Are Your Portfolio Assumptions Wrong?

No matter how comprehensive the analysis of an IT portfolio is, the subsequent discussion and action planning is typically far more constrained.

Typically, over 75% of the portfolio is “off the table” right from the beginning: no matter how much it might require renovation, replacement or retirement, it’s considered untouchable — often without even discussing it.

This sort of behaviour is constraining opportunities and locking in cost; as the economic turmoil that surrounds businesses deepens, closing so many doors in advance must also stop.

What are some of the reasons that lead people to block consideration of great chunks of their portfolio?

It May Be Expensive or Difficult, but It’s Working: Almost by definition, existing systems are working.

By and large, if there are training issues surrounding them, there is also a large existing cadre of people who know how to work efficiently with them. These systems may now be surrounded by workarounds galore (to reconcile other change in the business to old software which models practices in the past) but these, like barnacles on a ship’s hull, build up slowly over time and are often not even noted.

Then, too, systems support each other: with (for instance) three large core systems representing over 80% of the workload on a particular platform (perhaps a mainframe), removing any one of them from that platform would undo the economics of the other two — so nothing can be done with any of them.

So goes the subconscious reasons for eliminating these from consideration of change.

Often, to make change where it may have become obvious that it is needed, a whole change program that unfolds over years cascades out as a result.

If portfolio management had been a practice all along, these cycles would have repeated regularly: it is only the fact that this is a practice that needs to start that stands in the way.

Downturns, in turn, are a time where a comprehensive plan to manage cost out of the organization are able to get a hearing (unlike good times, where the capital may be easier to come by but no one sees the need to spend it on renewal when there is so much new “stuff” that could be done). Make sure you are not editing opportunity out of existence before you can even look at it.

The Business Isn’t Interested in Change: This is true only if IT sees its role as being akin to a waiter in a restaurant: “let me take your order” and deliver on it, but not take the initiative to suggest the patron try a new dish (or even help co-create it).

Change is something that you can build demand for. In turn, that demand — the perception on the part of your business client(s) that they have unmet needs that only change can provide — is built on how you are perceived: is your analysis of the situation credible, and is your ability to execute considered to be good? How strong is your comprehensive vision of the future?

These are all issues that can be worked on, and do not depend on first “getting the order” to proceed.

“If we didn’t have this, how would we solve this problem” is an excellent starting point.

Perhaps your analysis would put software-as-a-service solutions forward, or a different set of packages than the ones you currently use (a vendor may well have focused on your industry’s needs in recent years, but you are currently using a competitor’s products).

In general, I find that being able to show how a course of action turns fixed costs in the business into variable ones is generally a good avenue to getting the business thinking about demand: they have the same cost pressures to deal with, and herein lies an avenue to being able to do so.

It is said, rightly, that effective IT teams are financially-conscious: what this means in practice is that they can show how to achieve the equivalent of a service (which is metered and thus variable) out of a product (which is a fixed purchase and depreciation cost, or fixed staffing cost).

We Have a Large Lump of Depreciation to Eat: This last can be a real reason — the only real reason — to take a chunk of the portfolio “off the table”, but don’t dismiss it too soon even so.

Vendors still have the same issues of making sales that you do as a business: downturns affect them, too.

The stronger ones will often finance your depreciation in order to make a sale, relieving your books in the process. Yes, you will pay more per month/year until this is “eaten”, but if you are planning for a long cycle before replacement — say eight or more years — the burden is reasonable if the benefits of change support it.

Even here, in other words, it’s worth thinking seriously about how to make it happen.

The organizations that can stop editing themselves will be able to make more change happen that cleans up their own cost profile while improving the capabilities they offer the business (especially, the capability to do the same).

Make sure you’re not taking ideas off the table before you’ve even had a chance to look at them.

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About passionateobserver

I am a passionate observer of our society, the economy, and politics. Mostly I don't like much of what I see, so I write as a concerned citizen. To the fray, I bring a background in the philosophy of history, a lifetime's reading, a work history in information technology management, consulting and education.
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