Lecture 19 Chapter 10 A Portfolio Approach to Managing IT

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Lecture 19

• Chapter 10
• A Portfolio Approach to Managing IT Projects

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Announcements

• Final Exam overview today
• Business Plans returned today
• Grades for presentations etc. on Thursday
• Group project due Thursday

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Final Exam Outline

• 8 11am, Wednesday June 13
• Exam is CLOSED book
• No notes or text allowed
• Three sections
• Short answer questions
• Long Answer questions
• Case study questions

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Question 1 Find New Zealand on a world map
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Final Exam Sample Questions

• Short answer
• What is the difference between security and
  reliability?
• How does standardization affect business
  opportunities?
• In what ways is IT infrastructure different from
  other infrastructure resources?
• Cite an example from one of the cases we studied
  that shows how IT professionals with experience
  in one industry can bring changes to another
  industry

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Final Exam Sample Questions

• Long answer (1 page, 250 words)
• Discuss what risks are associated with major IT
  projects, and what a company can do to mitigate
  against them
• Describe the challenges associated with educating
  users of IT in a company, and what IT-focused
  companies can do to help their employees

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Case study questions

• You will receive a copy of a case in class
  Thursday
• Prepare in advance ie read case before exam!
• Questions will be short and long answer from the
  case
• Identify and analyze core issues

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IT Portfolio Management
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IT Disasters are still common

• Companies fail to realize risk of project
• Multiple projects lead to larger aggregate risk
• Different projects require different management

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Portfolio View of IT
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Financial Perspective
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Sources of Implementation Risk

• Project Size
• Experience with Technology
• Requirements Volatility
• See fig 10.1

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Fig 10.1 Effect of Adding Risk Factors on Project
Risk
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Barriers to Perspective
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Governance
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Strategic Grid and Governance
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Project Categories and Degree of Risk
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Risk Assessment

• Figure 10.3 Risk profile questionnaire
• Higher risk score, higher management approval
  required
• Repeated several times throughout project
• Different perspectives on risk expectation can
  lead to disaster

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Portfolio Risk

• Multiple projects can add or reduce risk
• Low-risk not always good
• All high-risk is vulnerable
• Identify risks in all projects, then consider
  combined portfolio of risks
• See fig 10.5

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Fig 10.5 Risk and Return Distribution for
Portfolio of Projects
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Project Implementation Dip

• Most projects dont go smoothly all the way
• New system going live common point
• Expectations not always realistic
• Short term downward shift may be necessary
• All happens in middle of business cycle and
  worker turnover
• Need to focus on end goal to get through value of
  change when people are complaining
• Ideally see it before it comes and get people
  ready

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Fig 10.4 Expectations vs. reality
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Questions, Presentations, Break
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Project Management

• No single correct plan
• Management Tools
• External integration tools
• Internal integration tools
• Formal planning tools
• Formal result controls
• See table 10.1 Tools for project management

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Table 10.1 Tools for Project Management
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Influences on Tool Selection

• Low requirements volatility/low tech projects
• Easy to manage
• Least common
• PERT (program evaluation review technique)
• CPM (critical path method)
• Low requirements volatility/high tech projects
• Difficult to manage
• Eg. Converting mainframe system, developing web
  access
• Outputs well defined
• Technical complexity drives characteristics of
  successful manager
• Formal planning not likely to add as much value

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Influences on Tool Selection (ctd)

• High requirements volatility/low tech projects
• Involve users in design, development and
  implementation
• Develop user support
• Formal planning and control tools help
• Close, aggressive management of external
  integration
• Leadership from management not technologists
• High Requirements Volatility/high-tech projects
• Managers need technical expertise
• Ill-defined projects common
• Formal tools useful once clarity is reached in
  direction
• Cross effects of different factors becomes
  important

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Project Management

• Relative Contribution of Management Tools
• Depends on specific project
• Results-oriented tools work in structured/formal
  environment
• Depends on corporate culture
• Emergence of Adaptive Project Management Methods
• Approaches to design, deployment, implementation
  and investment that assume a need to gather
  information and learn as one goes.
• Not really effective universal methods yet
• Software Development Life Cycles
• SDLC breaks down development into stages
• Analysis and design
• Construction
• Implementation
• Operation and maintenance

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Project Management (ctd.)

• Adaptive Methodologies
• Quickly build rough preliminary version
• Iterate through stages rather than finish every
  stage
• Fast cycle through stages
• Aim to deliver limited functionality fast
• Require skilled staff
• Adaptive Methods and change management
• Intensely involve users in evaluating outcomes
• Strictly control migration of system features
  from development, testing to production
• Separating stages avoids major problems

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Process Consistency and Agility in Project
Management

• Balancing tension between process consistency and
  process agility
• Tools useful one place shouldnt necessarily be
  applied to everything
• Success in balance often includes minimal
  formalization
• Flow
• Understand interrelationships between projects
• Completeness
• Keeping track of all tasks in project
• Visibility
• Getting info on status of rest of project

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Business Plan Feedback

• Lots of interesting ideas
• Make sure the highlights stand out dont make a
  VC look for the main points
• Simple presentation improvements go a long way
  spell check, section headings,

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Grading for Business Plan

• Exec summary /10
• Bus opportunity articulated /10
• Strategy and milestones /10
• Marketing /5
• Operations plan /5
• Management /5
• Financials /5
• Convincing case /10
• Presentation /20
• Total /80

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Grade summary (out of 80)

• Lower quartile 55
• Median 62
• Upper quartile 67
• Mean 60.33

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Business Plan Grades Distribution scores out of
80