IT portfolio tools you can use

In last week’s column I touched on IT project portfolio management. The sound bite goes something like this: “IT portfolio management measures how IT aligns with strategic business objectives.” This week, let’s dive in a little deeper.

Two companies, Niku and BluePhoenix, exemplify two unique approaches to bridging the IT/business disconnect. Both promise to help senior management measure the return on their IT investments in terms of strategic business decisions. 

Niku takes the top-down approach. It assembles high-level data, such as IT cost, broken down by business line and business function. Sheldon Monteiro, vice president of technology at Sapient, tells me you can get this data from accounting, including historical views and chargeback data into business units. If the data is incomplete, you can also make some assumptions as to where money is being sent based on how many applications and employees are needed to support each project.

From my conversation with Monteiro, I’d say he was fairly bullish on the top-down approach. If your time frames are short, as in a budget-planning cycle, top-down is good.

BluePhoenix offers IT a bottom-up approach. Perhaps it’s not, strictly speaking, IT portfolio management, but I believe it’s essential to seeing the big picture.

According to Ted Venema, senior vice president and product manager at BluePhoenix, there is a lot of distrust between business users and IT when planning projects. Working from the bottom up, BluePhoenix builds trust by analyzing your applications in depth and delivering real numbers, both for current assessments and future projections.

For example, the BluePhoenix solution will analyze an order-entry system to see how many different databases it touches, how it has been modified over the years, and what other systems it talks to. It works by digging down into the bits and bytes, discovering things such as how much of each programming language you’re using.

“People swear up and down they don’t have assembler code,” Venema told me, when of course they do.

“How can you possibly be doing an ROI on current systems if you don’t know what is in them?” he asked. Naturally, you’ll just be guessing.

Monteiro, however, is a bit cautious. He feels that bottom-up is good, but it depends on how much time you have for your portfolio planning effort. “Over a lengthy period of time it can yield substantial results,” he says, but he adds that those results can be skewed if you’re working in a compressed timeframe and miss something critical.

I also spoke with Heath Daughtrey, vice president of IT Services at Harrah’s Entertainment. Harrah’s Entertainment is a $4.3 billion company with 43,000 employees — dwarfed by companies like General Motors, perhaps, but big and modern enough to be representative of the new way of thinking about IT.

Initially, Harrah’s managed its resource capacity using three disparate systems, none of them integrated. Daughtrey has since deployed a top-down portfolio management suite from Niku. In addition, he says that if he was going to make modifications to a system he would run something like BluePhoenix. 

Daughtrey’s experience highlights the complexity of this emerging market. Different vendors offer different models, each trying to give companies a holistic model for IT. Application portfolio planning, project portfolio management and enterprise architecture strategy are all parts of the puzzle. Over time, both the top-down and bottom-up approaches will be needed to find the solution.