An Organization Framework for Strategic

Management of IS/IT

MSSI 2022S
Structure Demand-side Supply-side

Corporate & Aligning Organizing

business IS/IT with Managing the Strategic
strategy and business the app. Managmnt
IS/IT strategy portfolio of IS/IT
implications

A strategic Business Determine

perspective innovation the IS
of IS/IT with IS/IT strategy

Establish Search for Justifying & The Strat.

IS/IT strategy competitive managing Managmnt
process opportunit. IS/IT of IT service
to shape investment &
strategy infrstructure

Establishing IS/IT Portfolio & Organizing,

strategic strategy: investment sourcing, and
management tools & management infrastructure
framework techniques management
2
REVIEW

IS/IT Strategy Formulation & Planning Process: The Model

Describes the overall framework for managing To define how technical resources and
both demand and supply across the enterprise. technologies will be acquired, managed, and
It will address the following: developed to deliver applications and services
• Scope and Rationale: it will need to lay out required by the business IS strategy. It will
the business background, scope and normally address the following supply factors:
rationale for the directives it is stating, and • Organization of IS/IT activities and decision making,
preferably describe a vision of the corporate including the management of its people, maintaining
IS/IT environment and its expected impact on and developing capabilities and critical resources;
• Managing the information resources and provision
the business community.
of information, application, and technology services,
• Formal Organization and Resource Structure:
including security;
organization, resourcing and the allocation of • Procurement, contracting, outsourcing, and supplier
responsibility and authority for IS/IT selection policies and practices (~ IS/IT Management
decisions. Strategy);
• Investment and Prioritization Policies • Preferred or approved project and application
• Vendor Policies development and implementation methods and best
• HR Policies practices.
• IS Accounting Policies

3
Session Objectives
• To understand the position of IS/IT in an organization
and how to manage it
• To understand IS/IT capabilities and competences
• To understand what IS/IT Governance is and why it is
important

4
Agenda
• The Strategic Management Requirement
• Positioning and Managing IS/IT in an Organization
• From a Functional View of IS/IT to an Organization-wide Perspective –
Capability and Competences
• IS/IT Governance and Why It is Important
• What Decisions Need to be Governed?
• Creating the Organizing Framework for IS/IT Decision Making
• Instruments of Governance

5
Note …
• Earl notes that ‘it is the organisational issues in the strategic
management of IT that matter most’, and research highlights
that what distinguishes organizations that are successful with
IT is not technical sophistication, but how they manage IS/IT.
• The ‘organizational’ strategy for IS/IT resources cannot be
prescriptive. It must evolve over time as the organization
becomes more dependent upon, and demands more from,
IS/IT.
6
The Strategic Management Requirement:
Strategic Management Processes

Feedback or control mechanisms

are required to ensure that plans
and their implementation are
appropriate for the strategic
direction or to enable changes of
direction should achievement
prove impossible.

7
Risk of Disintegration of AP DUE to Lack of
Coordination in IS/IT Management
In the longer term, this failure of governance can have 3 effects:
1. The apps that are developed and implemented do not
meet overall business needs;
2. Resources are misused, even wasted;
3. Strategy formulation is essentially a retrofitting
process, producing enormous rework.

Caused by:
4.Lack of alignment between the business and IS
strategies;
5.Uncoordinated management of IS demand and IT
supply;
6.Over-centralization/-decentralization of responsibility
for IS/IT with lack of mechanisms to ensure coherence
across centralized and develved IS/IT decisions

8
Requirements for the Strategic Management of IS/IT

• To ensure IS/IT strategies, policies and plans reflect business objectives and strategies.
• To ensure potential business advantages from IS/IT are identified and exploited.
• To ensure strategies, changes, investments, and costs are viable in terms of business risks.
• To ensure the organization has the capability and supporting competences to gain maximum
benefit from IS/IT investment, either in-house or via external partners.
• To establish appropriate resource levels and reconcile contention/set priorities.
• To create a ‘culture’ for the management of IS/IT that reflects the corporate culture.
• To monitor the progress of business-critical IS/IT activities.
• To achieve the best balance between centralization and devolvement of IS/IT decision
making.

9
Positioning & Managing IS/IT in an Organization
• Where should IS/IT resources be positioned within the organization?
– Note: IS/IT is not something that can be managed from a box on the
organizational chart!
• In addition to operating the infrastructure, IS/IT Unit is also expected to be
accountable for the benefits and value delivered from IT spend  they are
accountable for something that only happens when their business colleagues
change working practices and use the apps effectively!
• Organizations require an organizing framework to provide effective decision
making about IS/IT
– Investment portfolio, organizational changes needed to deliver expected
business benefits, IS/IT demands, etc.
– Accountability for some decisions will reside with the CEO/Executive
team, others with SBU managers, and some will be shared.
– As accountability, consultation, and input into IS/IT decisions become
distributed across organization, what is then required is strong IS/IT
Governance. 10
From a Functional View of IS/IT to an Organization-
wide Perspective – Capability & Competences
• Peppard & Ward have identified 6 interrelated A Framework for Positioning Organizational IS/IT
‘macro-level’ competences that all organizations Competencies
must posses if they are to be successful with IS/IT.
– These 6 macro competences make up what we can call an
organization's ' IS/IT (or digital) capability', i.e. its ability
to continually optimize the value derived from IS/IT, in
terms of both strategic and operational contributions.
The term capability in this context refers to the strategic
application of competences, i.e. their use and deployment
to accomplish given organizational goals.
• The 6 competences can be linked together to
produce a model of framework to structure the
Use
competences that create the organizational
capability to deliver business value from IT
consistently over an extended period.

11
6 Domains of IS/IT Competences
1. Strategy: the ability to identify and evaluate the implications of IT-based
opportunities as an integral part of business strategy formulation and define the
role of IS/IT in the organization.
2. Define the IS contribution: the ability to translate the business strategy into
processes, information and systems investments and change plans that match the
business priorities (i.e. The IS strategy).
3. Define the IT capability: the ability to translate the business strategy into long-
term information architectures, technology infrastructure and resourcing plans
that enable the implementation of the strategy (i.e. The IT strategy).
4. Use: the ability to maximize the benefits realized from the implementation of IS/IT
investments through effective use of information, applications and it services.
5. Deliver solutions: the ability to deploy resources to develop, implement and
operate IS/IT business solutions that exploit the capabilities of the technology.
6. IT Supply: the ability to create and maintain an appropriate and adaptable
information, technology and application supply chain and resource capacity.

12
Location of Resources vs. IS Competences

Use

13
The IS Capability, Competences, and Resources –
a Model of IS/IT Capability
• The resource level denotes the
knowledge and know-how that are the
key to ingredients of the IS/IT
competences
• The organizing level is concerned with
how these resources are mobilized and
orchestrated via structures, processes,
routines, and roles to create IS/IT
competences
• It is only at the enterprise level that the
IS/IT capability actually manifests itself
as a strategic resource that delivers
value
– The extent to which competences contribute towards
IS/IT capability depends on 2 aspects: organization’s
strategy & investment decisions
– IS/IT capability may be sourced from internal,
external, or both

14
IS/IT Governance and Why It is Important
• IS/IT governance is concerned with promoting consistent and coherent decision making
behaviour across an organization regarding IS and technology in order to maximize the
value the organization derives from IS/IT
- both IS/IT and Business management’s decisions
• Establishing IS/IT governance framework entails the allocation of accountabilities &
responsibilities, defining processes, setting policies, establishing structures, determining
appropriate metrics, and creating mechanisms to bring together business & IT managers
and users in decision-making processes.
- ‘effective IT governance is the single most important predictor of value an
organization generates from IT’
• However, too often governance mechanisms are put in place in response to problems or a
crises, or have evolved in an uncoordinated way.
15
+/- of Different Structural Arrangement
Philosophy for
decision making

‘Multi-local’

decision making

• Cost
IS/IT decision making
across business units • Relationships

decision making)

16
The Federal Model of Organizing IS/IT

17
What Decisions Need to be Governed?
• 3 issues to be addressed:
– What are the critical governance decisions, both demand & supply decisions?
– How are the decisions made – the process, will they be unilateral or shared?
– Who makes the decisions – senior management, business managers, IT management, a committee or perhaps
external partners (or various combinations)?
Decision Desired Behaviour

Funding level for IT The executive management team should determine annual spend on IT

IS strategy The IS strategy should be bisiness-driven & involve all heads of business units
in its formulation
Prioritizing of spending Heads of business units should agree priorities for IT spending

Required IT capabilities Group CIO should determine technical capabilities required to implement IS
strategy
Managing projects All projects to follow a similar methodology; only one way to do IT enabled
change projects
Change management One process to follow for any software changes

IT security Total organizational conformance to set policies

18
Creating the Organizing Framework for IS/IT Decision
Making
• Authority – the individual, group, or forum that should make the decision & is ultimately answerable
for the outcomes of the decision
• Process – how the decision will be made to enable consistency in decision making & resource allocation
• Responsibility – the individuals or bodies responsible for day-to-day execution of the decision
• Coordination – the mechanisms (e.g., SC, strategy teams, etc.) and processes for ensuring coherence
across all IS/IT decision areas
• Monitoring – the approaches to policing decisions, ensuring conformance across the organization to
decisions made
• Example: Decision Authority Process Responsibility Coordination Monitoring

Funding level for Executive Zero budgeting Executive IT steering Group Audit
IT mangment team mangment. team committee
IS strategy CEO IS strategy CIO IT steering IT steering
process committee committee
Required IT CIO IT strategy CIO Architecture Architecture
capabilities process committee committee

19
Instruments of Governance
1. Structural – aligned with organizational structures or roles (CEO,
COO, CIO, Line Managers, …, Relationship Manager, Account
Executive, Deman Manager)
2. Horizontal – structural overlays (governance groups or councils, SC,
etc.) and non-structural devices (physical co-location of employees)
3. Functional – outline the degree to which IS/IT decision making
follows specified processes, rules & procedures
4. Instruments for Social Integration – seek to achieve a shared
understanding amongst stakeholders
20
Structural Instrument:
Does anyone still want to be a CIO?
• Every leader is now an IT leader
– The CIO role was once the obvious choice for a technology-oriented executive. After all,
aside from a few product-focused roles, there were few opportunities to lead the tech
decisions of a large organization.
– However, as IT has transitioned away from data centers and standalone IT groups at the
tactical level, it's also become a core component of most other leadership roles. Leadership
positions from the Chief Operating Officer (COO) to the Chief Marketing Officer (CMO) must
now exhibit the tech savvy that was once the province of IT.
• The bottom line
– Pundits have long hypothesized that the CIO role is "dead." Rather than dozens of
candidates clamoring for a non-existent role, perhaps companies should prepare for an
empty CIO chair, with no one interested in filling it, even as we enter a new "golden age" of
IT.
http://www.techrepublic.com/article/does-anyone-still-want-to-be-a-cio/ 21
Horizontal Instrument: Steering Organization

22
Horizontal Instrument:
Responsibility of the Committees
Executive steering group Application management groups
•Interpreting business strategy and agreeing overall IS/IT policies •Identifying and specifying the needs, benefits, business resources and costs of
•Establishing priorities, agreeing resource and expense levels, authorizing major applications to enable management to evaluate investments and set priorities
investments •Managing developments and ongoing use of systems to ensure benefits are
•Ensuring that strategic applications (especially those that cross business areas) maximized
achieve their objectives •Ensuring business changes necessary to get the benefits carried out
•Establishing the appropriate organizational responsibilities and relationships •Ensuring that user resources are made available as needed and used effectively on
Business (IS) strategy groups projects
•Identifying business needs, interpreting CSFs, assessing opportunities and threats and Service management groups
IS implications in that business area •Translating business needs into technical requirements and resource implications
•Prioritizing, planning and coordinating IS activities and expenditure in the area and •Selecting the optimum means of meeting the business needs
ensuring planned benefits are delivered •Monitoring performance against budgets/service levels agreed with the business
•Ensuring appropriate user resources are allocated to projects and appoint application •Ensuring technical solutions are tested and quality assured to avoid application failure
managers •Planning the development of services and resources to meet evolving demands
IT strategy group Technology management groups
•Interpreting IT trends and developments in the context of the organization’s business •Understanding technology development, formulating options and communicating the
•Ensuring resources are deployed to meet business priorities implications
•Developing IT resources and services in line with business IS plans and monitoring the •Assessing the capabilities of the technologies against known and potential needs
performance of those resources •Planning and managing infrastructure developments and migrations to minimize the
•Managing the supply of technology and specialist bought-in services risk to business applications
•Ensuring technical risks are minimized •Resolving technical issues/problems with suppliers and ensuring service groups are
effectively supported

23
Functional Instrument: IS/IT Policies

24
Strategic Management of IS/IT Services and IT
Infrastructure

MSSI 2022S
Structure
Corporate & Aligning Organizing
business IS/IT with Managing the strategic
strategy and business the app. managmnt
IS/IT strategy portfolio of IS/IT
implications

Key ideas &

A strategic Business Determine the future of
perspective innovation the IS IS/IT strategy
of IS/IT with IS/IT strategy

Establish Search for Justifying & The strat.

IS/IT strategy competitive managing Managmnt
process opportunit. IS/IT of IT service
to shape investments &
strategy infrstructure
Establishing IS/IT Portfolio & Organizing,
strategic strategy: investment sourcing, and
management tools & management infrastructure 26
framework techniques management
REVIEW

IS/IT Strategy Formulation & Planning Process: The Model

Describes the overall framework for managing To define how technical resources and
both demand and supply across the enterprise. technologies will be acquired, managed, and
It will address the following: developed to deliver applications and services
• Scope and Rationale: it will need to lay out required by the business IS strategy. It will
the business background, scope and normally address the following supply factors:
rationale for the directives it is stating, and • Organization of IS/IT activities and decision making,
preferably describe a vision of the corporate including the management of its people, maintaining
IS/IT environment and its expected impact on and developing capabilities and critical resources;
• Managing the information resources and provision
the business community.
of information, application, and technology services,
• Formal Organization and Resource Structure:
including security;
organization, resourcing and the allocation of • Procurement, contracting, outsourcing, and supplier
responsibility and authority for IS/IT selection policies and practices;
decisions. • Preferred or approved project and application
• Investment and Prioritization Policies development and implementation methods and best
• Vendor Policies practices.
• HR Policies
• IS Accounting Policies

27
Session Objectives
• To identify IT services
• To understand the strategies for managing IT services
• To understand the strategies for managing IT
infrastructure
• To understand issues on outsourcing of IT services

28
Agenda
• Creating and Sustaining Business Change: Projects and Services
• The Need for the Strategic Management of IS/IT Services and IT Infrastructure
• IS/IT Service Categories
• Managing Operational and Value-enabling Services
• Strategies for Managing IT Infrastructure and Infrastructure Services
• Understanding and Managing IT Risks
• Sourcing of IS/IT Resources and Services
• Business Process Outsourcing
• Innovation and Outsourcing
• Back-sourcing and Switching Suppliers

29
Creating and Sustaining Business Change: Projects and Services
Business/
IS/IT Strategy

Governance Principles & Priority Rules

Business
Case
Evaluate Decide

Administer Service Eliminate Evaluate Project Execute

Portfolio Portfolio

Deploy Deliver

Business As Usual Innovation/Change

Transparancy in real cost & business Transparancy in decision making & 30
value of IT products & services business value of IT investments
DevOps

• DevOps (a clipped compound of "software

DEVelopment" and "information technology
OPerationS") is a term used to refer to a set of
practices that emphasize the collaboration and
communication of both software developers
and information technology (IT) professionals
while automating the process of software
delivery and infrastructure changes.
• It aims at establishing a culture and environment
where building, testing, and releasing software
can happen rapidly, frequently, and more
reliably.

31
The Need for the Strategic Management of IS/IT Services and IT
Infrastructure
• The drivers:
1.Most businesses now deliver some aspects of their product/service to customers via IS/IT  the quality
and performance of IS/IT services are visible, not only internally but externally, and directly affect the
business performance & customer relationships.
2.As more and more aspects of service delivery are being outsourced, contracts with suppliers are becoming
integral management of IS/IT.
• Managing users’ expectations:
– There is often no competition  quality of service provided
• If the service fails to meet users’ needs, users may look outside for future service provision (‘shadow IT’)
– There is a general expectation of availability and high levels of service quality whenever required
– Users can often be reluctant to pay for IS/IT services
– Users often don’t appreciate what is required in delivering the service
– Those who pay/benefit for/from the service, and those who participate in service delivery process may
have different expectations/requirements
32
IS/IT Service Categories
• Application services Business strategy & operations

• Infrastructure services
• Operational services: assembling &
Value-enabling Services
operating the core IT environment
• Value-enabling services: services to
Application
enhance the value of information Operational Services Services
assets (strategy development,
business analysis, enterprise Infrastructure Services
architecture, …)
IS/IT services environment

Internal/external service providers

33
Gaps in Service Delivery
1. Not understanding what users expect or value due
to:
– a lack of user needs analysis; ineffective communication by either
or both parties; excessive bureaucracy in the IS function.
2. Setting the wrong IT Service Standards due to:
– lack of commitment to IT services by IS management;
perceptions of infeasibility in meeting user demands; inadequate
task definition and standardization or inadequate esourcing to
standards set; absence of objectives for the service to achieve
and/or inappropriate performance measurements.
3. Underperformance of the service due to:
– role ambiguity, including the user’s role in service delivery; lack
of resource availability; lack of actual or perceived controls; lack
of teamwork and inappropriate resource use, or inappropriate
use of the service.
4. Poor communication of what the service is and can
deliver due to:
– a propensity to overpromise and/or overreact to ‘complaints’;
– inconsistent communication across the user communities; lack of
visibility of the service process.
5. Expectation versus perception gap due to:
– not understanding user requirements and reasons for them;
users not understanding the service process and the implications
of their demands; user expectations actually being impossible to
satisfy!

34
Gaps in Service Delivery:
IT Cost/Service Trade-Off

35
Managing Operational & Value-enabling
Services
Degree of customization of service
• Service factory: ‘back-office’ services
such as security, capacity and network
Service factory Service shop
maintenance, software release/upgrades
and installation of basic desktop facilities
• Service shop: software acquisition,
Degree
of user infrastructure design, technical product
involvement
Service mall Service evaluation and vendor assessment
boutique
• Service mall: help desks and essential
IS/IT skills training
• Service boutique: strategy development,
consultancy, business analysis and
systems, and process design
36
The Dimensions of IS/IT Services
Overall Framework for Managing IS/IT Services

37
Application Development and Provisioning
Strategies
The main issues for application development can be summarized as:
• providing new applications more quickly in response to changing business demands;
• more cost-effective production or acquisition of more types of application and reduce ongoing
maintenance costs;
• increasing the quality and reliability of the software as it becomes integral to the business processes;
• implementing more customer-focused applications that can be used easily by untrained people;
• devising more flexible or adaptable applications than can be enhanced or modified quickly at low
incremental cost;
• providing efficient, seamless integration of business activities across different applications from the
desktop.

In other words—faster, cheaper, better, more flexible and easier to use!

38
IT Service Management (ITSM) Framework

39
ITSM Frameworks & Others
• The ISO 9000 family of quality management systems (QMS) is a set of
standards that helps organizations ensure they meet customer and
other stakeholder needs within statutory and regulatory requirements related to
a product or service.
• ISO/IEC 27000 is an information security management systems standard.
• ISO/IEC 20000 is an international standard for managing and delivering IT
services. Its process model bears many similarities to that of ITIL version 2, ….
• ITIL (Information Technology Infrastructure Library) is a set of detailed practices
for IT activities such as IT service management (ITSM) and IT asset
management (ITAM) that focus on aligning IT services with the needs of
business.[7][2]
• FitSM[8] is a standard for lightweight service management.
• COBIT (Control Objectives for Information and Related Technologies) is an IT
Governance framework that specifies control objectives, metrics and maturity
models. Recent versions have aligned the naming of select control objectives to
established ITSM process names.
• CMMI (Capability Maturity Model Integration) is a process and behavioral model
that helps organizations streamline process improvement and encourage
productive, efficient behaviors that decrease risks in software, product,
and service development.
• ISO 15504 is a set of technical standards documents for the computer software
development process and related business management functions.
40
Process Chain and Framework/Best Practices

ITIL

It is very useful to know how TOGAF relates to other frameworks like COBIT, ITIL and
PMBOK to define IS/IT Management Strategies

41
IT INFRASTRUCTURE MANAGEMENT

42
Strategies for Managing the IT Infrastructure &
Infrastructure Services: The SCOPE
• Physical infrastructure
– consists of a range of network, hardware and base software products and services,
deployed to enable applications
• Architectures
– describe the physical infrastructure
• Policies and standards
– cover technology aspects to determine how the infrastructure, its acquisition,
deployment and support are managed
• Management processes
– to ensure investments in infrastructure are coherently planned and justified, and
relationships with technology suppliers and outsourcing providers are appropriate
43
Strategies for Managing the IT Infrastructure:
Business Basis for Technology Management
• Main purpose:
– The purpose behind the overall management of the technology infrastructure is to provide an appropriate set of
technology, resources, processes and services to meet the evolving needs of the business and the organizational
ability to apply them effectively
• Some of the issues to be faced:
– Linking technology investments to business needs – how to describe requirements for technology
investment in terms of business implications
– Identifying technical opportunities – how IT capabilities can improve or radically change the
products/services
– IT investments by others – how competitors/customers/suppliers use technology to improve their
competitive positions
– Technical implications and ‘hype’ – separate real business opportunity from irresistible offerings from the
vendors/consultants
– Business and technical awareness – CIO needs to instill business judgement in his/here technology
experts and also create a sound understanding of technology issues in general management
44
 TOGAF Foundation Architecture:
Technical Reference Model (TRM)
“an architecture of generic services and
functions that provides a foundation on
which more specific architectures and
architectural components can be built”

45
 TOGAF Integrated Information Infrastructure Reference Model (III-RM)

“if TRM ocuses on the Application Platform space … III-RM focuses on the
Application Software space … to provide help in the need to design an
integrated information infrastructure”

46
Cloud Computing
Cloud Computing is cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of
configurable computing resources (e.g., networks, servers, storage, applications and services) that can be rapidly provisioned and
released with minimal management effort or service provider interaction (NIST)
Cloud Computing Services Models:
• Software as a Services (SaaS): The capability
provided to the consumer is to use the provider’s
applications running on a cloud infrastructure
• Platform as a Services (PaaS): The capability
provided to the consumer is to deploy onto the
cloud infrastructure consumer-created or acquired
applications created using programming
languages, libraries, services, and tools supported
by the provider
• Infrastructure as a Services (IaaS): The capability
provided to the consumer is to provision
processing, storage, networks, and other
fundamental computing resources where the
consumer is able to deploy and run arbitrary
software, which can include operating systems and
applications
47
Sources: NIST
Infrastructure
Gap Analysis
(Example)

48
Understanding & Managing IT Risks
• “Risk management is the process of identifying vulnerabilities and threats to the
information resources used by an organization in achieving business objective, and
deciding what countermeasures, if any, to take in reducing risk to an acceptable level,
based on the value of the information resource to the organization.”
• Steps in managing IT risks:
1.Understand legal requirements
2.Risk assessment
3.Risk mitigation
4.Develop response plans
5.IT risk management policies & procedures
6.Evaluation & Assessment
49
Sourcing of IS/IT Resources & Services:
Classifying Sourcing Options & Strategies
• Contract out – the supplier is responsible for delivering
the results of IT activity
• Buy-in – the organization buys in resources from the
external market, usually to meet temporary requirement
• Preferred contractor – the organization contracts long-
term with a vendor to reduce risk
• Preferred supplier – this takes buy-in approach further,
with an organization seeking to develop long-term close
relationship with a vendor
• Multi-sourcing option (prime contractor, best of breed,
panel) is increasingly popular strategy to minimize risks,
maximize benefits, and reduce costs.
• Vital competences that need to be maintained:
– track, assess, and interpret changing IS/IT capabilities and
relate them to org. needs;
– work with business management to define the IS/IT
requirements over time;
– identify appropriate ways to use the market, specify, and
manage IS/IT sourcing;
– monitor and manage contractual relations. 50
Outsourcing Strategies: Guidelines for Decision
• Organizations should choose to outsource carefully selected, non-core activities
that can be accomplished quicker, cheaper and better by vendors.
– Earl argues that companies should first ask why they should not insource IT services.
Indeed, actual outsourcing or, … is often the symptom of the problem of demonstrating the
value of IS
• Strategic Intents driving outsourcing:
– IS Improvement; Business Impact; Commercial Exploitation
• Sourcing strategy should be based on a combined assessment of financial &
economic, business, and technical factors, the relative importance of each being
determined by the strategic intent.
– Financial & Economic Reasons
• Cost savings; Shifting expenditure from capex to opex, providing budget flexibility
– Business Reasons
• Competitive Positioning (commodity/differentiator) & Business Operations (useful/critical)
– Technical Reasons
• Level of Maturity & Level of Integration

51
Risk Associated with Outsourcing:
Risk-Analysis Framework

52
Outsourcing Strategies: Contractual Issues

Main Issues Lessons

• Length of contract • Discard the vendor’s standard contract
• Service definition • Do not sign incomplete contracts
• Service-level requirements specifications • Measure everything during the baseline period
• Service-level measurement and verification • Specify escalation procedures
• Beware of ‘change of character’ clauses
• Incentives for service-level attainment
• Include cash penalties for non-performance
• Coordination and communication
• Include a termination clause
mechanisms
• Take care of your people post-contract

53
BPO, Innovation, Back-Sourcing
• Business Process Outsourcing
– Transferring the primary responsibility for executing and managing a business process to an
external organization. Often, this involves outsourcing the infrastructure supporting the
business process, including the IT infrastructure.
• Innovation & Outsourcing
– The outsourcing provider is expected to bring innovation, which often not realized. It is not
always the fault of the provider; one of the root causes behind a lack of innovation in
outsourced environments is an over-emphasis on stability by both parties.
• Back-Sourcing & Switching Suppliers
– Many organizations have significant negative experiences and problems emerge that ultimately
lead to re-evaluation of the outsourcing decision, which leaves options: renew, extend, or
renegotiate with original provider; re-tender to the market; ‘back-source’ and carry them out
in-house
54
 NEW

International and National Standards

• IT Governance: Seri SNI ISO/IEC 38500

• IT Services Management: Seri SNI ISO/IEC 20000
• Information Security: Seri SNI ISO/IEC 27000
• Data Center: SNI 8799
• Software Testing: SNI ISO/IEC/IEEE 29119

55
End of Presentation
Managing the Portfolio of Business
Applications

MSSI 2022S
Structure Demand-side Supply-side

Corporate & Aligning Organizing

business IS/IT with Managing the Strategic
strategy and business the app. Managmnt
IS/IT strategy portfolio of IS/IT
implications

A strategic Business Determine

perspective innovation the IS
of IS/IT with IS/IT strategy

Establish Search for Justifying & The Strat.

IS/IT strategy competitive managing Managmnt
process opportunit. IS/IT of IT service
to shape investment &
strategy infrstructure

Establishing IS/IT Portfolio & Organizing,

strategic strategy: investment sourcing, and
management tools & management infrastructure
framework techniques management
58
Session Objectives
• Understand how to classify the applications in the
portfolio
• Understand the various strategies in managing the
applications
• Understand how to align application development
approach to its portfolio segment

59
Agenda
• Conclusions from Various Portfolio Models
• Classifying the Applications in the Portfolio
• Reconciling Demand and Supply Issues in the Portfolio
• Generic Application Management Strategies
• Portfolio Management Principles Applied to the Application Portfolio
• Aligning Development Approaches to the Portfolio Segments
• The ‘Special Case’ of Enterprise Systems
• Managing Application Portfolios in Multi-unit Organizations

60
The Application Portfolio
• AP is a means of bringing together existing,
planned, and potential investments in IS and
then managing them according to their business
contribution.
• The main purpose is to ensure that they are
managed successfully and that the expected
contribution is delivered.
• Based on the issues relevant to each segment of
the portfolio, appropriate implementation
strategies can be adopted.
• AP’s simplification of a more complex situation
has its limitation  precision should not be
expected; merely relevant guidance to inform
and support management decision making.
61
Conclusions from Various Portfolio Models

Uncertainty, due
to external
forces of future
IS/IT impact

Ability of a firm to
control its destiny
62
The Various Portfolio Models
• The Sullivan: • Ives & Learmonth and Galliers:
– Demand-driven and decentralized planning – A vision of what is possible plus
approaches for the management of the strength of resources are
strategic and high potential essential if IS/IT is to be used as
– ‘Eclectic’ planning method to deal with the strategic weapon
strategic developments when IS/IT is
considered in establishing the business
objectives • E-business:
– Business criticality © & practice
innovation (I)
• Galliers: – ci: new fundamentals ~ support
– Strategy- vs. issue-driven – Ci: operational excellence ~ key
– Business- vs. technology-driven operational
– cI: rational experimental ~ high
potential
– CI: breakthrough strategies ~
strategic 63
Classifying the Applications in the Portfolio:
SWOT Analysis
EXPLOIT STRENGTHS
• high future potential, currently underexploited;
• can be extended, enhanced to be of more value;
• could be more valuable if integrated more effectively or used more
extensively;
• critical to the business, but data quality is poor;
• needs to be developed to meet current and future business needs;
• must be enhanced to meet changed business requirements for future;
• system required, but needs to be reimplemented to absorb less resources or
overcome technology obsolescence;
• system will be less important in future—needs to be simplified/reduced to
real needs;
• system is no longer of value—should be discontinued.

OVERCOME WEAKNESSES
64
Classifying the Application Portfolio
a)Result in a clear competitive advantage for the High Strategic Key Support
business? Potential Ope-
rational
b)Enable the achievement of specific business a) Yes (i)
objectives and/or critical success factors? b) Yes (i)
c)Overcome known business disadvantages in c) Yes
relation to competitors? d) Yes
d)Avoid foreseeable business risks becoming major e) Yes
problems in the near future? f) Yes (ii) Yes (ii)
e)Improve the productivity of the business and, g) Yes
hence, reduce long-term costs?
(i) If either applies, the supplementary question is then, ‘Is it clear
f)Enable the organization to meet statutory what the business benefits are and
requirements? how they can be obtained?’ If Yes it is Strategic, if
No it is High potential.
g)Provide benefits not yet known, but may result in (ii) To clarify which it is, the following question should be asked,
(a) or (b) above? ‘Will failure to comply lead to significant business risks (be specific
about the risk)?’ If Yes it is Key operational, if No it is Support.

65
Classifying the Applications in the Portfolio:
The Starting Point

Future Current
Strategic Key Operational
• Does/will create a clear competitive advantage for the • Does/will overcome known business disadvantages in
business relation to competitors
• Enable the achievement of specific business objectives • Avoid known/foreseeable business risks becoming major
and/or critical success factors problems in the near future
• Enable the organization to comply with legal and
High Potential regulatory requirements
• The impact IT could have is as yet uncertain but could be
of a strategic nature Support
• Does/will improve the productivity of the business and,
Once the portfolio is understood & agreed, hence, reduce long-term costs or meet general statuory
decisions on how best to manage each requirements
application can be made!
66
Classifying the Applications in the Portfolio:
Example [Manufacturing Company]
STRATEGIC HIGH POTENTIAL
* Advertising & Promotion – ? Virtual Reality Customer
Campaign Management Design & Specification
() Sales Analysis & Forecasting ? Product Profitability
** Customer Relationship Analysis
Marketing ? Analytics – Customer &
* Product Tracking Channel Profitability
* Vendor Managed Inventory ** Sustainability – Energy
() Activity-Based Costing Management
? ‘Innovation Factory’ for
New Development
* Product Database/Inventory * Payroll & Personnel Systems
Management * Ledgers (Receivables,
* Order Processing, Dispatch, Payables)
Invoicing, etc. * General Ledger & Budget
* Production Control, * Office Systems
Purchasing & Materials () e-Procurement
() Customer Account * Samples Management
* Direct Marketing * Project Management Legend:
* Warehouse & Logistics * Existing, satisfactory
* On-line Specification () Existing, need improvement
** Planned
KEY OPERATIONAL SUPPORT ? Potential
67
 Reconciling Demand and Supply Issues in the Portfolio

Driving Forces Critical Requirements

• Market requirements, competitive pressures or other • Rapid development (even iterative) to realize benefits within
Strategic

external force the window of opportunity

• Business objectives, success factors and vision of how • Flexible system that can be adapted in the future as the
to achieve them business evolves
• Obtaining an advantage and then sustaining it • Link to an associated business initiative to sustain commitment
through a combination of technology and business
changes
High Potential

• Rapid evaluation of prototypes and avoid wasting

• New business ideas or technological opportunity effort/resources on failures
• Individual initiative—owned by a ‘product champion’ • Understand the potential benefits in relation to business
• Need to demonstrate the value or otherwise of the strategy
idea or the capabilities of the technology • Identify the best way to proceed—the next steps

68
 Reconciling Demand and Supply Issues in the Portfolio

Driving Forces Critical Requirements

Key Operational

• Improving the performance of existing core processes and • High-quality, long-life solutions and effective
management activities information management
• Integration of data and systems to avoid duplication, • Balancing costs with benefits and risks—identify
optimum balance of IT and business change
inconsistency, and misinformation
• Evaluation of options (including outsourcing)
• Avoiding a business disadvantage or allowing a business risk available, by objective feasibility study
or complying with industry legislation
• Low-cost, long-term solutions—often packaged
Support

• Improved productivity/efficiency of specific business tasks software to satisfy most needs—compromise the
• General legislation needs to the software available
• Business process outsourcing is an option
• Most cost-effective use of IS/IT funds and resources available
• Objective cost/benefit analysis to reduce financial
risk and then control costs carefully

69
Reconciling Demand and Supply Issues in the Portfolio
[Questions to be answered before making decision on how to implement the solution]

70
Generic Application Management Strategies
• 3 Key Parties:
1.Executive management
2.Line management: functional/process managers & systems’ users
3.IS/IT specialists: internal (centrally/in business areas) or external
• Strategies:
1.Centrally Planned
2.Leading Edge
3.Free Market
4.Monopoly
5.Scarce Resource
71
Rationale and
requirements
for generic
strategies

72
Generic Application Management Strategies:
Management Control

73
Generic Application Management Strategies: Developing the IS/IT
Strategy

• Diagnostic—they are a way of assessing the current strategies being used—a clear way
of expressing how IS/IT applications and investments are actually being managed.
– There is a strong correlation between the successful applications developed and
the strategies adopted.
• Formulative—once a future portfolio of applications can be identified and the
strengths and weaknesses of the existing applications assessed, the generic strategies
can be used to identify a migration path toward the mix of approaches required in
future.
– No definitive mixture can be prescribed for every situation, but the generic
strategies provide a limited number of basic options from which to select the set
that matches best the application portfolio requirements.

74
Generic Application Management Strategies: Relating
to Approaches to IS Strategy Formulation

75
Portfolio Management Principles Applied to AP
• First, both applications and products have life cycles, and move around the matrix over time.
– … It is important in both cases to avoid high potential or wildcat investments from drifting straight down
into the support or dog quadrant …
• Second, both applications and products require investment funding.
– … Lack of reinvestment will in all cases cause the value of previous investments to depreciate, steadily but
surely, over time …
• Third, both applications and products need to be managed and have resources allocated …
– … Balancing the available resources and expertise to match the evolving portfolio needs is essential to
sustain success …

76
Portfolio Management Principles Applied to AP

77
Portfolio Management Principles Applied to AP: Aligning Management
Styles

(Developer) (Entrepreneur)

(Controller) (Caretaker)

78
Portfolio Management Principles Applied to AP: Aligning Management
Styles

a developer is a central planner, an entrepreneur is a free

close to the organizational goals, marketeer, who pays little
who builds resources to achieve attention to established
results procedure

a controller is a monopolist, a caretaker is a scarce

uncomfortable with anything resourcer, proving that he or
outside his or her control she can achieve as much with
less!

79
Aligning Development Approaches to the Portfolio Segments

• High Potential
– Successful management of IS/IT ‘R&D’ is becoming an increasingly important aspect of
most firms’ strategies, but one with which many are unfamiliar.
• Strategic
– This process of value-adding is expensive and resource intensive and is only justified
where IS/IT can change the business performance to gain a specific, sustainable
advantage.
• Key Operational
– The overall approach to managing key operational systems is to reduce costs while
sustaining the business value derived from the use of the system. Integration of systems
and resources with other applications will provide this net gain.
• Support
80
 Aligning Development Approaches to the
Portfolio Segments
Application Development:
Critical Requirements Key Aspects
High Potential

• Rapid evaluation of prototypes and avoid wasting • Prototypes and pilots to test performance, scalability
effort/resources on failures and user acceptance
• Understand the potential benefits in relation to business • Evaluate potential benefits and how to achieve them
strategy through low cost, iterative developments
• Identify the best way to proceed—the next steps • Acquire new skills/transfer knowledge from outside
expertise

• Rapid development (even iterative) to realize benefits • Dedicated joint IS/IT and user development teams using
Strategic

within the window of opportunity Agile methods to share knowledge and create new
• Flexible system that can be adapted in the future as the business processes
business evolves • RAD and GUI tools to produce and test pilots for
• Link to an associated business initiative to sustain functionality and performance
commitment • Executive sponsorship and senior management
leadership in the team

81
 Aligning Development Approaches to the
Portfolio Segments
Application Development:
Critical Requirements
Key Operational

Key Aspects
• High-quality, long-life solutions and effective • SSADM and Project Management methodologies,
information management process redesign and apply corporate information
• Balancing costs with benefits and risks—identify management standards and policies
optimum balance of IT and business change • Use industry-specific packages with minimum
• Evaluation of options (including outsourcing) available, customization, but integrated with other systems
by objective feasibility study • Combine IS/IT and business team

• Low-cost, long-term solutions—often packaged software • Design procedures to use software package efficiently;
Support

to satisfy most needs—compromise the needs to the interface not integrated; no customization
software available • Take advantage of the external capabilities available –
• Business process outsourcing is an option and used successfully by others
• Objective cost/benefit analysis to reduce financial risk • User makes final selection of package, using package
and then control costs carefully checklist to ensure compliance with IT strategy

82
The ‘Special Case’ of Enterprise Systems
• ES: ERP, CRM, SCM, …
• ES affect a large number of business processes & functions, standardizing & integrating
information, processes, and activities.
• ES do not normally fit into any one of the portofolio segments, given the activities covered
and the range of potential benefits available.
• Issues accelerating ES adoption:
– Replacement of non-integrated legacy systems
– Legislation/regulation compliance
– The need to expand the business by rapid replication of existing business models
• Differ from traditional IS development, ES are more complex, cross-functional in scope,
involving range of different stakeholders, dealing with significant business & organization
changes in order to accommodate the ‘ES’ business models
83
The ‘Special Case’ of Enterprise Systems:
2-Stage Implementation Model

84
Managing APs
in Multi-unit
Organizations

85
End of Presentation
Justifying & Managing IS/IT Investments

MSSI 2022S
Structure Demand-side Supply-side

Corporate & Aligning Organizing

business IS/IT with Managing the Strategic
strategy and business the app. Managmnt
IS/IT strategy portfolio of IS/IT
implications

A strategic Business Determine

perspective innovation the IS
of IS/IT with IS/IT strategy

Establish Search for Justifying & The Strat.

IS/IT strategy competitive managing Managmnt
process opportunit. IS/IT of IT service
to shape investment &
strategy infrstructure

Establishing IS/IT Portfolio & Organizing,

strategic strategy: investment sourcing, and
management tools & management infrastructure
framework techniques management
88
Session Objectives
• To understand how to justify & evaluate IS/IT
(business apps & infrastructure) investments
– To understand how to identify & manage IS/IT’s
investment benefits
• To understand how to assess & manage IS/IT’s
investment risks

89
Agenda
• Investment and Priority-setting Policies
• Justifying and Evaluating IS/IT Investments
• Justifying Business Applications
• Justifying Infrastructure Investments
• Assessing and Managing Investment Risks
• Managing the Portfolio Investmens
• Setting Priorities amongst IS/IT Investments
• Organizational IS/IT Portfolio & Investment Management Maturities

90
Survey Findings of Current Practices in IS/IT
Investment Management
Average
• Relatively low levels of
Management Average satisfaction
Satisfaction –
more
Management
Satisfaction –
• Post-implementation
successful less successful investment evaluation and
Practice group group review is the factor that
Portfolio 49% 33% differentiates the two
management
groups most
Business case 44% 19%
development • Overall levels of satisfaction
with both business case
Identifying and 44% 20% development and benefit
quantifying benefits
identification are about
Identifying and 69% 46% 30% (~similar to the
quantifying costs
percentage of IS/IT projects
Evaluation and 36% 7% deemed successful)
review

91
Investment and Priority-setting Policies
• IS/IT investments have traditionally been evaluated like capital projects such as
plant and equipment assuming a fixed cost offset against net revenue over the
life of the application. However, many IS/IT investments are now more like ‘new
business ventures’ or business initiatives where the financial aspects of the
outcome can only be guessed and the technology is only one component of a
major change program …
• … in most cases not all demand can be satisfied and priorities must be set. If no
consistent justification approach is followed, the more beneficial applications
may well be deferred, allowing those that make a lesser contribution to proceed.
• … the same principles and practice should govern the ‘go–no go’ decisions for
individual applications ... The only additional factor, assuming that systems are
not sequentially dependent, is the amount of resource consumed. The limiting
factor is normally people, in quantity or quality (particular skills or knowledge),
… priority setting should enable maximum return from the use of that resource.

92
Justifying and Evaluating IS/IT Investments:
Problems in IS/IT Investments
• Research findings: >90% of large organizations required some form of business case to
justify the funding of IS/IT investments
– only 59% subjected to a formal investment appraisal
– 60% felt that they were valuable in gaining funding approval
– <40% were satisfied that the case identified the appropriate benefits, secured commitment to deliver the
stated benefits
• Grindley summed up the mistrust of conventional justification methods:
– 83% of IT directors admit that the cost–benefit analyses supporting IT investment proposals are a fiction;
– CEO: “It’s like there is a spontaneous conspiracy to exaggerate the benefits.”
• Most technology investments are justified on the back of applications:
– Infrastructure’s investment are generally carried out in advance and the return can only be counted based
on subsequent application’s benefit
– However, it is difficult to associate infrastructure’s investment with application’s benefit due to accounting
practices (~IT lifetime, etc.)
– The full costs of the investments are not included (costs incurred by business departments in specifying,
testing, and implementing the system; costs of making the business changes)

93
Justifying and Evaluating IS/IT Investments:
Financial Appraisal of IS/IT Investments
• Payback
• Accounting ROI
• Discounted Payback
• Discounted Cash Flow – IRR
• Discounted Cash Flow – NPV
• Discounted Cash Flow – Profitability Index

94
Classifying IS/IT Investments –
business case effectiveness

In addition to obtaining funding, More Less

preparation of a business case often successful successful
or always … group group Total
Identifies all available benefits 50% 27% 37%
Gains commitment from the business 64% 44% 53%
to realizing the benefits
Attains an ROI above a required 56% 33% 43%
hurdle rate
Establish appropriate measures for 36% 17% 25%
the benefits
Adequately quantifies the benefits 47% 21% 32%
Overstates the benefits to get 25% 46% 37%
approval
As a result, what % of business cases 78% 44% 58%
are approved?

95
Classifying IS/IT Investments:
Types of Applications

• substitutive—technology replacing people with economics being

the main driving force, to improve efficiency ~ support & some
key operational apps
• complementary—improving organizational performance,
productivity and employee effectiveness by enabling work to be
performed in new ways ~ key operational & some strategic apps
• innovative—achieving a competitive edge by changing trading
practices and business relationships, creating new markets, etc. ~
strategic apps
96
Classifying IS/IT Investments:
Techniques of Evaluation

• Traditional cost–benefit analysis, which allows for efficiency improvements in

organizational processes resulting from automation
e.g. automating invoices and sending them electronically to customers via e-commerce
• Value linking, which estimates the improvement in business performance, not just
savings made, from improving the linkages between processes or activities
e.g. automatic reconciliation of orders, invoices and payments to enable accounts staff to spend more time
resolving customer queries and issues
• Value acceleration, which considers time dependence of benefits and costs in other
departments of system improvements
e.g. giving sales data to buyers on a daily basis, improving their ability to respond to changes in demand and
negotiate more effectively with suppliers
• Value restructuring, which considers the productivity resulting from process and
organizational change and change of job roles
e.g. information-intensive tasks such as forecasting and planning can often only be improved by a combination of
better systems and a change in organizational responsibilities
• Innovation evaluation attempts to estimate the value to the business of new business or
new business practices levered from IS/IT
e.g. the launch of an online banking service may change the company image and attract new types of customers 97
Evaluating Benefits:
Relationship with App. Portfolio

98
Benefits Management
• Benefits Management: the process of organizing and managing such that
potential benefits arising from the use of IT are actually realized.
• Why ‘benefits management’?
– One of the factors that differentiates successful from less successful
companies in their deployment of IS/IT is the management resolve to
evaluate IS/IT investments before and after they occurred.
– Post-implementation review must be carried out on a high percentage
of projects to identify whether (i) they were carried out as well as
possible and (ii) whether the benefits claimed (or possibly different
benefits) were achieved or not.
99
The Context of Benefits Management
The Context Inputs to Benefits
Management Process
• Why is the investment being made—
what is causing the organization to
change and how critical to its future is
the successful management of the
changes? (the benefit drivers)
• What types of benefit is the
organization expecting from the
investment overall—to reduce costs,
improve operational performance,
gain new customers, create a new
capability, etc.?
• How will other activities, strategic
initiatives, business developments or
organizational issues affect the
particular investment either to
facilitate or inhibit its progress and
outcome? (the organizational context)
100
Benefits Management Process
1.Identifying the target benefits & who should
be responsible for its delivery
2.Determine the changes required for delivery
of each benefit and how the IS/IT
development will enable the changes and
benefits to occur
3.Carry it out and adjust it as necessary
4.Review what was/not achieved to maximize
benefit & learn for future investments
5.Further benefits often become apparent only
when the system has been running for some
time and the associated business changes
have been made
101
Justifying Business Apps Investments
Justification ‘rules’ should allow for differences in
the rationale for implementing apps in each
segment!
• Support
– Any allocation of the resources should be argued
primarily on economic, ROI
– Some discretion can be left to local management
via free-market strategy
• Key Operational
– The business unit should be the final arbiter
• Strategic
– The ‘go/no go’ decision is based on how directly it
relates to the business objectives
• High Potential

102
Justifying Infrastructure Investments
• The main aims of infrastructure’s investments
are:
– to enable the business apps to perform
successfully
– to create appropriate capabilities for the general-
purpose use of IT tools in the short/medium term
– to anticipate longer-term (uncertain) organization
& business needs

• The business benefits are often difficult to

identify and use to justify the costs 
Building the Infrastructure Business Case:
– To reduce business and IT operating costs
– To enable or even create growth in the volume of
business
– New or planned apps
– New working practices
– New business capability

103
Assessing & Managing Investment Risks:
Check List
Technical risk factors Financial risk factors Business Change & Organizational
risk factors
Complexity of the system Size of the investment Senior mangement commitment to the
functionality project
Technical novelty – to the Project duration User commitment of resources and
organization & the supplier knowledge
The number of system interfaces Degree of confidence in all the Stability of the organization and key
and systems being replaced elements of project costs staff

Certainly & stability of the Confidence in the evidence for The extent of changes to business
business requirements the investment benefits processes and practices
Technical skills of the project Appropriateness of project The number of departments, functions
team cost control mechanisms and business staff involved and
affected

The extent of changes needed to Rate of change of the external The degree to which organizational &
the IT infrastructure environment role changes are needed to realize the
benefits
The degree to which the system The business criticality of the Existing change management capability
can be prototyped/piloted areas affected by the system & experience
104
Variations in Risk Patterns for Different Types of
Apps Investments
STRATEGIC HIGH POTENTIAL

Risks are likely to be of all Risks are likely to be of all

kinds kinds

TECHNICAL, FINANCIAL, & TECHNICAL, FINANCIAL, &

ORGANIZATIONAL ORGANIZATIONAL

Minimized by limited
scale/scope

Major risks are likely to be Major risks are likely to be

ORGANIZATIONAL ORGANIZATIONAL
due to vested interests

Financial & technical risks are Low financial risks & technical
addressed by strict application risks minimized by use of
of methodologies proven technologies

KEY OPERATIONAL SUPPORT

105
Managing the Portfolio of Investments
• Majority of IS/IT investments are managed as projects or programmes  IS/IT Portfolio
Management shares many characteristics with Project Portfolio Management
– PPM is defined as the selection and management of all of a firm’s projects, programmes
and related business-as-usual activities taking into account resource constraints [Assoc.
of PM]
• PPM approaches have aspects in common with financial portfolio management (balancing
risk & reward), but there are also significant differences that make PPM, and especially in
priority setting, particularly challenging.
• 3 areas found problematic:
1.How many projects to include and on what criteria to base that decision
2.Whether to include future planned investments as well as current ones
3.Mixed portfolios of projects and large multi-project programmes can be problematic
106
Setting Priorities amongst IS/IT Investments
• Three factors to be included in assessment of priorities:
1. What is most important to do, based on the identified benefits
2. What is capable of being done, based on the resources available
3. What is likely to succeed, based on the risks of failure of each investment
• Research findings:
– 80% of organizations considered [1], including alignment with business strategy,
ROI, business unit operational priorities to avoid disadvantages
– 60% of organizations also considered [2,3] that included ‘size’ (cost/duration) of the
investment to avoid committing to one large project
– Less successful organizations did not take into account other factors associated with
capabilities needed [2] or risks of intented investments [3]
107
Organizational IS/IT Portfolio & Investment Management Maturities
Benefit delivery:
Delivery planning –
organizational change &
Project selection: benefits.
Portfolio management.
Business cases –
identification of 4. Highly
benefits. Benefit &
successful
change reviews.

Project delivery: 4. Life cycle

approach to benefit
Business cases – 3. Successful management.
identification Demand led with
of costs. business ownership
Technology 3. Sound business of benefit delivery
& process change 2. Moderately cases based on plans and a
achievable benefits comprehensive
planning. TCQ successful but ineffective benefit
reviews. review process.
delivery and change
planning, with
2. Sound IT
1. Unsucessful insufficient business
methodologies, but
ownership &
ineffective portfolio
involvement.
management and
1. Inadequate & inconsistent business cases are cost
use of proven methodologies. rather than benefit base.
Unrealistic business cases, IT methodologies
limited business involvement dominate with insufficient
in all practices. business involvement in 108
business cases,
End of Presentation