Portfolio Management - Project Prioritization Best Practice

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IT PrioritizationDiscussion with Steering Committee

Ours is not a new or unique problem

IT

What investments should we fund?How should we compare the alternatives for ranking?How should we work the trade offs?Work (what we are going to do?)Resources (what we have to do it with?)Time lines (how long can we wait to have it done?)Almost every company struggles with:

I have three questions when someone comes to me with a request to spend money on systems:

What do you want to change and what is it worth?Why do we need to invest in systems to get it? Cant we change business policy, processes, rules etc.How will you be able to show me that you got the benefits you were going for?

One of my favorite CEOs said:His view was that the requestor should be able to answer those business questions before starting the process

ValueTangible things that can be measuredRevenue enhancement / ROI / Cost saving / Cost AvoidanceRegulatory / statutory requirementLinkage to or support of strategic initiatives which have valueIntangibleImproved customer service (could be tangible)Company imageImproved market visibilityEmployee satisfaction (again could be tangible)Technical obsolescenceRisks relative to what the company / firm has doneSizeSheer volume of requirementsNumber of people needed to get it doneAmount of data or technologyComplexity Organizational impact (How cross functional, cross business, cross geography)Technical (plumbing and wiring, service level requirements)Functional (how complex is are the business processes and rules)NoveltyFunctional (have we ever done this before, how different is it from what we have done)Technology

Companies that have a working priority system balance value and risk:Low Hanging FruitManage CarefullyFill inAvoidValueRiskLowLowHighHigh

Even sophisticated companies have trouble getting it right

Priority Process

IT Provisioning Process

Ideas and Work RequestFrom Anywhere

Time & $

NegotiationProcessPlanGovernanceIT

6

The first trick is to get the opportunities profiled rightScope definedBenefits and risks outlinedEnough challenge to make sure the opportunities are valid and the benefits will happen Make the requester defendThe second is to get good estimates on cost, schedule and IT assures that it can deliver as promisedIT has to understand its ability to commit resourcesIT has to be pretty good at sizingIT has to have resource planning processes which control assignments and availabilityThe third is to have variable resourcing capabilitiesStaff augmentation and / or outsourced project deliveryTight linkage with IT

Some best practice thougthsAt the end-of-the-day it needs to be business leadership not IT that decides priority and pace

Our current Project Scope document is pretty light

We need to develop a rating and weighting system for scoringValueTangible things that can be measuredRevenue enhancement / ROI / Cost saving / Cost AvoidanceRegulatory / statutory requirementLinkage to or support of strategic initiatives which have valueIntangibleImproved customer service (could be tangible)Company imageImproved market visibilityEmployee satisfaction (again could be tangible)Technical obsolescenceRisks SizeSheer volume of requirementsNumber of people needed to get it doneAmount of data or technologyComplexity Organizational impact (How cross functional, cross business, cross geography)Technical (plumbing and wiring, service level requirements)Functional (how complex is are the business processes and rules)NoveltyFunctional (have we ever done this before, how different is it from what we have done)Technology

One of the key challenges will be to balance the number of risky projects with the need to get things done

Resource managementWho is capable to work on whatWhat is the future forecast of availabilityIf there is slippage or change for any given project, what is the impact on the portfolioEstimationHow much effort will be required to do the projectHow does this translate to elapsed time (see above)Project managementHow do we know that a project is on trackHow do we manage change and its impact on other projectsSourcingHow do we work with other IT groups and outsiders to get the job done the right wayIT has to develop capabilities and put practices in place

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