What IT portfolio management tools can't do: Stop politics

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October 26, 2005 (Computerworld) -- LAS VEGAS -- A few years ago, when IT portfolio management software and techniques first came into vogue, many IT executives were trumpeting how the tools would remove politics from IT project prioritization debates. They envisioned IT steering committees that would objectively rank the value of proposals by calculating their expected return on investment, strategic impact and other quantifiable criteria.
But according to IT managers at the IT Financial & Asset Management Summit West here yesterday, that vision hasn't come true.
"IT portfolio management techniques don't help you get past politics," said Becky Hamilton, an information management director at Pioneer Hi-Bred International Inc., a commercial seed producer in Johnston, Iowa, that is a wholly-owned subsidiary of Du Pont Co.
"I can't imagine any tool would remove organizational dynamics" from discussions on IT project prioritization, said Sam Coursen, CIO at Freescale Semiconductor Inc. in Austin. Coursen, who like Hamilton was a speaker at the conference, said Freescale's executive committee has a dollar cap that "forces the group to focus on the top 20% of projects that are expected to deliver the most value." The New York-based International Quality & Productivity Center organized the event.
IT portfolio management tools "won't depoliticize anything," agreed Bernie Donnelly, vice president of quality assurance at Philadelphia Stock Exchange Inc. Instead, "it's about having a rigorous process around" prioritizing IT projects, he said. "That's what works."
IT managers interviewed by Computerworld during the past four years have often maintained that IT portfolio management techniques and software would short-circuit the politics often surrounding discussions between IT and business executives about which IT projects to fund. That's because the tools can calculate and rank the projects expected to have the greatest impact on an organization using a variety of metrics, including return on investment, net present value and internal rate of return.
But in hindsight, the belief that objective rankings would defuse the political jockeying around budget discussions were either naive or misguided, several conference attendees said.
"To be a successful CIO, you have to learn not to take sides in the budget battle," said Russ Finney, vice president and CIO at Tokyo Electron America Inc. The Austin-based company is a subsidiary of Tokyo Electron Ltd., which makes semiconductor manufacturing equipment.
Finney said he needs to listen to all sides of a discussion about which IT projects to fund -- and about the drivers behind them -- before he can make an objective decision. That's particularly true when it falls upon him to break a deadlocked vote. Still, he acknowledged that the budgeting process at Tokyo Electron "is very political. That's why we only do budgets every six months -- if we had to do them every quarter, we'd be at each other's throats."
Still, one IT executive at the conference sees an upside to the situation. "Some of the tools are pretty slick, and some of them enable conversations to happen" between IT and business executives about which projects to fund, said Michael M. Blake, vice president of finance for IT at Kaiser Permanente in Oakland, Calif.
"I'm a big advocate of conversations, and we can use these tools as a vehicle to drive those discussions and make those decisions," Blake said.

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