The ROI Discussion

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In preparing your team for the launch of an IT PMO initiative, you might begin with a little gap analysis of your own. The dimensions of this inquiry should embrace particular points of performance weakness within the IT organization, as well as areas of practice, such as business process reengineering knowledge, management, or architectural planning, where the existing organizational roles and responsibilities of your group preclude a consideration of such staff functions. Here are some of the questions you might ask yourself and your management team:

  • What is the state of our current IT planning process?

  • Is the allocation of IT organization resources properly aligned with enterprise priorities?

  • If there is an IT planning process in place, what percentage of IT management time is devoted to that process, and is this time and effort well spent?

  • How are IT's relations with our key customers (i.e., sponsors)? Do we and they understand one another, speak the same language, and agree on similar priorities?

  • How does our organization measure and report on its performance to those who fund our activities?

  • Are our customers satisfied with our service delivery? How do we know?

  • Are we managing customer expectations and, if not, what does it cost us every time we disappoint a sponsor?

  • How many resources do we currently devote to reactive problem correction (e.g., call center, CREs, maintenance and support personnel)?

  • Are our customers satisfied with our project delivery? Do we deliver our projects on time, in budget, and in keeping with customer requirements?

  • How often are IT resources misdirected because of a misunderstanding about customer specifications, project change orders, or performance metrics or reports?

  • How much IT staff time is devoted to finding out who has particular expertise, manages particular IT assets, or holds the responsibility for a particular area of service or project delivery?

  • What skills and experiences are needed for our team's success? How are these requirements captured and addressed today?

  • Does our enterprise suffer from the proliferation of information technologies or do we promote architected IT solutions built around recognized standards? What is the total cost of IT solution ownership?

Through such honest introspection, you will quickly come to understand those shortfalls in focus, resource allocation, or competence that expose your organization to service and project delivery failure. For example, if your self-assessment leads to the conclusion that the IT organization is poorly aligned with the enterprise's business priorities, this calls into question the appropriateness of your unit's investment decisions. If communications and relations between your delivery teams and their customers are frayed, even favorable service and project delivery outcomes might not be received as such. Similarly, if your outcomes are plagued with significant scrap and rework, delivery delays, and excessive staff overtime, this also would suggest a lack of alignment, poor communications, and an absence of effective delivery management practices.

Unfortunately, any number of IT organizations suffer from these short-comings, not because their people are incompetent but because their leaders expect technology line managers to embrace these additional duties. As I have already suggested, these assignments are often a mismatch of skills, interests, and personal makeup of line personnel. Instead, I recommend that you employ a PMO team to complement your technical managers. To that end, focus the efforts of the PMO in support of team delivery, interpersonal communication, and business process needs of technologist colleagues. The particular PMO roles encompassed in such an approach might include the following:

  • Resource conservation — assuming the support tasks associated with strategic planning, CRM, competitive benchmarking, process reengineering, documentation, reporting, and the like, to free IT executives and their overtaxed IT line managers to focus on those areas of strategy and service and project delivery where they will have the greatest impact

  • Risk management — serving as the objective third party to and the documenters of any and all IT ventures to ensure that those directing projects are fully cognizant of the risks associated with those undertakings; developing and implementing approaches to risk mitigation

  • Accountability and CRM — maintaining customer relationship portfolios and otherwise keeping the IT organization's CREs staffed with materials and information so that they, in turn, may interact with IT's executive customers (sponsors and working clients) in an effective and efficient manner

  • Doing the right things — documenting and communicating IT organization priorities in line with the unit's alignment with and commitments to its line-of-business sponsors

  • Doing things right — championing best practices, disciplined processes, performance metrics, accountability reporting, and lessons-learned activities in line with service and project delivery

  • Total cost of IT ownership — enabling the streamlining of technology platform choices and the standardization of IT deployments through applied research, objective analysis, comprehensive financial modeling, and the honest assessment of the organization's investment strategies and spending practices

  • Internal harmony, communication, and collaboration — facilitating communication and collaboration among IT delivery teams and between those teams and their customers

The need for these PMO services is borne out each time an IT team fails in its service and project delivery efforts. With a PMO in place, the IT organization is better positioned to balance the dynamic pressures of the business for new or expanded products and services against the internal tensions of running complex and fragile IT operations with constrained resources. My PMO model adds strength and flexibility to the mix of your IT organization's capabilities by placing appropriately skilled people at the most likely points of failure within key IT processes. In doing so, your organization may derive any number of benefits:

  • Increased revenues from the successful delivery of improved IT products and services

  • Decreased costs from the rationalization of business processes and technology platforms, and from the reuse and repurposing of project artifacts, system components, and team knowledge

  • Cost avoidance due to a reduction in scrap and rework and a better alignment between enterprise needs and IT investments

  • Increased productivity within the IT organization itself thanks to process reengineering, and an adherence to technology standards and architected solution designs

  • Improved time-to-market thanks to the rigorous adherence to industry best practices, reuse, repurposing, and the adoption of standards-based solutions

  • Improved customer-servicing capabilities and an enhanced perception of value thanks to better communications and relations with customers

  • Managed risks through adherence to the practices of project life-cycle management, rigorous project planning, performance measurement, and a regular, open review process

These accomplishments establish a framework for the overall improvement of an IT organization's delivery capabilities. Your business colleagues will surely value contributions that lower costs and increase revenues. They will also appreciate on-time, in-budget project results that lead to improvements in line-of-business performance. They may even recognize the benefits of risk mitigation and of compliance with industry standards. Other returns from the investment in a PMO, however, may be less perceptible. For example, the office's work in enabling an effective KM practice may contribute significantly to IT's time-to-market delivery, but the arcane work of building a knowledge store may appear, at first blush, of little value. Similarly, the applied research and discussions that will lead to architected system solutions may not carry a clear ROI, even though such work may mitigate escalating costs for downstream application maintenance and integration.

Solutions like these will undoubtedly contribute to the long-term success of IT. But how can these be presented in such a way that they appear as something other than overhead costs in the thinking of nontechnical observers? Because technical arguments alone will not suffice, IT leadership must convey these benefits in ways that are meaningful to business colleagues. To assist the reader in this important exercise, the author would like to revisit my ROI model and offer a few additional insights into how this may assist in building a case for a PMO within the IT organization.

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The Hands-On Project Office(c) Guaranteeing ROI and On-Time Delivery
E-Commerce Security: Advice from Experts (IT Solutions series)
EAN: 2147483647
Year: 2006
Pages: 132 © 2008-2017.
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