This article is found in the 2003 Resource Guide, a supplement to the December issue of DM Review.

As we look back on the economic changes over the past couple of years, we don't have to look far to realize that the bursting tech bubble impacted more than just new economy Internet companies. Organizations worldwide now realize that unbridled enthusiasm for things technical must be tempered by the application of sound business principles. Namely, if a technology does not reduce costs or increase revenue commensurate with its costs in a reasonable period of time, the technology does not increase an organization's value and therefore should not be implemented. With the current poor economic conditions, organizations are now doing far more due diligence when faced with the costs of deploying expensive technology solutions; portals are no exception. Additionally, in most cases, the return on investment must be achievable in a matter of months for a project to receive the funding it needs.

Justification Process

How do you go about providing the economic justification of a portal, especially given the current short-term returns demand of organizations? Here are some actions that can be used to justify the project.

  • Identify User (s) –­ First, and foremost, you must understand who will use the portal. Make certain that the identified users are a part of a core functional area (production, sales, finance, customer service, etc.) that provides a high value to the organization and offers many opportunities for improvements (low hanging fruit).
  • Build Support –­ Understand the pains of your targeted group and identify key stakeholders. Make sure you understand the implications to the business of not curing their pain. Identify evangelists who have a stake in the success of the project. Begin building consensus on the goals of the portal.
  • Create a Shared Vision –­ How will the world be different when your portal is deployed? What business value will be delivered? Make sure that the value you identify is clearly aligned with the business and its goals. If it isn't, start over. Articulate the vision as concisely as possible. In our experience, projects fail to provide tangible benefits because they have no clearly articulated vision that supports the overarching business objectives.
  • Document the Benefits –­ Clearly articulate the benefits that come from achieving the shared vision. What are the costs of the status quo? How will the portal increase efficiency, increase customer service, reduce inventory or otherwise provide business value? Look for opportunities to collaborate electronically to reduce travel expenses and save time. Look for business processes with lots of opportunity for improvement that can be reworked or even eliminated. These justifications can be tricky because they are not always easily quantified. According to Gartner, through 2003, more than 50 percent of the costs of a portal will be justified primarily on soft, or qualitative, benefits.1 Creatively explore ways of making soft benefits firmer, but be careful to avoid setting user expectations that cannot be realized.
  • Select an Appropriate Tool –­ Choose a portal tool that best meets the business requirements. Weigh the various needs of your business with the functions and features available out of the box. Choose a portal product that requires the least amount of custom development for as many of the desired features as possible. Be sure to keep a complete and accurate estimate of the costs. Total cost of ownership is what you're trying to capture. Make sure you have included software license fees, maintenance and training costs in addition to the cost for development, quality assurance and deployment platforms. As you begin evaluating tools, remember ­ don't take your eye off the business! Repeat after me: "It's not about the technology, it's about the business." Make sure your technical team buys into this key idea. This is where many portal projects go awry.
  • Create an Iterative Plan ­– Break your vision into smaller, clearly defined iterations. Demonstrate how you plan to deliver the highest value functions early. Anything you can do to increase return in a shorter interval will help your business case. Make certain that there is accountability to the plan.
  • Use All Resources Available –­ If you don't have a lot of experience developing cost/benefit analyses, include the CFO or other members of the finance department. They should be pleased and supportive to find someone doing proper due diligence to support a new idea. They may even help you develop your case.

Critical Planning Issues

Development

The initial development of a portal is typically focused on getting the portal product installed and available to the users, and using the out-of-the-box features of the portal.

Gartner estimates that most initial deployments will follow the 90/10 rule ­90 percent of the initial functionality will be provided by out-of-the-box components and 10 percent will be custom integration. For subsequent deployments, Gartner estimates that these numbers will flip ­ 10 percent will be out-of-the-box features and 90 percent will be custom development.2

Bear this in mind when planning for the deployment. The initial iterations of the project will not need as many development resources, while subsequent iterations will need more. For many companies, however, much of the return on a portal is realized when existing custom applications are integrated into it. The project plan should take this into account to ensure that the ROI is generated as rapidly as possible.

Integration of custom components can be a potential nightmare. Changes to back-end systems invariably affect the custom integration components. It is important to plan for and manage these changes so components can be synchronized properly.

Testing and Deployment

Don't forget testing and deployment in the planning stages. Too often, these tasks are not given adequate attention until development is completed. Planning for testing and deployment should begin early in the project, and often tasks can be carried out simultaneously with development tasks.

The project plan should follow an iterative deployment model. As mentioned previously, identify the critical functionality that provides the biggest return on investment (ROI) and include this in early iterations of the project. This ensures that the project will provide benefits as quickly as possible.

One critical issue for testing and deployment is to ensure that proper environments are set up correctly. One common mistake is to develop and test in an environment that does not mirror the production environment. Ideally, you should create three environments (development, quality assurance [QA] and production) with hardware and software that mirror each other. Unfortunately, most portal deployments do not happen in an ideal world. In order of priority, you should have:

  1. Common Software Environment between QA and Production –­ This is critical, as the software environment causes most problems. QA should have the same software as the production environment to enable you to detect conflicts prior to going live.
  2. Common Hardware between QA and Production –­ Hardware problems are the second most common cause of problems.
  3. Common Software between Development and QA –­ This allows you to catch problems earlier; however, if you follow an iterative model and deploy to QA frequently, you can minimize the impact of not having common software between these two environments.
  4. Common Hardware between Development and QA –­ As with common software between development and QA, common hardware allows you to catch problems earlier.

Planning tests for the portal should be done in conjunction with requirements gathering. This will allow you to define release criteria as the software passes critical tests that match the requirements.
User acceptance testing (the practice of getting actual end users to test the software and provide feedback) is vital for portal deployments. Most portals having a large number of users, so it may not be practical to have everyone participate in the test. However, it is still a good idea to get a representative sampling of users from each department and have them test the portal. End users can provide additional validation of the functionality provided in the portal; but, more importantly, they can validate that the functionality is usable. Ideally, the users will create their own acceptance tests. This will insure the validity of the tests.

Agility ­ Effectively Rolling with the Punches

Portal projects can change dramatically over the course of the project. As users begin to work with the portal, they often develop new and interesting ways of using it. Many of these emergent ideas may provide a better return than the originally planned items. This proves the value of using an iterative project plan. An iterative plan makes it easier to adjust the direction of the project as new needs arise. If a project is being managed properly and is focused on generating the greatest return on investment, changes in direction and scope should not invoke fear. The portal needs to evolve with the business and therefore should welcome improvements. In this changing environment, it is important to keep your focus on the high-priority items to ensure the project meets the appropriate goals.

Getting rapid return on your portal investment depends on proper planning, user involvement, iterative development and organizational agility. During the planning phase, it is imperative to: identify all of the project stakeholders and gain their support; clearly define and document the business goals; and establish and document the anticipated return on investment. To implement a portal that serves the organization effectively, users must be part of the development process every step of the way, from requirements gathering to testing. Iterative development is also key to rapid ROI for portal projects. By beginning implementation with those functions that yield the greatest impact on the organization, ROI quickly becomes evident. Lastly, it is important to remember that developing and implementing a portal is often a moving target. Enterprises that can anticipate and adapt to natural evolution of their organization, the business environment and technology will quickly realize the ROI they seek from their portals.

References:
1. "Calculating the ROI of Your Enterprise Portal." Gene Phifer, Gartner. 28 September 2001. Note Number: SPA- 14-5679.
2. "The 90/10-10/90 Rule For Portal Deployment." Gene Phifer, Gartner. October 3, 2001. Note Number: SPA-14-5861.

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