Enterprise Portfolio Management

Enterprise Portfolio Management

Contents Executive Summary...3 Introduction...4 The IT Planning Ecosystem...5 The Enterprise Portfolio...8 Creating an Enterprise Portfolio...8 Enterprise Portfolio Management...9 Enterprise Portfolio is Critical to High Priority Initiatives...10 Application Portfolio Management...11 M&A...11 Cloud Planning...12 Investment Management...12 Solution Architecture...12 Change Management...13 The Troux Approach...13 Troux Accelerators...17 Appendix: A Parable that Enlightens...18 Troux Confidential Distributed Under NDA 2

Executive Summary CIO s can better respond to the needs to reduce cost, become more agile and reduce risk by understanding the connections and relationships between the connected set of Enterprise Portfolios. Enterprise Portfolio Management delivers analytics that greatly improve planning processes. An Enterprise Portfolio approach is critical to success for high priority CIO initiatives such as Application Portfolio Management, Cloud Migration, M&A, etc. Furthermore, by supporting a cross portfolio approach to answer questions critical to the business, insights can be delivered that are not possible when focusing on a single portfolio such as projects or applications. Troux provides Enterprise Portfolio Management solutions that combine software and know-how to ensures customer success and self-sufficiency. Troux Confidential Distributed Under NDA 3

Introduction Everyday enterprises fail to react to the threats and opportunities that present themselves. The result is increased costs, lost opportunities and increased risk. Furthermore, this rate of change is accelerating. We know that for most enterprises the IT budget allocated to keep the lights on is large 1 on average 70% of the total IT budget. These costs are directly tied to sprawl & complexity that have come about due to M&A or simply undisciplined growth over time. Business as usual is exacerbating this problem. It is difficult to react to new opportunities as the traditional silo-ed approach to these is hindered because the complexity of IT impedes agility and soaks up innovation dollars that would be better spent improving the competitive stance. Risk management is on everyone s mind and since it is the IT systems that at the end of the day support most business processes understanding those systems and how they support the business is paramount to being responsive to compliance mandates and risk management. It is these business drivers that are behind the strong interest in improving how IT supports the business through Enterprise Portfolio Management. The IT Planning Ecosystem A number of investments have been made to date in IT planning tools, Figure 1 is a representation of the common IT planning systems deployed in most enterprises today. In this diagram these systems are depicted in an ecosystem based on the types of information they contain and the processes they enable. The horizontal axis represents the spectrum of run the Business information to change the Business information and the vertical axis represents whether the information is operational or strategic in nature. The positioning of the various systems is subjective, but generally speaking relative placement represents the nature of each of these systems and the types of processes they support. For instance, an enterprise s IT Service Management (ITSM) investments are largely established to support ITIL processes and to achieve IT operational excellence with a very limited viewpoint of future state strategic information or processes. 1 2012 IT Budget Planning Guide For CIOs, Forrester, October 27, 2011 Troux Confidential Distributed Under NDA 4

STRATEGIC INFORMATION Financial Management GRC RUN THE BUSINESS BPM Data Management ALM ITSM EA Modeling Project and Portfolio Management CHANGE THE BUSINESS OPERATIONAL INFORMATION Figure 1: The IT Management Ecosystem The combination of the information found in this eco-system represents the Enterprise Portfolio which we will discuss further in the next section. It s also worth noting that for most enterprises this IT Management ecosystem requires multiple vendors, each providing best of breed solutions and processes. Enterprises have invested in their current IT management systems to support a wide variety of IT processes. Today most of these processes are silo-ed within a particular system, but in fact if we step back and take a big picture view of these processes it is possible to identify a set of interacting planning value chains that span IT in its entirety. These value chains can be characterized into four fundamental planning processes as shown in Figure 2. 1. Business and IT Planning: The process of business and IT strategic planning and roadmapping. 2. IT Portfolio Governance: The processes of managing the risk, health, standards and compliance of the IT assets such as infrastructure, applications, and services. 3. IT Demand to Delivery: The process of managing business demand, funding, solution architecture, governance, and delivery. 4. IT Financial Management: The processes of IT financial budgeting, measurement, reporting, and forecasting. Troux Confidential Distributed Under NDA 5

IT Portfolio Management Risk, health, standards and compliance management IT Demand Management Business demand, funding, solution architecture and delivery IT Financial Management IT financial budgeting, measurement, reporting and forecasting Business & IT Planning Business and IT strategic planning and roadmapping Figure 2: IT Planning Value Chains These value chains do not exist independently, but instead create a value network through their interactions. Figure 3 depicts an example showing how they interact. In this case a new business need identified in the Business/IT planning value chain drives budget needs in the IT Financial Management value chain resulting in a new program request in the Demand to Delivery value chain that needs to be coordinated with investment needs (for example an application modernization need) coming from the IT Portfolio Management value chain. IT Portfolio Management Portfolio Stewardship Assess risks, opportunities Plan to improve Measure and communicate IT Demand Management Capture Demands Evaluate Execute Measure and communicate IT Financial Management Budgeting Allocation Reporting Forecasting Business/IT Planning Manage Business Context Assess Gaps Manage Plan of Action Measure and Align Figure 3: The IT Planning Value Network As can be seen, the IT Planning space is comprised of a broad set of rich information sources and a number of interacting value chains and processes that are each dependent on the other. It is clearly a complex system and due to that complexity it can be chaotic and subject to the IT butterfly effect where small changes in the environment can have unexpected and potentially disastrous results. The Enterprise Portfolio As an alternative approach, the information necessary to inform the IT Planning Value Network (Figure 3) can be organized into a set of portfolios that describe the enterprise e.g. an Enterprise Portfolio viewpoint. (See Figure 4) The complete sets of Enterprise Portfolios contain descriptions of all assets, both tangible and intangible that represent the enterprise. The complete set of portfolios also contains information assets that describe IT and the business. Both current and future states descriptions are included in these portfolios as well. Troux Confidential Distributed Under NDA 6

INFORMATION INVESTMENTS TECHNOLOGY GOALS & STRATEGY APPLICATIONS BUSINESS ARCHITECTURE Figure 4: The Enterprise Portfolios The assets that describe IT can be categorized into the following four portfolios: Applications: Applications are the touch point between the Business and IT. Applications represent a substantial IT asset that requires continuous ongoing management. The application portfolio also describes the roadmaps associated with each application. Ultimately the Application portfolio is leveraged for many use cases and periodically referenced by almost everyone in the enterprise. Investments: Program and Project Portfolio Management (PPM) is a mature capability practiced by many leading enterprises today. Also referred to as Demand Management, it s the process by which business stakeholders make decisions about investment funding and execution of a change to the current IT or business operations. When combined with an Enterprise Portfolio perspective, better decisions are enabled across the entire portfolio of investments. Technology: The Technology portfolio represents all the hard or physical IT assets in which the Enterprise has invested. In addition it also contains the catalog of all technology standards, their status in the Enterprise (approved, denied, etc.) and the roadmap for each portfolio item. Information: The Information assets are critical in identifying information risks and how existing data can be leveraged within the enterprise. Pro-actively managing Information assets and their policy status using techniques such as sensitivity rankings helps keep those assets under proper control. Using a portfolio approach to manage and classify information assets provides a comprehensive understanding of what common information assets exist and how they relate to other portfolios, most notably to Business and Applications information. Troux Confidential Distributed Under NDA 7

In addition, an Enterprise Portfolio must go beyond IT and contain descriptions of the Business which is be represented in two additional portfolios: Business Goals and Strategy: This portfolio captures all the intangible aspects that drive the Business decisions going forward. This critical portfolio, referred to by Gartner as Business Context 4, contains all the external drivers, strategies, requirements, principles, goals and objectives affecting the Enterprise as a whole. Business Architecture: This portfolio describes the Business capabilities, functions, processes, products and organization. Capturing and managing these business-oriented portfolios is a critical component in providing visibility into the business alignment of the IT portfolios and investments. It is these elements, the Business viewpoint, that enable a movement from IT Portfolio Management to a comprehensive Enterprise Portfolio Management approach. For a different perspective on why the comprehensive multi-portfolio approach is important, the reader is referred to the Appendix at the end of this document. Creating an Enterprise Portfolio Much of the information that describes the IT portfolios exists today in repositories that support IT processes such ITIL, ALM and PPM. As previously stated, the need is to integrate these silo-ed processes to improve the decision-making processes. The first step in this integration is the aggregation of the various planning repositories into an Enterprise Portfolio. Figure 1 is a representation of the various existing sources of information about the IT portfolio. Each of these repositories is the authoritative source for one aspect of the Enterprise Portfolio, but none are well suited as the Enterprise Portfolio because they are purpose built to support well established critical processes such as Change Management or Project Management. As shown in Figure 5, what is required is an integration approach that aggregates information from each repository and then enriches that information to describe relationships between all the portfolios including the business portfolios. 4 Gartner, EA Must Include Defining Your Enterprise Context, Publication Date: 2 March 2011 ID Number: G00209976 Troux Confidential Distributed Under NDA 8

Figure 5: Enterprise Portfolio Management Integrates Silos of Information Additionally, many of these existing IT planning systems are solely focused on the current operational state, so, future plans or roadmaps must to be defined for each portfolio so effective planning can be accomplished. Furthermore, in order to manage and govern the information in the Enterprise Portfolio, ongoing stewardship and governance has to be established and automated, via workflows, for each portfolio, addressing data quality, currency and completeness criteria so that the information can be trusted. Lastly, integrations with other sources of record must be automated to the extent possible to ensure data currency required to support the day-to-day needs of decision makers. Enterprise Portfolio Management The Enterprise Portfolio is the sum of all IT portfolios (Applications, Investments, Technologies and Information) and their relationships to each other and to the Business Portfolios (Business Architecture and Business Strategies). CIO s can better respond to the needs to reduce cost, reduce risk, and be more agile by managing this set of connected Enterprise Portfolios. The need is to seamlessly enable the collection of IT value chains by leveraging information found across the multivendor IT management ecosystem. Given the complexity, mission criticality, multi-vendor and evolving nature of the IT eco-system, it s unlikely any single vendor can deliver a solution in totality. That said, we at Troux have a single focus to help our customers improve decision making by providing out of the box analytics that span the multi-vendor eco-system and inform the IT value chains. To that end we approach the challenge by integrating the set of enterprise portfolios creating an approach we call the Enterprise Portfolio Management, which represents the comprehensive view that true IT planning and decision support solutions requires. We call this solution TrouxView (see Figure 6). Troux Confidential Distributed Under NDA 9

S O F T W A R E INFORMATION T Y INVESTMENTS TECHNOLOGY C O M M U N I GOALS & STRATEGY TrouxView Enterprise Portfolio Management APPLICATIONS S E R V I C E S BUSINESS ARCHITECTURE P A R T N E R S Figure 6 Enterprise Portfolio Management is Critical to High Priority Initiatives When the information assets that represent the connected set of enterprise portfolios are captured in Troux new critical use cases are unlocked enabling cross portfolio planning. (see Figure 7). STRATEGIC INFORMATION Financial Management Enterprise Portfolio Management (Troux) Asset Management RUN THE BUSINESS Business Process Management MDM ALM ITSM EA Modeling Project and Portfolio Management CHANGE THE BUSINESS OPERATIONAL INFORMATION Figure 7: Troux Enterprise Portfolio Management Troux Confidential Distributed Under NDA 10

To that end it is useful to move beyond the theory of an Enterprise Portfolio and better understand how it would be used in delivering high priority initiatives. It is also important to note that an Enterprise Portfolio cannot by itself deliver these initiatives, but rather it can deliver critical analytics that improve the planning and decision making across all portfolios and processes. The examples that follow are just a few of the numerous high value use cases an Enterprise Portfolio approach can enable. Application Portfolio Management IT organizations are under constant pressure to better synchronize the business, optimize resource usage, identify and redirect wasteful spending, improve compliance, and increase agility. In many organizations basic application maintenance expenditures account for over 80% of annual budgets so finding efficiencies in the application portfolio can yield significant benefits. Since the application portfolio is the touch point with the business, it is essential that an Application Portfolio Management program is a sustainable and continuous. It has a large audience of stakeholders and is foundational to a large number of use cases beyond cost saving including compliance, impact analysis, risk management, modernization, and investment planning. What IT and business stakeholders need is complete visibility into the application portfolio with detailed understanding of the higher order dependencies (business processes, functions and strategies) and lower order dependencies (infrastructure, software, servers) of applications, services and projects. IT organizations need the appropriate capabilities to effectively communicate cost-optimization efforts, change impact, risk management plans and effectively communicate with business partners as well as provide real-time reporting on the application portfolio risk, health, compliance and alignment. Troux solutions enable businesses to analyze and gain insight into how best to manage and optimize the Application Portfolio through the understanding of the of the entire enterprise portfolio. Troux provides an integrated and automated out-of-the-box solution for application portfolio management. M&A Executing an M&A transaction requires companies to understand the ramifications across business, operations and IT domains. In addition, merging with or acquiring another enterprise requires understanding of how new portfolios align to business goals and strategies. How those portfolios create new or enhance existing business capabilities is key to a successful M&A event. IT infrastructures are not always assessed during the formative stages of an M&A project. This can lead to serious business and technology misalignments when integrating two organizations. The key to successful acquisitions is to develop a successful integration plan that accommodates business, operational and IT aspects. Troux solutions allow enterprises to assess these potential pitfalls and help align the organizations strategies, operating models, and IT assets ultimately helping the enterprise gain a business-centric view of the necessary IT transformations by considering the entire enterprise portfolio within the context of the acquisition or merger. Troux Confidential Distributed Under NDA 11

Cloud Planning The cloud creates opportunities for IT and business improvements in agility, efficiency, cost and simplification. Every enterprise needs to look at cloud transformation initiatives to not only understand the business benefit and operational differentiation they can provide, but to also understand the ramifications and implications to the business of making such a transformation. In answering the question what and how to move to the cloud, IT organizations have a number of facets they need to assess including deployment options, project and budget risk, security risks, elasticity of demand, regulatory implications, SLA s, audit challenges and finally the expected ROI. Troux solutions allow enterprises to understand their enterprise portfolios and assess application candidates for migration to a cloud environment within the context of technology risk, application suitability, security considerations and alignment to business goals and strategies. By understanding the cloud opportunity through the lens of all the affected enterprise portfolios, businesses can build better cloud transformation initiatives. Investment Management Large enterprises are faced with an increasing array of investment demands. To make effective, impactful decisions about which investments to pursue and which to reject requires a deep understanding of each investment proposal within the context of the overall enterprise portfolio. Investments and program proposals need to be evaluated as part of the business and IT planning process. To make the right decision, executives need to understand the alignment of the potential investment landscape to the strategic goals and intent of the business. For example, a proposed investment in application modernization or cloud transformation needs to be evaluated with respect to the impacted enterprise goals, strategies and business capabilities together with an understanding of existing application and technology roadmaps. Troux solutions allow enterprises to assess investment and program proposals using a business-centric view of the impacts and align these proposals to business goals and business capabilities. New understanding of the investment with respect to the impact on the Application, Technology, Process and Information Portfolios is gained. Solution Architecture Delivering on time and on budget is always a top CIO priority as CIOs strive to make best use of scarce project funding. Key to delivering projects that meet the needs of the business is accurate and complete solution architecture. Solution architecture is an architectural abstraction of the end-to-end solution consisting of applications, information and technology to support specific business capabilities and business strategies. Without insight into the enterprise portfolio it is problematic to design correct solution architectures. Troux Confidential Distributed Under NDA 12

Solution Architects must understand the current state with which their solution will integrate and leverage opportunities for re-use in the current portfolio. Additionally, solution architectures must adhere to the published catalog of technology standards and patterns. Architecture governance boards will use these catalogs to govern project compliance. Good solution architectures inform deployment teams so they can better understand how the solution fits into the enterprise, how it integrates with other aspects of the IT portfolio and how it supports the business. Troux offers a purposed product based on The Open Group s TOGAFTM approach to enterprise architecture that supports the full TOGAFTM ADM insuring that solution architectures address all aspects of the enterprise portfolio. Change Management Most CMDB/ITSM systems implement data models that represent elements of the business architecture such as Configuration Item (CI) owners and the business processes supported. In practice however, this information is not populated because it is not the remit of the Operations teams to manage this type of information. Hence it is difficult for operation change teams to understand risks and business impacts of change requests. As the business becomes more and more dependent on IT to run all business processes, the direct impact to the business of SLA failures becomes more and more acute. Better understanding of impacted business capabilities and organizations improves the operations team s ability to mitigate risk and improve SLA s. Troux provides integrations with leading ITSM products. These integrations allow business architecture portfolios to augment the ITSM tools being used by the operations teams. By providing the ITSM tools with access to the enterprise portfolio, the business architecture can be automatically provisioned to the ITSM tools enabling Change Teams to better manage change impacts and improve SLA s. The Troux Approach Troux provides industry-leading solutions that deliver rapid and continuous value by utilizing an Enterprise Portfolio Management approach; by leveraging out of the box analytics that give insight into the interconnected nature of the Enterprise Portfolio, Troux s solutions deliver sustainable business value. (see Figure 4). Additionally, Troux also provides a prescriptive approach to ensure customer success and on-going customer self sufficiency. These Troux Accelerators are based on an outside in approach that focuses on answering a set of business critical questions that are aligned to Troux s rich set of out of the box analytics (see Figure 8). Troux Confidential Distributed Under NDA 13

Figure 8: Troux s Outside in Approach Let us consider a few examples of how this might be applied. EXAMPLE 1: There are two issues often found in large enterprises today. The first one is a need to reduce operating costs and thereby free up funding for innovation. This is often approached from an application portfolio perspective. The second issue is that significant parts of the enterprise technology portfolio are out-dated due to spending constraints previously enforced. This IT debt 5 reflects an operational risk to the business but is difficult to understand where to apply the technology refresh funding. These two issues can be combined and distilled into a single business question: What are the high cost/risk applications and what do they mean to the business? As shown in Figure 9 if we create a cross portfolio visualization that relates Business Capabilities from the Business Architecture portfolio with the Application Portfolio and the supporting technologies from the technology portfolio we can get immediate insight into the business cost and risks sought after. These insights will inform application modernization, application retirement, and technology refresh decisions. Troux Confidential Distributed Under NDA 14

Figure 9: Business Architecture + Application Portfolio + Technology Portfolio EXAMPLE 2: From a practical standpoint really understanding strategic alignment can be difficult, but if you reduce it to the right focused business question, practical visualizations can be delivered. Consider the question: Which applications and technologies are affected by a change in strategy? To be responsive to this question we need to deliver a visualization that gives insight into how a strategy contained in the Business Strategy portfolio is implemented by programs and projects in the investment portfolio and how those projects affect and are affected by the underlying application roadmaps and supporting technology roadmaps. As shown in Figure 10, if we create a cross portfolio visualization that relates business strategies from the Business Architecture portfolio with the Investment, Application and Technology portfolios we can get immediate insight into the alignment and gaps in the overall plan. These insights will inform the enterprise so that corrective action can be taken. Figure 10: Business Strategy + Investment Portfolio + Application Portfolio + Technology Portfolio Troux Confidential Distributed Under NDA 15

Troux Accelerators Based on years of experience working with hundreds of customers, Troux Accelerators deliver a structured, yet agile approach to help you align and synchronize your EPM program to realize better execution, control risk, and improve financial performance. Troux Accelerators are a proven prescriptive set of best practices, designed to deliver immediate value by answering critical business questions, and are packaged so your EPM program provides your decision makers and stakeholders with rich information and analytics. As a result, you can operationalize Program Management, Stewardship, and Governance. Accelerators are based on a four step program (see Figure 11) 1. The Success Planning Phase establishes the foundation for success; defining the vision, goals, targeted value, & stakeholder priorities; level-setting the team, and setting the course forward 2. The Data Quality Phase operationalizes data stewardship; enabling domain stewards through best practices to keep key data current, correct, & complete. 3. The Information Analysis Phase identifies opportunities; executing key analytics and examining the results for trends and anomalies that illuminate possible change opportunities for consideration 4. The Business value Phase makes decisions; using the results of analyses in governance body actions & investment planning processes. Figure 11: Troux Accelerator Methodology Troux Confidential Distributed Under NDA 16

Troux recognizes that one size doesn t fit all and you need to size your approach to your objectives and business imperatives. To that end, Troux offers three categories of Accelerators to meet your needs and budgets: 1. Quick Start Accelerator - Quickly populate a targeted set of out-of-the-box Troux analytics with the data required to get immediate value from your Troux software. Typically time boxed to 2 months. 2. Rapid Answers Accelerator - Provide analytics for a high priority, near-term need within a EPM program --- typically within 3 months. 3. Program Accelerator - Establish a EPM program that is operationalized and sustained through Program Management, Stewardship, and Governance, providing a set of analytics to communicate information centered on one or more functional areas typically in 4 months. The program accelerator can be implemented on previously executed Rapid Answers or Quick Start Accelerators Troux Confidential Distributed Under NDA 17

Appendix: A Parable that Enlightens There is an ancient parable that originated in India about the blind men and an elephant. Each blind man is given a chance to feel a different part of an elephant and describe what an elephant is like. One man who handles the trunk says it is like a snake, another who feels the tusk says it is like a spear, another who touches the tail says it is like a rope etc. They violently disagree about what the elephant is, with no resolution to the debate. The Enterprise Portfolio is much like the elephant in this story. If we don t see it in its totality including the Business viewpoint, we cannot understand how all the parts make a whole enterprise. Furthermore we risk endless debates that result in no business value. For example, if we are looking to make decisions about the Application portfolio and are only analyzing projects and applications, we are overlooking four additional domains (Business Strategy, Business Architecture, Technology and Information). Without analytics that consider all dimensions of the problem space, it is highly unlikely the right application decisions will be taken and in fact much like the blind men and the elephant there can be much disagreement and little business value delivered. Additionally, many of these existing IT planning systems are solely focused on the current operational state, so, future plans or roadmaps need to be defined for each portfolio so that effective planning can be accomplished across multiple portfolios. Furthermore, in order to manage and govern the information in the Enterprise Portfolio, ongoing stewardship and governance has to be established and automated, via workflows, for each portfolio, addressing data quality, currency and completeness criteria so that the information can be trusted. Lastly, integrations with other sources of record must be automated to the extent possible to insure currency needed to sustain the on going decision support needs. AMERICAS HEADQUARTERS: Troux Technologies 8601 FM 2222, Building 3, Suite 300 Austin, TX 78730 USA Tel: +1 512 536 6270 Fax: +1 512 231 8796 Email: info@troux.com EMEA HEADQUARTERS: Troux Technologies, UK 268 Bath Road Slough, SL1 4DX UK Tel: +44 (0) 1753 725660 Fax: +44 (0) 1753 725661 Email: emeasales@troux.com GERMANY: Troux Technologies GmbH Landsbergerstr. 302 D-80687 München Germany Tel: +49 89 452 1326 0 Fax: +49 89 452 1326 29 Email: emeasales@troux.com 201204 Copyright 2012 Troux Technologies, Inc. Troux, all products prefaced by the word Troux and the Troux logos are either registered trademarks or trademarks of Troux Technologies, Inc. in the United States and/or other countries. All other products mentioned are either registered trademarks or trademarks of their respective corporations. Troux Confidential Distributed Under NDA 18