The following case study/profile was originally published by BI Review. For similar industry implementations and profiles please visit BI Review's Web site.

IT portfolio management has come a long way since the early 1990s, when the discipline first borrowed thinking from finance to quantify risks and justify new investments within technology infrastructure. In those days the focus was mostly on cost control, but over time, as business increasingly aligned IT investment with business goals - and as IT assets multiplied many times over - the portfolio approach grew to be much more comprehensive and metric driven, as any deft program manager will tell you. "Portfolio management is about providing a single holistic view into what IT is working on, the investments it is making and making sure that at any given point in time the portfolio is optimized in terms of business value versus risks," says Craig Symons, vice president at Forrester Research. "It requires an ongoing review process to make sure everything is on track, and if not, a means to take appropriate action. As things change we need to make appropriate changes to the portfolio."


Our example here is Hallmark Inc., whose gifts and greeting cards are ubiquitous features of the American household. With 2006 revenues of over $4 billion, Hallmark products are found in more than 43,000 retail outlets in the U.S., about 5,000 of which are independently owned. Globally, the company publishes products in 30 languages and sells them in more than 100 countries.


As it applies to information technology, Hallmark faces issues familiar to any large enterprise, a mix of investment and consolidation, containment and growth. But where portfolio management is typically or initially driven by smaller discretionary spending, Hallmark is in the midst of a large SAP implementation - dubbed Project Horizon - which tends to dominate the conversation. "Because this is so big for Hallmark, the business process leads and the business transformation leaders will want to see the information," says Cheryl Randle, project office process and capability manager, Hallmark Cards Inc. "IT and our business development representatives work very closely with the business and keep them up on how projects are progressing and how portfolios are being managed."


Randle works on the IT side of the house and manages several groups, for project metrics and reporting, for quality assurance of deliverables, for information technology training services, and for requirements management where business desires and projects come together. Years ago, as homegrown solutions topped out, Randle's own requirement was a tool, and in 2002 portfolio management software provider PlanView was chosen to help a variety of functions at Hallmark manage their work. Along with some already-owned technology from Peregrine Systems to manage trouble tickets, problem resolution, application support and asset management, Randle now owned the platform she needed.


With IT's business transformation plans centered on Project Horizon, there has been a huge initiative to retire much of Hallmark's older infrastructure. "We've sunset a lot of bits and pieces over the last five years, now we're focused on replacing many of our old legacy systems," says Randle. "The leaders want to make sure the implementation want a business-led project and we are tracking all the budgets, progress, everything in PlanView." Randle herself was anxious to replace systems that were "dying," in her words. "We were using an Access database and Excel spreadsheet for time management and financials, people were using Microsoft Project, we'd reached critical mass."


Process Optimization


Even before Hallmark's CIO gave his blessing to PlanView, Randle was tasked with overhauling the methodology required for repeatable IT execution. When the time came for PlanView to be rolled out, the work breakdown structure and metrics to be tracked on time were already in place. "We were already tracking 'On Time, On Budget' but now we started tracking process-centric metrics to either prove or disprove the effectiveness of the processes in the work structure, which all of our projects are required to use." The work structure includes phases of project initiation, analysis, design, build, test, deploy and warranty. Each line item, whether an activity, task or milestone, has a unique ID attached to a metric.


The first priority was in the area of requirements management. With work breakdown structure and project information, Randle could track the effectiveness of the entire process program. For example, the work breakdown structure contains tasks associated with business requirements, technical requirements, and impact analysis. "We tracked projects that did not use the requirements process and determined how long they took to execute from beginning to end and compared that to projects that did use the requirements process." Measuring in man-hours, Randle gained a better view of execution. "We determined that the analysis phase on a typical project was taking 32 percent of the project hours," Randle says. "When we compared this to projects that were using our requirements process, analysis took between 15 percent and 25 percent of hours, a much better result."


Translated back to business goals, what Randle is trying to ensure is that she has people with the right skills working on the right projects. Randle had to prove that the process area was important enough to allocate resources toward it, and the only way she could do that was to track the impact of having a skilled person on a project. "It's reduction in project hours, an improved solution and a big plus is the business buy-in. Now, the business doesn't even view requirements architects as members of IT, we're much more cohesive as a group."


Working Efficiently


If multitasking is part and parcel of any management experience, the most an individual can hope for is that he or she is spending time where it's most valuable to the business. Hallmark took the step of bringing in a project analyst whose goal it was to return project managers 15 percent of their working hours. It doesn't take a genius to offload administrative headaches to a lower pay grade or outsource the work, but again, the proof point came from metrics that tracked working hours in different areas and how this affected projects. In this case the project analysts quickly became popular even among former micromanagers at Hallmark who could now use their time more profitably.


Braced with success, Randle launched another project to track post-production defects associated with projects. "We were able to say, okay, here are the weaknesses in a given process, we've got a problem in unit testing or a problem in design. By measuring what was occurring we would determine whether they were requirement errors, design errors, testing or build errors." Companies don't typically look at testing errors, but upon examination this proved to be a weakness at Hallmark that had been misidentified. For example, a program may have been written correctly and as intended, but production environment changes occurring in the meantime might have undone the work. "If it had been tested in the right environment we would have found the problem and properly identified it as a testing error."


Smart Reporting


Randle's groups produce extensive reporting for different functions and purposes. In an area such as decision support, the output might be extremely detailed or condensed at a high summary level. Hallmark managers utilize a balanced scorecard; a level down, information is delivered in a dashboard; and where granularity is required the reports themselves are employed. Consumption of information at Hallmark is a matter of time, function and recognition, not disinterest. Management prefers the immediate impact of graphs or bubble charts (where big is big and red is bad). In the same sense, finance wants actual numbers in summary, while project delivery directors want to use graphs as a starting point to dig deeper. While all of IT management uses project reporting, with the SAP implementation, business managers will see this project reporting for the first time, all in the interest of making Project Horizon a business-driven transformation. In that sense the portfolio view closes the business/IT gap in appropriate and contextual fashion. In the old setting, IT would tend to focus on cost while the business would look at growth or customer satisfaction. Now it is the job of 40 business development managers and consultants at Hallmark to leverage metrics, manage budgets and make sure that the business and IT are thinking alike.


A tool-based approach to portfolio management addresses related requirements such as compliance and regulatory hurdles at the same time it pushes the business forward. "I think any IT organization that wants to get a handle on portfolio management and really optimize resources in ways that drive business results needs a tool," Randle says. "Otherwise, you'd better plan to bring in a huge staff." But Randle does not believe that technology alone is a means to an end. In her view, a process-centric approach must precede any benefits to be gained by automation. With a tool such as PlanView, but without the processes to support it, managers won't know what is to be tracked, how it will be tracked, or which managers will benefit from the information. "And, if you don't get it to senior management, it's a waste of money to tell you the truth."


Though most companies know what they spend on IT, few measure return on their investment. To maximize benefits, Randle insists that repeatable processes and a metric-centric culture are at the core of business transformation. Once that is established, the judicious application of a portfolio management tool will go a long way to point companies in directions lurking beneath the data. For enterprises that have neither a framework nor a structure, that's a plus.


Forrester's Symons says cultural change and the failure of business to take ownership explain why IT portfolio management remains immature. A 2005 Forrester Research study found that just 33 percent of respondents had a formalized IT portfolio management practice in place, meaning that in most enterprises, the left hand doesn't know what the right is doing. It is Randle's job to ensure this is not the case at Hallmark. "We're pretty confident that anything the business would ask us we could explain to them, and vice versa. You don't want less than that.”

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