IT Portfolio PlanningUsing Excel

Jerry BishopThe Higher Ed CIO

Creative Commons Attribution-NoDerivs 3.0 Unported License.

INTRODUCTIONFoundations for the slides

PurposeTo provide a simple and transparent paper-based method for setting up an IT project portfolio using Excel.

Why View this Presentation1. Without having prior experience this can

seem impossible to know where to start.2. Before choosing a tool to do this, working out

your method using Excel is a major benefit.3. It’s the only way to accurately commit to a

body of work and know you can deliver on it.4. Tight FY12 budgets and increased demands

require reasoned decisions on projects to do.

Who Should Complete This• CIO’s• IT Governance Committee – Project Approvers• Functional Executives – Project Sponsors• Functional Managers – Project Requesters• IT Managers – Project Managers• Project Management Office – Role• Project Managers

What is a Portfolio• Aggregates all demands expected of IT for

review and approval decisions• It’s like a “budget” for allocating staff to

projects requiring IT resources• A tool for building an “annual plan of work”• It’s a workload management tool for seeing

the total demand for IT resources

RESOURCE CAPACITYHow to determine your capacity

Guidelines for Capacity• Determine the reasonable capacity a resource

has to do project work• Be conservative – avoid over committing IT • Initially start with generic resources types– Network Admin, Sys Admin, App Admin, DBA, App

Analyst, Report Writer, Desktop Admin, Desktop Tech, Help Desk

– When comfortable move to named resources if it makes sense

Portfolio Illustration• The following illustration is taken from the

actual initial FY11 portfolio for a college• Reflects all initial requests for IT support and

projects work for FY11 prior to approving or denying decisions were made

• Actual hours used here are from the 3-person Business Analyst group supporting the Banner ERP and related applications

Determining Raw CapacityTime Category Hours

Gross Work Year (Note) 6264Average Overtime per Year +120Non-Contract Time(Holidays, Vacation, Sick, Personal)

-720

Net Raw Capacity 5664

Note: 2012 is a leap year with 261 weekdays from July 1, 2011 to June 30, 2012

Raw Capacity Thoughts• Keep it simple• Averages are better when first starting out• If overtime is taken as paid time off then add

an additional deduction as with comp time– 1 hour overtime becomes 1.5 hours PTO

• Illustration reflects sick and personal time being treated like non-contract “vacation”– Use historical averages if appropriate

Determining Usable CapacityTime Category Hours

Net Raw Capacity (previous step) 5664In-Service Days -48

Adjusted Capacity 5616Productivity Goal (85%) (Note) 4774

Usable Capacity 4774

Note: Nobody is 100% productive with their day. There’s email, phone calls, meetings, breaks ,and birthday treats to hunt down. This approach avoids having to track this in any detail. Can be reconciled in time-tracking if used.

Maximizing Usable Capacity• Consider the value of in-service activities– HR and IT Governance input on the priority– Limit participation to job related activities

• Manage productivity up to 95% or better• Train on time and task management• Minimize general team meetings, manager one-

on-ones, and committee assignments• Don’t use default meeting lengths– Instead of 60 minutes use 45 or 30 it adds up

CREATING THE PORTFOLIOLoading the work load and resource demands

Terminology• Routine Maintenance: Daily production

support obligations. Checking logs, monitoring systems, tape handling, storage management, job scheduling, user administration.

• Operational Support: This is Incident Management (break-fix) work and standard Service Requests not considered projects.

Setting Up the PortfolioCategory Hours

Usable Capacity (previous step) 4774Routine Maintenance (5%) -239Operational Support (15%) -716

Project Capacity 3819Contingency Bank(10%) -382Projected Carryover 0

Net Project Capacity 3427

Project Estimating• Avoid getting bogged down on the estimate – Use SWAGs for initial estimates on all projects– Take multiple passes through to refine

• Use ranges of hours– 25, 50, 100, 150, 200, 500, 750, etc….

• Estimating accuracy will improve– Review estimates at project completion

Cautions• “Research” and “Investigation” Projects– Include them in the Portfolio– Big capacity drains, often slow burning of hours– Evaluating new technologies and software

• Managing Contingency Hours– Decrement the bank as it is used– You can’t use it all at the end, its not like cash

• Revenue generating (billable) projects– Consider special treatment if fully funded in FY12

Organizing the Projects• Separate projects by importance• Most important come off the top

1. Institutional Strategic Plan related projects first2. Required (mandatory this year) Projects next

• Required for regulatory compliance – financial aid• Required to stay on supported versions – Oracle 11G• Means they cannot be deferred without risks

3. Discretionary is everything else in rank order• Value-add, nice to do, and projects that might become

Required by next fiscal year

Loading the PortfolioTime Category Hours

Net Project Capacity (previous step) 3427Strategic Plan Projects -725Required Projects -1631Discretionary Projects -4693

Remaining Surplus/(Deficit) (3622)

Balancing the Portfolio Part 1• Manage down Routine Maintenance – Look for activities to automate and free capacity

• Use Demand Management to reduce Support– Target Top 5 support issues– Develop Problem Management process

• Enforce IT Governance process– Stop informal requests and drive-bys– Manage scope to <10% variance

Balancing the Portfolio Part 2• Scrutinize ALL Required “Mandatory” Projects– “Show Me” the requirement– Challenge IT’s own Required Projects just as hard– It’s discretionary if it van really wait

• IT Governance– Focus on Priorities: The What, Not How

• Reduce Contingency Bank Percentage• Challenge IT Managers to Free-Up Capacity• Trim Scope and complexity of Projects• Cancel projects instead of tapping contingency

THE COMPLETED PORTFOLIOApproving the Annual Plan of Work

Assembling the PortfolioTime Category Hours

Net Raw Capacity 5664Usable Capacity 4774

Routine Maint & Prod Control -239Operational Support -716

Project Capacity 3819Contingency Bank(10%) -382Projected Carryover 0

Net Project Capacity 3427Strategic Plan Projects -725Required Mandatory Projects -1631Discretionary Projects -4693

Remaining Surplus/(Deficit) (3622)

Download the Excel File• Download the excel file from SlideShare.net

at

Project Portfolio Planning - The Workbook

Full Portfolio Worksheet

Simple Resource Planning

RESOURCING STRATEGIESBalancing the Portfolio

Supplemental Labor Thoughts• Backfill labor for Operational work– Often cheaper at $60 - $135 per hour– More capacity for the same dollar– Frees knowledgeable employees for projects

• Project Labor may be required– More costly at $185 - $220 per hour– Contract for fixed fee & guaranteed outcome

• Add contractor resource when it makes sense– You have lots of work requiring vendor assistance

Balancing the PortfolioTime Category Hours

Remaining Surplus/(Deficit) (3622)Supplemental Labor – Backfill 0Supplemental Labor - Project 3622Total Supplemental Labor 3622

Cost of Labor (~$185/hr) $670K

NOTE: Supplemental labor can include limited term employees, temps, contractors, and vendor resources.

Optional Staffing Strategy• Staff IT department for normal workload – Routine Maintenance– Operational Support

• Use supplemental labor for ALL project work– Requires sponsor to account for full cost & ROI when

championing the business case– Allows flexing up then down as project load surges

• Maintains minimal overhead run rates– Simplifies producing savings and avoids layoffs– Add incremental staff FTE as new systems are added

Final Thoughts• Portfolio planning takes some getting used to• Leave contingency for unplanned projects– They always come up

• Develop good IT Governance Committee• Be transparent– Publish your process and the Portfolio

• Train on project management

QUESTIONS?Jerry BishopThe Higher Ed CIO

Look for others in this series

IT Governance Project

Requests