5 goals IT should use to show it can meet changing enterprise priorities and demands

Last week, we considered what COBIT 5 prescribes for innovation. This included looking at the need to ensure that innovation is focused upon extending the differentiation of what Booz and Company calls the enterprise capabilities system (in other words, its tools, talent, processes, infrastructure, etc). This week we extend these ideas to consider what the COBIT standard says about the portfolio process. The aim of this process so it is clear is to optimize the performance of the overall portfolio of programs in response to program and service performance and changing enterprise priorities and demands. To me this describes a cradle-to-grave view where IT is charged with ensuring that the portfolio of services (whether existing or extension) meets the enterprise’s priorities and demands. Do this and you are strengthening the enterprise’s capabilities system, and thus its capacity for innovation.

 

COBIT 5 goals for portfolio management

To improve the management of the portfolio, COBIT 5 suggests IT organizations measure themselves explicitly against six process improvement goals. Let’s explore each along with their recommended metrics. 

 

1.                  An appropriate investment mix is defined and aligned with enterprise strategy. This means that investments need to be focused on capabilities that “coherently” support enterprise capabilities and extend what Booz calls the enterprise right to win. Two metrics are used to measure success here: percent of IT investments that have traceability to enterprise strategy and degree to which enterprise management is satisfied with IT’s contribution to enterprise strategy. The first measures how well investment ties to the enterprise capability system and the second measures how well IT manages perception. This means that IT business relationship managers need to be good at telling how these things link.

2.                  Sources of investment funding are identified and available. This is clearly about the quality of the planning system and what I like to call IT predictability. Two metrics are recommended here: ratio between funds allocated and funds used and ratio between funds available and funds allocated. Both of these go after IT’s ability to manage investments.

3.                  Program business cases are evaluated and prioritized before funds are allocated. Wow, imagine what it would be like if this was not the case? Prioritization needs to happen before dollar one is spent. One metric is recommended here: the percent of business units involved in evaluation and prioritization process. Clearly, IT needs to involve its business customers. Otherwise, requirements and priorities will be guesses.

4.                  A comprehensive and accurate view of the investment portfolio performance exists. IT needs to be able to holistically evaluate and show the value of its portfolio. And one metric tells whether this is the case. It is the level of satisfaction with portfolio monitoring reports.

5.                  Investment program changes are reflected in the relevant services, asset, and resource portfolios. Investment needs to tie back to capabilities, services, assets, and resources. And resources need to reflect these priorities. Clearly, this fits with improving the right to win. One metric is recommended here: percent of changes from investment program reflected in the relevant IT priorities. This means that as priorities change IT make appropriate change in IT investment.

6.                  Benefits have been realized due to benefit monitoring. Once again, I believe if investment is tied to the capabilities system, benefits become easy to judge. One metric is recommended to measure success: percent of investments where realized benefits have been measured and compared to business cases. And all I can say here is I agree.

 

So where should you start?

Once again, my suggestion is you start where the most immediate value can be driven. But if it were up to just me, I would start by showing an appropriate investment mix is defined and aligned with enterprise strategy. What do you think? I would love to hear back from you.

 

Related links:

Blog post: 3 ways IT leaders can strengthen compliance and control

Blog post: Making COBIT 5 part of your IT strategy

Blog post: COBIT 5 guides IT leaders to better manage future orientation in their organizations

Blog post: 7 goals in COBIT 5 that will improve your operational excellence

Blog post: COBIT 5’s scorecard measures IT’s relationship with its customers

Blog post: COBIT 5 scorecard measures the quality of IT’s financial performance

COBIT 5

Solution page:  IT Performance Management

Twitter: @MylesSuer

Comments
carodriguez(anon) | ‎10-12-2012 06:22 AM

Thanks a ton for being my own mentor on this theme. I actually enjoyed your current article greatly and most of all liked the way in which you handled the aspect I regarded as controversial. You're always extremely kind towards readers like me..

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About the Author
Mr. Suer is a senior manager for IT Performance Management. Prior to this role, Mr. Suer headed IT Performance Management Analytics Product ...


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