Order ID 53563633773 Type Essay Writer Level Masters Style APA Sources/References 4 Perfect Number of Pages to Order 5-10 Pages Description/Paper Instructions
Instructions attached. Only complete task #1 without the cover page and conclusion.
In this exercise, each team has been promoted and you are now chartered as the DoD Investment Review Board (IRB) Working Group. Congratulations! After you read these instructions, open the IT Investment Portfolio folder in this lesson to access some of the exercise materials. Other exercise materials, unique to your team, are available in your Group workspace.
You have four tasks to perform during this two-week Team exercise. In Task 1, performed during the First Week, each team must evaluate a portfolio of DoD investments using prescribed methods to identify investments with a potential for termination. Just to make it fun, you will be considering diverse investments ranging from IT to weapons platforms to military bases. Evaluation is based on how well the portfolio is aligned and balanced with regard to DOD [and DoD CIO] strategic goals and objectives, allocation of resources among components, new/ongoing projects, risk/return and mission-critical versus support projects as well as whether any investments are duplicative or are over-budget or over-schedule. Complete Task 1 before moving on to subsequent tasks.
First Week, Task 1 Deliverable:This is an interim milestone deliverable (to ensure you do not drift too far afield in your deliberations). Describe the teams’ understanding of the investment portfolio’s overall status based on your data analysis from the two tools assigned to your team. Rank order and identify which investments are flagged for possible termination and the associated rationale.
Create about five or so ”vanilla” Powerpoint slides
, one graph for the other tool’s results and a conclusion page identifying possible investment terminations]. Subject to modification in the Second Week, these slides will be part of the DoD Investment Review Board (IRB) briefing. Post the slides to your GROUP Discussion Board.Managing the IT Portfolio
This is the final team exercise. Not sure how the team lead will work this week.
The deliverable for Week 7 should be posted in your GROUP discussion board by Wednesday at 8am.
The deliverable for Week 8 should be posted to this discussion board by Wednesday at 8 am.
Each team has a different focus and different tools to use, so the character of each portfolio will be different.
Scope
This lesson focuses on assessing competing proposals for possible inclusion in the IT portfolio and subsequent modifications of the portfolio. Investments are assessed using IT investment assessment criteria that have been agreed to by the class. In an exercise, student teams use the IT investment assessment criteria and an application instrument to assess assigned IT-based proposals, identify the strengths and weaknesses, and determine how proposals could be improved to increase the likelihood that they would be successful in competing against other proposals for scarce funds and IT portfolio membership. Students will analyze the usefulness of the IT assessment criteria and instrument in developing and improving IT-based proposals that must compete for funds. Students also examine the IT portfolio and its management using performance feedback and process analyses. The focus is on the steps an agency may consider taking (such as using assessment criteria portfolio-wide) to manage and evaluate the continued viability of an organization’s information technology capital assets as part of the organization’s portfolio.
Lesson Outcomes
Students will be able to:
- Analyze the role of operations analysis in tracking and evaluating IT capital assets.
- Evaluate the functions of the post-implementation review (PIR) as a tool for ensuring continual improvement of an agency’s capital programming process based on lessons learned
- Analyze possible policies and procedures required to implement an effective system for managing the IT portfolio of capital assets.
This is the last Group Exercise. Group Leaders, post your Group briefing on the Discussion Board for the class to read and question.
Issues To Consider While Reading the Documents
Note: You are not expected to post answers to these questions
- Who should have responsibility for managing the IT portfolio in an organization? The decisions on IT investments are made by the investment board. Should the board have a staff that manages the IT portfolio or should this be done by the CIO’s staff?
- How does an agency determine which IT assets should be included in the IT portfolio and which should not be included? Should they be only the ones that go to the investment review board for decision?
- How sensitive is the balance or “IT portfolio mix?” In other words, what problems, if any, are likely to result if an IT portfolio begins to have “too large a proportion” of its IT investments in one of its life cycle phases (e.g., steady-state, development/modernization, or new proposal) or one of its investment categories (e.g., “keep the lights on,” improvement, or strategic impact)? When is a proportion “too large?”
This is the last Group Exercise. Group Leaders, post your Group briefing on the Discussion Board for the class to read and question.
Read [or skim as directed] the following :
- Investment Criteria–go see the criteria and scoring guide created during Week 5.
- Group Exercise -DoD background materials
DOD & NII & TLA Mission info- Hunter, R., Apfel, A., McGee, K., Handler, R., Dreyfuss, C., Smith, M., and Maurer, W.A Simple Framework to Translate IT Benefits Into Business Value Impact . Gartner Group Research Note, G00156986. 16 May 2008.
- Tjan, A. K. Finally, A Way to Put Your Internet Portfolio in Order . Harvard Business Review, February 2001, pg76-85.
- Executive Guide: Measuring Performance and Demonstrating Results of Information Technology Investments . GAO/AIMD-98-89. March 1998. Read Practice Area 4, PDF pages 53-62.
- S. Department of Defense.Department of Defense Instruction 8115.02 Information Technology Portfolio Management Implementation . 30 October 2006.
- S. Department of Defense.Defense Business Systems Investment Management Process Guidance. June 2012.
- S. Office of Management and Budget.Implementing PortfolioStat, M-12-10 . 30 March 2012.
- S. Office of Management and Budget.Fiscal Year 2013 PortfolioStat Guidance: Strengthening Federal IT Portfolio Management, M-13-09. 27 March 2013.
- S. Office of Management and Budget. FY 2019 IT Budget – Capital Planning Guidance. 1 August 2017. Read pages 5-7 and skim 8-9.
- Technology Business Management Council. TBM Taxonomy: Version 2.0. 31 October 2016. Read pages 1-4.
- Kost, J.How to Manage the Consolidation of Government IT Infrastructure . 13 February 2006. Gartner, Inc. ID Number G00137407.
Page 4 of 20
Manage Portfolio Part 1
Before reading the lecturette, please view the following Portfolio Demonstration-as-a YouTube video embedded above.
12 Food based portfolio v7
It is best to view the video full screen. Humor me and first view the Demonstration in its entirety; don’t stop it.
Once you complete the Demonstration, then read this lecturette.
Please don’t look ahead, okay? Okay.
Food portfolio selection discussion.
There are two components to the demonstration. First, you might detect that how investments are presented (a component of governance) affected investment selection and thus portfolio composition.
In Segment 1, the selection process had you look at an onslaught of individual bright idea “investments” serially presented until one of the “investments” struck your fancy and you selected it. This is how many organizations select investments. The selection board/person looks at items individually and decides in the abstract about an investment, makes their selection, and realizes later that another even better investment was available. Unfortunately, an investment was selected and no money remains to fund the “even-better” investment. However, some organizations do not want to invest in a scrumptious steak or delicious doughnut or they wait for something to appear (a pizza?) but it never appears. So get stuck with the last “investment”–an eggplant (not to demean the elegant eggplant).
Segment 2 presents food a little differently. It assembles groups of like investments (candy-lovers, meat-lovers, ethanol beverage-lovers, and balanced meal-lovers) but still in a serial process—one investment group at a time. You still might select one “investment” group only to find a better investment later. A better process because there is the ability to compare and contrast among the investments in a group to see if the group is acceptable. However, the serial presentation process still is a problem.
Segment 3 took a different tactic—show ALL the investments at one time and select a limited number. This process removes the serial presentation problem in Segment 1 or 2. Of course, you did have limited time to find seven items–kind of like year-end monies. Just find seven items whether you need them or not.
Therefore, when you have to examine investments present a clustered set of investments rather than a linear string of individual investments.
Second, criteria for selecting investments are a useful tool. You might realize that selection criteria for Segments 1 and 2 were relatively ad hoc (select one food or a group of food you want to “invest” in) compared to Segment 4 where the groups of investments were pared with explicit guidance. In Segment 1, you get to choose whatever “investment” you want whether it is good, bad, or indifferent for your health. For example, create a balance diet which contains 2 servings of meat. However, most of us do not know what a serving looks like so this is not a good criteria but it is better than no criteria. Eat 2.5 cups of vegetables use a better defined criteria (a cup) and thus provide good guidance. Eat 2 cups of milk but also exercise for 30 minutes per day provides better criteria and links to a measurable mission objective. Measurable criteria which link to mission achievement are used to assess the portfolio contents, individually and collectively, throughout the selection, control, and evaluate life cycle.
Using Segment 4, by analog, the business lines and IT determine portfolio criteria that will determine how much and what kind of IT investments best serve the organization: for standard office work, smart terminal clients with 5 GB of local storage are connected to a cloud-based server, mapping and imaging work require X, and data-intense analytics require Y equipment.
Manage Portfolio Part 2
Define the IT Portfolio
Before you actually manage a portfolio, some rules and definitions, as part of establishing an IT governance process, need to be agreed upon. Think back to the Weill article about six IT decisions:
1. How much should we spend on IT?
2. Which business processes should receive our IT dollars?
3. Which IT capabilities need to be companywide?
4. How good do our IT services really need to be?
5. What security and privacy risks will we accept?
6. Whom do we blame if an IT initiative fails?You and your business colleagues should hold a strategic conversation to define what is and is not IT and how IT is categorized/classified. These actions will aid you as you inventory the IT investments and construct the IT portfolio(s). Your organization may decide that while one grand portfolio does exist, it makes more sense to define sub-portfolios for ease of evaluation. You will need to define what criteria are used to assess the collective IT investments. Major and non-major investments exist along with infrastructure investments, embedded systems, applications-as-a-service, and other IT stuff. It may take some time to refine what is in and how it is classified in the portfolio. Fortunately, we already know what criteria will be used for our lesson—you defined them a couple of weeks ago.
Contents of the IT Portfolio
The IT investment includes the original business case that persuaded the governing board to select (and resource) the investment. The investment also includes the justification for the investment by components, what organizational business processes are involved, what organizational performance will improve as a result of the investment, what risks might occur , how the risks are addressed, what expected results should occur, and when the improvements should occur. In essence, what Value you expect to harvest and what Risk exposure you expect. As the investment operates over time, reported actual results are obtained for each investment and included in the portfolio. Once actual results become available, a comparison to the recorded expected results should be conducted. Organizations need to decide what data is part of their IT portfolio in order to best manage their IT investments and to achieve organizational goals.
The Office of Management and Budget (previously via Circular A-11’s Exhibit 53 and Exhibit 300 and now via fiscal year Exhibit 53 reporting in OMB MAX) has established electronic reporting requirements for annual agency budget estimate submissions. These requirements call for detailed information to justify each significant IT investment. At minimum, an agency’s IT portfolio should contain the information needed to meet these electronic reporting requirements. However, budget submission reporting should not be the only purpose of an organization’s IT portfolio management.
Manage Portfolio Part 3
Categorize/Classify Investments in the IT Portfolio
Value and Risk Dimensions
Managing the portfolio allows us to extend the concepts of Value and Risk from the individual investment to the entire portfolio. Using a Value-Risk graph permits us to consider what the organization’s expected and actual portfolio envelopes look like (how many investments in each quadrant and distributed in what shape). As illustrated below, a more useful way to assess the value of the IT portfolio is to determine the net effect of the IT in helping to meet the mission(s) of the organization.
An overall picture of the investment portfolio and its relative balance involves assessing investments using standardized weighted Value and Risk criteria (for example, the Parker and Benson criteria) and plotting the assessed Value/Risk score pair on a Value/Risk graph. You have used the Value/Risk graph several times. The Value/Risk graph uses the Value (x-axis) dimension and the Risk (y-axis) dimension with same scales (1 to 100, for example) to plot various investments as a score pair. The IRB predefined the criteria for the Value and Risk dimensions and should predefine the organization’s investment envelope to identify the acceptable value and risk region. Assessing each investment’s Value and Risk and plotting the scores permits the IRB to see how balanced the portfolio is. (Since assessing all investments for the first time might be a tad overwhelming, the IRB might choose to only assess the high cost (top 50%) investments in the first year.)
In the Sample IT Portfolio graph below, besides the four labeled quadrants (Must Do, Low Hanging Fruit, Ooops, and Strategic Impact), you also see a simple Life Cycle (New Investment, Development Investment, and Steady-State Investment) dimension. Exchanging the Life Cycle dimension for another categorization schemes permits you to see how the portfolio balance changes with these other dimensions.
Once the graph is populated with investments, many intriguing questions come to mind:
- In which quadrant might you find most new investments?
- How might an investment become anOoops investment?
- Do mandated investments start in theOoops quadrant?
- In what quadrant would you find very old investments?
- What does a “good” portfolio or a “bad” portfolio look like? [While good and bad are subjective terms, such a question does make you consider the relative pictures.]
- What does a high performance portfolio (versus low performance portfolio) look like?
- What does a portfolio whichis tightly aligned with the agency’s strategic goals look like versus a loosely aligned portfolio?
- Does the level of enterprise architecture development and implementation affect the investment portfolio’s composition and balance?
- What is the composition of your agency’s portfolio?
Other Categorization Dimensions
The portfolio investment classification reflects an organization’s investment management approach and specific needs. The table below illustrates one approach to categorizing investments based on the information found in many, if not most, IT portfolios. This approach combines organizational structure and life cycle. The first row identifies category labels although the category labels may differ across organization. Within each investment category heading, investments are further categorized by the investment’s stage in the investment life cycle.
Below is one example for defining the life cycle stages which may range widely:
- Improvement Concept (an idea or need being considered by the business or CIO),
- New Proposal (a new idea or need supported during vetting and a go-ahead to construct a business case),
- New Project (an idea or need with a solid business case which will be submitted as part of a budget request),
- Development Projects (prior New Projects that received funding so that the implementation plan is underway but no capability is delivered yet), and
- Steady-state Projects (prior Development Projects that are fully implemented and delivering full capability with occasional need for enhancement or modernization).
The categories reflect a strategic conversation among the business leaders and CIO. A substantial amount of information may be contained in each category, with “infrastructure” and “program specific” (or business line) usually the two largest general categories. Knowing which investments are in what life cycle category is key to good portfolio management.
A second approach, asserts category labels which define the relative magnitude of improvement investments will provide. Weill and Broadbent (1998), in their book Leveraging the New Infrastructure, suggest the following category labels: infrastructure, transactional, informational, or strategic. Rosser and Potter
(2001) suggest more IT-focused category labels of infrastructure, utility, enhancement, or frontier. Hunter et al. (2008) suggest more business-focused category labels of run-, grow-, or transform-the-business.
A third approach to categorizing portfolio information uses an organization’s strategic goals. Investments should be able to be mapped to the strategic goals. This approach might compliment a balanced scorecard perspective.
Recent DoD Instructions
to implement IT portfolio management DoD-wide have resulted in DoD defining four IT portfolio management mission areas (warfighting, business, defense intelligence, and enterprise information environment). As presented below, functional capabilities within each mission area also are defined and are used to provide category refinements. DoD components are working to categorize their investments previously captured in the DoD portfolio repository system. The components are also working to understand how various investments might and could be shared among components as funding constraints continue to manifest themselves. The definition of joint capability areas which would supersede these IT portfolio categories is being pursued as well. One item you should note is the Enterprise Information Environment Mission Area. These investments represent the infrastructure upon which the other three Mission Areas depend. Infrastructure investments are challenging for the organization.
Manage Portfolio Part 4
IT Infrastructure
One of the most important, the largest, and usually the most expensive category of the IT portfolio is “infrastructure.” As presented below, there are many challenges associated with managing the IT infrastructure (see Kost, 2006
). One of the biggest challenges is communicating to senior management the value of a proposed IT infrastructure investment. The need for such an infrastructure investment is generally (but not always) identified by the IT component of the organization and typically in advance of other IT investments such as software applications. This need–and the value of meeting the need–must then be communicated by the CIO (or other senior IT person) to the senior management who make the investment decisions.
Additional characteristics of the IT infrastructure, as depicted below, include the critical importance of the IT infrastructure to the future performance of the organization. IT portfolio planning in regard to IT infrastructure is often very complex. It must take into account a number of factors, such as:
- The long range strategic thinking of the organization, as reflected in the strategic goals and other information available about the organization’s future
- The emergence of innovative IT, including new and emerging infrastructure and application technologies
- The opportunities that may arise for the organization over the next several years. Putting the right infrastructure in place is a long lead time activity. If it is not already in place when it is needed, it is usually too late for the organization to take advantage of an opportunity. An inferior IT infrastructure can cause an organization to lose customers and the respect of its stakeholders.
The hierarchical nature and complexity of the IT infrastructure is further illustrated below. The importance of the vertical integration of IT infrastructure, the relative timeline of infrastructure development, and the need for joint infrastructure planning among agencies and their parent are demonstrated. Each higher level IT infrastructure builds on the infrastructure(s) beneath it. Consider the interrelatedness of IT infrastructure at different levels within DoD, for example.
Manage Portfolio Part 5
Life Cycles and the Three Phases of IT Portfolio Management
An organization’s IT portfolio should contain information on significant IT investments over their entire life cycle. Indeed, portfolio information should clearly indicate where an IT investment stands in its life cycle. For example, an IT investment may be added into the IT portfolio immediately after the proposal/business case concept has been selected and approved by the IRB. The business case serves as a history as well, recording when the project starts, when it is implemented, and when it enters the steady-state phase. One crucial entry is when should the IT investment be terminated, replaced, or revised, especially if it is an IT infrastructure investment. As depicted below, the IT investment life cycle and relevant IT investment assessment criteria should determine whether an IT investment would continue to be funded or would be discontinued or replaced.
and OMB guidebooks describe three phases for IT portfolio management: selection, control, and evaluation. Notice the basic questions that are asked in each phase. Keep in mind that different IT investments will be in different life cycle phases at the same point in time. This has implications for how the IRB schedules its review of proposed, on-going, and steady-state IT systems.
GAO and OMB suggest that IT investment and portfolio management be viewed as having three phases that encompass the entire life cycle of the IT investment.
- Phase One: Selection – which new projects best meet vital needs not met by the current IT portfolio? This phase is conducted annually.
- Phase Two: Control – based on the periodic evaluation of on-going projects, which projects should continue to be funded and which projects should be cancelled? This phase is conducted throughout an investment’s life as enhancements and modernization is performed.
- Phase Three: Evaluate – based on post-implementation reviews and the periodic evaluation of implemented projects, which systems should continue to be funded and which should be changed, replaced, or otherwise discontinued? This phase also is conducted throughout an investment’s life as new capabilities are delivered.
Certain management tools are used in all three of the phases, as illustrated below.
Manage Portfolio Part 6
IT Portfolio Analysis and Management
There are a number of benefits to actively analyzing and managing the IT portfolio. Conducting an IT inventory to construct the IT portfolio allows the CIO and the business side to begin to answer truthfully some of the 6 IT decisions that Weill identified:
- How much should we spend on IT?
2. Which business processes should receive our IT dollars?
3. Which IT capabilities need to be companywide?From those answers, you can identify duplication of IT assets and decide if duplication is necessary. For example, one organization found that it had 12 different and incompatible accounting systems, and in some cases different versions of the same accounting software systems were being used. With this information, it is very unlikely anyone would recommend a 13th accounting system to solve a problem. In this case, the IT portfolio information lead to an initiative to consolidate the accounting systems.
With a portfolio, you can also identify what IT assets, although still operational, are not in use or are no longer needed by the business side (perhaps because you no longer have a mission requirement). Perhaps the most important benefit of IT portfolio management is that the portfolio’s information answers the question of how each IT investment and how the collected investments are contributing to mission achievement. Each investment claims linkage to strategic goals such that accomplishing certain goal-derived objectives are anticipated. The exact nature of the investment’s results are recorded and related to accomplishing those objectives or not. Further, the effect of adding or deleting a specific IT investment is made apparent–e.g., without the IT being proposed, the organization will no longer be able to track ships in that region. The IT portfolio provides the information that executives and managers need to understand the value and contributions of their IT investments and to justify the IT expenditures to customers and stakeholders.
A less obvious but nonetheless important benefit is identifying the linkages and dependencies between projects. For example, decision makers who fail to fund infrastructure project C by a certain time may see strategic projects A and B delivering little or no value. As decision makers (e.g., the organization’s investment review board (IRB)) consider funding future IT proposals the portfolio provides a history about prior investments and their performance relative to the organization’s goals and priorities. Portfolio management serves as a powerful tool for communicating to management and staff the present and future value of IT as a means of enabling improved performance throughout the organization.
Analyzing an IT portfolio determines, in part, whether and how changes in IT investments might be made. IT portfolio analysis is facilitated by the use of common analytical tools, including statistical analysis and meaningful arrangements of information.
The table below is from Gartner Group’s report by Rosser and Potter (2001) of a survey of managers and their view of IT investments. Notice that investments are placed in one of four categories: infrastructure, utility, enhancement, or frontier. See that infrastructure IT investments, which represent 47% of all IT investments are viewed by management as overhead investments. Also, notice the view represented by Performance contribution. This table has implications for gaining management buy-in for proposal concepts, for preparing proposals and business cases, and for making presentations before the investment review board. Hunter et al. proposed a similar investment categorization schemes (Run-the-business, Grow-the-business, and Transform-the-business).
IT literature frequently refers to balancing the IT portfolio. While it is not always clear what this means, a common view holds that balancing includes making investment tradeoffs between meeting current needs and expected future needs. For example, it is possible that all of the funds available for IT investment could be spent to meet current operations and maintenance needs. If this were done, nothing would be spent on new IT infrastructure or on new applications. Conversely, if all IT investment funds are spent pursing new IT investments, investments reaching steady state (those investments with operation and maintenance needs) would suffer. It would be in everyone’s best interests to make investment tradeoffs so that both the present and future investments are being accommodated within the limits of the resources available.
Balance also can refer to the amount of risk being assumed by the organization. If all IT investments are of the super-safe variety, this would suggest that the organization is a late adopter of IT innovations. Further, it may suggest that the organization lacks pilot projects, R&D, and other IT applications that are more risky but could have a very substantial pay-off.
Still another aspect of balancing is the proportion of IT investments in each of the three major phases. If virtually all investments are in the Steady-state (implemented) phase, this would suggest that the organization is in danger of following (and falling) behind other organizations. The world—including customers, missions, and so forth—keeps changing which results in the need for modifications or improvements to current IT-based activities. Such changes also should result in a regular stream of newly approved investments being funded (phase 1) and on-going development projects being deployed (phase 2) in addition to the steady-state/ implemented systems being evaluated (phase 3). This balancing act is illustrated below along with other considerations often used in arriving at a balanced IT portfolio.
Manage Portfolio Part 7
Organization Performance and the IT Portfolio
The IT portfolio should be a repository for organizational and IT performance data. The organization’s CIO component should be involved with regular reviews of organizational performance information. This feedback is essential to monitoring the contributions of the IT assets in the IT portfolio.
Assume, for example, that a particular business process or mission process is not meeting its expected performance targets. The performance measures indicate that Defense/Business Process A (see below) is underperforming. An analysis is conducted to determine what needs to be done to modify this process so that it will meet its performance targets. Given that a process change will occur, the question is asked: are the current IT systems able to support the required process change? As shown, there are three IT support systems used by this process. It is determined that IT Support #2 and IT Support #3 are able to support the process change. However, IT Support #1 is unable to support the change and will need to be replaced by another IT investment that is able to support the change. A proposal and business case can be prepared that justifies an investment in new IT to replace IT Support #1 based on the contribution it will make to achieving the mission performance targets.
Thus, investments in the IT portfolio are assessed using performance data from two basic sources:
- The organizational performance measures and
- The internal measures of performance.
The internal measures of performance include how well the needs of the various activities in the organization are being met and IT operations data (e.g., percentage uptime and network response times).
In considering “performance management,” agencies are expected to monitor their performance not only to determine how well the agency is performing but to determine if there are performance gaps. Also, the agency must determine whether a performance gap may be closed without the acquisition of additional capital assets, such as IT. In many cases, IT must be acquired to enable a business change that, in turn, will close a performance gap.
If acquisition of an IT investment is necessary to close a performance gap, what value does the IT portfolio provide in relation to this IT acquisition? In other words, if the existing IT and proposed IT is justifiable as essential for meeting agency performance goals, why have an IT portfolio? Is the IT portfolio irrelevant because of the apparent focus on performance requirements being critical to agency success?
Also, is the IT portfolio relevant to risk management? When a proposed or existing IT investment is assessed, one of the areas examined very carefully is the risk that is or might be associated with the investment. If the value-risk tradeoffs are made in conjunction with deciding on individual IT investments for mission performance, then is the notion of “balancing risk” in the IT portfolio a meaningful concept?
Recently, OMB implemented PortfolioStat, “a face-to-face, evidence-based review . . . of an agency’s IT portfolio (OMB, 2012
).” Agency Chief Operating Officers must conduct the PortfolioStat review session annually to determine what duplicative investments or wasteful investments exist as well as understanding how the agency IT portfolio is performing and assessing the IT portfolio management process maturity. OMB’s report on PortfolioStat Lessons Learned (OMB, 2013 ) identified three best practices which agencies should employ: empowering agency CIOs, strengthening IT portfolio governance, and enhancing service delivery.
In 2016, OMB worked with the Technology Business Management (TBM) Council to implement the TBM Taxonomy
(TBM Council, 2016) (read p. 1-4, skim the rest). The TBM Taxonomy identifies the relationship between IT cost pools, IT services, and business units. These relationships permit the agencies to understand better results of their IT investments as a portfolio. The TBM Taxonomy was incorporated into OMB’s FY 18 and FY19 IT Investment Guidance (OMB, 2017) (read p. 5-7, skim p. 8-9, look through the rest at your leisure) for agencies to use as they construct their annual budget. The TBM Taxonomy is the latest method employed by OMB to compare investments, individually and as a portfolio, across cost, value, and risk dimensions.
Conclusion
The IT portfolio is a collection of up-to-date relevant data about the organization’s significant IT investments and their contributions to organizational performance. It is a database about IT investments that provides a picture of IT investment utilization organization-wide. It provides insight into the extent to which the organization is using IT to leverage its core competencies. It permits an analysis of the organization’s risk-vs.-reward approach in selecting and implementing IT-based investments.
Some basic advantages of the IT portfolio are that it can
- help identify and avoid duplication of IT investments,
- help to make more effective use of existing IT investments,
- enable IT investments to be tracked throughout their life cycle,
- aid in monitoring IT performance,
- aid in monitoring IT investment “balance,”
- support developing appropriate risk-reward tradeoffs, and
- aidin the development of the agency’s capital plan.
In addition, a portfolio provides information (documented in an investment’s business case) that can be used to justify the organization’s existing and proposed investments in terms of their contribution to achieving specific organizational goals and performance targets. Indeed, the portfolio concept (including the use of Value and Risk criteria) could be expanded and applied to a portfolio of diverse investments such as new weapons platform proposals or legacy facilities (including buildings, forts, shipyards, and airbases) in addition to IT investments. The ability to compare and contrast diverse investments on a stable set of criteria related to the organization’s goals and objectives promotes the integrated consideration of investments by the IRB.
While PortfolioStat sessions and the TBM Taxonomy are no doubt useful, each agency must have a defined method which is used by leadership (and its working group) for examining the investments and the portfolio together. Categorizing investments on several dimensions [for example, cost, business function, and performance contribution] and examining across each dimension what value they deliver at what risk for what cost gives decision makers a more structured and repeatable method to decide how to modify the portfolio so as to better support and aid mission achievement.
Team Exercise:
Group Exercise: Manage an Investment Portfolio to Add Selected Investment Proposals
This is the last Team Exercise and it will be a TWO-week exercise. If you have not yet led your team, this is your time! As with previous team exercises, there will be a deliverable due each week so please be advised of this fact. Use your Blackboard Group workspace to work on the assignment. Once you have assembled your briefing deliverable, post it to the appropriate discussion area for the class to read and question.
Introduction
Greetings! In this exercise, each team has been promoted and you are now chartered as the DoD Investment Review Board (IRB) Working Group. Congratulations! After you read these instructions, open the IT Investment Portfolio folder in this lesson to access some of the exercise materials. Other exercise materials, unique to your team, are available in your Group workspace.You have four tasks to perform during this two-week Team exercise. In Task 1, performed during the First Week, each team must evaluate a portfolio of DoD investments using prescribed methods to identify investments with a potential for termination. Just to make it fun, you will be considering diverse investments ranging from IT to weapons platforms to military bases. Evaluation is based on how well the portfolio is aligned and balanced with regard to DOD [and DoD CIO] strategic goals and objectives, allocation of resources among components, new/ongoing projects, risk/return and mission-critical versus support projects as well as whether any investments are duplicative or are over-budget or over-schedule. Complete Task 1 before moving on to subsequent tasks.
In Task 2, performed during the First and Second Week, each team must decide how it will add selected Investment Proposals [some of which were considered in a previous lesson, Assessing Competing Proposals] by terminating/de-selecting other investments that are not performing well, and what the consequences are for modifying the existing portfolio into a new portfolio of investments.
In Task 3, performed during the Second Week, each team must examine a set of emerging technologies and decide which technologies appear to have great promise for the entire DoD and would be examined in greater depth.
In Task 4, performed during the Second Week, each team must develop a strategic briefing report in which it presents its recommendations for modifying the investment portfolio along with identifying high-potential emerging technologies to the DoD Investment Review Board.
To assist you in understanding how this DoD investment portfolio fits into the bigger picture, each team will find background information about the current goals and objectives of DoD’s CIO and the functions and goals of the DoD in the Required Readings. In The IT Investment Portfolio folder below, you will find links to descriptive summaries of the portfolio investments. In an attempt to mirror reality in our constrained artificial environment, each team will also receive [in their Group File Exchange space] additional directions concerning how the DoD [and DoD CIO] goals and objectives were refocused and thus how the portfolio must be rebalanced.
The Investment Portfolio
For the purposes of this exercise, we “understand” that the TLA Investment Review Board (IRB) conducted significant discussions (including reflection and rescoring of the proposals) and selected several investment proposals to form their “new” investment proposal. These proposals were sent forward to the TLA Director for approval. The TLA Director concurred that these were beneficial investment proposals and would be useful across all ten Supply Depots. [What this means is that each investment’s costs and savings will be multiplied by at least a factor of ten.] These investments were bundled together with other worthwhile investments to form the TLA investment request entitled “Logistics Modernization Program (LMP).”The supplied investment portfolio spreadsheet [in each Group’s File Exchange space] contains relevant information on this LMP program as a new investment along with other new investments from other organizations. The current DoD portfolio is composed of DoD investments from across the three services and the defense agencies. Some of the current DoD investments are still in development [that is, receiving funds but not yet implemented or producing results] and other investments are steady-state/ operational [that is, receiving funds, implemented, and producing results].
Before deciding how to modify the current investment portfolio [Task 2 deliverable], each team needs to determine their portfolio’s current condition [Task 1 deliverable]. Conceptually, these two steps are involved in evaluating the portfolio: 1] assess the individual investments and 2] assess the portfolio.Assess the individual investments
Your team receives TWO analytic tools (1] value/risk only and 2] by category per team) and selected information tailored for your tool use including the description of each portfolio investment along with the investment’s costs. For each investment, the team should: 1] review each investment’s information including its descriptive summary and 2] determine how well the investment appears to be performing, considering the organization’s mission, vision, goals, and objectives.If an investment does not support or align with the organization’s goals [read the project summaries to get a sense of this], flag it for possible termination/deselection. If you see a duplicative investment or other nonsensical investment, once again flag it for possible termination/deselection.
To make sense of this information, your team needs to understand the taxonomy of investment information. Here is the investment portfolio information taxonomy:
- DoD mission area: Business Mission Area [BMA], Warfighting Mission Area [WMA], or Enterprise Information Environment Mission Area [EIEMA]
2. Unique Project ID code
3. Service: Navy =17, Army= 21, AirForce=57, Defense Agencies=97
4. Short Title and Investment Title and [brief] Investment Description[Your team will have SOME but not all of the following information depending on your Team-unique analytic tool.]
- Line of Business function and subfunction
Refer to the OMB FEA Reference Model Mapping Quick Guide and the code sheets which identify all the different functions and subfunctions which are provided by the U. S. Government.- Past Year [PY] Project VALUE Score
7. Past Year [PY] Project RISK Score- Honest John’s IV&V Current Year [CY] Investment VALUE Score
9. Honest John’s IV&V Current Year [CY] Investment RISK Score- 5 Year Approved Budget [Note: all monetary figures are in US$millions.]
11. Calculated 5Y ROI- System Phase [SDLC = system development life cycle] and sub-phase
CONCEPTUAL: Initiation, Selection, Planning,
DEVELOPMENT: Requirements, Design, Build, Configuration, Test
OPERATIONS: Implementation, System Implementation- Life Cycle Begin and End dates
- Gartner’s Relative Enterprise Performance Improvement Categories
Infrastructure
Run-The-Business
Grow-The-Business
Transform-The-Business- Project Manager
Assess the portfolio
Your team also should develop an understanding of the portfolio’s current condition using the TWO analysis tools assigned to your Team. This involves examining and understanding the organization’s portfolio objectives and the relative priority of the various investment categories. As a result of considering the portfolio and the information in its taxonomy, other issues and avenues to examine the investment portfolio might arise. For example, How balanced are the investments on the dimension we are using? How many high cost v. low cost investments are there? How many high value investments v. low value investments are there? How many high risk investments v. low risk investments are there? Is this distribution appropriate for the needs of the organization or would a different distribution of resources produce better results?KEY EVALUATION TASKS: For the purposes of the exercise, your Team must evaluate the portfolio using TWO analytic tools identified by your professor. Here are the possible analytic tools:
- ALL teams will examine the investments organized by current Value and Risk [see the spreadsheet containing the Value/Risk_Selected_De-Selected chart in your File Exchange space] [your team might want to create multiple graphs showing selected and de-selected investments, to do so create different file names]. Based on previous meticulous analysis by the DoD IRB Working Group (and their very faithful contractor, Honest John’s IV&V), each investment was scored on each weighted Value and Risk criteria [think back to those Value and Risk criteria which were constructed a while back]. In addition, an overall Value score and an overall Risk score was calculated and reported for the Past Year and the Current Year. Your Team can create a Value/Risk graph by plotting each investment’s Value and Risk scores on a 2-dimensonal graph of Value [x-axis] and Risk [y-axis]. Consider what “good” and “bad” portfolios might look like before you examine the current portfolio.
Once you have created the Value / Risk graphs, your examination will assist you in interpreting and understanding the nature of the current portfolio and a modified portfolio. What do you think the distribution of investments across value and risk dimensions should look like? That is, how many high cost v. low cost investments should the portfolio have? How many high value v. low value investments and how many high risk v. low risk investments should there be for each cost level? What do you think the Value-by-Risk graph should look like for high cost compared to low cost? Does the graph look like what you predicted? Again, what does it mean and what do you suggest?
- One team will examine the investments organized by SDLC phase, determine how many investments are in each category, and decide how the portfolio might be rebalanced as best as possible to approach the ratio. Generally there should be a few new/conceptual investments, more in-development investments, and an abundance of operational investments. For the purposes of our exercise, we assert that a 1:5:10 ratio [concept/ development/ operations] across investment categories is the appropriate ratio. [Yes, I made up those ratios] If the agency does not follow this rule, what does it mean and what do you suggest?
- One team will examine the investments organized by Gartner Relative Enterprise Performance Improvement category, determine if the investments follow the ratio provided by Gartner for federal agencies: Transform-The-Business 10%, Grow-The-Business 20%, Run-The-Business 30%, and Infrastructure 40%, and decide how the portfolio might be rebalanced as best as possible to approach the ratio. [Yes, I made up those percentages.] If the portfolio does not follow this data, what does it mean and what do you suggest?
- One team will examinethe investments organized by Lines of Business and their political support and determine if all the expected lines of business have investment support and decide how the portfolio might be rebalanced to support the lines of business. If some lines of business do not have associated investments, see if you can determine how come. Also examine the investments to determine if they are aligned with the correct line of business. If you think an investment is not aligned correctly, what would you suggest?
- One team will examine the investments organized by Finance/Cost[you may want to organize investments by ROI as well]. Rank order (sort) investments from largest to smallest Cost using the provided Cost data (but do not include the new investments being added to the portfolio). and split into three equal groups, high, medium, and low. Use the Cost and ROI to decide how you might rebalance the portfolio.
First Week, Task 1 Deliverable:
This is an interim milestone deliverable (to ensure you do not drift too far afield in your deliberations). Describe the teams’ understanding of the investment portfolio’s overall status based on your data analysis from the two tools assigned to your team. Rank order and identify which investments are flagged for possible termination and the associated rationale.
Create about five or so ”vanilla” Powerpoint slides
, one graph for the other tool’s results and a conclusion page identifying possible investment terminations]. Subject to modification in the Second Week, these slides will be part of the DoD Investment Review Board (IRB) briefing. Post the slides to your GROUP Discussion Board.First and Second Week, Task 2: Modifications to the Portfolio
Earlier your team assessed each individual investment to decide whether to flag it for termination or not. Now you must decide which investments to terminate because several new proposals are presented. Your team must select only TWO of the FOUR new proposals for addition to the current investment portfolio (the new investments proposals are at the top of the spreadsheet). Given that the portfolio has a finite monetary size, adequate funds for the new proposals must be found in the rest of the portfolio. Each team must deselect/terminate enough investments such that adequate funds are available to support the selected TWO new proposals while still supporting the organization’s overall strategic objectives in the form of a balanced portfolio. You may find that the investments which should be terminated provide more money than is needed for the two new proposals. This is quite acceptable; you may propose expending some monies on advanced technology forecasting.
Use the 5Y Approved Budget column in the spreadsheet to determine how much total money is available in the portfolio. You may NOT cut a percentage of funds from one or more investments as a way to fund a new investment–an investment is either FULLY funded or it is terminated. Make sure that you can explain how an investment was chosen for termination compared to other investments and what the implications and consequences of investment terminations would be.
Based on your team’s particular directions and the analytic results from the two tools (your team may need to conduct further analyses during Task 2, hint, hint), decide how to modify the portfolio and report out to the IRB your team’s recommendations (including explaining the modifications and how they were determined).
Second Week, Task 3: Assess Emerging Technologies
Concurrent with de-selecting/ terminating certain investments, each team must consider what new technologies will keep the DoD at the vanguard of defense organizations. As you will read in a memo addressing emerging technologies [look for the memo in The Investment Portfolio folder], each team will use its portfolio knowledge to assess the list of emerging technologies and rank order the top three most promising technologies for the future DoD. While you will not allocate any funding to these potential technologies, it is probably a good thing to show the IRB that there is financial room to fund them based on your assessment of the current investment portfolio. These identified technologies should be part of the new portfolio summary you develop wherein you explain your decisions to de-select certain investments, and discuss the consequences and impact of these decisions.
Second Week, Task 4 Deliverable: Strategic Decision Brief (not an analysis brief) to be presented to the DoD IRB
The team will create a strategic decision brief for the DoD Investment Review Board (IRB) concerning the following items, not necessarily in priority order:
1] the current status of the investment portfolio including the overall status of each portfolio category assigned to your team (including appropriate Value by Risk graphs);
2] recommendations on what investments to deselect/terminate so that the investment portfolio accommodates the proposed new investments and what the modified portfolio would look like (including appropriate Value by Risk graphs);
3] recommendations on what emerging technologies deserve additional examination for the future DoD
4] a summary of the modified portfolio including the potential consequences of the recommendations, should they be adopted.
Each team’s presentation needs to clearly identify all investments being selected for the future portfolio and which investments are de-selected.The team’s briefing must be in sufficient detail that the DoD IRB can easily decide whether or not 1] the proposed new investments should be selected and funded and 2] the modifications to the investment portfolio will accomplish the recommendations without adversely affecting the portfolio and the organization.
The strategic decision brief generally follows a bottom-line-up-front format (BLUF): the task, the recommendation, the strategic details including graphs or other tables, and the conclusion restating the recommendation. The briefing is short and focused and is given with the aid of generic vanilla PowerPoint slides [see the suggested PPT template in The Investment Portfolio folder] which focus on the meat and not the sizzle (no Powerpoint Rangers, please). However, your team could write a 2-3 page recommendation paper with appropriate graphic figures instead.
Summary of Your Tasks:
Task 1. Evaluate the current investment portfolio and develop a portfolio summary.
Task 2. Decide how to modify the current investment portfolio to include the selected investment projects, identify emerging technologies, and develop a new portfolio summary.
Task 3. Assess and select emerging technologies.
Task 4. Brief the IRB on the team’s recommendations concerning the investment portfolio.This is part of the IT Investment Portfolio you will be examining and managing during the course of the week.
Investment Assessment
The investment criteria documents are the same as you used in Week 6.
The documents are found in Course Information.
ROI refers to a five year time period.
Manage the Portfolio DoD Functions
View the DoD functions/mission/strategic goals here.
Manage the Portfolio IT Portfolio Project Descriptions
Here are the investments in your portfolio. Read them.
Manage the Portfolio Emerging Technologies
- Succ Mgt Emerg Tech 2015 (939 KB)
The CFO would like to know what emerging technologies you and your staff are considering for investments in the near future. Read the memo and follow the directions on how to use this document.
IRB Briefing Template
- View Briefing Outline (37.5 KB)
Here is a suggested outline for your briefing to the DoD IRB.
Manage the Portfolio Value Rick Chart
- Value-Risk Plot template-v1.xlsx (589 KB)
Here is an Excel spreadsheet (Value-Risk Plot template-v1) solution we developed to plot multiple, categorized investments on a Value-Risk chart with each point having a relevant label. Each Team is assigned the Value-Risk chart and a second analytic tool to use in managing the investment portfolio. The Value-Risk Plot in each Team’s File Exchange space has a spreadsheet with the appropriate data for the second analytic tool–several Value-Risk Plots have already been created for your Team.
Feel free to use the Value-Risk tool [you could replace the Value dimension with another dimension if you want]. Please be aware of the tool’s limitations:
- It is designed to plot scores on two dimension, each having a range of 0-100. If you use scores outside this range, the resulting chart will not be in a quadrant style.
- Each data series (for example, investment category) can address a limited number of data points [30 data points is about the limit] as indicated in each data series.
- There is no error-checking built in. If you do something we haven’t anticipated, there’s no predicting what results you’ll get.
Gartner Report: Hype Cycle for Emerging Technologies 2013
hype_cycle_for_emerging_tech_252762(1).pdf (572.096 KB)
Manage the Portfolio Congressional interest in investments
- View Cong. Leader interest (48.5 KB)
For your information.
Here is a spreadsheet which identifies Congress leaders and their potential interest in various investments found in the DoD Portfolio
RUBRIC
QUALITY OF RESPONSE NO RESPONSE POOR / UNSATISFACTORY SATISFACTORY GOOD EXCELLENT Content (worth a maximum of 50% of the total points) Zero points: Student failed to submit the final paper. 20 points out of 50: The essay illustrates poor understanding of the relevant material by failing to address or incorrectly addressing the relevant content; failing to identify or inaccurately explaining/defining key concepts/ideas; ignoring or incorrectly explaining key points/claims and the reasoning behind them; and/or incorrectly or inappropriately using terminology; and elements of the response are lacking. 30 points out of 50: The essay illustrates a rudimentary understanding of the relevant material by mentioning but not full explaining the relevant content; identifying some of the key concepts/ideas though failing to fully or accurately explain many of them; using terminology, though sometimes inaccurately or inappropriately; and/or incorporating some key claims/points but failing to explain the reasoning behind them or doing so inaccurately. Elements of the required response may also be lacking. 40 points out of 50: The essay illustrates solid understanding of the relevant material by correctly addressing most of the relevant content; identifying and explaining most of the key concepts/ideas; using correct terminology; explaining the reasoning behind most of the key points/claims; and/or where necessary or useful, substantiating some points with accurate examples. The answer is complete. 50 points: The essay illustrates exemplary understanding of the relevant material by thoroughly and correctly addressing the relevant content; identifying and explaining all of the key concepts/ideas; using correct terminology explaining the reasoning behind key points/claims and substantiating, as necessary/useful, points with several accurate and illuminating examples. No aspects of the required answer are missing. Use of Sources (worth a maximum of 20% of the total points). Zero points: Student failed to include citations and/or references. Or the student failed to submit a final paper. 5 out 20 points: Sources are seldom cited to support statements and/or format of citations are not recognizable as APA 6th Edition format. There are major errors in the formation of the references and citations. And/or there is a major reliance on highly questionable. The Student fails to provide an adequate synthesis of research collected for the paper. 10 out 20 points: References to scholarly sources are occasionally given; many statements seem unsubstantiated. Frequent errors in APA 6th Edition format, leaving the reader confused about the source of the information. There are significant errors of the formation in the references and citations. And/or there is a significant use of highly questionable sources. 15 out 20 points: Credible Scholarly sources are used effectively support claims and are, for the most part, clear and fairly represented. APA 6th Edition is used with only a few minor errors. There are minor errors in reference and/or citations. And/or there is some use of questionable sources. 20 points: Credible scholarly sources are used to give compelling evidence to support claims and are clearly and fairly represented. APA 6th Edition format is used accurately and consistently. The student uses above the maximum required references in the development of the assignment. Grammar (worth maximum of 20% of total points) Zero points: Student failed to submit the final paper. 5 points out of 20: The paper does not communicate ideas/points clearly due to inappropriate use of terminology and vague language; thoughts and sentences are disjointed or incomprehensible; organization lacking; and/or numerous grammatical, spelling/punctuation errors 10 points out 20: The paper is often unclear and difficult to follow due to some inappropriate terminology and/or vague language; ideas may be fragmented, wandering and/or repetitive; poor organization; and/or some grammatical, spelling, punctuation errors 15 points out of 20: The paper is mostly clear as a result of appropriate use of terminology and minimal vagueness; no tangents and no repetition; fairly good organization; almost perfect grammar, spelling, punctuation, and word usage. 20 points: The paper is clear, concise, and a pleasure to read as a result of appropriate and precise use of terminology; total coherence of thoughts and presentation and logical organization; and the essay is error free. Structure of the Paper (worth 10% of total points) Zero points: Student failed to submit the final paper. 3 points out of 10: Student needs to develop better formatting skills. The paper omits significant structural elements required for and APA 6th edition paper. Formatting of the paper has major flaws. The paper does not conform to APA 6th edition requirements whatsoever. 5 points out of 10: Appearance of final paper demonstrates the student’s limited ability to format the paper. There are significant errors in formatting and/or the total omission of major components of an APA 6th edition paper. They can include the omission of the cover page, abstract, and page numbers. Additionally the page has major formatting issues with spacing or paragraph formation. Font size might not conform to size requirements. The student also significantly writes too large or too short of and paper 7 points out of 10: Research paper presents an above-average use of formatting skills. The paper has slight errors within the paper. This can include small errors or omissions with the cover page, abstract, page number, and headers. There could be also slight formatting issues with the document spacing or the font Additionally the paper might slightly exceed or undershoot the specific number of required written pages for the assignment. 10 points: Student provides a high-caliber, formatted paper. This includes an APA 6th edition cover page, abstract, page number, headers and is double spaced in 12’ Times Roman Font. Additionally, the paper conforms to the specific number of required written pages and neither goes over or under the specified length of the paper. GET THIS PROJECT NOW BY CLICKING ON THIS LINK TO PLACE THE ORDER
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