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1
Implementation of Application Portfolio Management
Governance, Process, and Execution(The What and Why of APM)
February, 2006
2
Presentation Agenda
Topic Slides
Approximate Times
(Minutes)Perspectives and Overview
of APM
Concepts, Processes, and Practices of APM
Implementation of APM in NC State Government
Questions
Total Time 60
3 -10
10 - 24
24 -36
10
15
20
15
3
Portfolio ManagementPortfolio Management is:
A collection of items grouped together to facilitate efficient and effective management and optimally allocate fiscal, staffing, and other scarce resources. The purpose is to meet strategic business goals and objectives in the most effective and productive manner by appropriately considering key factors, such as desired returns or public value, initial and life cycle costs, architectural directions, risk profiles, and the inter-relations among investments. The objective is to make fact-based, data-driven, and analytics -oriented management decisions, using a consistent and disciplined approach within a well-defined governance structure.
Major Portfolio Management Tasks are:• Inventory and classify items in the portfolios.
• Perform relevant analyses – identify problems and opportunities, develop viable options, determine relevant criteria, ask the right questions, evaluate alternatives using pertinent information, and make decisions.
4
Status of Implementation of Portfolio ManagementPhase/Type of Portfolio
Management EffortImplementation Status
and Timeframe
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
In process - winter and spring 2006
Applications (APM)
Topic Research and Purchase of Tool
Completed – performed in 2004 and early 2005
Completed – performed summer and fall 2005
Project (PPM)
5
Summary of Findings of Keane/Gartner Legacy Applications Study – December 2004
• 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.• Remediation timeframes are: 11% require action immediately (within next two years), 35% require action in the near term (2 to 4 years), and 54% require action in the long term (4 to 6 years).• Although the immediate needs of the portfolio appear to be manageable, projections of its future status, if no remediation actions are taken, indicate an increasingly deteriorating condition as the applications age.
6
Framework for Managing IT InvestmentsI. Strategic Business I. Strategic Business and IT Planning and and IT Planning and Investment Selection Investment Selection
and Budgetingand Budgeting- Investment Portfolio - Investment Portfolio
Management (IPM) – Build, Management (IPM) – Build, Buy, and/or Implement the Buy, and/or Implement the
Right AssetsRight Assets
III. Investment III. Investment Operation and Operation and
Maintenance, and Maintenance, and Renewal, Retirement, Renewal, Retirement,
or Replacement or Replacement - - Applications Portfolio Applications Portfolio
Management (APM) – Maintain Management (APM) – Maintain and Operate Assets in the and Operate Assets in the Right Ways and Retire or Right Ways and Retire or
Replace Them at the Right Replace Them at the Right Times Times
II. Project ImplementationII. Project Implementation -- Project Portfolio Project Portfolio Management (PPM) – Build and Implement Assets in Management (PPM) – Build and Implement Assets in
the Right Mannerthe Right Manner
Life Cycle of IT
InvestmentsIdentify 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
• 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
Manage projects by:
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
7
Processes andInformation
Business
Data and Work Tools
Applications
Technical Infrastructure
Drives
Prescribe
Enabled by
Supported by
Business / IT Alignment
8
NC is not Alone in Implementing APM - Gartner Prediction for 2006
Gartner predicts that 40% of large public and private enterprises will implement application portfolio management in the next two years. The reason for the rapid growth in the use of APM is other companies and government entities have achieved successes in cost reduction, managing the complexities of hundreds of established assets, and improving budget process effectiveness.
Applications portfolio management is critical to understanding and managing the 40 percent to 80 percent of IT budgets devoted to maintaining and enhancing software. Most organizations don’t track established applications over time to ascertain return on investment (or to determine which should be disposed of), and few manage application portfolios with tools. In other words, these organizations haven’t truly associated the substantial amount of money they’re spending with what they are spending it on.
Gartner Research Note “Predicts 2006 Reacting to Application Development Challenges With Management and Automation” dated November 15, 2005
9
Reasons for Applying APM Concepts and Disciplines to Existing Applications
1. Identify and catalogue all applications – know what you have and what they do in order to manage them.
2. Track and communicate technical and business status of applications to identify problems and take advantage of opportunities.
3. Enhance the alignment of applications with agency strategies and technical architectures to improve support of business processes.
4. Identify and eliminate or replace applications that are redundant, high-risk, low-performance, or high-cost (especially O&M).
5. Develop a multi-year management decision roadmap to optimize benefits/costs and minimize risks over application useful lives.
10
Primary Goals for Managing Applications• Reduce maintenance and support costs –
provide a source of funds for new investments.
• Align IT with business – better satisfy business priorities and evolving needs.
• Fund the right application remediation efforts – maximize benefits/costs for dollars spent.
• Coordinate and prioritize IT investments – there is not enough money to do everything, so do the right things.
11
Seems to run forever, but ultimately has a finite business, economic,
and/or technical life
Sources of Risks
Issues Surrounding Systems ObsolescenceOver time, sustainability of applications becomes questionable due to age and
technology advances, combined with changed business needs. They no longer:a) support business goals and objectives, b) are cost-effective to operate or maintain, and/or c) are risk-acceptable by presenting too great a likelihood of failure with
cataclysmic consequences.Business Issues
Impediment to the implementation of new and more cost-effective service delivery models – unable to respond to demands for new functionality, support business processes, or provide adequate and secure information access
Becomes a constraint in meeting regulatory requirements
Staffing issues - Unavailability of Skills Unavailability of staff skills or expertise to maintain Unavailability of third party vendors Dependency on individual contractors
Technology issues Expired warranties, with no vendor support Can not handle increased usage or volumes of data Does not run anymore on available platforms Inefficient IT resource utilization Used beyond original intent, and cannot be enhanced Cannot meet security, privacy, or confidentiality requirements Are not easily recoverable for disaster recovery and business continuity System can fail, with untraceable error Inconsistent or inadequate information and data quality Not compliant with state or agency technical architectures
12
Business
Technology Financial
Application Portfolio Application Portfolio Analysis PerspectivesAnalysis Perspectives
• Do we have the right capabilities in place?
• Are they aligned with business priorities?
• Where are potential synergies?
• Are there duplications?
• Are applications sustainable?
• Do they fit in the desired architecture?
• What is the technical migration road-map?
• Are they risk-acceptable?
• Do they present security, privacy, or disaster recovery vulnerabilities?
• How do we maximize overall value?
• Can costs be optimized across the organization?
• To what extent can innovation and new applications be funded by cost savings?
• Do they cost too much to operate or maintain?
Key Concepts: Analysis PerspectivesBusiness, technology, and financial perspectives are combined to determine the posture of the application, indicate the appropriate remediation strategy, and to provide recommendations for managing the application portfolio over time
General idea – action is required when an asset is not cost-effective or risk-acceptable (it is worn out, no longer technically fits, or costs to much to keep)
13
Applications Portfolio Inventory and Classification
• General – ID, business owner, age, etc.• Business processes enabled/supported• Business value/criticality• User information• Functional quality
– Present business requirements– Future business growth and new business needs
• Technical quality– Architectural compliance– Operations and maintenance – support of or detriment to
• Costs– Operations– Maintenance and technical support
• Risk profile• Disaster recovery/business continuity status
Key Attributes for Each Application
Attributes can be unlimited – use potential for compelling analyses (usefulness) and ability for consistent refresh as decision criteria for the selection of them.
14
Applications Portfolio Inventory and ClassificationWho Knows About Particular Attributes:•Public Users (State’s Citizens and Businesses)•Users From Other Government Entities•Business Users•Managers and Executives•IT Managers•Technical Architects•Application Developers•Application Maintainers•IT Operations•Help Desk•Business and IT Security and DR/BC Staff•Financial, Accounting, and Budgeting Personnel
Sources of information can (and maybe should) be numerous – don’t overcomplicate, but ensure that all perspectives are offered and data is fact-based, reliable, and complete.
15
Analysis of Applications Portfolio - Basics• Business leaders
– What are strategic business drivers?– Which apps fit drivers (contribute to business)? Which do not?
• Users– Which apps meet business needs? Which are lacking?– How many users are dependent on app? What are the
vulnerabilities and what are the impacts of outages.• Business analysts
– Which apps have accessible, complete, actionable, accurate, and timely data? Which do not?
– Which apps enable business process reengineering? Which do not?• Applications maintenance
– Which apps require the most maintenance effort and expense? Which are scalable and adaptable? Which are not? Which are most reliable and maintainable? Which are not?
• Help desk– Which apps generate the most trouble tickets?
16
Analysis of Applications Portfolio - Basics• Technical architects
– Which apps contain components that comply with agency and statewide technical architectures? Which do not?
– Which apps contain components that are beyond vendor support – aged releases and/or removal of product support?
• IT managers– Which apps have reliable and dependable vendor maintenance support
– either in-house or outsource? Which do not?– Which apps do not integrate (share data) well? How critical are the
these apps to the performance of other applications supporting critical business processes?
– Which apps have performance problems? What are the business and cost impacts of these? Can they be rectified?
– Which apps are subject to determinable vendor mergers or acquisitions? What are the consequences, and how can they be mitigated?
– Which apps have questionable risk profiles – security; DR/BCP; vendor viability; regulatory compliance; HR risk from staff retirement; privacy and confidentiality; and/or information availability, quality, and retention?
17
Application Portfolio Management -Approach for Assessing and Managing
Applications
Step 2 - Analyze Portfolio
No
Yes
Step 3 - Manage Portfolio
Step 4 – Optimize Portfolio
Near-Term Action
Needed?
Incorporate Results
in Business and IT
Planning and Funding Request
Processes - Investment
Portfolio Management
Next Steps
Data Collection, Analysis, and Decision-Making ProcessStep 1 - Build and
Maintain Inventory
Approximately 50% of UMT database updated from data used in Keane/Gartner study
Create and Maintain Inventory in UMT
Portfolio Management Software Tool
Assess Overall Posture of Application
Business Status?
Technical Status?
Determine if Remediation (Other Than
Regular Ongoing Support and Maintenance) Required and
Develop Life Span Transformation
Roadmap
Evaluate Business Importance and
Criticality of Problems or Opportunities – Prioritize, Specify
Timeframe for Action, and Determine Costs
and Benefits
ContinueRegularSupport & Mainte-
nance
18
Expensive to operate or maintain None or decreasing vendor support for major components Insufficient or decreasing availability of staff support Can not enhance for new business requirements Inefficient IT resource utilization Inadequate data access and quality Vulnerable security Recoverability difficult or suspect Not compliant with state or agency tech. architectures
Cost-effective to operate and maintain Adequate vendor support for major components Adequate availability of staff support Can enhance for new business requirements Efficient IT resource utilization Adequate data access and quality Adequate security protection Resilient to human-induced or natural disasters Compliant with state and agency tech. Architectures Easily recoverable
Meets present service delivery needs Meets anticipated needs for new services,
business process reengineering initiatives, and information access
Protective of individual privacy and data confidentiality
Creates inefficient and less effective service delivery processes
Constraint on implementation of new services, expanded citizen benefits, and/or more efficient business processes
Individual privacy and data confidentialityat risk
Business Perspective
Low High
High
High Attention Zone – Both
Business and Technical Risks
Safe Zone
Warning Zone – Not Making Best Use of In-Place Technology
to Meet Business Needs
Warning Zone – High Technical
Risks
Application Portfolio Management - Determining the Posture of Applications
Technical Perspective
Safe Zone
Generic criteria are defined to assess applications from a business and technology perspective
Bad
Good
GoodBad
19
Options for Life Span Transformation Roadmap
• Technical renovation/enhancement, such as re-host, employ Service Oriented Architecture (SOA) or Web services architectures to modernize, recode, update database management software, etc.
• Functional enhancement.• Replace (COTS, GOTS, or custom development) and
retire.• Sunset/eliminate.• Consolidate with applications performing the same or
similar business functions.• Consolidate with multiple diverse applications as part of
an agency wide or state wide initiative.• Continue maintenance.
20
Application Portfolio Management - Remediation Approaches
Replace - if possible, with Commercial or Government Package:• If low business value, probably doesn’t justify custom code renovation or replacement• Consider elimination or consolidation
No Technical Reengineering:• Re-host candidate• Functional enhancement• Tolerate or invest
Low Priority Technical Reengineering:• Low maintenance and support costs• Provides value as is• Regular support and maintenance
Technical Perspective
Business Perspective
Good Technical Reengineering Candidates:• High business value means quicker ROI• Renovation will improve support and maintenance costs
High/Good
High/Good
Low/Bad
Low/Bad
21
Application Portfolio Management - Investment Selection and Prioritization
•“At Risk/Critical” are highest priority were level of risks drive (broader) remediation activities
• “Limited Risk/Critical” applications are second priority compared to critical/at risk
• “At Risk/Less Critical” applications are also second priority for remediation, especially if risks can be mitigated
• “Limited Risk/Non Critical” applications should be reviewed to minimize technology investments and look for opportunities to consolidate or substitute for better solutions
Overall Importance
to Organization
Low High
High
Selectively
Second Priority
Business/Technology Risk or Urgency
Second Priority
First Priority
At Risk / Critical
Limited Risk / Non Critical
Limited Risk / Critical
At Risk / Less Critical
Prioritization and timeframe for action is driven by overall importance as well as risks.
In addition prioritization is driven by:
– Specific business initiatives, programs, and/or funding streams available
– Overall risk issues, interrelationships between applications, and the general need for modernization of legacy systems
Low
22
APM is an Ongoing Process – Not Just a Project
• Identify expansion budget requests for:
– Long (biennial budget) session of General Assembly
– Short (2nd year of biennial budget) session of General Assembly
• Assist in preparation of BCPs
• Provide IT cost data to OSC for annual report submitted to General Assembly
• Identify funding needs from other sources, such as federal funds
• Assist in making decisions for or documenting changes due to:
– New implementation projects
– Additions, renovations, or upgrades to technical infrastructure
– Renovations/modernizations to applications
• Provide answers to ad hoc questions
Examples of How APM Information Will be Used by Agencies
23
Overview of IT Portfolio ManagementAgency Missions and Vision and Business Goals and Objectives
Statewide and Agency IT Plans
Application Portfolio Management
Project Portfolio Management
Investment Portfolio Management
Identify Problems and Opportunities
Funded New ProjectsManage
Portfolio
Analyze Portfolio
Optimize Portfolio
Build and Maintain Inventory
Develop Business Drivers and Business Cases
Analyze Candidate Investments
Adjust Project Portfolio
Assess Value of Projects and Portfolio
Manage Portfolio
Implement Projects
Select and Plan Investments
New or Renovated Applications
Proj
ect
Prop
osal
s for
App
licat
ions
Ren
ovat
ions
,
Ret
irem
ents
, or
Rep
lace
men
ts
24
Conclusions• Applications swallow cost, time, and management bandwidth, while
increasing risks – unless they are well managed to reduce complexity and risk and retired or consolidated in a timely fashion, the entire IT budget will be operations and DR/BCP will be unaffordable
• Creating a portfolio view of existing applications does not have to be complicated; focus on the basics and the big picture – let the software tool highlight problem areas and offer improvement opportunities for management decision making
• Benefits of APM are clear;– Investment decisions for elimination, replacement, or remediation are made in a
consistent manner considering application risks, value/importance to organization and its priorities, most effective use of personnel, and life span optimization of costs/benefits
– IT complexity is reduced; thereby, maximizing business value received while minimizing IT cost incurred
– Planning for DR/BCP is facilitated to ensure continuity of operations– Risks are managed, and stewardship for assets is facilitated
25
Inventory (Build and Maintain Inventory) Application identity and basic information
Financial (Analyze and Manage Portfolio) Detailed application-level costs and cost-effectiveness analyses
Assessment (Analyze and Manage Portfolio)
Risk, Operational Performance, Architectural Fit
Alignment (Optimize Portfolio) Process Inventory, contribution, function association Core Business Drivers, priorities, process
contribution
Application Portfolio Management Perspectives
Level I
(Ste
p 1
)
Level II
(S
tep
s 2
an
d 3
)
Level II
I (S
tep
s 2
an
d 3
)
Level IV
(S
tep
4)
InitialDeploymentFocus
Scope of Keane-Gartner Study
26
Applications Portfolio Management ProcessTool Assisted Decisions Subjective Business Decisions
Transition to Executive Decision Making Process
Step 1 – Level I
Collect, Validate, and Maintain Data
(Build and Maintain Inventory)
Step 2 – Levels II & III
Perform Assessments
(Analyze Portfolio)
Step 3 – Levels II & III
Determine Dispositions and Life Span Transition
Roadmap
(Manage Portfolio)
Step 4 – Level IV
Determine Priorities, Timeframes, Costs, and
Benefits
(Optimize Portfolio)
Funding Requests
Investment Portfolio Management (IPM) Process
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)
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
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
27
Comparison and Contrast of Keane/Gartner Study with APM Implementation Project
1. Database attributes for applications:
• K/G – all data collected by agencies and input by K/G staff from scratch
• APM – Approximately 50% of data elements transferred from K/G study and agency staff will both collect additional data and input it into UMT software tool
2. Annual maintenance and support costs:
• K/G – not included in data collection or analyses
• APM – included in data and an important part of analyses
3. Perspectives for analyses and future actions for applications:
• K/G – Single point-in-time assessment, analogous to annual physical
• APM – Long-term management plan, analogous to lifetime health/fitness plan
28
Comparison and Contrast of Keane/Gartner Study with APM Implementation Project
4. Responsibilities for application assessments and action plans:
• K/G – K/G staff performed all analyses with agency review
• APM – Agency staff responsibility for performing assessments and developing life-span transition roadmaps
5. Follow-up to initial assessments and updating of attributes, analyses, and transition plans over time:
• K/G – Not within scope of study and little/limited follow-up to date
• APM – Frequent and regular, especially in response to budgeting and funding cycles and development of BCPs
6. Project planning, management, and reporting:
• K/G – K/G staff and State CIO project team
• APM – Each agency responsible for its performance and the meeting of schedules and quality, while the State CIO project team will provide overall coordination, training, and assistance to agencies
29
Sunday Monday Tuesday Wednesday Thursday Friday Saturday
1 2 NC Holiday 3
Training Materials Review
4
Legacy Study roadmap complete
5 6
Training Materials ready for Beta
7
8 9 10
Beta Kickoff Meeting
11
Beta Basic Training
12
Beta Basic Training
13 14
15 16 NC Holiday 17 18 19 20 21
22 23 24 25 26 27 28
29 30 31
January 2006
Beta Implementation
Beta Implementation
Beta Implementation
Beta Implementation
APM Rollout Preparation
30
February 2006Sunday Monday Tuesday Wednesday Thursday Friday Saturday
1 2 3 4
5 6 7 8 9 10 11
12 13 14
DENR Business Objectives
DPI Business Objectives
15
DENR Business Objectives
DPI Business Objectives
16
DENR Business Processes & Functions DPI Business Processes & Functions
17 18
19 20 21 22
DENR Level IV Advanced Training
23
DPI Level IV Advanced Training
24 25
26 27 28
Beta Implementation
Beta Feedback – Revise Configuration & Training
Beta Feedback – Revise Configuration & Training
Beta Implementation
Beta Implementation
Beta Implementation
31
March 2006Sunday Monday Tuesday Wednesday Thursday Friday Saturday
1 2 3
Training materials ready for rollout
4
5 6 7
Wave 1 Kickoff
8
Wave 1 Basic Training
9
Wave 1 Basic Training
10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28
Wave 1 Business Objectives
Wave 2 Kickoff
29
Wave 1 Business Objectives
Wave 2 Basic Training
30
Wave 1 Business Processes & Functions
Wave 2 Basic Training
31
Wave 1
Wave 1
Wave 1
Wave 2
Wave 1
Beta Feedback – Revise Configuration & Training
32
April 2006Sunday Monday Tuesday Wednesday Thursday Friday Saturday
1
2 3 4 5
Wave 1 Level III Charting Analysis
6
Wave 1 Level IV Advanced Training
7 8
9 10 11 12 13 14 NC Holiday 15
16 17 18
Wave 2 Business Objectives
Wave 3 Kickoff
19
Wave 2 Business Objectives
Wave 3 Basic Training
20
Wave 2 Business Processes & Functions
Wave 3 Basic Training
21 22
23
30
24 25
Wave 2 Level III Charting Analysis
26
Wave 2 Level IV Advanced Training
27 28 29
Wave 3
Wave 2
Wave 2
Wave 3
Wave 2
Wave 2
Wave 1
33
May 2006Sunday Monday Tuesday Wednesday Thursday Friday Saturday
1 2 3 4 5 6
7 8 9
Wave 4 Kickoff
Wave 3 Business Objectives
10
Wave 4 Basic Training
Wave 3 Business Objectives
11
Wave 4 Basic Training
Wave 3 Business Processes & Functions
12 13
14 15 16 17
Wave 3 Level III Charting Analysis
18
Wave 3 Level IV Advanced Training
19 20
21 22 23 24 25 26 27
28 29 NC Holiday 30 31
Wave 3
Wave 4
Wave 4
Wave 4
Wave 4
Wave 3
Wave 3
34
Agency “To Do” List Before Start of APM Implementation – We Will Help Accomplish
• Develop approach for collecting and inputting application attribute data:– Application independence and autonomy (minimum central
control of data integrity or completeness)– More centralized input and quality control (managed approach)
• Develop approach for conducting application analyses work, reviewing results, and making decisions regarding life span transformation roadmaps
• Determine agency personnel that will participate in the project, and ensure each is scheduled for training, has the time availability to contribute to the effort, and calendars are updated to reflect time commitments
35
Agency “To Do” List Before Start of APM Implementation – We Will Help Accomplish
• Develop high level project plan, with key responsibilities, schedule/milestones, organization chart, etc.:– Appropriate to size, business and IT complexities, number of applications,
governing structure/relations, and culture of agency– Include sufficient numbers of personnel and appropriate representation from
business, IT, senior executive/management, and other types of agency staff• Determine whether agency desires to participate in Level IV (step 4) implementation –
voluntary option:– Significant participation and commitment from top executives, business managers,
and senior IT staff– May introduce needs for major cultural changes and considerable modifications to
long-standing business unit-to-business unit relations and business-to-IT interactions– May not be appropriate/useful for all agencies, and must request this optional
implementation effort through the State CIO
36Date Modified
3/15/2006
Major ActivitiesIdentify
Dependencies on other applications andprojects
Costs/fiscal requirements Personnel resource requirements Technical infrastructure requirements Benefits/value to accrue
Applications Portfolio Management (APM) Process
Identify
Major Activities
Problems/opportunities Alternative approaches Best actions for managing applications overexpected life spans
Determine Whether To
Step 1Collect, Validate
and Maintain Data(Build and
Maintain Inventory)
Step 2Perform
Assessments(Analyze Portfolio)
Step 3Determine
Dispositions andTransition Roadmaps
(Manage Portfolio)
Step 4Determine Priorities,
Timeframes, Costs andBenefits (Optimize
Portfolio)
Iterative Steps for Analysis of Applications
Tool Assisted Decisions Subjective Business DecisionsTransition toExecutive DecisionMaking Processes
Invest additional funds Technical renovation/enhancement Functional enhancement Replace (COTS, GOTS, or custom) and
retire Sunset/eliminate Consolidate Replace and consolidate as part of anagency wide or state wide initiative
Continue maintenance
Cost-effectiveness
Risk acceptability - status of :
Current and projected O&M costs andreasonableness with industry standards
Support for current business process andenabling of future business needs
Opportunities for savings in businessprocess operations (process efficiencies)
Opportunities for citizen serviceimprovements
Opportunities for savings in systemsmanagement and operations processes
Opportunities for savings in duplications ofbusiness functions
Opportunities for savings in the use ofshared technical infrastructure andcommon technical services
Opportunities to move to target agency andstatewide technical architectures
Opportunities to standardize andconsolidate technical infrastructure
Opportunities to eliminate or consolidateapplications
Opportunities to support / improve DR/BCP
Consider
Technology / Operations risks Business risks Continuing funding risks DR/BCP risks Regulatory compliance risks Security, privacy, and/or confidentiality risks
InvestmentPortfolio
Management(IPM) Process
IdentifyMajor Activities
Business problems/issues
Relations to and support of business processes Support of key business or political drivers Criticalities to agency missions and business goals
and objectives Key users and importance to them Resident business knowledge Enable/support regulatory compliance Dependences on and support for other applications Business continuity preparedness Gaps in business support - current and future
Technical problems/issues
H/W and S/W vendor support Resident technical knowledge Warranty expirations Availability, reliability, and maintainability Obsolete or dated technology Information availability and data quality/integrity Usability Enterprise architecture fit Adequacy of supporting technical infrastructure Use of shared technical infrastructure and/or common
technical services Security, privacy, and confidentiality Recoverability from disasters/failures (DR status)
Risk vulnerabilities, probabilities, and impacts Funding dependability and reliability Technical / Operational Business DR/BCP
Other problems/issues Cost performance (excessive costs and areas for
potential savings) Duplications of business functions among applications
Evaluate Status/Health (Good, Bad, Moderate)
Business Technical / Operational DR/BCP Funding
Value (High, Moderate, Low) Strategic for agency mission or governmental initiative Essential for business criticality or regulatory compliance Enterprise architecture fit
Risk of unrecoverable failure (High, Medium, Low)
Select priority for action (High, Medium, Low)Determine Priorities and Timeframes
Risks to be avoided/mitigated Strategic value Criticality to operations Savings generated Other benefits/value offered Costs Funding availabilities
Transfer and validate selectedrelevant data from Keane/GartnerStudy to software support tool
Perform initial collection andvalidation of remaining data
Major ActivitiesOne-Time Work
Ongoing Work
Perform data changes andvalidations as they occur
Collect and validate data forimplementation projects transitioningto applications assets
In-house or outsource COTS, GOTS, or technical or
business enhancement Phases of work
Confirm and/or Develop Implementation approach
FundingRequests
Select timeframe for action Immediate (with in next 2 years) Near-term (between next 2 to 4 years) Long-term (after next 4 years)
Major Data Elements
ID Name and description Business and IT owners Application type Business processes
enabled Business value/criticality User information
Costs (Internal Personnel,External Personnel, Hardware,Software, Other External Costs)
Functional quality
Data quality Application business
quality Technical / Operational quality
Architecture Operational
Risk profile
Security DR/BCP Vendor viability Regulatory compliance Business and IT staffing Information Privacy and confidentiality
Potential Benefits for Selected Actions Consolidate/eliminate applications
Operational cost savings (licenses, staff, etc.) Simplify DR/BCP, security, privacy, and
confidentiality Remove deviant from agency/state technical
architecture - reduce complexity Create funds for new projects/investments from
savings Functional/technical renovation or replacement
Transition to agency/state technical architecture Operational cost savings Better availability, reliability, and maintainability Improved citizen services Improved/reengineered business processes Improved data accessibility, action ability, and
quality/integrity Improved DR/BCP, security, privacy, and
confidentiality Easier adaptability and scalability Better enable/support regulatory requirements More reliable, available, and economical vendor or
agency support Enable/support business drivers or political
initiatives
37Adopted and Modified From: PMO Executive Council research.
PortfolioManagement
(PM)Components
Investment PortfolioManagement (IPM) -Build the Right things
(skill mix is 75%busines/financial and
25% technical)
Investment/project idea screening Portfolio definition Portfolio segmentation and prioritization Business drivers identification Risk identification and probability/impact analysis Technical and business architecture fit Business case development Investment/project evaluation and prioritization (strategic fit, financialanalysis, and value assessment)
Fiscal and personnel resource availability, prioritization, and allocation Investment governance structure and process
Required Competencies for Comprehensive and EffectivePortfolio Management
Revision Date11/22/2005
Project PortfolioManagement (PPM) -
Build Things Right(skill mix is 75%
technical and 25%business/financial)
Project management methodology and standards (PMI) System development methodology and standards (IEEE) Project governance and organization structure and process Project planning and management Project manager coaching and development Compeititive bidding readiness Business/user readiness assessment Business case realization tracking Status tracking and reporting Requirements definition Fiscal and personnel resource estimation Stage-gating and ongoing reviews Design and technical architecture review Test planning and management Rollout planning and management Risk management and mitigation Quality assurance management Vendor and outsourcing management Service/operations management Security review Data confidentiality and personal privacy review Disaster recovery and business continuity planning Post implementation review
ApplicationsPortfolio
Management (APM) -Operating,
maintaining, andrenovating/retiring thethings in the inventoryof applications stock(skill mix is equallydivided between
business/financial andtechnical)
Service/operations management Technical and business architecture fit Vendor assessment for hardware/software support Technical and business knowledge availability Current and future strategic fit Business needs suitability Cost-effectiveness analysis Disaster recovery and business continuity planning Risk acceptability analysis Asset life cycle planning and management Investment governance structure and process
38
Contact Information
• Tom Runkle – Tom.Runkle@its.nc.gov– 754-6677
• Jim Tulenko– Jim.Tulenko@its.nc.gov– 754 – 6606
• Charles Richards– Charles.Richards@its.nc.gov– 754 - 6612
• Barbara Swartz– Barbara.Swartz@its.nc.gov– 754 - 6657
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