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Portfolio Rationalization: Effective Optimization of IT Funds
IT portfolios in large organizations become bloated over time with an ever-increasing inventory of applications running on multiple platforms, duplicative or misaligned systems or technologies whose ability to deliver value has degraded over time. As a result, a majority of the IT budget gets allocated to “keeping the lights on” rather than investing in new strategic initiatives. This in turn results in poor business-IT alignment. As stewards of public funding, we must continuously focus on evaluating the effectiveness of our programs and systems and take action to improve our business practices when necessary in order to maximize business value. DOT IT’s process for maximizing business value is call IT portfolio rationalization.
As budgets decrease, the OCIO is focused on optimizing our best practices and adjusting or eliminating outdated systems that are no longer useful or cost effective. The OCIO’s Portfolio Rationalization project will reduce operating costs, position the department for future growth, and focus on strategic imperatives that give us new capabilities for a competitive advantage. We want to create strategic value for our IT investments and optimize our environment as a business enabler. In other words, portfolio rationalization is getting our portfolio healthy, while our governance and management will help it stay healthy. Operational efficiency is a key element of this goal, as is the effective use of resources.
Over the course of the portfolio rationalization process we are focusing
on a couple of key metrics: aligning systems with our departmental strategy and improving systems’ business effectiveness. We will retain or modify systems that strongly align with one or both of these measures. This process will make strong use of customer surveys and feedback, in addition to enterprise-level analysis and review through TechStats and other methods. As we identify systems that are outdated, redundant, or provide low business value, we will either re-engineer or retire them. Our goal in this process is to rationalize our resource allocation by rewarding and upgrading high-performance systems while retiring low-performance systems.
This initiative is not exclusive to OCIO. We are relying on several partnerships to accomplish these tasks effectively. We are working with the Office of Management and Budget, Office of the Chief Financial Officer, Office of the Senior Procurement Executive, and the DOT operating agencies. A team effort is required between leadership, partners, and working groups to properly analyze and prioritize critical programs. Portfolio rationalization will address several challenges that span many DOT modes:
· Cyber security planning and execution
· Establishing a comprehensive enterprise architecture program
· Cloud first strategy and data center consolidation
· Savings through shared services
· Focus on modular development and rapid program deployment
This extensive assessment will create comprehensive measurement standards for the effectiveness of our services and ultimately allocate IT funds more efficiently. We need to get serious about addressing low-performing services by improving them, consolidating them, or retiring them. Portfolio rationalization will increase the agility and innovation potential of our IT services, and will maximize business value to the department.
