Simplifying it using a disciplined portfolio governance approach
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This document summarizes Salt River Project's use of Oracle's Primavera Portfolio Management software to help simplify their IT portfolio. SRP used the software to create an enterprise IT asset portfolio that provided transparency into their inventory of applications and infrastructure technologies. This allowed them to identify redundant functionality, assess asset value, and rationalize their portfolio. Their first rationalization process identified opportunities to reduce costs through consolidation and eliminating unsupported technologies.
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Simplifying it using a disciplined portfolio governance approach
- 1. Session 89260 Simplifying IT Using a Disciplined Portfolio Governance Approach Eileen Ahles
- 2. Abstract Learn how Salt River Project, one of Arizona's largest utilities, utilizes Oracle's Primavera Portfolio Management software to help them improve management of their organization's IT portfolios (business applications and infrastructure technologies). By identifying cost reduction and risk mitigation opportunities, a continuing trend of IT simplicity has resulted in improved IT standardization and modernization across the enterprise.in improved IT standardization and modernization across the enterprise. Objectives: • Learn how SRP got started with IT portfolio management. • Hear about the results from using portfolio management to reduce IT complexity. • Discover lessons learned along the portfolio management journey.
- 3. Agenda 1. Background & Challenges 2. Governance Framework 3. Enterprise IT Asset Portfolio3. Enterprise IT Asset Portfolio 4. Portfolio Rationalization 5. Simplifying Business Continuity & DR Planning 6. Lessons Learned
- 5. SRP-History In 1903, Salt River Valley Water Users’ Association was formed by Arizona landowners The National Reclamation Act of 1902 provided funding for the construction of Roosevelt Dam In 1909, a hydroelectric generator at the Theodore Roosevelt Dam site was built In 1937, the Association created the Salt River Project Agricultural Improvement and Power District to operate the power generation and distribution system. The Association and District later became known as Salt River Project.
- 6. SRP-Today Two companies serving metropolitan Phoenix: • Public Power Company • Private Water Management Association Employees = 4,461Employees = 4,461 Annual Revenues = $2.7 billion SRP has been honored by JD Powers as the top-rated large power company in residential customer satisfaction in the West for 11 of the past 12 years.
- 7. Challenges SRP uses a decentralized IT support model • Multiple Business Unit IT groups – as well as Corporate IT – all at various levels of sophistication • Redundant application functionality and duplication of• Redundant application functionality and duplication of technologies • No process to manage or prioritize technology requests • Existing systems did not inform executives of enterprise IT spend, making cost containment challenging.
- 8. IT Governance Realization: If SRP continues to progress without a solid IT strategy and IT governance framework, we risk service, cost, and security obstacles. Solution:Solution: • In 2004, SRP launched an IT governance program. • Our governance model blends business unit flexibility with centralized facilitation
- 10. Governance Hierarchy • Approves: • Architectures • Enterprise IT standards and policies. • IT initiatives for funding • IT projects based on threshold levels IT Leadership Committee (ITLC) • Recommends: Enterprise strategies, IT Architecture • Recommends: Enterprise strategies, goals, policies, architectures, standards • Approves work/projects within a certain impact on the enterprise. IT Architecture Committee (ITAC) • Information Governance Council (IGC) • Enterprise GIS Steering Committee (EGIS) Governance Sub-Committees (Standing & Ad hoc)
- 11. Governance Goals Manage an Enterprise IT Asset Portfolio • Include methods for maintaining an IT asset inventory, monitoring its performance and assessing its value. • Reviewing performance and value indicators of the IT portfolio will drive the launch of projects for adjustments.portfolio will drive the launch of projects for adjustments. Manage Project Initiation & Prioritization • Processes for evaluating all IT projects to ensure risks, resources and funding are mapped against corporate priorities.
- 12. Solution Oracle’s Primavera Portfolio Management (PPM) • Acquired in Summer of 2005 • Components: • Fast Track for Application Portfolio Management• Fast Track for Application Portfolio Management • Fast Track for Project Portfolio Management • Utilized professional services consulting for support and oversight of implementation process • Primavera Propose and Primavera Bridge for Microsoft Project Server added at a later date.
- 13. The Portfolio Management Cycle New Projects Identify Asset Retire Assets Adjust Launch New Project/ Initiative Adjust Program Portfolio Launch New Project/ Initiative Design & Develop Solution Implement Solution Assess Value New Assets Asset Improvements Manage Asset Usage Assess Asset Value Assets Adjust Program Portfolio Initiative Design & Develop Solution Implement Solution Assess Value IT Portfolio Management Program Evaluating - - Prioritizing - - Planning - - Communicating Adjust Program Portfolio Launch New Project/ Initiative Design & Develop Solution Implement Solution Assess Value
- 15. Enterprise IT Asset Portfolio Provides transparency into current inventory of assets and resource consumption • Identify & eliminate redundant / overlapping functionality • Assess the condition of technology assets• Assess the condition of technology assets • Quantify assets’ business value • Aid strategic planning efforts • Diffuse Business / IT conflict
- 16. Enterprise IT Asset Portfolio: Domains Business Applications / End-User Solutions: Software used to automate & optimize business functions, processes, tasks, and activities. Infrastructure Technologies: Foundational technologies used to create and operate business solutions and store / transmit information.
- 18. A Business Application’s Infrastructure Dependencies
- 19. An Infrastructure Technology’s Supported Applications . . .
- 20. Domain Specific Information Business Applications / End-User Solutions • Business Functions Supported • Application Health Survey Infrastructure Technologies • Infrastructure Domain & Class • Standards Classification
- 21. Application Classification by Functionality
- 22. Drill Down Capability for More Detail
- 23. Drill Down Capability for More Detail
- 24. Application Health Survey • Technical Quality • Criticality to the Business • Platform Health• Platform Health • Risks • Total Cost of Ownership
- 28. Gartner’s “TIME” Model for Application Rationalization Invest Migrate Tolerate Invest Eliminate
- 30. Drill Down Capability for More Detail
- 31. Drill Down Capability for More Detail
- 32. Technology Standards • Ensure interoperability of all elements of systems • Economies of scale / lower procurement costs • Simplify maintenance, support and asset management to reduce total cost of ownership • Creates an easier / faster path to procure and use items designated as “Enterprise Standard”
- 33. Standards Compliance Pyramid Low Risk / Flexible Goal: 50 – 80% Solutions Infrastructure App Development High Risk / Restrictive Goal: 90 – 100% Shared Infrastructure / Service Frameworks Middleware Data Management Foundational Infrastructure IT Operations / Systems Management End-Point / Consumer Devices Server Platform & Virtualization Technologies Storage Network Security
- 36. Portfolio Rationalization Process Our goal for our first rationalization process was to analyze SRP’s IT portfolio in order to identify opportunities that: • Reduce maintenance & support costs through consolidation and/or decommissioningconsolidation and/or decommissioning • Increase manageability by reducing the number of technologies in use • Decrease the risk of running on unsupported technologies
- 37. FY10 Infrastructure Software & Hardware Costs Application Development $1,840,938 Application Development $1,840,938 Application End Point / Consumer Devices $2,838,829 End Point / Consumer Devices $2,838,829 Client Devices Data Management $2,211,243 Data Management $2,211,243 Database & File IT Operations / Systems Management $1,324,091 IT Operations / Systems Management $1,324,091 Change Middleware $1,196,599 Middleware $1,196,599 Application Network $2,866,133 Network $2,866,133 Host / Remote Security $773,268 Security $773,268 Identity Mgmt & Server Platform $2,568,808 Server Platform $2,568,808 Server Devices Storage $2,227,247 Storage $2,227,247 Storage Devices >= $1 Million $500,000 to $999,999 $100,000 to $499,999 < $100,000 Application Construction $922,018 GIS/CAD $710,376 Programming Languages $48,648 Testing & Debugging Tools $159,135 Web Development $762 Devices $2,129,287 Client Operating Systems $621,421 Client Utilities $88,120 File Structures $1,216,081 Data & File Utilities $740,410 Metadata Management $257,752 Change Management $300,224 Output Management $291,181 Performance Management $220,204 Production Management $340,347 Schedule Management $172,134 Application Integration $384,862 Application Servers $370,438 Data Integration $62,894 Messaging & Telephony $331,274 Web Management $47,130 Remote Connectivity $123,366 Network Health Management $1,508,548 Network Topology $1,234,219 Mgmt & Provisioning $186,524 Protection Health $586,741 Devices $1,311,881 Server Operating Systems $1,024,902 Server Management Tools $232,025 Devices $1,490,949 Storage Management $736,297
- 38. Standards Compliance by Infrastructure Domain RISKLEVEL 65% 56% RISKLEVEL 75%
- 39. Applications by IT Support Group Each bubble represents an application identified in the Portfolio Rationalization effort. Yellow bubbles indicate that the application is transitional and is currently being migrated, upgraded or has been identified to be retired.
- 40. Rationalization Results • Identified approximately 150 applications at risk of running on unsupported technologies • Determined that there is significant redundancy in specific functions • Discovered almost $500,000 in budget reduction opportunities by eliminating low use software • Recommended the centralized management of software licenses in order to capitalize on economies of scale
- 41. Strategic Initiatives Launched • Application Modernization Multi-year Project • Development of a Software Asset License Management & Compliance program • Implementation of Standard Enterprise Solutions • Consolidation of Work & Asset Management Applications • Infrastructure Systems Management Tools Analysis
- 42. SIMPLIFYING BUSINESS CONTINUITY & DISASTER RECOVERY PLANNING
- 43. Simplifying Business Continuity & Disaster Recovery Planning • Partnered with SRP’s Business Continuity & Emergency Management department • Used Primavera Portfolio Management’s capabilities to link• Used Primavera Portfolio Management’s capabilities to link Key Business Processes to Applications • This information is used to define critical applications and subsequent disaster recovery requirements • Developed list of applications with a recommended tier of recovery
- 44. Cost Center Dependencies & Relationship Work Initiation & Prioritization Infrastructure Technology Business Process Business Application & End User Tools
- 45. Cost Center IT Footprint Lists: • Business Applications • Infrastructure Technologies • Work Initiations• Work Initiations • Business Processes
- 46. Cost Center IT Footprint
- 47. Cost Center IT Footprint
- 48. LESSONS LEARNED
- 49. Lessons Learned • IT Portfolio Management data and analysis processes can be a powerful tool for: • Providing information for decision making • Reducing risk by managing technology life-cycle, health, cost, and value • Management support is essential for championing the processes and gaining buy-in. • Communicating your efforts and analysis results is very important! • SRP’s adoption has evolved over the years and continues to evolve. • Be flexible!
- 50. Recommended Reading IT Portfolio Management: Unlocking the Business Value of Technology Authors: Bryan Maizlish & Robert HandlerAuthors: Bryan Maizlish & Robert Handler
- 51. They say the world has become too complex for simple answers. They are wrong. -Ronald Reagan