One of the best ways to optimize the value of your IT portfolio’s assets is by instituting a robust, automated performance management program.
3. Analyze Portfolio Performance. During this step, the team leverages the IT asset inventory and preliminary performance results to produce an overarching big picture evaluation of the current state of the IT portfolio. The evaluation should include a consolidated list of IT assets, projects and metrics within the scope defined in step 2, and enable leadership to quickly understand the portfolio’s strengths and weaknesses. This analysis should include:
· Calculation of IT portfolio spend for assets in scope, including total cost of ownership for each IT asset, and determination of the value provided vs. the costs incurred
· Assessment of portfolio performance vs. original target metrics and best practices, including the identification of poorly performing IT assets
· Prioritization of assets within the IT portfolio that deserve management attention.
If steps 2 and 3 are conducted as a pilot focused on a limited portion of the overall IT portfolio, the project team can also leverage the initial portfolio analysis as an opportunity to re-evaluate the classification structure and performance metrics outlined in step 1, and make adjustments as necessary.
4. Draft Action Items. Once the portfolio analysis is complete, and assuming the performance metrics are sufficiently robust, the project team will be able to draft a series of recommendations and action items to set the organization on a path toward maximizing the returns on its IT investments. The recommendations should be considered preliminary and directional until the performance metrics can be properly vetted. The draft recommendations should include tactical decisions for IT assets and projects, such as:
· Initiate –For new IT assets or projects that have not yet started, but deserve immediate consideration
· Expand –For successful, high-value IT assets or projects that should be widened in scope or project resources
· Reform – For poorly performing yet important IT assets that require investment or management attention to improve their value
· Maintain – For IT assets that should continue on their current course with minimal changes
· Retire – For IT assets that should be deliberately drawn down over a specified period of time
· Terminate – For IT assets or projects that should be immediately cancelled or eliminated.
The project team should also define the implications—such as cost, technology, resource and risk—for these portfolio recommendations. Furthermore, an IT portfolio governance structure should be defined and launched to manage portfolio decisions on an ongoing basis.
5. Automate Performance Management Process. Lastly, the organization should seriously consider automating the performance management process. The aforementioned activities require significant manual effort to collect, assemble, analyze and report on the desired performance metrics for the organization. However, to make this process repeatable and more effective in the future, the ongoing performance management effort can be automated via a variety of tools and systems. Developing a formal and automated performance management system also has the advantage of enabling improved communication and tracking via real-time dashboards and reporting.
Most organizations would greatly benefit from a comprehensive IT performance management program. Once completed, this effort will allow IT leadership to possess increased visibility into the performance of its IT assets and projects and be able to make sound investment and management decisions. Furthermore, once the performance metrics have been clearly defined and communicated, the entire IT organization will be able to monitor results, take corrective action when necessary, and deliver improved performance to maximize returns on IT investments.
About the Author
Mark Ball is the managing director of Emerging Sun LLC, a Washington, DC-based management consulting firm that offers an array of IT strategic services, enabling clients to reduce costs, improve performance, and make intelligent business and technology decisions.
To read Mark Ball’s previous CIO Insight article, “Identifying Red Flags in Your IT Spend,” click here.