Portfolio Management in a Shared Services Infrastructure Organization

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Portfolio Management in a Shared Services
Infrastructure Organization
NJ-SIM Meeting, March 11, 2004 Charles C.
Schmidt, PMP Director, Strategic Planning JJ
Networking and Computing Services 1003 U.S. Rt.
202 Raritan, NJ 08869 Phone [phone] Cell
[phone] Fax [phone] cschmid1_at_ncsus.
jnj.com
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(No Transcript)
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IM Stats / Facts
140 TB - Application Storage 110TB File
Print Storage
527 UNIX Servers
1.5 B (Total IM Spend)
2,300 NTMidrange Servers
110,000 JJ Employees
Websites receive 7.0MM hits/day
97,000 Desktops/Laptops
Remote Access Users 60, 000 (15,000 have
broadband access)
518 Internet sites 429 or 83 managed by NCS
4,100 Employees WW 1,100 Consultants WW
3,725 help desk calls/day
60MM e-mails/month
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NCS Growth in Service Offerings - NA
30-40 CAGR
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NCS Business Evolution
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Results of Initial Applications of a Portfolio
Management (PfM) Methodology.
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Definition Portfolio Management

• Portfolio management is the ongoing allocation
  of resources among investment alternatives with
  the objective of maximizing business value with
  acceptable risk

Think in Terms of Your 401(k)!
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Initial PfM Application Prioritized Portfolio of
63 Strategic Initiatives
Prioritize
Classify
Pipeline
Cut Line
5
5
7.5
7.5
7.5
7.5
12
10
12
10
3
3
5
5
12
12
5
5
10
10
3
3
12
5
5
5
12
5
5
5
7.5
7.5
10
10
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How we Prioritize NCS Initiatives
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Check Definitions
1. Prioritize Projects Using Standard Criteria
Prioritize
Possible Scores (Hover Cursor to See Definitions)
4
4
4
4
4
4
3
3
3
3
3
3
ROIgt10 or
2
2
2
2
2
2
savings gt10MM
1
1
1
1
1
1
0
0
0
0
0
0
Composite Scores are Calculated
Proioritization Criteria
Financial
Alignment
Op Co
Risk
PE
Benefit-
Compliance
with NCS
Strategic Initiatives
Demand
level
Alignment
JJ
Strategy
Weights
Strategic
Strategic
Strategic
Relative
Q1'03

Objectives /
Sponsor
K
L
M
N
O
P
Composite
Driver
Imperative
Composite
Initiatives
Score
Score
Project Scores
Assign Scores
Align with and
Project Title
influence our
Customer /
CH
Project Milestones
4.0
1.1.1
4
3
2
1
0
4
XXX
100
Market Focus
business
partners
Align with and
Customer /
3.6
influence our
Project Title
Project Milestones
Market
1.1.2
CH
3
3
0
4
1
1
YYY
90
business
Focus
partners
Align with and
Customer /
Project Title
influence our
Project Milestones
3.5
Market
1.2.1
CH
2
2
1
4
2
1
ZZZ
88
business
Focus
partners
Align with and
Customer /
influence our
Project Title
Market
1.2.2
CH
Project Milestones
business
Focus
partners
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2. Estimate Resources Required from Each Function
Enter Resource Estimates
Totals are Computed
Identify Level of Person Directly Accountable
Project Title
Project Title
Scores are Computed
Project Title
Project Title
Project Title
Project Title
Project Title
Project Title
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Resource Rollups by Function Identify Resource
Constraints
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3. Classify ProjectsExample-Project
Classification
Classify
Do we have the right balance to achieve strategic
objectives?
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Example- Risk/Reward Chart
Classify
Are we taking more risk than we need to?
Can we move these left and/or up?
Risk
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Example-Cost/Benefit Chart
Classify
Are the benefits in proportion to the cost?
Can we move these left and/or up?
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Strategic Process InitiativesPortfolio Analysis
It is balanced across our strategic drivers
Our portfolio is Strategic!
Portfolio has a low risk profile
Benefits are in proportion to cost
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4. Put Selected Initiatives into PMLC Pipeline
and Execute Them
Execute
4-Square Reporting Format
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Going Forward.A Global Process for NCS
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Formalize the Portfolio Management Process
Demand
Governance
BU/Sector Infrastructure Projects
Business Unit IM Strategies
Prioritization by NCS, with Corp. IM
Oversight
Business Planning Process
JJ Global Infrastructure Projects
Corp. IM Strategies
Budget Requirements (FTEs, )
NCS Infrastructure Projects
NCS Strategies
NCS Strategic Process Improvement Initiatives
Cut Line
The NCS Portfolio
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Portfolio Management--Critical Elements
Project Portfolio Management Tool from Pacific
Edge
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Proposed Definition Governance

• Governance is the process by which decisions
  are made among competing alternatives, work is
  authorized, progress is monitored, and processes
  are enforced. Governance may exist at multiple
  levels in an organization.

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Governance Vision
NCS Board Allocates Budgets, Reviews NCS
Portfolio, Adjudicates Top-Level Priority
Conflicts
GPMO Oversees Management of Individual Portfolios
and Prioritizes Major Cross-Functional Projects
Management Committee for Each Portfolio Sets
Priorities and Allocates Resources
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Implementing a Global Portfolio Management Process

• Successful Implementation Requires That the
  Process
• Is defined and agreed to by key stakeholders
• Has CTQs, measurements and benchmarks
• Is verified by a pilot implementation
• Process and deployment plans are approved by the
  NCS Board
• Is documented in sufficient detail to instruct
  users
• Is supported as necessary by automated tools
• Is taught to users via live training sessions
  and/or automated training
• Is continuously improved based on CTQs

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GPPM ScheduleMust Feed 2005 BP Process!
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Questions?Suggestions?