A Practical Approach for IT Governance

Archive for February 2015

Revisiting IT Analytics

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We are so involved with day to day challenges, we seldom get the time to use some of the same tools we are delivering to our customers. The solution is quite simple – we should think and act like CEOs of an IT company. Using Key Performance Metrics (KPMs) to help manage your IT as an enterprise, IT Analytics provides you the ability to prioritize your demand and allocate resources that best serves the interest of the enterprise.

From the IT perspective, Analytics can be classified into four types: Financial, Business Alignment, Request Source and Resource Analytics. Financial Analytics help understand IT using a Project Portfolio approach. Business Alignment Analytics focus on the value IT brings to the Enterprise. Resource Analytics helps understand how to deliver technology efficiently. Request Analytics helps identify the source of the technology needs and indicates the technology maturity of the organization.

As an illustration of the use of Analytics, consider the challenge of managing a portfolio of projects. It is very difficult to visualize the project performance without developing a common project assessment framework. Yet, common frameworks have the challenge that each project is unique and may have specific characteristics. To help resolve this issue, an IT Analytic can be developed to provide a project score. The project score can be used to assess the impact of the project using a Portfolio Management approach. Suppose we want to assess the project portfolio using a set of Financial Analytics. We can define each project using a common set of evaluators using measures such as budget variance, schedule variance, scope changes (“churn”), and also a set of measures that are unique to the project. These measures are weighted specific to each project but all contribute to a common scale such as 0 to 100. To illustrate the use of Business Alignment Analytics, we can use the same project portfolio, except the projects are now scored on the value they bring to the Enterprise and how closely they match to the business needs. Similarly, we can develop Request Analytics which essentially map the project scores to requesting organizations. Early stage companies may show a higher use of technology, say for example, in engineering and marketing to drive innovation and create demand, whereas mature enterprises will show a balanced use of technology across the enterprise. As technology is resource intensive, Resource Analytics (utilization and demand) are essential to triage and develop an IT plan that best meets the enterprise needs.

Using IT Analytics is a simple and effective mechanism to visualize each project in the portfolio. Clearly, the Project Portfolio Analytic does not replace the functions of the PMO, but facilitates management by providing a mechanism to quickly see trends and issues, and drill down to understand the direction and develop a IT strategic plan.

Written by Subbu Murthy

February 20, 2015 at 1:00 am