| In
looking at a complete IT project portfolio, care should be taken to ensure
that project dependencies and links are taken into account. For example, infrastructure changes (which may be defined as separate projects) may be needed to provide a platform for a new customer relationship management (CRM) system. On their own, the infrastructure changes may not deliver sufficient specific, quantifiable value, but without the changes the CRM implementation will not be possible. Therefore, relevant costs of the infrastructure need to be factored into the CRM project to obtain a complete and reliable picture of the real, combined costs and benefits. Therefore, it can often be sensible to look at the portfolio in terms of a series of ‘programmes’, each containing a number of linked projects, rather than as a collection of totally independent, stand-alone projects. Of course, active management is effective only if, from time to time, projects are cancelled because of actual or anticipated non-performance. This is not always easy but it is essential if proper governance is to be achieved. Indeed a Gartner research paper from 2002 encourages corporations to ‘kill projects early and often’ to enhance value delivery from the total IT investment portfolio. However, the problems to be overcome often include: |
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| - | The propensity of projects to develop a momentum of their own once approved and underway. History and current experience tell us that this momentum can be dangerous and needs to be tempered with regular, independent and objective review followed by positive action. |
| - | Project cancellations being seen as a sign of failure and weakness. In fact, cancelling or rescoping a project as soon as it becomes apparent that it cannot be delivered satisfactorily should be seen as a sign of strong management and good governance. |
| - | The profit-and-loss (P&L) statement impact can be significant if the project under scrutiny is large and previous costs have been capitalised. Cancelling the project is likely to lead to these costs having to be written off in one P&L account hit. This may not be popular with the CEO and CFO, but it is likely to be absolutely necessary for financial prudence and regulatory compliance. |
