IT Portfolio and HR Management. Prof. Dr. Juliana Sutanto Chair of Management Information Systems (MIS)

Transcription

1 IT Portfolio and HR Management Prof. Dr. Juliana Sutanto Chair of Management Information Systems (MIS)

2 Lectures 2, 3, 4 Lectures 5, 7 Lectures 8, 9, 10, 11 Henderson and Venkatraman (1993) Jsutanto 2

3 Agenda IT portfolio management IT portfolio risk management IT HR management Jsutanto 3

4 IT Portfolio Management Analogous to financial portfolio management the seeking of value is constantly balanced with risks and costs the mix is constantly monitored to assess which projects are on track, which need help, and which should be shut down Jsutanto 4

5 Scope of Work Tactical Strategic Scope of Initiatives Portfolio Management The continuous process of identifying, selecting, and managing the optimum set of Portfolio investments to realize maximum business value. Project management The application of knowledge, skills, tools, and techniques to Project activities to meet the Project requirements IT Business/IT Enterprise Sources: Chevron Gartner Group PMI Combined Standards Glossary (2 nd ed.) Jsutanto 5

6 60 % of respondents to a survey of 317 IT decision makers affirming that they practice portfolio management at some level within their organizations versus only 39.4 % providing the same answer in (Forrester Research, 2007) Information technology portfolio management is increasingly recognized as a management discipline used to improve return on investments. (Gartner Research, 2007) Jsutanto 6

7 Remember these? Jsutanto 7

8 IT Portfolio Management Principles Strategic applications Continuous innovation Pursue high value added solutions Key operational applications Defensive innovation Pursue high quality solutions High potential applications Research and design Ensure effective cost control Support applications Divest and rationalize Pursue sustained quality solutions Jsutanto 8

9 Key Demand and Supply Issues Strategic applications Market requirement or competitive pressure Rapid applications development High potential applications New business idea or technology opportunity Rapid prototype evaluation Key operational applications Improve business process effectiveness Quality applications development (balance costs and benefits) Support applications Improve business process efficiency Low cost applications development Jsutanto 9

10 Generic IT Management Strategies Strategy (1) Centrally planned (2) Leading edge Management rationale Organizational requirements Central coordination of all requirements will produce better decisions Knowledgeable top management Technology can create competitive advantage and risks are worth taking Commitment of resources and funds Role of IT Role of managers and users Provide services to match business demands Identify applications to meet business needs Push forward boundaries of technology usage Use technology and identify the advantages Jsutanto 10

11 Generic IT Management Strategies Strategy (3) Free market (4) Monopoly Management rationale Organizational requirements Market makes the best decisions and users are responsible for business results Knowledgeable and accountable users Technology is a corporate good and an integrated resource for users to employ Acceptance of policy on single sourcing Role of IT Role of managers and users Achieve return on resources by being profit oriented Identify, source, and control applications development Satisfy requirements of users by being non directive Understand business needs and present them to obtain resources Jsutanto 11

12 Generic IT Management Strategies Strategy Management rationale Organizational requirements (5) Scarce resource Technology is a limited resource and its development must be clearly justified Policies to control and justify technology usage Role of IT Role of managers and users Optimize use of technology resources with tight cost control Identify and justify applications based on costs and benefits Jsutanto 12

13 IT Portfolio Management Strategies Strategic applications Centrally planned Key operational applications Monopoly High potential applications Leading edge Free market Support applications Scarce resource Free market Jsutanto 13

14 Agenda IT portfolio management IT portfolio risk management IT HR management Jsutanto 14

15 IT Portfolio Risk Management Assess any risks that would prevent the portfolio from achieving business objectives What constitutes a portfolio risk? E.g. projects inter-dependencies within the portfolio Resource availability and possible delays Jsutanto 15

16 Types of Projects Inter-dependencies Finish-start Predecessor A B Successor Start-start A B Start-start with lag A B Jsutanto 16

17 Assessing Projects Inter-dependencies 1. Estimate time needed to accomplish each project 2. Establish project relationships 3. Identify important project sequence 4. Compute overall time needed and success / failure probability Jsutanto 17

18 Tools to Assess Projects Inter-dependencies Visualize projects on actual time scale Gantt chart Depict projects relationships Network diagram Compute probabilities to complete the projects Program evaluation and review technique (PERT) Jsutanto 18

19 Network Diagram Projects Precedence Time needed a: network connection -- 5 months b: data warehouse -- 4 months c: intranet portal a 6 months d: e-commerce a, b 2 months e: crm system c, d 8 months 5 mths a b 4 mths 6 mths c d 2 mths e 8 mths Can you identify the critical path? Jsutanto 19

20 Network Diagram Typical areas that can hold resources and/or cause delays include: Anywhere on the critical path A long sequence of projects A project that has many predecessors Many parallel projects Source: Jsutanto 20

21 Agenda IT portfolio management IT portfolio risk management IT HR management Jsutanto 21

22 Managing the IT Function Distributed Location of IT decision rights Centralized Traditional IT function Towards user control Towards outsourcing Internal Provision of IT resources External Jsutanto 22

23 Provision of IT Resources Rationale for using external resources Economic factors (high overhead costs) Technology factors (rapidly changing technology) Business factors (focus on core competency) Rationale for using internal resources Need to track and understand technology trends Need to identify valuable applications Need to monitor and manage external resources Jsutanto 23

24 Location of IT Decision Rights Rationale for having centralized decision rights Economy of scale for IT resources Control of standards for applications Critical mass of skills Rationale for having distributed decision rights Business users control of IT priorities Business users ownership of the applications Business users accountability for costs Jsutanto 24

25 Case Example Toyota (1996) IT function was isolated and primitive Business units were buying their own IT systems because in-house IT couldn't deliver IT was more in an "order taker" role rather than a "let's build the solution together" partnership with business users Toyota (2003) Embedded top personnel as divisional information officers (DIOs) in all business units These DIOs are accountable for IT strategy, development and services, and they sit on the management committees headed by top business executives Executive steering committee to approve all major IT projects (Wailgum, 2005) Jsutanto 25

26 Strategies for IT Human Resources Strategic applications High potential applications Trained users Develop applications with user support Buy expert help and transfer knowledge Technology specialists Newly trained or recruited IT professionals Service providers Develop applications via outsourcing Key operational applications Train users to exploit package applications Support applications Package suppliers Jsutanto 26

27 Takeaways IT portfolio management principles IT portfolio management strategies IT portfolio risk management tools IT H/R management strategies Jsutanto 27

28 References CIO Executive Council, Hunting Down Opportunities in the Recession, CIO.com, 2009 Franke, J, Chevron s Portfolio Management Journey, CIO.com, 2008 Info-Tech Research Group, A CIO's Guide To IT Portfolio Management, CIO Zone Wailgum, T, The Big Fix, CIO.com, 2005 Ward, J. and Peppard, J. Strategic Planning for Information Systems (Third Edition), John Wiley Jsutanto 28

29 Case Questions MDCM 1. Which projects to recommend and when to implement the projects over the next 3 years? 2. Devise strategies for the IT human resources (i.e., who should implement each project) Note: Where details are not given in the case, feel free to make assumptions based upon your experience Jsutanto 29