Over the years, I have performed dozens of data warehousing assessments. During these assessments, clients are routinely asked how much they spend annually on data warehousing. Most cannot accurately estimate what they actually spend. In order to manage these costly IT initiatives, it is critical to measure each one, but it is impossible to measure what most companies do not understand. This is where IT portfolio management enters the picture.

IT portfolio management is the formal process for managing IT assets. An IT asset may be software, hardware, middleware, an IT project, internal staff, an application or external consulting. As with other new disciplines, many companies are not setting up IT portfolio management efforts correctly. Following are some of the keys to building successful IT portfolio management applications.

Keys to Successful Applications

Portfolio management targets metadata (both business and technical) and, as such, needs to be stored in the managed metadata environment (MME). The MME will allow the corporation to aggregate the portfolio-related metadata into an executive view so that it is clear which projects are proceeding well and which are lagging behind. It can also publish information to a Web site so that front-line IT staff can see the status of other projects. This will greatly aid their project timelines and planning.

The MME should be directly linked to the more granular business and technical metadata to allow developers to understand what IT projects are underway, what technology these projects are implementing and what data sources they are accessing. Most large companies have duplicate IT efforts. This happens because the metadata is not accessible. I have a couple of large clients whose only goal is to remove these tremendous redundancies, which translates into tremendous initial and ongoing IT costs.

Finally, the MME should contain both a business and a technical component. In most cases, the business component is more complicated than the technical. For example, a project manager communicates a project's funding, status and technology to the group responsible for the portfolio management application. The metadata in the portfolio application is only as good as the information that these managers provide, so it is vital to integrate the IT portfolio application into the company's IT production turnover procedures. This ensures that the portfolio application stays current.

Prevent IT Applications Failure

When a corporation undertakes a major IT initiative such as a customer relationship management (CRM), enterprise resource planning (ERP), data warehousing or an e-commerce solution, the likelihood of project failure is between 65 and 80 percent, depending on the study referenced. This is especially alarming considering that these same initiatives traditionally have executive management support and cost many millions of dollars. For example, one large client was looking to roll out a CRM system and an ERP system globally within four years with an initial project budget of more than $125 million. In my opinion, they have a zero percent probability of delivering all of these systems on time and on budget. When was that last time you saw an ERP or CRM initiative delivered on time or on budget?

Examining the causes of project failure, the following themes become apparent. First, the company did not address a definable and measurable business need. This is the number one reason for project failure of a data warehousing, CRM, MME or other project. Second, it did not incorporate the existing IT environment and business rules. This includes custom applications, vendor applications, data elements, entities, data flows, data heritage and data lineage.

An MME dramatically reduces the likelihood of IT project failure because it allows a corporation or government agency to decipher its IT environment and to greatly speed up its IT development lifecycles. The MME captures the key metadata around a company's IT applications and uses this metadata to generate an impact analysis. An impact analysis is a technical metadata-driven report that shows the impact of a potential change to an organization's IT systems. Chapter 3 of my book, Universal Meta Data Models, co-authored by Mike Jennings, presents several MME use case examples utilizing impact analysis. The MME case studies featured in that chapter also discuss impact analysis.

Reduce IT Expenditures

If your MME reduces the applications, processes, data, software and hardware, and it lowers the likelihood for IT project failure and speeds up the IT development lifecycle, then clearly it will greatly reduce your company's IT expenditures. The majority of MMEs are focused on reducing and managing IT expenditures. 

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