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Implementation of Application Portfolio Management. IT Advisory Board Meeting January 2006. Framework for Managing IT Investments. III. Operation, Maintenance, and Renewal, Retirement, or Replacement Applications Portfolio Management - APM.

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implementation of application portfolio management

Implementation of Application Portfolio Management

IT Advisory Board Meeting

January 2006

framework for managing it investments
Framework for Managing IT Investments

III. Operation, Maintenance, and Renewal, Retirement, or Replacement Applications Portfolio Management - APM

I. Strategic Business and IT Planning and Investment Selection and Budgeting

Investment Portfolio Management - IPM

Life Cycle of IT Investments

II. Project Implementation

Project Portfolio Management - PPM

framework for managing it investments3
Framework for Managing IT Investments

III. Maintain Operate Assets in the Right Ways and Retire or Replace Them at the Right Times

I. Build, Buy, and/or Implement the Right Assets

  • Identify investments that best:
  • Enable governmental initiatives or agency missions and strategies
  • Result in financial returns – revenue generation or cost savings
  • Provide better constituent services or program effectiveness
  • Fit technical architectures
  • Satisfy budget, staffing, and other constraints
  • Meet risk profiles
  • Operate and maintain assets so that:
  • Benefits/costs are optimized over their useful lives through astute and timely renovations, consolidations, or eliminations
  • Services offered meet availability, reliability, security, quality, and recoverability expectations within acceptable budgets
  • Retirements and replacements are effected when assets are no longer cost-justified or risk-acceptable

Life Cycle of IT Investments

II. Build and Implement Assets in the Right Manner

Manage projects by:

  • Clarifying roles and responsibilities
  • Providing appropriate oversight
  • Ensuring they are well planned and thoroughly researched prior to starting
  • Defining, tracking, and evaluating project progress frequently to achieve budget, schedule, scope, and quality expectations
  • Completing them successfully so that business goals and objectives are realized
portfolio management is
Portfolio Management is…
  • Information analyzed in a way that helps decision makers optimally allocate scarce resources.
  • The purpose is to weigh key factors, such as desired returns or public value, initial and life cycle costs, architectural directions, and risk profiles to meet strategic business goals more effectively and productively.
  • The objective is to make fact-based, data-driven decisions using a consistent and disciplined approach.
major portfolio management tasks
Major Portfolio Management Tasks
  • Inventory and classify items in the portfolios.
  • Perform relevant analyses – identify problems and opportunities, develop viable options, determine relevant criteria, ask the right questions, and evaluate alternatives using pertinent information.
  • Make decisions.
overview of it portfolio management
Agency Missions and Vision and Business Goals and ObjectivesOverview of IT Portfolio Management

Develop Business Drivers and Business Cases

Investment Portfolio Management

Identify Problems and Opportunities

Statewide and Agency IT Plans

Analyze Candidate Investments

Project Proposals for Applications Renovations, Retirements, or Replacements

Select and Plan Investments

Funded New Projects

Manage Portfolio

Adjust Project Portfolio

Application Portfolio Management

Analyze Portfolio

Optimize Portfolio

Assess Value of Projects and Portfolio

Project Portfolio Management

Manage Portfolio

Implement Projects

New or Renovated Applications

Build and Maintain Inventory

status of implementation of portfolio management
Phase/Type of Portfolio Management Effort

Implementation Status and Timeframe

Status of Implementation of Portfolio Management

Completed – performed in 2004 and early 2005

Topic Research and Purchase of Tool

Project (PPM)

Completed – performed summer and fall 2005

Applications (APM)

In process - winter and spring 2006

Investment (IPM)

In process - initial efforts in winter and spring 2006 as part of applications endeavor; more advanced capabilities will be implemented later as agencies are ready and need them

project portfolio management
Project Portfolio Management
  • Provides a workflow process that encompasses project approvals, checkpoint reviews, and periodic status reporting at project, agency, and statewide levels
  • Provides a “gated” review approach to ensure work done acceptably and project is in position to complete the succeeding phase successfully.
  • Offers documents and administrative management capabilities that follow industry recognized best practices for system development life cycle (IEEE) and project management (PMI)
  • 91 projects with estimated cost approaching $850 million being tracked in December 2005
applications portfolio management
Applications Portfolio Management
  • Collects and analyzes cost, benefit, and strategic value information to evaluate the TCOs of retention, enhancement, or replacement alternatives
  • Evaluates assets by determining business and technical status; developing remediation, retirement, or replacement approach; and ascertaining priority and timeframe for action
  • Develops cost estimates for asset modernization, and retirement (with and without replacement) and total statewide
  • Identifies vulnerabilities, criticalities, return-to-service needs, dependent business processes, public services offered, supporting technical infrastructure, etc.
applications portfolio management builds upon legacy study
Applications Portfolio Management Builds Upon Legacy Study
  • In the portfolio of approximately 900 applications: 40% are considered critical for department mission/strategy; 17% are enterprise (statewide) applications; and 75 of the applications processed by the state data center require 1-day return-to-service capability.
  • The statewide portfolio is relatively young, with an average age of 7.5 years – since 1997, from 70 to 90 new or replacement applications have been added each year to bring down the average age.
  • Health status is: 23% presenting functional, technical, or both problems; 50% with some problems, but manageable; and 27% healthy, with a prescription for continuing on-going operations and maintenance.
application portfolio management perspectives
Application Portfolio Management Perspectives

Alignment (Optimize Portfolio)

  • Process Inventory, contribution, function association
  • Core Business Drivers, priorities, process contribution

Level IV (Step 4)

Level III (Steps 2 and 3)

Initial

Deployment

Focus

Financial (Analyze and Manage Portfolio)

  • Detailed application-level costs and cost-effectiveness analyses

Level II (Steps 2 and 3)

Assessment (Analyze and Manage Portfolio)

  • Risk, Operational Performance, Architectural Fit

Scope of Keane-Gartner Study

Level I (Step 1)

Inventory (Build and Maintain Inventory)

  • Application identity and basic information
applications portfolio management process
Transition to Executive Decision Making Process

Funding Requests

Applications Portfolio Management Process

Tool Assisted Decisions

Subjective Business Decisions

Step 1 – Level I

Collect, Validate, and Maintain Data

(Build and Maintain Inventory)

Step 3 – Levels II & III

Determine Dispositions and Life Span Transition Roadmap

(Manage Portfolio)

Investment Portfolio Management (IPM) Process

Step 2 – Levels II & III

Perform Assessments

(Analyze Portfolio)

Step 4 – Level IV

Determine Priorities, Timeframes, Costs, and Benefits

(Optimize Portfolio)

  • One-Time Work
  • Transfer data from Keane/Gartner study
  • Perform initial collection and validation of remaining data
  • Ongoing Work
  • Perform data changes and validations as they occur
  • Collect and validate data for implementation projects transitioning to applications assets
  • Major Data Elements
  • ID
  • Costs
  • Business criticality
  • Business processes enabled or supported
  • Functional quality
  • Technical quality
  • Risk profile
  • Identify
  • Business problems/issues
  • Technical problems/issues
  • Risk vulnerabilities, probabilities, and impacts
  • Other problems/issues
  • Evaluate
  • Status/Health (Good, Bad, Moderate)
  • Value to organization (High, Moderate, Low)
  • Risk of unrecoverable failure (High, Medium, Low)
  • Identify
  • Dependencies on other applications and projects
  • Costs/fiscal requirements
  • Technical infrastructure requirements
  • Benefits/value to accrue
  • Alignment with state/agency priorities
  • Confirm and/or Develop
  • Implementation approach
  • Determine Priorities and Timeframes
  • Select priority for action (High, Medium, Low)
  • Select timeframe for action (Immediate, Near-Term, Long-Term)
  • Potential Benefits for Selected Actions
  • Cost savings from consolidate/eliminate applications
  • Improvements in public service, reliability, recoverability, and security resulting from functional/technical renovation or replacement
  • Consider
  • Cost-effectiveness
  • Risk acceptability – status of
  • Identify
  • Problems/opportunities
  • Alternative approaches
  • Best actions for managing application over expected life spans
  • Mission criticality/importance to agency
  • Determine Whether To
  • Invest additional funds (technical or functional enhancement or replacement)
  • Sunset/eliminate
  • Consolidate
  • Replace and consolidate as part of an agency wide or state wide initiative
  • Continue maintenance
investment portfolio management
Investment Portfolio Management
  • Identifies a pool of IT investments that best support core mission functions and prioritized business needs, best fit with approved architectures, have acceptable risks, and are accomplishable within fiscal and personnel limitations
  • Requires high quality business cases that increase probability of successful outcomes (on budget, within schedule, and meet user and stakeholder expectations)
  • Enables collaboration and transparency between IT/non-IT executives via an integrated process and better managed decision making activities that optimizes program benefits and public value throughout the enterprise
overview of it investment portfolio management in state government
Overview of IT Investment Portfolio Management in State Government
  • Department Mission
  • Statutory Mandates
  • Governmental Initiatives

Department Business Strategy

  • Business/Program Goals and Objectives
  • Processing and Information Flows
  • Organization Charts
  • Business Reengineering Opportunities

Department Business Architecture

(Business Service Models)

Application Portfolio Management

Asset Infrastructure Management

New Projects

  • Retirements
  • Replacements
  • Modernizations
  • Maintenance
  • Refreshment Cycles
  • Security/Reliability Upgrades
  • New Applications
  • Infrastructure Additions/Upgrades
  • IT Investment Portfolio Management
  • Identify potential investments and evaluate candidates against defined criteria
  • Prioritize projects based on analysis results (relative weighted scores)
  • Balance staffing and fiscal resources
  • Determine disposition – invest, adjust, or sunset

Current IT Project Portfolio

Other Plans and Strategies

  • Status of all projects (schedule, budget, business objectives, etc.)
  • Projects no longer relevant or with lower priorities
  • Projects with higher priorities or increased urgency
  • State CIO IT Plan
  • Statewide IT Initiatives
  • Department & Statewide Tech. Architectures
  • Department IT Plan

Funding Requests and Project Approvals

slide17
Steps for Evaluation of Alternative Investments

Develop and prioritize Business Drivers and Impact Measures

Build candidate investment portfolio using a consistent business case framework

2

1

Business Drivers

Document Business Cases

Evaluate the relative impact/linkage of candidate investments on Business Drivers

Understand project priorities - based on strategic linkage(business drivers) - to strengthen transparency of rankings for decision making

Business Drivers

4

3

Investments

Investment Prioritization

Business Alignment

slide18
Steps for Evaluation of Alternative Investments

Evaluate multiple variables in concert before making investment/portfolio selection decisions (e.g., priority, cost, benefits/value, architectural fit, and risk)

Optimize investment sequence (schedule) by analyzing key staff competencies, supply/demand by month, and regulatory deadlines against the strategic value of the selected portfolio

5

6

L - Priority - H

Investment Implementation Sequencing

Portfolio Analysis

Cost

Mathematically calculate the best portfolio selection of investment opportunities considering value/benefits offered for costs incurred under selected constraints

7

Portfolio Optimization Curves

timeline for implementation and use of application and investment portfolio management capabilities
Timeline for Implementation and Use of Application and Investment Portfolio Management Capabilities

Legend

SCIO Deliver Interim Legacy Assessment Report to General Assembly for 90 Projects Needing Immediate Attention

APM – Applications portfolio management

IPM – Investment portfolio management

SCIO – State CIO

Agency Submissions to SCIO: 1) Legacy Assessments, 2) Agency IT Plans, and 3) Expansion Budget Requests

Agencies Assess Study Findings for 90 Immediate Attention Applications and Report Status, Remediation Approach, and Needs for Assistance

  • Submissions to General Assembly:
  • Governor’s Budget Package
  • SCIO – 1) Statewide Legacy Assessment, and 2) Statewide IT Plan

SCIO Review Agency Expansion Budget Requests, Prepare Statewide Legacy Assessment, and Write SCIO IT Plan

Agencies Perform Legacy Assessments, Develop IT Plans, and Prepare Expansion Budget Requests

APM Configuration and Agency Rollout Plan Development

APM and IPM Rollout to Agencies

Four Months

Five Months

Implement APM and IPM

Use APM and IPM

Jun 2005

Sep 2005

Jan 2006

Apr 2006

Due Date

Jun 2007

Mar 2006

Jun 2006

Aug/Sep 2006

Jan 2007

Jan 2008

Today

2007 –2009 Biennial Budget

2005 –2007 Biennial Budget

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