State Agency Drives IT Strategy and Execution with Transparent Financial Management

A State Government Agency needed better transparency and

control of its portfolios of IT services, applications, infrastructure

and projects. The agency contracted UMT to design and

implement a process and tools solution based on UMT 360 and

Microsoft Project Server - to drive better investment decisions

and deliver more value and efficiency for its customers.

SITUATION

The State Agency contributes several billion dollars annually to State revenue. The IT organization at the agency enables the agency’s business goals through delivering technology that gives the general public and State employees access to the services they need.

IT is under pressure every year to deliver a large volume of changes to services and technology, driven by new legislation and by the need to continuously improve its services.

The agency had two goals: better visibility into all of its IT activities, assets and associated costs; followed by improved team capabilities and improved strategies for planning and executing.

SOLUTION

1. Assessing the Issues

The agency wanted to improve its ability to assign costs and benefits to

different types of work and technology assets, and to enhance the discussions and decisions with the business on what to invest in and when.

The agency had a significant backlog of work, meaning that demand for new work and projects exceeded the ability to supply. Additionally, the prioritization process used to align the demand with the agency strategy and objectives was not meeting the advancing needs of the agency workforce.

The aging portfolio of technologies – primarily applications – was inefficient to maintain and made it challenging to reduce the average cost per transaction.

UMT conducted an assessment of the current and potential future state of IT capabilities, using a combination of surveys, interviews and by studying artifacts. The assessment covered organization, people, processes and tools and data.

Case Study: IT Portfolio Management

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Organization Profile:

State and Local Government

>1,500 employees

~$3 billion revenue

>6 million customers

Business Need:

Financial and operational visibility of the IT portfolios of services, applications, infrastructure and projects

Capabilities Implemented:

IT Financial Management

Application Portfolio Management

Software Used:

UMT 360

Microsoft SharePoint

Microsoft Project Server

Microsoft Project Professional

Microsoft Team Foundation Server

ABOUT UMT CONSULTING

UMT is a recognized provider of Project Portfolio & Integrated Portfolio Management solutions and management consulting best practices. UMT is Microsoft's Worldwide PPM Partner of the Year 2013 and has been twice named a Gartner Cool Vendor in PPM and is positioned as a Visionary in Gartner's Integrated IT Portfolio Analysis Magic Quadrant.

2. Building a Roadmap

The agency faced challenges in managing resources and projects, and in understanding and rationalizing IT applications, assets and services. The recommended approach was to address the root causes in the long term as well as address challenged processes in the near term. For example, what was initially perceived as a resource and demand management problem was found to also relate to the burden of maintaining the agency’s aging technology and application portfolio.

UMT worked with the agency to develop a roadmap that focused on creating a holistic IT360 perspective for managing IT as an integrated portfolio of assets and services as follows:

Understand IT – bring financial visibility into all applications and services and organize them into a meaningful relational structure.

Run IT – make informed investments and shape maintenance and operations activities in full alignment with the asset portfolio strategy.

Transform IT – plan technological transformation projects based on business strategy and a deeper knowledge of the existing systems –not only their labor and hardware costs, but also the costs of transactions and their return on investment.

3. Designing Processes and Tools in Iterations

The approach was to first address the processes, and then implement the improved processes by using better and more integrated tools. The tools solution - consisting of UMT 360 software, Microsoft Project Server and Microsoft Team Foundation Server – has been named by the agency as ‘OneSource’, reflecting the strategy of

connecting disparate processes and managing a single source of reliable information.

UMT used an iterative approach that gradually matured different capabilities and ultimately created a solid foundation for managing the business of IT:

Design and implement simple, foundational project portfolio management processes for the following: managing intake or demand for IT from the business; prioritizing demand; planning and managing projects; resource planning and time sheeting.

Build the complete application repository by collecting applications’ metadata; assessing the applications for risk, business impact, etc., creating associations between applications and infrastructure.

Organize the portfolio into services, applications, infrastructure and projects.

Roll-up labor cost from projects and support activities to applications and infrastructure, with a clear break down between project work, support work and administration time.

Link the reporting system to the general ledger accounts to assure data integrity, but keep the advantage of maintaining the information bottom-up.

Create comprehensive analyses and reports of the IT portfolio with a view into assets, services, applications, projects, resources and roles.

Improve and integrate the application lifecycle management process into the mix, leveraging Microsoft TFS.

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BENEFITS & BUSINESS IMPROVEMENTS

The roadmap developed focused on establishing foundational project and application portfolio management to create IT transparency within the first few months. After this successful start, the agency now has fresh insight into the costs and human resources assignments across IT, as well as better processes for prioritizing and executing work. The roadmap goals for the following two years include:

15% savings across the IT portfolio, through improved alignment of work with the IT strategic plan, and improved execution performance driven by process and people improvements.

Transparency and reliability of actual resource effort and cost by service, application and project: from a reliable, bottom-up process.

Better decision-making and control regarding the strategic targets of IT time and cost (e.g. production support vs. transformation).

Move towards a transactional model by understanding the cost and return of transactions.

Case Study: IT Portfolio Management