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Know the four building blocks of IT governance frameworks

Centralization and analytics are keys to realizing costs savings and efficiencies from IT governance and portfolio management.

A number of criteria go into choosing the right IT governance framework and applying project portfolio management...

(PPM) toward the goals of increasing efficiency and cutting costs. Once manufacturing IT managers commit to these strategies, it’s time to develop an implementation plan that addresses how systems and processes will need to be re-engineered and what commercial tools offer the best fit for each organization’s needs. Start by focusing on these four building blocks.

Building block #1: Central repositories

IT governance depends on having the full breadth of information about enterprise resources and projects available to planners during the decision-making process. Unfortunately, information about available resources, schedules, staffing allocations and budgets often lies in spreadsheets scattered across  departments. PPM veterans say setting up a central repository as a single system of record is one of the most important steps organizations can take toward better IT governance.

“Consolidation of information is the first key step,” said Ben Chamberlain, a senior vice president at New York-based UMT Consulting Group and a specialist in project portfolio management.

Chamberlain advises organizations to look beyond a simple move from spreadsheets to a conventional database as they put their centralization plans in place. General-purpose databases may store relevant PPM information in a widely accessible spot, but they fall short of solutions designed for project management applications. The advantage: Managers can use built-in tools to quickly define and categorize IT as well as business projects and develop basic workflows for taking the efforts from start to finish.

Building block #2: Standardized data

Centralizing data helps only if the information can be easily plugged into all the various fields within the new management application. Thwarting this goal are inconsistencies in data formats that exist when different departments send information into the central storehouse. That requires IT managers to enforce rules that specify which data formats should be used for each field.

This takes work, but the effort can have a big payoff. “Organizations will then be able to effectively create reports across all projects,” Chamberlain said. “You’ll quickly create an entire demand management framework for organizing project types, the key data you are going to capture across project lifecycles, the workflows that are going to control each project, as well as information about schedules and financials.”

Building block #3: Reporting tools

Turning all that centralized data into actionable information requires sophisticated business intelligence and analytical tools. The good news: These programs aren’t just for technical geeks anymore.

In the past, people responsible for creating reports needed to hone their skills at writing SQL queries to pull information from data stores and slice and dice it. Analysts advise organizations to take advantage of spreadsheets and PPM applications that allow you to build a report in the spreadsheet application and access information from the reporting database.

In addition to creating various types of charts, these programs also can create electronic dashboards to give managers clear status views of projects. The best solutions offer summary and drill-down capabilities for overall status, schedules, finances and resource allocations.

“The value of IT governance is its ability to provide a rolled-up, dashboard view of activities from a project perspective across the enterprise. It seems like a simple thing, but a lot of companies don’t have that,” said J. Schwan, president of Chicago-based Solstice Consulting.  “Once you set up standard metrics, executive leadership has a little more insight into which projects are performing well and which ones are struggling, so they can address issues faster.”

Another new innovation is the integration of PPM repositories and analytics with collaboration solutions, which allows organizations to easily set up environments where stakeholders can view and share project details.

Building block #4: A focus on processes

Governance success also hinges on building processes for evaluating needs and resources.

Focus on business priorities. Is the top goal to identify which new projects to undertake, or is it more important to manage the delivery schedules of projects already underway? The answers will guide organizations about improving processes accordingly.

For example, if the main challenge is how to look at all the projects that need to be done without knowing which to undertake given constrained budgets, many organizations will emphasize business case development and then apply analytics to help them make the right decisions.

The IT governance payoff

With these building blocks in place, manufacturers can start to reap cost savings from automated processes, faster access to up-to-date information and tools for analyzing what-if scenarios.

“It improves decision making and ensures that the executive team is selecting the right projects based on the business strategies they have defined,” said Chamberlain. In short, manufacturers have a consistent way to identify the biggest bang for their limited buck.

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