IT Portfolio Management Step-by-Step: Unlocking the Business Value of Technology

NEW END-TO-END PROCESS

The biggest driver of the PMO was the recognition that the existing method of approving and funding IT projects was seriously flawed. Business units would express a need; IT would respond with a proposal and solution outline. Approval of the proposal by the business unit was coupled to full project funding. However, at this early stage, many projects were "half baked." The business side might not have thought through its needs carefully; IT might not have asked the right questions needed to elicit sufficient detail. The usual result was a continuing stream of project change requests (PCRs) as work progressed and the actual requirements came to light. These PCRs often led to added costs and project delays, which in turn eroded business unit trust in IT's estimation capabilities in particular, and its project management skills in general. As an illustration, prior to the new process PCRs consumed over 69% of Xcel Energy's IT capital budget. The Xcel Energy Business Systems leadership, working closely with the core business units, remapped the prior project process to a stage gate view. This provides a consistent, easy to understand set of requirements to carry an initiative from the idea stage through adoption into the portfolio, then execution through the PMO and post-implementation benefits realization. See Exhibit D.

SNAPSHOT OF ECONOMIC VALUE ADDED (EVA) FOR IT PROJECTS AT EXCEL ENERGY

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