Delivering exceptional digital services is a key goal for Canadian public sector organizations at all levels of government. The dynamic pace of digital transformation means governments must ensure that failures no longer are an option. They must invest their scarce resources in the right technology at the right time and ensure the right outcomes. At a small scale, this can be difficult but manageable. In large organizations traditional, siloed portfolio management approaches are no longer suitable. Info-Tech’s research shows that a holistic approach that embraces the whole portfolio of assets (applications, data, software, hardware, etc.) and changes that impact them (projects, resources, operations) is required to achieve these goals at scale. This is particularly true in the public sector. The combination of aging technology, out-of-date skills, and structures and practices may stand in the way of new ways of governing and managing portfolios holistically: enabling, data driven, Agile, automated, and integrated.
You Cannot Rush Into EPM
The better part of a decade ago I was at the IT headquarters of a global financial services company in North Carolina to kick off a project. The goal seemed simple enough – define the processes, technology, and training required to ensure every investment, down to the individual change, was traceable to the goals and strategic capabilities of the organization across their portfolio. Rather than dozens of projects and hundreds of apps, they ran hundreds of projects that impacted over 17,000 applications worldwide. Instead of flying home on the Wednesday night as I had planned, I was out buying new clothes and finding a new hotel room and flight home in the middle of the NCAA Basketball playoffs. That proved easier than defining how we would work together to achieve that goal. We had to continue until we had a three-year roadmap in place that would see a new integrated portfolio management technology stack, reinvented processes, and the delivery of a global training program that would impact thousands of people over the next two years. Much like this example, large government departments share complex portfolios and would benefit from the same rigor in defining and implementing EPM practices successfully.
The Roots of EPM in the Public Sector
The Seven Challenges of EPM
EPM is not a new topic in the public sector. One of our members in the US federal government with over 17,000 employees implemented their EPM function in Y2K to holistically manage “Information Technology (IT) systems, applications, assets, intellectual property, people, and projects across four strategic portfolios.” Early in the last decade, state level CIOs began to leverage EPM when they were required to implement Technology Business Management, a framework driven by software vendor Apptio that ties projects and apps to business goals. In the last couple of years state CTOs are also looking beyond Apptio to ensure a similar outcome as my friends in financial services – a mission and business architecture-informed view of investment and outcomes. Closer to home, another member in the Canadian Federal Government with over 6,800 employees used the term to describe their practices for enterprise level customer relationship management of key private sector stakeholders and their needs. The difference in these definitions alone, notwithstanding the requirements for disclosure and transparency in government, highlights seven challenges public sector organizations must overcome to succeed with EPM.
Challenge: Competing Definitions of EPM
The examples above show that there are divergent definitions of EPM in the public sector. Further exploration in the industry reveals different and incomplete definitions. Project Portfolio Management (PPM) software vendor Planview calls EPM the evolution from “traditional to modern PPM.” This is a fairly one-dimensional view, and most industry definitions include the combination of PPM and IT Portfolio Management. The latter usually includes Application Portfolio Management (APM), Service Management, Software/Hardware Asset Management (SAM/HAM). Data Management and Security Risk Management have also emerged in the space. However, the drive to embrace digital solutions and services has strained the capability of existing management and governance frameworks:
“The demand for agility [in digital transformation] imposes changes for portfolio management and governance, but best practice frameworks for portfolio management (e.g. PMI) or IT governance (e.g. COBIT or IT Infrastructure Library (ITIL)) are rather suited for stable environments and traditional command-and-control settings. Existing approaches for coordinating a multitude of agile teams via a portfolio (e.g. Scaled Agile Framework or Disciplined Agile) address this need by providing rather inflexible blueprints as one size for all solutions, which might not suit every organization.”
Agile Portfolio Management: Design Goals and Principles, Horlach et al, Association for Information Systems, ECIS 2019
As a result, organizations must define EPM and the related set of practices in a way that is relevant to their context and aligned with the goals they need to achieve. To do that there are a number of challenges they must overcome to leverage EPM to drive Canada’s digital ambitions.
Challenge: Misaligned Organizing Principle for EPM
It is common to leverage the concept of value streams to organize digital transformation. The abstraction can be useful to change the nature of conversations around value delivery. They can also lead us down the White Rabbit’s hole and lose sight of the relationship of the value stream to the whole portfolio of operations and delivery of products and services. Info-Tech’s research indicates that effective EPM begins with defining the right organizing principle, or focus, for the portfolio. The organizing principle guides the structure and definition of the elements in the portfolio. Choose correctly and you significantly reduce the effort required to make wise investment decisions and evaluate the benefits delivered by the portfolio. For example, project-centricity remains the current standard for most public sector organizations. Unfortunately, the project is not the key driver of success in the public sector. It is only an enabler. Programs and services and the operational elements that enable you to deliver them are the focus of all levels of government in Canada. Effective EPM in the Canadian public sector begins with a shift in portfolio management focus from a project-centric portfolio to a service-centric portfolio to provide insight into the following:
- Are our services trending toward delivering the expected value/benefits?
- Do we have the right mix of and maturity of services to deliver on the government’s mandate?
- Do we have the right mix of people and skills to deliver and continually improve our services?
- Are we making the right investments at the right time into increase the value-delivered services?
- Are we doing the right actions to ensure technology continues to enable service delivery?
- Is data of sufficient quality accessible to those delivering and using the services?
The answer to these questions and the insights required to take action on the portfolio depend on applying the lens of the architecture of the organization to not just program and service delivery, but the operational capabilities requirement to run the organization as well. This starts with a defined business architecture such as the GC Business Capability Model to provide the ability to differentiate between systems, relationships, and perspectives in the portfolio.
Challenge: Defining Business Value
Info-Tech’s research shows that defining business value, or the link between how technology enables effective operations and the delivery of business outcomes, is one of the biggest challenges faced by IT leaders in the public. Old fashioned thinking of IT as a cost center and purely financial models of value limits the definition. Business and IT leaders must embrace a holistic definition of value and related metrics that evolves and changes as the organization does to ensure their view of portfolio is current, relevant, and holistic. This starts with the table stakes discussion of around business benefits created by technology such as the revenue generation and cost reduction (or efficiency). However, no one ever won big playing for table stakes, particularly in the digital economy. The big wins only come when your definition of value embraces human benefits of technology as well. In the public sector, human benefits come in the form of enhanced effectiveness of the civil servants who deliver services, and the adoption of digital service channels by the community.
Challenge: To Centralize or Decentralize EPM
In large scale, and particularly federated entities, the question of centralization is key. The challenge is it can be tempting to centralize the function to enhance control. However, while it is possible to centralize some of the governance, at scale centralization can quickly become a bottleneck that slows the dynamic, agile decision making required to deliver digital services to a crawl. The key is, Steve Denning wrote in his Strategy and Leadership article Ten Agile Axioms That Make Managers Anxious, “Control is enhanced by letting go of control,” and as organizational psychologist Karl Weick prescribes in Managing the Unexpected, “The real trick in highly reliable systems is somehow to achieve simultaneous centralization and decentralization.” The key is to make centralized governance an invisible function that leverages decentralized operational data for insights into where support is required by decentralized services and capabilities amongst federated government organizations. Decentralization done well pushes accountability down to where the work is being done, improves engagement, and ensures alignment toward a common set of objectives as described in Info-Tech’s Make Your IT Governance Adaptable.
Challenge: Garbage In… Bad Decisions Out
Success with EPM requires a dramatic shift in how change and asset data are managed in organizations. Project portfolios in mature organizations receive the most attention. However, application and technology assets tend to be managed retroactively (if at all). Investment in operational changes and enhancements are seldom tracked reliably. Data quality is low, and updates are handled as a catch-up activity that is all too frequently forgotten after falling off the corner of people’s desks. Effective EPM requires people be dedicated to develop and maintain good quality, current data around the key aspects of enterprise portfolio management, namely: workforce, projects, products, services, applications, data, software, and hardware assets (SAM/HAM), business continuity/disaster recovery (BC/DR), security, and vendors. Technology leaders must invest in shoes for the shoemakers, and focus on effective data management and technology to manage the data from these different aspects of the organization’s IT portfolios.
Challenge: Human Middleware
Document-centric practices reinforce governance by document, and by extension human beings creating the documents that are sent to central governance bodies. The cost of this human middleware is high. A recent Info-Tech benchmarking study across government departments in Canada found an average of four full-time equivalents were required to maintain retroactive reporting of Application Portfolio (APM) data alone. The key challenge here is that having people serve as middleware across portfolios is far from efficient and effective, which does not create value for the organization. Human middleware approaches do not scale economically across large portfolios across multiple services.
Challenge: Disconnected Practices, Disconnected Portfolios
There are software solutions targeted at every aspect of a portfolio, including workforce management functions in HRMS systems, Project Portfolio Management software, product management software, Application Portfolio Management solutions and modules in multiple different types of systems, IT Service Management tools such as ServiceNow for services, IT Asset Management solutions for SAM/HAM, and cloud management, Security tooling, BC/DR tooling, and vendor management platforms. While all have APIs and interfaces, integration of multiple systems represents a monumental undertaking. Government departments can start small and focus on three pillars:
- Project Portfolio Management tooling can provide a reasonable proxy for project and resource management,
- Application Portfolio Management tooling that supports a robust, nuanced evaluation of the health of the applications, required dispositions, and operational and project investments in them, and
- Enterprise Service Management software to manage the performance of the services supported by the technology.
However, when a government invests in tooling to analyze the business of technology, it must also invest in the related practices as well. As Ellis found in the Business Analysis Benchmark,
“A tool enforces a set of practices and standards on the organization that can be productive. Where the implementing organization uses the tool as a catalyst to also improve other areas, the activity can be seen as highly productive – and significantly impactful.”
This begins by bringing together the projects, services, and applications to Integrate Portfolios to Create Exceptional Customer Value.
The demand for more effective digital services is driving initiatives across Canada. Municipal, Provincial, and Federal technology leaders with large portfolios of projects, applications, and services must also invest in the people, processes, and technology to ensure they make the right investments at the right time to continue to evolve and deliver enduring and exceptional value to the Canadian public through digital services.
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