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