Performance Driven IT Management: Five Practical Steps to Business Success

259 Pages·2011·3.049 MB·English

by  Ira Sachs

P E R F O R M A N C E - D R I V E N
I T M A N A G E M E N T
Five Practical Steps to Business Success
Ira S. Sachs
GOVERNMENT INSTITUTES
An imprint of
THE SCARECROW PRESS, INC.
Lanham (cid:129) Toronto (cid:129) Plymouth, UK
2011
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Published by Government Institutes
An imprint of The Scarecrow Press, Inc.
A wholly owned subsidiary of The Rowman & Littlefield Publishing Group, Inc.
4501 Forbes Boulevard, Suite 200, Lanham, Maryland 20706
http://www.govinstpress.com
Estover Road, Plymouth PL6 7PY, United Kingdom
Copyright © 2011 by Government Institutes
All rights reserved. No part of this book may be reproduced in any form or by any
electronic or mechanical means, including information storage and retrieval systems,
without written permission from the publisher, except by a reviewer who may quote
passages in a review.
The reader should not rely on this publication to address specific questions that apply
to a particular set of facts. The author and the publisher make no representation or
warranty, express or implied, as to the completeness, correctness, or utility of the
information in this publication. In addition, the author and the publisher assume no
liability of any kind whatsoever resulting from the use of or reliance upon the contents of
this book.
British Library Cataloguing in Publication Information Available
Library of Congress Cataloging-in-Publication Data
Sachs, Ira S., 1958–
Performance-driven IT management : five practical steps to business success / Ira S.
Sachs.
p. cm.
Includes bibliographical references and index.
ISBN 978-1-60590-702-4 (cloth : alk. paper)—ISBN 978-1-60590-703-1 (electronic)
1. Information technology—Management. 2. Electronic data processing
departments—Management. 3. Business enterprises—Computer networks.
4. Performance technology. 5. Success in business. I. Title.
HD30.2.S227 2011
004.068—dc22
2010036287
™
The paper used in this publication meets the minimum requirements of American
National Standard for Information Sciences—Permanence of Paper for Printed Library
Materials, ANSI/NISO Z39.48-1992..
Printed in the United States of America
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Contents
List of Figures and Tables v
Note to the Reader vii
Introduction 1
Why This Book Is Needed 1
The Current State of IT Investments and Organizational
Challenges 2
High Failure Rate of IT Projects 3
IT Project Studies 4
Case Studies 11
U.S. Federal Government—Overall Assessment 15
Guidance and Legislation to Date 18
Introduction to the Five-Step Process 29
Step 1 Developing Actionable Business Strategy 37
Overview 37
Strategic Planning Approach 42
Case Study Examples 48
Strategic Planning Critical Success Factors 50
Summary 52
Step 2 It’s All about Business Performance 53
Overview 53
Develop Business Performance Objectives 56
Develop Performance Framework 60
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iv Contents
Develop Appropriate Measures 64
Develop Baseline and Target Values 75
Pitfalls and Critical Success Factors 76
Summary 89
Step 3 Invest for Results 91
Overview 91
Portfolio Candidate Investments 95
Enterprise Architecture 96
Investment Portfolio 110
Business Case 111
Business Case Approach 115
Additional Thoughts on Business Cases and Their
Importance 135
Portfolio Selection 140
Summary 152
Step 4 Achieve Investment Results 155
Overview 155
Project Execution 156
Project Revalidation 172
Management Dashboards 179
Implemented Project 185
Critical Success Factors for Investment Implementation 185
Step 5 Realize the Benefits, and Close the Strategy Loop 187
Overview 187
Implications 202
Overall Summary 208
Appendix A: Federal Legislation, Requirements, and Guidance for IT
Initiative Management 209
OMB and IT Investment Management 211
Appendix B: PRINCE2 213
Appendix C: Risk Management Approaches 217
Risk Assessment 223
Glossary 225
References 243
Index 245
About the Author 249
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Figures and Tables
Figures
I.1 High Level Overview of Five-Step Approach 35
I.2 Overview of Five-Step Approach 36
1.1 Overview of Step 1 38
1.2 Performance-Driven Management Overview 39
1.3 Strategy/Feedback Loop 41
2.1 Annotated Strategy/Feedback Loop 55
2.2 Overview of Step 2 57
2.3 Balanced Scorecard Overview 61
2.4 Strategy Map Concept 63
2.5 Performance Metric Driven Strategy 65
2.6 DOE Performance Measures and Targets 70
2.7 Performance Line of Sight 73
2.8 Business Process Performance Overview 74
3.1 Overview of Step 3 92
3.2 Step 3 Detailed Process 93
3.3 Investment Cause-and-Effect Relationships 112
4.1 Overview of Step 4 157
4.2 SDLC Waterfall Model 161
4.3 Department of Transportation 2008 Scorecard 181
5.1 Overview of Step 5 189
5.2 Best Practices Yield Improved Results 196
C.1 SDLC and Risk Management 221
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vi Figures and Tables
Tables
I.1 Recipe for Success: CHAOS 10 6
I.2 Risk Elements—Construction versus IT Projects 18
1.1 Strategic Planning Approach 42
3.1 Investment Portfolio Levels 95
3.2 Architectural Analysis Summary 101
3.3 Architecture Definition Summary 101
3.4 Architecture Maintenance Summary 102
4.1 SDLC Advantages and Challenges 166
4.2 Notional PDM Example 178
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Note to the Reader
THIS BOOK INCLUDES SELECTIVE TEXT and illustrative materials published by a
wide range of federal agencies and other organizations. These materials
are in the public domain, but accreditation has been given in the text and in
the reference section. I contributed to a number of these documents.
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Introduction
Why This Book Is Needed
There is no such thing as an IT project in isolation from its business change
program. (Getting IT Right for Government, Intellect, June 2000)
(cid:129) Despite organizations implementing numerous best practices, informa-
tion technology (IT) implementations remain risky and can often have
questionable business value propositions.
(cid:129) An improved IT management approach is needed based on under-
standing and maintaining the business value proposition from concept
through to implementation.
LARGE IT PROGRAMS are inevitably fraught with risks that often result in
cost and schedule overruns, lack of functionality, less-than-envisioned
business impact, and—at times—outright program failure. These results
have plagued large IT acquisitions and modernization programs for decades
despite the use of more structured acquisition processes, advanced program
and project management techniques (such as earned value analysis), process
improvement programs (such as Capabulity Maturity Model Integration
[CMMI]), and advances in the technology underlying systems development.
On a separate track, many large public-sector organizations have initiated en-
terprise architecture (EA) and performance management programs. Unfor-
tunately, however, these EA-related initiatives have had little impact beyond
meeting statutory requirements.
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