Transforming IT Project Portfolios into Strategy Execution Initiatives

Dr Mathias Kirchmer, Managing Director and Co CEO, BPM-D
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ITprojects, when successful, can generate large returns for the organizations that undertake them.  Unfortunately, IT initiatives also can carry considerable risk of failure. To maximize the chances of success – delivering real business value -organizations benefit from the discipline of value-driven business process management (BPM) as overall management approach for a portfolio of IT projects. The process-context helps to achieve fast and sustainable business outcomes at low risk.

Target value with IT projects – Through the BPM-Discipline

The most relevant IT projects for organizations are those that have a direct business impact and directly improve business processes. All resulting projects need to be aligned with each other and with the expected business outcomes. The BPM-Discipline provides the overall framework to achieve such goals [1].

IT related projects are often subject to failure for a variety of reasons. For example, they may have the wrong focus and they may not be consistent with the overall business strategy. Forinstance,a machinery company invested in a significant software effort in support of processes related to specialty products. It turned out to have only a marginal share of the overall revenue, and very little impact to the bottom line, even though the automation project was challenging to address. Frequently, project managers underestimate the importance and complexity of the “people factor”. ERP projects, for example, fail or deliver reduced value in many situations due to the challengesrelated to people.. The BPM-Discipline helps to address all of those challenges.

  The management discipline of value-driven BPM helps convert strategy into execution and enables projects to proceed with pace and certainty  

A key step in the IT project lifecycle should be to establish a clear focus. Management efforts should be concentrated on optimizing and innovating the most important processes, or the high impact processes, of the organization. Commodity processes should be organized and implemented based on industry common practices, reducing the necessary effort significantly. The focus moves away from the basic technology to the improvement of processes and the creation of business value. The BPM-Discipline helps identify the 15-20 percent high impact processes that are the best targets for creating value. More than 80 percent commodity processes can simply be implemented based on industry common practices, as reflected, for example, in ERP systems or industry reference models [1][2].

After setting the right priorities, value-driven BPM delivers the appropriate methods, tools, and approaches, like the systematic use of process and other information models in a repository that can be used to keep projects on track [2]. BPM capabilities, such as people change management or the establishment of process communities, enable the adoption of resulting process improvements.

The value-driven BPM approach identifies, in addition, which process management capabilities have to be established to maintain and grow improvements over time. It isnot enough to implement a business process automation engine; it is also necessary to build the right governance organization to adjust the system over time to changing business requirements.

The Process of Process Management makes it happen

After more than two decades of research and practice, BPM capabilities have evolved significantly.  The tools, methods and approaches related to BPM have been battle-tested. A large body of knowledge is available that can be used to drive business outcomes. The BPM-Discipline assembles this learning into a comprehensive management discipline that helps executives address the challenges they face. It transforms business strategy into IT and people based execution – at pace and with certainty. Hence, it makes the management of IT project portfolios part of this strategy execution engine.

One of the central insights of a value-driven BPM-Discipline is that it is a business process by itself [1]: the Process of Process Management.  It is through the Process of Process Management that the BPM-Discipline comes to life in every part of the organization. The Process of Process Management puts the BPM-Discipline to work by defining how the process organization functions across the enterprise: How to focus on value, how to define the appropriate transformation projects, how to apply the right methods and tools, how deliver process improvement initiatives and how to include people-related transformation activities systematically.  Ideally, it becomes a built-in “strategy execution discipline”. IT projects are combined with the right process improvement methods to drive strategy execution.

Realizing the Benefits of IT Project Portfolios within the BPM-Discipline

The BPM-Discipline provides significant benefits for IT projects, both those implemented through company specific software developments, and those using standard software packages like ERP. The management discipline of value-driven BPM helps convert strategy into execution and enables projects to proceed with pace and certainty. It transfers IT project portfolios into strategy execution initiatives.

The process-driven approach not only keeps the project focused, with all items accounted for and change requests clearly defined, it saves money by avoiding elements that do not support the organization’s business objectives. The emphasis on transparency and simplicity helps to ensure that models and software developed for one IT project can be readily accessed and re-used for other projects.

IT project portfolio management becomespart of the larger BPM-Discipline.  - This emerging management discipline makes IT projects enablers of an effective execution of business strategies.

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