Where goes the Money - Project Portfolio Management
Oftentimes, many view project portfolio management as a standalone process, while others see it as part of the project selection and/or management process. Experton Group advises clients that the purpose of IT project portfolio management is to select the projects that are best aligned to corporate goals and objectives. Experton Group also cautions clients that many corporations experience difficulty determining which projects to execute because there is an excess of projects, political difficulties in prioritizing and selecting the best investments, and not enough resources. IT executives as well as their line-of-business (LOB) counterparts should develop a project portfolio management process. Once that is in place, they should consider tools for assistance.
Many Clients who are selecting project initiatives have debates about proper selection criteria. Value criteria for project selection should be developed by the enterprise to align projects appropriately with corporate goals. Executives must weigh cost, current budget constraints, project size, time to market, and other associated risks. Other criteria include project length and phasing, resources required, and termination factors. Projects should be tracked so that people understand later why they made the decisions they did originally. Executives need to know that they have chosen the right criteria and that they are weighing those criteria correctly when doing project selection. Moreover, there are tools available that can help IT executives manage these metrics and even help them to proactively predict when problems will occur by using “what if” scenarios. A good graphical display of the project portfolio matrix with simple comparison, positioning, and ongoing tracking is a must in order to support the executive selection and review process.
Experton Group believes it is imperative to develop a project portfolio management process to evaluate, select, implement, and support projects that align with corporate strategic goals and objectives. IT executives should work with their line of business (LOB) counterparts to define a project portfolio management process. They should also ensure that their LOB counterparts share in the responsibility of not only selecting appropriate projects, but also in ensuring they are completed in a quality manner, on budget, and on time. IT executives may also wish to tie the results of the projects to both their and their LOB counterparts' profit and loss (P&L). This provides a valid baseline and helps ensure accountability.
The Road to Business Excellence – Processes & KPIs
Alexander Hemzal
Business excellence is the systematic use of quality management principles and tools in business management, with the goal of improving performance based on the principles of customer focus, stakeholder value, and process management. Your thoughts, processes, innovations, creativity, quality, it all aids in the construction of a successful and excellent business. Regardless of sector, size, structure or maturity, organizations need to establish an appropriate management system to be successful. The Excellence Model is a practical tool to help organizations do this by measuring where they are on the road to excellence; helping them understand the gaps; and then stimulating solutions. The British Quality Foundation (BQF), with the European Foundation for Quality Management (EFQM), is committed to researching and updating the Model with the inputs of tested good practices from thousands of organizations both within and outside of Europe.
The Excellence Model is an over-arching, non-prescriptive framework based on nine criteria. Five of these are 'Enablers' (Leadership, Policy & Strategy, People, Partnerships & Resources, and Processes) and four are 'Results' (Customer Results, People Results, Society Results, and Key Performance Results). The 'Enabler' criteria cover what an organization does. The 'Results' criteria cover what an organization achieves. 'Results' are caused by 'Enablers'.
Business excellence to a large extent is defined by process excellence. Companies that have developed the organizational maturity and have implemented the right Business Process Management (BPM) environment are generating more robust, flexible, and agile business processes. Best-in-Class organizations are delivering process management capability to their non-technical business users faster and more efficiently for a substantial reduction in operating cost and cycle time. As in many countries the economy limps along through a recession companies are looking for solutions to help identify and streamline inefficient business processes.
Without making it very complex Best-in-Class Performance can be measured along three criteria: An average year-over-year reduction in 1) operating cost, 2) a reduction in process cycle time and 3) improvement in output capacity. Some companies also measure the innovation capability in tracking the mix of new and old products. If you have those numbers established you can now compare them against the industry and you know if you are Best-in-Class, Industry Average, or maybe just a Follower. Those are very powerful benchmarks for the business units as well as the IT organization. A horizontal process approach with end-to-end responsibility, clear business driven KPIs, and the right amount of creativity, innovation, and a pragmatic approach to BPM will strongly help to improve the image of the IT organization as contributor to Business Excellence. Most IT organizations have not yet mastered this challenge but they need to get on this road to business excellence.
The Next Wave in Data Center Transformation: IBM zEnterprise
Andreas Zilch
IT organizations are caught between two competing forces: the need to rapidly develop new business applications and rapidly expand into new markets, while at the same time being a focal point for reducing company costs. Most IT executives find it impossible to reconcile these forces. New applications are usually implemented quickly by placing them on new sets of hardware and software that do not necessarily integrate with the existing environment, which increases acquisition and management costs and reduces flexibility. On the other hand, reducing the number of systems in an environment and reducing personnel support usually results in an increased time to deploy applications, longer system maintenance outages, and reduced application performance.
The reality of developing and managing enterprise data centers is the need to have high performing applications running in mixed environments, with high security and low costs. Most distributed platforms do not have the ability to meet these challenging requirements. However, it is clear that new IBM System zEnterprise directly addresses these requirements in a way that allows IT to transform data centers from risky cost centers to stable, dynamic environments that serve as compelling business multipliers. IBM zEnterprise 196 is a preferred target system for a majority of enterprise applications. It can handle database intensive applications, new Linux-based, Java and XML-based applications and data, as well as redefine new performance levels for legacy batch processing, allowing continuous batch operations. Because of the ability to both isolate application environments for security and development as well as facilitate application integration, System zEnterprise has lower costs throughout the application business lifecycle.
Mobile exposes Skype's Achilles' heel
The Skype IPO filing highlights what a double-edged sword the mobile application market is. On the one hand, mobile applications have been a massive boon for web services providers since the marriage of smartphones and third-party applications have quite literally placed these services in the palms of consumers' hands. Unlike applications running on a tethered PC, the mobile version of a web service supports virtually every context users might find themselves in. On the other hand, the more fundamental a service becomes to the smartphone experience, an incentive emerges for that service to be supported natively within the operating system itself.
The Skype application is free but it must be manually downloaded from the app store and configured. The capability of the app is almost entirely at the mercy of both the OS provider and carriers. For example, initially, Skype iPhone users were unable to make calls over 3G. Also, until the release of iOS4.0, the app could not run in the background on the iPhone. And although Skype can now run in the background on most OSes, it is a power hog, devouring battery life, which encourages users to kill the app when not in use. Naturally, if Skype isn't running, the user cannot be contacted.
Many of these issues are acknowledged in Skype's IPO filing: "For example, although our application for the Apple iPad, iPhone and iTouch is currently enabled to make voice communications over 3G networks, Apple or its carrier partners may choose to alter the terms of inclusion in its application store, effectively withdrawing this functionality at any time or develop competing applications, such as Apple Face Time, that may better integrate with Apple's devices," says Skype in the filing. What point is there of maintaining a Skype account if, for example, an integrated FaceTime experience is possible across the iPhone, iPad, iPod Touch, Mac and PC? The threat posed by the smartphone platform providers goes beyond the mobile space and Skype. It shows how the mobile space and its players are intruding the traditional PC market.
Playing in Skype's favor is its first mover advantage: since its launch the company has amassed 560 million registered users. However, an average of just 124 million use the service each month and only 8.1 million part with any cash. In the six months to the end of June, Skype posted revenues of $406 million so its annual revenue is roughly at the $1 billion mark.
Oracle & Sun – A new Sunrise?
Andreas Zilch
Everybody was waiting for the latest news on how the Sun acquisition impacted Oracle’s quarterly numbers. And Oracle announced better-than-expected financial results for the fourth quarter of 2010, fueled by the Sun acquisition and strong hardware sales. The company reported earnings of $2.4 billion, or 46 cents per share, on revenue of $9.5 billion. Operating profit from Sun contributed about $400 million in non-GAAP operating income, and fiscal year 2010 sales from Exadata machines is fast approaching $1 billion, Oracle executives claimed. Oracle's CFO stated Sun had $1.2 billion in systems revenues.
But Oracle's claims about Sun's sales are a mixed statement. Oracle failed to report that comparable Sun hardware sales in last year's quarter were $1.3 billion for servers and $570 million for storage while its gross margins were approximately 42 percent. Oracle did make improvements in the hardware production and delivery process but the news was not as strongly positive as presented. IT executives should take Oracle's claims with a bit of salt and base decisions on whether or not to utilize Sun hardware or Exadata database engines upon current and long-term enterprise requirements and vendor roadmaps and strategies.
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SOA and Web 2.0 – Who Cares?
Every once in a while new disruptive technologies arrive on the scene that change the way IT executives and professionals think about technology usage and its impacts. These impacts may or may not be as profound as perceived. The arrival of SOA and Web 2.0 are two such disruptive technologies. They have generated so much excitement that IT professionals are once again talking them up as though the technologies can provide answers to business problems. IT cannot tell business executives that SOA or Web 2.0 is the answer. IT must explain what business value these technologies provide to the issue at hand. The objective here is to ensure that the first project selected succeeds. This means not just having a good business case, but also having a good business partner that will support the effort and that is recognized by his/her peers as a respected leader.
Experton Group has identified 5 major characteristics required for a successful project that this business executive should have.
- Shows leadership and vision
- Funds and provides critical resources
- Has a project that impacts the P & L
- Can define and stick with a small project
- Will sell the project's success to peers.
It is Experton Group's experience that all 10 characteristics are required for the project to become a first of a kind using the new technology. If any one of the elements is missing, the project may or may not succeed, but the ability to leverage the experience in additional projects becomes tougher and more often than not, there are no follow-up projects.