Enterprise Portfolio MANAGEMENT isn’t Application Portfolio Optimization

The portfolio based approach that has been pioneered by companies like Troux and which is now part of the standard lexicon by which organizations discuss their enterprise information technology asset base is creating an incredible lens through which to understand the organization.

It is useful however to distinguish between optimizing your current portfolio and building processes and governance that help you sustain a healthy portfolio. For example application portfolio optimization (APO) which targets redundancy and other inefficiencies in the the existing portfolio does not fix the systemic problem. This portfolio approaches treat the NOW problem. It may save you millions an dit may get you a raise, but the benefits while real are for TODAY. They don’t fix the governance and business process issues that got you into the situation you are in today. Doing that means remaking the decision making processes that got you where you are today. You need to understand the value landscape.

Thanks as always for reading my blog, I hope you will join the conversation by commenting on this post.

If you liked this post, please consider subscribing to this blog and following me on twitter @jmillsapps. I regularly give talks via webinar and speak at events and other engagements. If you are interested in finding out where to see me next please look at the my events page on this blog. If you would interested in having me speak at your event please contact me at events@joshmillsapps.com.

If you are interested in consulting services please go to MB&A Online to learn more.

Unlocking the full value from a change initiative

unocking blog 6-18

I had another conversation the other day about the value landscape.  I’ve talked about this before and I wanted to touch on it a little bit again because I think it’s applicable to almost any type of project that you do, especially around business intelligence and anything within the analytics realm. I’m going to use Troux for this example. Troux, for those of you that don’t know, is an enterprise portfolio management software. It’s got a lot of specific use cases that help organizations get a fairly rapid return on investment. So an organizational command will acquire the Troux tool. They’ll get involved in specific programs to achieve their goals and pretty soon they’ve made this great progress. What happens as time goes on is they sort of lose a little bit of steam. The low hanging fruit that was there at the beginning goes away and then they start to wonder, “Well how come I’m not still getting the same benefit that I was getting before?”

I think that one of the things that organizations run into is that they haven’t thought a lot about how to take that information and use it to make a lot of incremental returns. What I mean by that is one of the big use cases organizations have for Troux is to look at their IT portfolios and figure out

  • Where do I have redundancy
  • Where do I have things that I can consolidate

So at the beginning there’s this huge value for a lot of organizations because it’s a unique way of looking a problem they haven’t seen previously. They get all this value really rapidly and then they start to slow down because they use the tool to make these big decisions but they’re not embedding that intelligence into their ability to make smaller decisions. That intelligence they use for the big decisions can also help them be able to make decisions farther down within their organization. It will get them that same return on investment only distributed out amongst more folks. This happens all the time.

I’m using Troux as an example because it’s easy to talk to but I think almost any business intelligence activity that goes on within an organization has this problem. It’s usually the impetus, some big problem that you’re trying to solve, some particular thing you’re trying to get insight into and there’s this big bang value proposition that goes out. Then unless the organization takes and figures out how to leverage that information within their processes, they stop getting that same big return. I think this is one of the biggest missed opportunities that we have within modern organizations.

We’ve got one of the most highly educated work forces that we’ve ever had and we’ve got all these capabilities to do advanced analytics and yet we haven’t really taken advantage of any of that to the degree that we could. In this example of having analytics that maybe get used by an executive but they’re never driven down into the business processes and to users who are probably quite capable of leveraging those to make decisions. They’re either unavailable or the processes don’t dictate that they leverage them. There’s this huge opportunity to capture value that is currently not being executed on and it’s simply because we’ve brought the capability into the organization to make better decisions but we haven’t built our processes to take advantage of that. I think it’s something that as you go through large change initiatives you need to really look at:

  • What are the phases of  this
  • How is this going to drive value in our organization
  • Where and when am I going to get ROI
  • Really think about what happens when I’m in my post implementation world

I wrote a blog post awhile back about living in a post-Troux world but I think it’s just as applicable to any of these large systems that you implement that are supposed to give you greater insight into what you’re doing. You have to build it into your processes if you want to get all the value from it.

Thanks as always for reading my blog, I hope you will join the conversation by commenting on this post.

If you liked this post, please consider subscribing to this blog and following me on twitter @jmillsapps. I regularly give talks via webinar and speak at events and other engagements. If you are interested in finding out where to see me next please look at the my events page on this blog. If you would interested in having me speak at your event please contact me at events@joshmillsapps.com.

If you are interested in consulting services please go to MB&A Online to learn more.

What’s more valuable: Listening to your Spidey Senses or your Statistics?

Spiderman

I had a business school professor that said you had to be careful with statistics because it was like driving using the rearview mirror.  I’m reminded of that because one of the major things I’ve spent the last couple weeks working on is some financial projections and trying to build out a business case.  This work has primarily been centered on school safety. So we’ve looked at things like what is the overall size of people involved? Well it turns out there’s:

  • 77 million Americans that are involved in education in some way
  • There are about 100,000 K-12 public schools
  • There are roughly 6,000 colleges and universities
  • Finally there are around 35,000 private schools

Along with those statistics there are obviously demographic build outs and parent teacher association involvement.  Turns out that’s one of the areas where there’s still a strong showing.  85% of the people surveyed said that they had attended or participated in a PTA meeting in the last year.  This means that either that’s an area where we’re very strong as  a country or people feel bad saying that they didn’t go so they over reported saying they did go.

There’s also a lot of statistics around crime. For example, 27% of teachers in the District of Columbia in 2010 reported they had been threated or physically attacked at school. Also a student is more likely to be victimized in school than out of school. Now on some level that makes since given the amount of time that a student spends in school vs. outside of school and what types of settings those are but it’s also a little bit scary. It’s one of the things that we’ve been focused on trying to develop technology solutions for, going on the better part of two years now.  So it’s interesting as you look at all that and you try to draw meaning from it. You think about how you might work to change some of those statistics especially around the prevalence of crime and safety issues in schools. You think about what are the contributing factors and how can private industry engage to support better education environments.

Now as you try to build out a financial model that allows you to stay in business while also providing this socially redeeming service and encourage people to invest in the model based on financial projections; it makes me think of other times where I’ve been at something like this. Times where we’ve done a business case for a technology investment or for even looking at a large IT portfolio for a private sector or public sector organization.  You’re trying to build out a business case again based on different statistics and your understanding of the organizations ability to handle change. You’re looking at what types of numbers are out there for people who have tried to do similar things and all of it amounts to essentially a lot of guesswork, educated guesswork, but still guesswork.  The actual implementation and reality are almost always starkly different from what you originally thought. So I don’t say all that to discount doing the activity because I believe to this day that it’s one of the most valuable things that you can do as you look to build out even a small project. I believe it is vital to try to build out financial models, business cases, and return on investment because it forces you to think about things that you would otherwise take on gut feel.

So whether or not things go according to your projection down the road, I think you’re much more prepared to handle the twists and turns that are to come by virtue of having really thought through the data that is available. You learn a lot by forcing yourself to wade through things where other people have gone out and attempted similar things and succeeded or failed. You have the chance to think about what are the lessons learned from those previous success and failures. I think that for most organizations, and even in entrepreneurial pursuits, there’s huge value in doing a business case.  Also when talking about the case that I’m working on right now there’s huge value to be found in working  the financial forecast for a new venture because it forces you to step through that project piece by piece.

So I’m curious what other people think. Do you run through those types of processes around the projects that your organization is attempting to do and how often do people go to the numbers to back an argument vs. just using gut feeling?  Now I don’t say that with a strong feeling one way or the other because I believe that the best way to approach it is to have the numbers but not to discount gut feel. Particularly if you’ve been at it a long time, there’s almost a spider sense that develops about certain projects that gives you a hint to where things might be going that maybe the numbers don’t tell you. At the same time I’m also a big believer in having those numbers available because they can provide great cues to action that otherwise you may ignore. They also may point out areas where you need to stay focused on as you progress through a project to make sure that you don’t fall into a trap that could have easily been avoided had you taken the time to take a look at the data that is out there.  So again I’m very curious to know what other people’s experiences have been and how they balance gut feel vs. projections and spreadsheets and what they believe is valuable in terms of business case.

Thanks as always for reading my blog, I hope you will join the conversation by commenting on this post.

If you liked this post, please consider subscribing to this blog and following me on twitter @jmillsapps. I regularly give talks via webinar and speak at events and other engagements. If you are interested in finding out where to see me next please look at the my events page on this blog. If you would interested in having me speak at your event please contact me at events@joshmillsapps.com.

If you are interested in consulting services please go to MB&A Online to learn more.

The Value Landscape

Discovering the key to successful IT and EA

There is a shift afoot in the Information Technology (IT) and Enterprise Architecture (EA) worlds towards portfolio based thinking. Organizations are keying in on the cost savings they can achieve by using a solution, like that put forward by Troux, (www.troux.com) in order to realize what is in some cases extraordinary cost savings and efficiencies. As stories of these savings and their associated enormous return on investment begin to trickle out into the public eye, momentum is growing in the market place to leverage these solutions. The associated use of the portfolio approach and tools as a mechanism to save on costs has grown as well, with many organizations pushing very specific cost saving agendas and projects forward.

Before I say another word, let me be clear. Cost savings are good. It was part of the promise of EA from its inception. The idea that we would gain real insight into how the resources of the organization should be configured, in order to support the mission of the organization in as efficient and effective manner as possible, has always included the idea of cost savings. What I want to discuss today is ensuring that you get maximum value from this effort in the longer term. Remember that the cost savings we are talking about in these cases are almost always the product of a system that was not capable of optimizing in order to deliver this level of efficiency and effectiveness previously.

The problems of yesterday won’t disappear because you’ve gathered the information necessary to eliminate them now. You need to fix the systemic issues that led to those problems and optimize the system as a whole. Without that, you either won’t achieve a maximum return or in the worst case, you will have to re-cleanse your system periodically because your processes keep leading you to the same problems. The right approach is to ensure that the right people in the organization leverage this new information on an ongoing basis and ensure that as many decisions as possible are being made based on the best information the organization has to offer.

In order to do this several things have to occur, the first of which is the recognition that this is not a one-time fix. The enlightenment your organization gets by evaluating its application portfolio etc. for cost savings doesn’t solve the decision-making problem that gave you the mess you have today. You truly need to look across the stakeholder landscape within your organization as a whole and begin to categorize the roles and decisions that should be made using this new information. For example, if the current process for evaluating technology buys within the organization does not include referencing organizational standards, you will never gain the benefit of having standardized on anything.

By embedding this process into an automated workflow, you can be assured that the right information will be in front of the right person when the buy decision is made. You also need to ensure that if you have spent the time and money to develop a repository that has “one version of the truth,” that it doesn’t simply present one face to every stakeholder. One of the biggest complaints I’ve heard from people who are customers of EA products is that they are cumbersome and hard to use. A procurement officer shouldn’t have to be an EA specialist to buy the right technologies for their organization. A simple list of approved vs. not should be available with enough information to make informed decisions. It is worth understanding your stakeholders well enough to deliver tailored reporting because this will drive adoption, which will drive an ongoing return on investment.

You need to develop a mechanism or framework for calculating the benefit each of these stakeholders receives from their information as well as the benefit the organization is receiving. This value framework is critical to achieving long-term success for the organization. You simply cannot maintain this type of effort, generate the type of buy in needed to succeed, or maintain the necessary funding levels without developing this type of valuation framework. Specifically the value framework should enable benefit calculation across factors like risk, agility, cost, alignment, etc., and enable executives to understand the specific value that is being gained across the organization as a whole and on a stakeholder by stakeholder basis.

This is critical because you hear all of the time from people that EA should be relevant across every person in the organization, but when it comes time to pay for it they balk at what would essentially amount to a miniscule percentage of funding on a per person basis. I fervently believe that this is because they have no mechanism for measuring the value it is bringing on anything other than the cost avoidance basis outlined above. In fact, in order to maximize the return on investment, an organization should invest in order to understand the complete value landscape being delivered as part of the portfolio approach. Essentially, this is the combination of a stakeholder landscape that defines specific stakeholder types, the decisions they make, and the impact/benefit the organizations receive in aggregate from having the right information, at the right time, to make the right decisions.

To me, the value landscape should enable executives to understand the specific value of information that is being developed and maintained as it relates to specific stakeholders, decisions, organizations and the enterprise as a whole. Without this information the organization will only have anecdotal insight into the value of these programs. Some people think that this is enough; that as long as executives understand intuitively that this information is useful it doesn’t really matter if it is quantified and that the cost to quantify is therefore useless. This is wrong-headed and will eventually lead to under utilization, under funding, and the degradation of the capability as a whole.

On some level, EA and the portfolio-based approach to enterprise management is about understanding value in order to manage resources. If the program cannot effectively advocate and measure its own value, do you really believe executives will trust it to measure theirs?

 

Thanks as always for reading my blog, I hope you will join the conversation by commenting on this post.

If you liked this post, please consider subscribing to this blog and following me on twitter @jmillsapps. I regularly give talks via webinar and speak at events and other engagements. If you are interested in finding out where to see me next please look at the my events page on this blog. If you would interested in having me speak at your event please contact me at events@joshmillsapps.com.

If you are interested in consulting services please go to MB&A Online to learn more.