Rrt-cio

Moshav Bnei Zion P.O.Box 151, 60910 Israel Tel. 972-9-7444474 Fax. 972-97442444

Round Table Review Summary – Office of the CIO (IT Governance, Portfolio Management, Demand Management, Resources Management, Tools etc.) Present at the meeting were user organizations from various industries. Representatives of the organizations were: Office of the CIO and PMO department managers, CIOs, development managers, applications managers and so on. The object of the discussion was to table subjects with which most IT organizations deal, at present, within the IT management framework, to share existing experience in this field; and also to examine the maturity of existing tools. •

What does the importance of the Office of the CIO (ITG) stem from?

The organizations agreed that IT management is an important and key subject. Increasing dependence of industries on IT requires IT organizations to cease being a “black box” in the hands of management. Users currently want to know and understand the allocation of moneys in IT and also the real return on the investment in IT. The phrase that best characterizes IT is: “the cobbler goes barefoot”… IT organizations currently do not possess mature tools enabling them to extract all the necessary knowledge for IT management. While IT is responsible for most resources in the organization, there is still no true information, available at all times, as regards the real position of resources. Now more than ever, IT is seeking information online, which coordinates all data and events in order to obtain relevant information beforehand, and not as a tool for the analysis of an event that has already taken place. IT is in need of knowledge on all the resources at its disposal at any given moment, and also, it needs to be able to identify any resource constituting a “bottleneck”. In addition, IT must obtain a full picture as regards planning, budgets, status of existing projects, orders, incidents and so forth. The existing tools for project and portfolio management are not providing a full solution and do not constitute a true tool for decision making, one that is capable of presenting problems to the CIO before they actually happen. On the whole, these would be BI tools, which enable the required information to be concentrated in a single place on the managers’ Dashboard. One organization noted that IT is entering into the domain of portfolio management following its handling of another subject: management of suppliers in strategic outsourcing projects, including maintenance and change management. To that end, special purpose tools have been constructed. Following collection and analysis of data accumulated in the EPM system the CIO saw that in order to promote an improvement in IT management, what was needed was a decision making support tool, which would facilitate constant improvement both in inward visibility and in the This report constitutes the opinion of STKI – a consultancy firm providing its clients with 1 strategic and tactical information based on its research in Israel’s IT market and also on research by international firms such as Cutter, Experture, Datamonitor and Butler. Moshav Bnei Tzion P.O.Box 151, 60910 Israel Tel: (972)-9-7444474 Fax: ( 972)-9-7442444

Moshav Bnei Zion P.O.Box 151, 60910 Israel Tel. 972-9-7444474 Fax. 972-97442444

face presented to IT “customers”. IT must be managed like a business firm. The CIO currently needs a Dashboard, showing him the principal IT indices, the progression of major projects, and the utilization of infrastructures. The IT unit is to be examined as a profit and loss unit to all intents and purposes: IT expenses compared with commercial value, quality of IT services and so forth. Since IT value is currently being painstakingly measured, a difficulty arises in obtaining budgets for the internal needs of IT. Part of the profits of IT comes from the provision of outsourcing services to customers, and another part from the implementation of projects for customers. On the whole, IT is managed without sophisticated tools, despite the fact that it operates in a very dynamic environment. Just like the commercial organization, it must be prepared for constant business changes, budgets and work plans sometimes being totally revamped following the acquisition of new companies or due to competition with business rivals. A global organization with a number of branches dispersed all over the world describes a similar situation. The organization requires IT to show constant rationalization (reduction of costs per employee). In a decentralized organization, too, it is desirable to achieve central IT management. Correct to the present, the company has departments that are perceived as profit sources, such as training centres, and therefore it is easy for them to obtain budgets and resources. The object is to cause the organization to perceive IT in a similar light, and hence, IT must be capable of demonstrating its commercial value to the company. IT must start conducting public relations campaigns for itself vis-à-vis the organization. As things stand, IT is always at the tail end of the order of priorities. Sometimes absurdity reaches the point that it is easier to obtain budgets for placement employees than to obtain additional resources for IT. The IT world has undergone an evolution which enables and even requires processes to be automated within the IT units. Today more than ever, genuine IT management is lacking: projects are not being properly managed, there is no genuine visibility of a work plan, there are no orderly processes of investment prioritization, and there exists no analytical capability as regards project status. For this reason, it is important to examine tools for the management of IT processes: a tool that will support IT decision making in the outlining of work plans and will enable IT investments to be classified in accordance with the organization’s strategic goals. IT is under pressure to reduce costs and resources even though requirements are constantly mounting. •

Most common work practices in organizations, tools currently in use, and recommendations

This report constitutes the opinion of STKI – a consultancy firm providing its clients with strategic and tactical information based on its research in Israel’s IT market and also on research by international firms such as Cutter, Experture, Datamonitor and Butler. Moshav Bnei Tzion P.O.Box 151, 60910 Israel Tel: (972)-9-7444474 Fax: ( 972)-9-7442444

2

Moshav Bnei Zion P.O.Box 151, 60910 Israel Tel. 972-9-7444474 Fax. 972-97442444

One organization stated that the Office of the CIO existed within its IT unit. This office was responsible for the strategic IT plan, for contract management and also for management of internal customer services at a high level of transparency both in budgetary terms and in terms of the level of service. Such activity is conducted with the aid of an HP Project and Portfolio Management Centre (IT Governance of Mercury and the former Kintana) The assimilation of IT Governance tools followed on from the understanding that whereas every one works on his own private Excel sheets – there is no one tool that coordinates all users’ requests, indicates the status of open requests, supports the decision making and approval processes, and presents all information in centralized format. Even after the work plan has been finalised and executed, there can still be more efficient follow up of the progression of realisations using the tool. People report on the completion of the task, on the progression status and so forth. In addition, a Web product was constructed which connected to the ITG for the reporting of hours. Hours are reported in accordance with work packages, including completion of tasks. In the final analysis, the assimilation of an ITG solution was not as successful as hoped. An attempt was made at imposing upon this tool the matrix work method already existing in the company. An attempt was also made to force the tool to work precisely in accordance with existing work processes, which, however, made it very cumbersome, with slow response times. In addition, assimilation and training took a long time since it was difficult to alter the habits of field personnel who were required to report on all their activity. Managers want to obtain reliable information on the basis of the reports from the field and it is therefore most important that the tool should be user friendly. When a solution of this kind is assimilated, the company must take into consideration not only the needs of management but also the convenience of field personnel. The solution incorporates 2 modules and a Dashboard, adapted to commercial requirements and presented in the form of portals; Workbench - a Project-like tool. It is a known fact that users prefer to work with MS Project and ITG tools still do not interface well with Project. It is important to note that the new version of Portfolio Centre offers much better synchronization and export of the data, thus enabling users to continue to work with Project and to view the entire picture properly with an ITG module for the management of requests. Correct to the present, the initiation of a new project passes through many approval stages in ITG - which renders technical realization very cumbersome, since numerous formats must be gone through en route. Participants recommended simplifying the approval process. Complicated workflow does This report constitutes the opinion of STKI – a consultancy firm providing its clients with 3 strategic and tactical information based on its research in Israel’s IT market and also on research by international firms such as Cutter, Experture, Datamonitor and Butler. Moshav Bnei Tzion P.O.Box 151, 60910 Israel Tel: (972)-9-7444474 Fax: ( 972)-9-7442444

Moshav Bnei Zion P.O.Box 151, 60910 Israel Tel. 972-9-7444474 Fax. 972-97442444

not serve the best common interest; rather, it ultimately makes it difficult for the person responsible for the overall process to advance. Customers moreover recommend lowering the level of task reporting. The simpler and the less cumbersome the process, the greater the likelihood that users will put their shoulders to the wheel and that reliable data will be obtained. Another important theme is that of connection to an ERP budget system (such as Oracle Application), that is suited to outside customers’ projects, but does not provide a solution for the organization’s internal projects. Moreover, an organization that used PS of SAP stated that the solution was not suited to the management of internal projects since it contained a great deal of non usable information. Users also recommended the use of a BAC product of Mercury which provides excellent information on the status of the system. BAC is a product that examines end user experience, verifies the transactions of the end user, and reveals malfunctions which, in the past, would have been missed. With a view to providing a solution to the difficulty of measuring development quality, a software program has been developed that examines the new software packages in accordance with predetermined parameters of software quality. The parameters are set prior to the software being forwarded for testing. This practise has succeeded in bringing about a double-digit decrease in the number of incidents in manufacture. One example of the relations between QA and the organization’s development personnel is 40:700. Another organization revealed that it was at the final stage of assimilation of the PSNext tool of Xioma, which had undergone success application in IT and is about to be installed throughout the organization. This system enables all concerns to report on the number of hours invested per project and per type of activity: maintenance, new development and so forth. An analysis of the investment of hours is made on a system level rather than on the level of the individual employee. In addition, there is integration between the hoursreporting system and PSNext. Hours-reporting is on the responsibility of the designers and is made at the end of the day, since it has transpired that reporting hours on a once-a-week basis is almost valueless. 97% of activity, including reporting by contractors’ employees, is currently being reported in the system, and the reliability of the reporting is being checked. Reporting of hours in accordance with activity brought to light inefficient processes, and therefore, following use of the system and Dashboard of critical indices, IT contrived to improve many work processes and to bring about a This report constitutes the opinion of STKI – a consultancy firm providing its clients with 4 strategic and tactical information based on its research in Israel’s IT market and also on research by international firms such as Cutter, Experture, Datamonitor and Butler. Moshav Bnei Tzion P.O.Box 151, 60910 Israel Tel: (972)-9-7444474 Fax: ( 972)-9-7442444

Moshav Bnei Zion P.O.Box 151, 60910 Israel Tel. 972-9-7444474 Fax. 972-97442444

reduction of the percentage that was being directed to maintenance activity as compared to development activity from 70% to 40%. The IT budget is currently divided into 30% maintenance, 20% CR (change request) – requests that were not pre-planned, and 50% development. Demand management and follow-up of decisions is managed with the aid of an ActionBase. Demand Management is implemented with the aid of designated development which connects to the PSNext system and automates the process of transfer of the requests via referents who are present in every department and who explain the commercial need for the projects. Automation of the process enables the projects to be more easily prioritized. IT today has the capability of pricing the requested project, such that sometimes a customer, seeing the volume of the investment required for implementing the project before it commences, may also reach the decision that this investment is higher than he thought, and that he would be well advised to relinquish it in favour of another project that is critical for his department. There are organizations whose IT is outsourced. The outstanding advantage of outsourcing is that it forces the organization to work in a structured and orderly manner, and vacates time for IT management for making strategic decisions and for routine follow up of operational performances, such as: load on the servers, utilization of disks, incident reports, time taken in addressing problems and so forth. The IT management is not required to deal with day to day operation; it is at leisure for IT management matters, and for choosing management methodologies and methods, including an examination of tools that support those processes. It is important to note that tools for Project and Portfolio Management were examined in the past and were disqualified due to being excessively costly. Another example serves to describe an organizational structure that includes a PMO unit in each division (in IT, also). Participants complained that what is currently lacking for the efficient management of the IT organization is ERP for the IT. ERP with a strong financial aspect and development oriented core business. However, following an examination of most of the tools currently found in the market, one realises that there is no one tool that fully provides the entire solution to the IT. It is possible, of course, to go on working with MS Project and Excel, but that solution does not provide data in real time, IT projects are constantly increasing in volume, and many tools and infrastructures in IT are already becoming confused. Customers have stated that the solution will come from constructing interfaces between project management systems, reporting of hours, budget management, demand management; all these will interface with one single central CMDB and with This report constitutes the opinion of STKI – a consultancy firm providing its clients with 5 strategic and tactical information based on its research in Israel’s IT market and also on research by international firms such as Cutter, Experture, Datamonitor and Butler. Moshav Bnei Tzion P.O.Box 151, 60910 Israel Tel: (972)-9-7444474 Fax: ( 972)-9-7442444

Moshav Bnei Zion P.O.Box 151, 60910 Israel Tel. 972-9-7444474 Fax. 972-97442444

BAC. Before a number of systems are hooked up to one another, with the object of reflecting data from several worlds on a single Dashboard, a decision must be reached as regards how low a degree of resolution one truly wishes to reach, what objects one wishes to attain, where will it be possible to see an order of priorities covering all of them together and so forth. In addition, IT also lacks software for managing its IT budgets. Organizational software packages for budget planning are not suited to IT needs. Attempts were made to download from the Internet a not very large software package with an uncomplicated WF for approvals, but these efforts did not meet with success. Another organization conducted a test of IT Governance tools, which are supposed to reduce the time currently invested in daily monitoring, so as to make time for more strategic tasks. Generally speaking, there is a sense that the tools are over spec to basic requirements and are expensive. The organization is not yet ripe for a complete, complex tool of the kind suppliers are offering, despite the fact that the impression gained following an examination of HP, IBM and Microsoft PPM was that existing tools present a vision that is most attractive to the organization. For the present, the decision was reached to focus on the creation of an organizational culture that is compatible with IT Governance mechanisms, all by creating “home grown” methodology and tools which in future will enable tools of this type to be more easily implemented. The current methodology enables them to institutionalize processes such as project control and work plan management.

This report constitutes the opinion of STKI – a consultancy firm providing its clients with strategic and tactical information based on its research in Israel’s IT market and also on research by international firms such as Cutter, Experture, Datamonitor and Butler. Moshav Bnei Tzion P.O.Box 151, 60910 Israel Tel: (972)-9-7444474 Fax: ( 972)-9-7442444

6

Moshav Bnei Zion P.O.Box 151, 60910 Israel Tel. 972-9-7444474 Fax. 972-97442444

Organizations are, however, desirous of expanding: •

The mode of prioritization and optimization of IT investments

•

Presentation capability of distribution of investments

•

Capability of grading projects in accordance with the commercial value they adduce (this is currently done by gut feeling)

•

Better regulated planning of the annual work plan on a more automatic level of control

The work method in another organization: at the beginning of the year, a calculation is made as to the capacity level of the IT. After that, the organization computes the net amount of work days, subtracting the time required for routine maintenance (calculated on the basis of past figures), and thus arriving at “the budget” of development days that customers have in work days. Maintenance works (mostly dealing with bugs) are determined following meetings that take place once a month between the team leaders and the programmers. In addition, the organization has a 3member PMO office, which is responsible for constructing the Gantt charts, budgets, and internal customer management. IT management tools: Microsoft Project Server and Excels for the management of Gantt charts and reporting on hours. Team leaders and programmers report on all tasks: maintenance, ailments, and vacation days into the system. The reporting is also subdivided into routine tasks and development tasks. It is important that the reporting on tasks and hours be made through one screen and in convenient form by means of SharePoint for example. A customer recommends the use of SharePoint, where it is very easy to build the requisite forms, there is mini workflow, a reports catalogue can be constructed, users can easily see all meters and indices, and the project milestones can be exposed to them. Correct to the present, only IT reports hours by Web. What is still lacking is a demand management tool (this is currently done using Excel). There is a problem with tools such as Test director for the management of requests that have no automatic data update.

This report constitutes the opinion of STKI – a consultancy firm providing its clients with strategic and tactical information based on its research in Israel’s IT market and also on research by international firms such as Cutter, Experture, Datamonitor and Butler. Moshav Bnei Tzion P.O.Box 151, 60910 Israel Tel: (972)-9-7444474 Fax: ( 972)-9-7442444

7