Enterprise IT Portfolio Management With SAP xRPM

Even in the information age, the jury’s still out on the role of IT. 28 percent of CIOs surveyed by Kellogg School of Management admitted that senior business executives at their companies view IT as “a necessary evil.” Fortune 500 companies spend on average 25 to 50 percent more than has been earmarked for IT. Why? Because of persistent, seemingly inevitable cost overruns, and the inability to enforce an IT governance code across the whole enterprise – leaving individuals to haphazardly procure systems and services via their own cost centers. Although some of the criticism is borne out of cynicism and a lack of understanding of IT topics, there is little arguing with the statistics. And like it or not, the CIO has to lump it. Unfortunately, getting an effective grip on all IT activities is like trying to tame a wild beast – and the bigger the company, the more daunting the task.
That’s where IT portfolio management systems take center stage. There are several on the market today, each promising to put the CIO firmly in charge of the IT organization’s destiny. Problem is, they often only address part of the issue.

Grip on up-to-date HR information

One of the reasons why IT has such a bad rap is because too many initiatives fail. And many portfolio management systems are incapable of stopping the rot. The reason: They do not deliver a full or accurate picture of the true state of affairs – making up for a lack of facts, on resource availability for instance, with guesswork.
IT professionals have lots of commitments. Most of their time is spent on baseline services (keeping things up and running), not strategic projects (driving change). But baseline services are often most pressing, so projects are forced to take a back seat.
Being in the know about how long professionals really spend on baseline activities makes or breaks planning. And this is exactly where conventional systems fail to deliver – because they are unable to draw resource availability information from HR systems. So they compensate by building in corrections and using ballpark figures.
To effectively manage the enterprise IT portfolio, however, decision-makers need to know exactly who is available when – taking into account time dedicated to operational and administrative tasks, vacation, regional holidays and whether staff are full- or part-time.
Every inaccuracy has a knock-on effect downstream – projects cannot proceed until certain work is completed, and cost and schedule overruns are inescapable. But that’s not the end of the story. Because projects fall behind schedule, corners have to be cut to get them back on track. Shortcomings not addressed during implementation need ironing out on completion. In many cases, that means more resources are required for initial operation, and performing last-minute fixes. So what might have been a two-hour-a-week job becomes a twenty-hour-a-week job. In other words, more effort needs to be invested – effort that cannot be correctly accounted for, and the whole cycle starts over – with conventional project portfolio management systems offering no way out.

The missing link

There is, however, one notable exception: technology developed by SAP, which is set to redefine the IT portfolio management space. How? By providing that vital piece of the puzzle – full integration with human resources and financial accounting systems. As a result, key up-to-the-minute data on skills, budgets and resource availability flows directly into strategic and operational planning and management of both projects and baseline services. In other words, SAP offers true enterprise IT portfolio management capabilities – an unrivaled value proposition. Based on its xApp for Resource and Portfolio Management (SAP xRPM) and SAP NetWeaver, SAP’s solution slots effortlessly into existing IT environments, and integrates fully with SAP and non-SAP operational project management systems –such as SAP Collaborative Project Management (cProjects), SAP Project System, or Microsoft Project.

Inventorying the IT portfolio

Project Dashboard
Project Dashboard

So how does this translate to real-life needs? First, it allows companies to inventory their entire IT portfolio. A dashboard provides decision-makers with an at-a-glance view of everything in progress or in planning. They can then drill down to greater levels of detail see what resources are assigned where, and check that budgets, schedules and key-performance indicators (KPIs) are being met.
Getting the right people on the jobSAP xRPM enables the CIO to take a proactive role in setting the course of the IT organization – ensuring that corporate IT policy is enforced on the ground. Non-mission-critical or non-core services or projects can be easily spotted, and either killed off or identified as candidates for outsourcing.
When setting up new projects or programs, decision-makers can indicate the strategic importance of roles – deciding from the very outset whether the activity is “plain vanilla,” an add-on, or key to business – and staff it accordingly. Internal resources can then be redeployed to initiatives of strategic importance – keeping essential knowledge in-house and increasing the chance of success by assigning the best people for the job, based on criteria such as skills, location and availability.

The manager In the driver’s seat

What-If Analysis
What-If Analysis

SAP xRPM gives control over all operational aspects of baseline services and projects: From planning, to budgeting, to accounting, to execution, to wrap-up on completion. New initiatives can be established quickly on the basis of templates, and structured by phases, tasks, and checklists. Approval and review processes as set out by corporate IT policy can vary depending on the cost, type of initiative, or other factors. Deadlines are defined within the system and individual segments can be linked to relevant documents and business objects – such as purchase or internal orders – that are located in other systems.
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SAP’s solution also supports collaboration with partners and subcontractors beyond company boundaries. And authorization can be defined in accordance with individual roles, ensuring that sensitive data is properly protected. Once an initiative is underway, decision-makers, project and resource managers can scrutinize lists of issues, and all related documents, or check schedules, keep track of dependencies, deliverables, costs and quality. Team members know exactly what they have to do, and when. Quality gates ensure predefined tasks are completed to full satisfaction before approval is granted for the next phase. So nothing slips through the net, and IT policy can be enforced across the board.
If the undertaking is very important, executive sponsors can be assigned. Alternatively, if it is a non-core task, it can be farmed out. Everyone involved is automatically kept in the loop via SAP’s core workflow engine, which works across all SAP applications and beyond. The chain of command is clear to see, and nothing progresses without the appropriate approval.

Capacity Management
Capacity Management

Seamless links with HR systems give a true picture of resource supply, availability, and demand – not one based on guesswork. SAP’s system also helps the IT organization to meet strategic staffing goals. Full visibility into professionals, their skills, and tasks, makes it easy to staff initiatives effectively, or to quickly re-assign staff to projects in need of extra support. One positive side effect is greater employee satisfaction, as less time is spent on routine tasks, and more on things that will make a difference. IT specialists can also market themselves across the organization, and see what skills are in demand.

IT becomes business-driven

A combination of SAP xRPM and SAP NetWeaver is the only solution on the market that can genuinely claim to deliver true, end-to-end enterprise IT portfolio management. It puts the CIO firmly in charge of the IT organization’s destiny. It forges closer links between IT and business, fostering the kind of credibility that is essential to a partnership of equals, working towards common goals. SAP’s solution helps companies to tightly align IT activities with business strategy, by prioritizing them on the basis of business goals, and harmonizing them with broader objectives, such as total cost of ownership, net present value, or ROI. In other words, it helps IT to become business-driven, and gets IT professionals working toward strategic objectives. Using the language of business is a significant step toward dispelling the mysticism and skepticism surrounding the work of IT.

Uli Fröhlich
Uli Fröhlich