owned benefits drivers
Simple math with few key assumptions
No One Size Fit All
ProjectGovernance Review Process
Project Registration
Conceptual Design Review
Detail Design Review
Build and Install Review
Production Review
• Ensure enough information for classify full/fast track
• Ensure quality on architectural component level
• Ensure quality on ready for build
• Ensure quality on ready for production
• Ensure quality on sustainable operation
Full Track(for projects with relatively high cost and/or risks)
Conduct depends on previous review results and project needs.
Fast Track(for IT projects with relatively contained cost and/or risks)
Required review steps
Conditional review step
Upgrade Review
Tracks Differentiation
Balanced Project Profiling
Project Profile Filters Hardware + Software + Services > US$ X,
or
Insource Effort > 50 Man Month, or
Project Duration > 1 Year, or
Cross Application Division, or
Introduction of New Technology, or
Strategic (determined by IT Directors)
IT Project N+1(Division C)
IT Project N(Division A)
IT Project 1(Division A)
IT Project 2(Division B)
IT Project 1(Division A)IT Project 2
(Division B)
Match
any of the criteria
IT Project 3(Division B)IT Project N
(Division A)
IT Project 5(Division A)IT Project 6
(Division B)IT Project 7(Division B)IT Project 8
(Division B)IT Project 10(Division A)IT Project 9
(Division B)IT Project 4(Division B)IT Project N+1
(Division C)
Fast Track Review Group
Full Track Review Group
All IT Projects Classification Criteria
Match
none of the criteria
Portfolio is Managed
DiscretionaryCAPEX
Non-Discretionary
OPEX
StrategicX%
EnablingY%
SustainZ%
IT executives are measured by CAPEX / OPEX target
IT executives actively drive usage of discretionary spending to achieve goals agreed with business
Strategic goals Enabling tools Sustain enhancements
Lesson #1 – Human Factors
• Facts– Decisions are made by human– Decision = bias– Enterprise and personal goals not always align
• Strategies– Consider human factors– Build in success factor to kill 2 birds with 1 stone
Lesson #2 – Enterprise Factors
• Facts– Most enterprises are partially business case driven– Initiatives are prioritized predominately based on
budget, difficult to approve big work in one go
• Strategies– Challenge yourself what needs to be done minimally– Structure initiative into phases– Get into the door to demonstrate the benefits
Lesson #3 – User Factors
• Facts– IT is here to support business– Least appealing projects are purely IT capability
projects
• Strategies– Find business buyers on your idea– Test and build business needs– Have business users initiate the needs
Lesson #4 – Government Factors
• Facts– Non-public Sector – Drive revenue and minimize
cost– Public Sector – Drive revenue and keep cost– In conglomerate as well
• Strategies– Know previous year budget– Know what has been left before proposing
Lesson #5 – China Factors
• Facts– Western – IT is top-down– China – IT is bottom-up and then top-down
• Strategies– Create needs in working level– Get executives to hear from internal channel
Lesson #6 – Wrong in Right
• Facts– Having the wrong project approved is worse than
having the right project not approved– Enterprise lost US$ M and personal credibility damned– Cherish your own brand and career
• Strategies– Receptive to opposite ideas– Always ask for second opinion
Measurement of Success
• PMP’s definition of project– A project is a temporary endeavor undertaken to
create a unique product, service or result.
• Quality– No More– No Less– Fit for Use