Session 89260
Simplifying IT Using a Disciplined Portfolio Governance Approach
Eileen Ahles
Abstract
Learn how Salt River Project, one of Arizona's largest utilities, utilizes Oracle's Primavera Portfolio Management software to help them improve management of their organization's IT portfolios (business applications and infrastructure technologies). By identifying cost reduction and risk mitigation opportunities, a continuing trend of IT simplicity has resulted in improved IT standardization and modernization across the enterprise.in improved IT standardization and modernization across the enterprise.
Objectives:
• Learn how SRP got started with IT portfolio management.
• Hear about the results from using portfolio management to reduce IT complexity.
• Discover lessons learned along the portfolio management journey.
Agenda
1. Background & Challenges
2. Governance Framework
3. Enterprise IT Asset Portfolio3. Enterprise IT Asset Portfolio
4. Portfolio Rationalization
5. Simplifying Business Continuity & DR Planning
6. Lessons Learned
BACKGROUND & CHALLENGES
SRP-History
In 1903, Salt River Valley Water Users’ Association was formed by Arizona landowners
The National Reclamation Act of 1902 provided funding for the construction of Roosevelt Dam
In 1909, a hydroelectric generator at the Theodore Roosevelt Dam site was built
In 1937, the Association created the Salt River Project Agricultural Improvement and Power District to operate the power generation and distribution system.
The Association and District later became known as Salt River Project.
SRP-Today
Two companies serving metropolitan Phoenix:
• Public Power Company
• Private Water Management Association
Employees = 4,461Employees = 4,461
Annual Revenues = $2.7 billion
SRP has been honored by JD Powers as the top-rated large power company in residential customer satisfaction in the West for 11 of the past 12 years.
Challenges
SRP uses a decentralized IT support model
• Multiple Business Unit IT groups – as well as Corporate IT –all at various levels of sophistication
• Redundant application functionality and duplication of • Redundant application functionality and duplication of technologies
• No process to manage or prioritize technology requests
• Existing systems did not inform executives of enterprise IT spend, making cost containment challenging.
IT Governance
Realization: If SRP continues to progress without a solid IT strategy and IT governance framework, we risk service, cost, and security obstacles.
Solution:Solution:
• In 2004, SRP launched an IT governance program.
• Our governance model blends business unit flexibility with centralized facilitation
GOVERNANCE FRAMEWORK
Governance Hierarchy
• Approves:
• Architectures
• Enterprise IT standards and policies.
• IT initiatives for funding
• IT projects based on threshold levels
IT Leadership Committee
(ITLC)
• Recommends: Enterprise strategies, IT Architecture
• Recommends: Enterprise strategies, goals, policies, architectures, standards
• Approves work/projects within a certain impact on the enterprise.
IT Architecture Committee
(ITAC)
• Information Governance Council (IGC)
• Enterprise GIS Steering Committee (EGIS)
Governance
Sub-Committees
(Standing & Ad hoc)
Governance Goals
Manage an Enterprise IT Asset Portfolio
• Include methods for maintaining an IT asset inventory, monitoring its performance and assessing its value.
• Reviewing performance and value indicators of the IT portfolio will drive the launch of projects for adjustments.portfolio will drive the launch of projects for adjustments.
Manage Project Initiation & Prioritization
• Processes for evaluating all IT projects to ensure risks, resources and funding are mapped against corporate priorities.
Solution
Oracle’s Primavera Portfolio Management (PPM)
• Acquired in Summer of 2005
• Components:
• Fast Track for Application Portfolio Management• Fast Track for Application Portfolio Management
• Fast Track for Project Portfolio Management
• Utilized professional services consulting for support and oversight of implementation process
• Primavera Propose and Primavera Bridge for Microsoft Project Server added at a later date.
The Portfolio Management Cycle
New ProjectsIdentifyAsset
Retire Assets
Adjust
Launch New Project/ Initiative
Adjust Program Portfolio
Launch New Project/ Initiative
Design & Develop Solution
Implement Solution
AssessValue
New Assets
Asset Improvements
Manage Asset Usage
Assess Asset Value
AssetsAdjust Program Portfolio
Initiative
Design & Develop Solution
Implement Solution
AssessValue
IT Portfolio Management ProgramEvaluating - - Prioritizing - - Planning - - Communicating
Adjust Program Portfolio
Launch New Project/ Initiative
Design & Develop Solution
Implement Solution
AssessValue
IT ASSET PORTFOLIO
Enterprise IT Asset Portfolio
Provides transparency into current inventory of assets and resource consumption
• Identify & eliminate redundant / overlapping functionality
• Assess the condition of technology assets• Assess the condition of technology assets
• Quantify assets’ business value
• Aid strategic planning efforts
• Diffuse Business / IT conflict
Enterprise IT Asset Portfolio: Domains
Business Applications / End-User Solutions:
Software used to automate & optimize business functions,
processes, tasks, and activities.
Infrastructure Technologies:
Foundational technologies used to create and operate business solutions and store / transmit information.
IT Asset Attributes
A Business Application’s Infrastructure Dependencies
An Infrastructure Technology’s Supported Applications
.
.
.
Domain Specific Information
Business Applications / End-User Solutions
• Business Functions Supported
• Application Health Survey
Infrastructure Technologies
• Infrastructure Domain & Class
• Standards Classification
Application Classification by Functionality
Drill Down Capability for More Detail
Drill Down Capability for More Detail
Application Health Survey
• Technical Quality
• Criticality to the Business
• Platform Health• Platform Health
• Risks
• Total Cost of Ownership
Data Visualization CapabilitiesScorecard
Assessing Criticality
Data Visualization CapabilitiesInvestor Map
Gartner’s “TIME” Model for Application Rationalization
Invest
Migrate
Tolerate
Invest
Eliminate
Infrastructure Classifications
Drill Down Capability for More Detail
Drill Down Capability for More Detail
Technology Standards
• Ensure interoperability of all elements of systems
• Economies of scale / lower procurement costs
• Simplify maintenance, support and asset management to reduce total cost of ownership
• Creates an easier / faster path to procure and use items designated as “Enterprise Standard”
Standards Compliance Pyramid
Low Risk / Flexible Goal: 50 – 80%
Solutions
Infrastructure
App Development
High Risk / Restrictive Goal: 90 – 100%
Shared Infrastructure / Service Frameworks
Middleware
Data Management
Foundational Infrastructure
IT Operations / Systems Management
End-Point / Consumer Devices
Server Platform & Virtualization Technologies
Storage
Network
Security
Standards Waiver Example
PORTFOLIO RATIONALIZATION
Portfolio Rationalization Process
Our goal for our first rationalization process was to analyze SRP’s IT portfolio in order to identify opportunities that:
• Reduce maintenance & support costs through consolidation and/or decommissioningconsolidation and/or decommissioning
• Increase manageability by reducing the number of technologies in use
• Decrease the risk of running on unsupported technologies
FY10 Infrastructure Software & Hardware Costs
Application Development
$1,840,938
Application Development
$1,840,938
Application
End Point / Consumer
Devices
$2,838,829
End Point / Consumer
Devices
$2,838,829
Client Devices
Data Management
$2,211,243
Data Management
$2,211,243
Database & File
IT Operations / Systems
Management
$1,324,091
IT Operations / Systems
Management
$1,324,091
Change
Middleware
$1,196,599
Middleware
$1,196,599
Application
Network
$2,866,133
Network
$2,866,133
Host / Remote
Security
$773,268
Security
$773,268
Identity Mgmt &
Server Platform
$2,568,808
Server Platform
$2,568,808
Server Devices
Storage
$2,227,247
Storage
$2,227,247
Storage Devices
>= $1 Million $500,000 to $999,999 $100,000 to $499,999 < $100,000
Application Construction
$922,018
GIS/CAD
$710,376
Programming Languages
$48,648
Testing & Debugging
Tools
$159,135
Web Development
$762
Devices
$2,129,287
Client Operating Systems
$621,421
Client Utilities
$88,120
File Structures
$1,216,081
Data & File Utilities
$740,410
Metadata Management
$257,752
Change Management
$300,224
Output Management
$291,181
Performance Management
$220,204
Production Management
$340,347
Schedule Management
$172,134
Application Integration
$384,862
Application Servers
$370,438
Data Integration
$62,894
Messaging & Telephony
$331,274
Web Management
$47,130
Remote Connectivity
$123,366
Network Health
Management
$1,508,548
Network Topology
$1,234,219
Mgmt & Provisioning
$186,524
Protection Health
$586,741
Devices
$1,311,881
Server Operating Systems
$1,024,902
Server Management
Tools
$232,025
Devices
$1,490,949
Storage Management
$736,297
Standards Compliance by Infrastructure Domain
RISK LEVEL 65%
56%
RISK LEVEL
75%
Applications by IT Support GroupEach bubble represents an application identified in the Portfolio Rationalization effort.
Yellow bubbles indicate that the application is transitional and is currently being migrated, upgraded or has been identified to be retired.
Rationalization Results
• Identified approximately 150 applications at risk of running on unsupported technologies
• Determined that there is significant redundancy in specific functions
• Discovered almost $500,000 in budget reduction opportunities by eliminating low use software
• Recommended the centralized management of software licenses in order to capitalize on economies of scale
Strategic Initiatives Launched
• Application Modernization Multi-year Project
• Development of a Software Asset License Management & Compliance program
• Implementation of Standard Enterprise Solutions
• Consolidation of Work & Asset Management Applications
• Infrastructure Systems Management Tools Analysis
SIMPLIFYING BUSINESS CONTINUITY & DISASTER RECOVERY PLANNING
Simplifying Business Continuity & Disaster Recovery Planning
• Partnered with SRP’s Business Continuity & Emergency Management department
• Used Primavera Portfolio Management’s capabilities to link • Used Primavera Portfolio Management’s capabilities to link Key Business Processes to Applications
• This information is used to define critical applications and subsequent disaster recovery requirements
• Developed list of applications with a recommended tier of recovery
Cost Center
Dependencies & Relationship
Work Initiation &
Prioritization
Infrastructure Technology
Business Process
Business Application &
End User Tools
Cost Center IT Footprint
Lists:• Business Applications• Infrastructure Technologies• Work Initiations• Work Initiations• Business Processes
Cost Center IT Footprint
Cost Center IT Footprint
LESSONS LEARNED
Lessons Learned
• IT Portfolio Management data and analysis processes can be a powerful tool for:
• Providing information for decision making
• Reducing risk by managing technology life-cycle, health, cost, and value
• Management support is essential for championing the processes and gaining buy-in.
• Communicating your efforts and analysis results is very important!
• SRP’s adoption has evolved over the years and continues to evolve.
• Be flexible!
Recommended Reading
IT Portfolio Management: Unlocking the Business Value of Technology
Authors: Bryan Maizlish & Robert HandlerAuthors: Bryan Maizlish & Robert Handler
They say the world has become too complex for simple answers. They are wrong.
-Ronald Reagan