Strategy for IT Program and IT Service Management

Prof. Anindita Paul Indian Institute of Management Kozhikode

Topics
IT Project, Program and Portfolio Management PMO COBIT Risk IT Service Management ITIL

IT Project Management
Projects are temporary endeavors undertaken to create a unique product or service have specific defined goals, objectives, requirements and life cycle cost have a beginning and an end, leading to the delivery of a specific work product, service or outcome. Project management is always short-term, start-end mindset, and tactical in approach so as to achieve project objectives of deliverables, time-frame and cost.
(definition in the Project Management Book of Knowledge)

IT Program Management
Programs

Are a group of related work efforts, including projects managed in a coordinated way.
Usually also include the elements of the ongoing work, other than projects such as infrastructure creation, service level management, staffing, billing (if an outsourcer), vendor management, software and hardware asset and license management among others. Program management is the process of managing multiple ongoing projects to achieve business objectives. It combines the ability and resources to define, plan, implement, and integrate every aspect of the comprehensive IT strategy program. While each project manager is responsible for his individual project results, he needs the support and guidance of inter project issues and is accountable to the program manager.

 Programs are not just a collection of similar projects, or even the assignment of similar projects to a common management team. Instead, programs are integrally related projects, which together move towards the realization of a particular organizational goal. (Olson and Branch, 2002) Program management is strategically-driven to achieve overall business vision, broader in scope, and helps integrate and synergize all projects to meet the global outcome and drive overall business benefits. Example: - The ERP system will include several specific individual projects (i.e. Finance, Purchasing, Materials Management, etc.). Each of these specific projects should be run by a project manager using a formal project management approach. The overall grouping of these related projects will be run by a Program Manager

IT Portfolio Management
A portfolio is a collection of projects or programs grouped together to facilitate effective management of efforts to meet strategic business objectives. These projects or programs are not necessarily interdependent or directly related. It is the centralized management of multiple projects, programs and possibly portfolios. It typically includes identifying, prioritizing and authorizing projects and programs to achieve specific strategic business objectives.

(Robertson, K., KLR Consulting Inc)

 The group of projects and programs within a specific business division could be an example of a portfolio. Example: This might include the implementation of a Customer Relationship Management (CRM) program Sales Data Warehouse program; Commission Tracking project and a project to launch a new product within the Sales & Marketing Division.

Portfolio Manager
Portfolio Manager (PM) manages this broad range of somewhat unrelated programs and projects towards a specific set of strategic divisional business objectives. The PM will become very involved in the front-end activities of identifying, prioritizing and initiating projects and programs. PM will track these projects/programs to ensure they continue to deliver towards the expected strategic outcome in terms of quality, cost, schedule and scope. PM will also be responsible for analyzing and tracking project management elements across the entire portfolio looking for ways to leverage economies of scale, reduce risk and improve the probability of successfully delivering expected business results.

Issues
Delay in IT Project Completion Over Budget Spending Lack of Coordination Lack of standardization of PM methodology Lack of adherence to PM practices Proliferation of IT Project IT environment more complex

PMO
Program/Project/Portfolio Management Office Enterprise program management office (EPMO), Project Portfolio Management Office (PPMO) Centralized command and control of all the project initiatives PMO oversees ongoing and repetitive operations even though the projects it oversees have distinct beginnings and ends. Typically, such a PMO group works directly under the CIO office so that they have a good view of all projects. While project teams are formed and disbanded as and when the projects get started or completed, the Program Office remains a permanent group within the IT function.

Value Addition
Establishes and deploys uniform project management processes, templates and tools which saves the project manager's time, energy and resources. Improves inter project team communication Such knowledge bank yields opportunity to reduce project start-up time and help build core project management competencies. CIO can get a broad view of the project priorities and status through the PMO and in case a project is at risk, coach it to get back on track. Provides a way for routine tracking of the basic project progress measurement to provide project visibility and to track organization-wide measurement.

 Takes responsibility for across-group deployment of each project while eliminating resource wastage due to project overlap or continuous work on nonpriority projects Ensures no overlapping projects kicked off in different departments

Maturity Levels of a PMO

Baby Stage PMO vision is still under development, operations are carried out following a trial and error approach, the focus is always on project time lines and deliverables, processes are not well-defined, PMO team is new without having any background on how to measure project performance, etc. Teen Stage Vision more aligned with business strategy, PMO gets better of control, starts focusing on program rather than just projects, PMO operates with planned activities for monitoring projects progress, PMO team is a mix of new and experienced (Bruce and Laura, n.d. )

Maturity Levels of a PMO (cont.)

Matured Stage PMO has portfolio focus, Vision aligned with business strategy approaches all activities in a strategic manner, all processes are optimized, focus shifts to quality and continuous improvement, operations are planned covering projects, programs and portfolios, driven by a cohesive team with consistent, repeatable methodology using well articulated performance metrics, etc.

(Bruce and Laura, n.d. )

Maturity Levels of a PMO (cont.)

The mature PMO has distinct components forming the roadmap:
Vision and strategy Operations People Metrics

The matured PMO will have depth in these components, a baby PMO and teen PMO will only have mastered a subset of these components.

PMO Management
Create a charter
Mission/Vision Goals/objectives Service expectations Scope Business need Name of the sponsor Measurement of performance/key performance metrics

PMO Governance
How will it be organized? What skills are required? Who will it report to (board, steering committee, CIO, CEO, others)? How will it interact with operational and development functions? What is the reporting process for communicating status and progress? Who reports to whom (line of business vs. IT organization)

Implementation of PMO Strategy

Revolutionary Approach (higher implmntn risk, high start-up costs, ROI demonstrated quicker) Organization that is a Strategy Driver Recognized crisis Identified change is imperative Evolutionary Approach (lower implmntn risk, lower start-up costs, takes longer to demonstrate ROI) Organization takes time to understand PMO High resistance to change Low level of management support

Measuring PMO Performance

Business Value Metrics
Measures and demonstrates value to business Expressed in terms of ROI or rupee sav-ings/revenue Helps justify existence

 Typical Functional Performance Metrics

Measure and Demonstrate the performance or quality of PMO functions Needed to justify PMO budget and improve PMO performance Expressed in percent or count and depend on functions performed (no. of projects -completed/ahead of schedule, on/below budget, projects managed or increased (target vs. actual) etc.)

 Service Level Metrics

Measure and demonstrate service level or quality of service to internal and external customers Help improve and maintain customer satisfaction, SLA and can be expressed in a variety of ways Usually select and measure the key metrics that has most value to customers (e.g., turnaround time on business cases, request for support, resolution of issues; Customer satisfaction based on survey results)

Maturity Assessment
Maturity assessment is a valuable tool for establishing PMO, which helps define its objectives, charter, and processes. The process starts with the assessment of current status and its comparison against the best practices so as to develop a strategy and road map for PMO and help communicate vision and get buy-in from senior management. There are different models to help assess the maturity such as CobiT, OPM3, ISO 15504, and CMM/CMMI, which are available in public domain and organizations can use anyone of them. CobiT: Control Objectives for Information and related Technology

COBIT Capability Maturity Model

CobiT- Control Objectives for Information and related Technology Developed by IT Governance institute, the industry body that is also Information Systems Audit and Control Foundation, sponsors of Certified Information Systems Auditor (CISA) and Certified Information Security Manager (CISM) certification. CobiT Mission research, and develop, publicize, and promote an authoritative international set of generally accepted information technology control objectives for day-to-day use by business managers and auditors. Major work carried out by team in Free University of Amsterdam, the US (California Polytechnic University) and Australia (University of New South Wales). CobiT CMM is a valuable and comprehensive framework for assessing maturity of IT organization. 6 maturity levels (Level 0- nothing, 1- initial, 2- repeatable, 3-defined, 4managed, 5- optimized)

CobiT defined PM success factors

1. Experience and skills of project managers 2. Accepted and standard project management process in place 3. Senior manager sponsorship of projects, and stakeholders and IT staff share in the definition, implementation, and management of projects 4. Understanding of the abilities and limitations of the organization and the IT functions in managing large, complex projects 5. Organization-wide project risk assessment methodology is defined and enforced 6. All projects have a plan with clear traceable work breakdown structures, reasonably accurate estimates, skill requirements, issues to track, quality plan, and transparent change process (note: effective PM methodology enforced) 7. Transition from implementation team to operational team is a well managed process 8. System development life cycle methodology has been defined and is used by the organization.

CobiT PM Key Goal Indicators

1. Increased number of projects completed on time and on budget 2. Availability of accurate project schedule and budget information 3. Decrease in systematic and common project problems 4. Improved timeliness of project risk identification 5. Increased organization satisfaction with project delivery services 6. Improved timeliness of project management decisions.

CobiT PM Key Performance Indicators

1. Increased number of projects delivered in accordance with defined methodology 2. Percent stakeholders participation in projects (involvement index) 3. Number of project management training days per project team member 4. Number of project milestones and budget reviews 5. Percent of projects with post-project reviews 6. Average number of years of experience of project managers

Managing the Risk

There are four types of risks that need to be assessed and managed.
1.Business risks: when the results delivered are of no value. 2.Organizational risks: when the targeted user audience resists the system implementation, and a major change management effort is needed else the project may have to be abandoned. 3.Technical risk: covers aspects such as vendor's failure to perform or not following standards. 4.Execution risk: covers large volatility in cost, time estimates and not previously having achieved similar size of project and have major implications for support costs, time and integration.

Implementation Risk
Dimensions
Project size (budget, staffing levels, duration, no. of departments affected) Experience with Technology (Familiarity with technology) Requirements volatility (stable vs. evolving)

Benefits (Variation, Improved Benefits, New Benefits, New

Core Value)

Risks (Low, Medium, High, Very High)

Management Tools
(Please read textbook)
External Integration Tools- Organizational and communication devices used to link the project teams work to system users Internal Integration Tools- Include various personnel controls and communication devices that ensures that project team operates as an integrated unit Formal Planning Tools- Structures the sequence of the project tasks in advance and determines time, money and technical resource estimates. Formal Results Control- Helps managers evaluate progress and spot potential discrepancies for corrective action Influences on Tool selection

Influences in Tool Selection

(Please read textbook)
Low requirements volatility/Low technology projects Low requirements volatility/High technology projects High requirements volatility/Low technology projects High requirements volatility/High technology projects

Adaptive Methodologies
(Please see textbook)
Significance Basic Characteristics Change Management Agility in Project Management

Significance of IT Service Management

Increasing reliance on IT by businesses ITSM is a term used to denote the philosophies, methodologies and best practices required to address the increasing demands and to bring discipline for managing the IT infrastructure with an integrated approach.

What is IT Service Management?

IT service management is a set of guiding principles covering process, tool, people and partners who together establish and deliver high quality IT services. ITSM covers not just how to manage technology efficiently or effectively but associated processes and people factor also. It is also not just about managing services but managing the complete life cycle from initial idea through to decommissioning of obsolete solutions. Customers want IT services (not desktop, servers, software or routers) and applications such as SAP or mail to work. Services are the central driver, shaped by customers usage whereas infrastructure will remain in the background.

IT Application Development vs. IT Services

Application (IT Product) Development is the development of a software product in a planned and structured process. This software could be produced for a variety of purposes to meet specific needs of a specific client/business to meet a perceived need of some set of potential users (the case with commercial and open source software) for personal use (e.g. a scientist may write software to automate a mundane task) IT Service Management (IT Services) is a discipline for managing IT systems, philosophically centered on the customer's perspective of IT's contribution to the business.

Goals of IT Service Management

The goal of IT service management is to bring quality consciousness in the management of IT services and to help organizations provide quality IT service.
Align IT services with the current and future needs of the business and its customers. Improve quality of IT services. Reduce long-term costs of IT service provision.

Information Technology Infrastructure Library (ITIL)

ITIL is a set of concepts and practices for ITSM, IT development and IT operations. British Governments effort to improve IT management. Is a trademark of UKs Office of Government Commerce (OGC).

Originally, a library of over 40 books that documented various IT Service areas, processes and standards.
Was further improved by a number of agencies by forming task force where industry leaders such as IBM, HP and Microsoft participate along with OGC, IT Service Management Forum (ITSMF), British Standards Institute (BSI), among others.

 It is not only just a collection of best practices but it aims towards IT delivering quality services that meet the needs of the organization. It is a fundamental shift from a focus on technology to a focus on customer service and quality. ITIL framework is easy to adopt, adapt and improve to suit the organization's needs. The processes may take 1-2 years to implement, but 2-3 years of consistent and unrelenting work for the culture to truly change. ITIL also helps the IT organization to be cost-effective and cost efficient in IT service provision.

ITSM Components
IT Service

security

Continuity Management Capacity Management Financial Management

for IT services

Availability Management

Configuration Management

Service Level Management

IT Infrastructure

Release Management Change Management

Incident Management

Problem Management

ITIL Support Processes

ITIL has described five processes
1. Incident management (maintain record and devise consistent approach to address incidents) 2. Problem management (identify, classify, record, diagnose error) 3. Change management (hardware, software and application changes to minimize impact on service) 4. Release management (manages customer and user expectations of release and roll outs) 5. Configuration management (identify hardware and software configuration items required to operate and support IT)

The first two being the operation part of the service life cycle stage and the next three as the transition part

Service Delivery
Service delivery is the tactical and customer focused processes listed in ITIL v2 and covers the following processes: 1. Service level management (process of defining, agreeing,
documenting and managing the service levels) 2. Financial management for IT services (managing cost and preventing surprise investment) 3. Capacity management (to ensure that adequate infrastructure is in place to meet increasing demands) 4. IT service continuity management (information support for business continuity) 5. Availability management (IT services are available to meet business objectives) 6. Security management (secured and safe IT environment for the customer)

ITIL Services Lifecycle (v3)

The implementation of all the processes takes place over a life cycle, as described in V3 stages
1. Service strategy formulation: At this stage of the life cycle, the organization examines the overall business objectives, strategies and ensures that IT strategy is aligned to it.

2. Services design: Here the IT services team takes up the business needs and designs requisite service to meet them.
3. Service transition: When the new services are launched, the IT services teams have to manage change, risk, and assure quality so that the operations team can perform them suitably. 4. Service operation: Once a new service is launched, IT operations take over and perform day-to-day operations, following end-to-end processes. 5. Continuous service improvement: This is the stage when services team looks for improvement areas by having a synergistic view of the entire life cycle.

Shifting Focus

43

Source: Pink Elephant Whats New in ITIL v3, George Spaulding 2007

Wyndham International
Wyndham Hotels acquired by REIT Patriot American Hospital Inc. for $1.10 bn in cash, stock and assumption of debt Firm restructured from the REIT in the face of significant financial challenges Wyndham International

Assets that could not be rebranded to Wyndham were sold

New focus was on operations and hotel management Senior executives with significant experience and deep knowledge of operations were brought

Discussion
What are the major challenges facing the industry? What was the companys strategy in meeting the challenges of the industry? What is the value proposition of the company? How will you evaluate the ByRequest Program? (SWOT)
Can the ByRequest program be imitated? What aspects are hard to imitate?

Case Discussion
Challenges for Wyndham
Building the brand in the lodging industry Increase customer loyalty/preference Create a differentiation Franchisee Relations/Conflict of interest Ownership of the data System-wide execution Getting franchisees in confidence Standardization through the ByRequest Program

 Customer Value- Make your room your room Value to partnerships (Franchisees reflagging common) Advantages Owned its own properties No previous loyalty system IT enabled sustainable competitive edge

Wyndham ByRequest
Strength:
Value to the customer in terms of personalization Human touch by way of the manager who met once a month Provides sustainable competitive advantage
Owned their own properties, integrated organizational structure Complex to implement, interoperability between Byrqst and PMS and CRS (Project barrier) IT Resources and Capabilities 6 months to integrate PMS with customer developed s/w that consolidated the data needed to support the information needs of Byrqst managers. Assembled customer data on preferences and past stays

 Weaknesses
Failed to collect customer data on demographics and psychographics Very limited analysis of the data collected Looking at the stress on standardization managers meeting once a month insufficient

Threat
Franchisees shifting to an ASP model from a centralised model Franchisees may oppose the recruitment of the ByRqst manager No switching costs for customers as no advantage of accumulating points.