Structure in Threes: Tools Development

Organizational Design Tools Need Completion

Continuing to build out Enterprise Analysis and Design tools this morning along with a workflow to integrate the Modern IT Portfolio Management methodology.  After finishing the Org Design Tool, the next steps will be to finish off the Portfolio Management Tool and then document the workflow for possible automation.

Strategy Analysis

Modern IT Portfolio Management

Digital Nervous System Architecture

It looks like I’m going to build out the original concepts I developed when discussing what and how Active Directory should be with Hans.  I had presented to Hans an idea that Active Directory (SMS Server) could accomplish its mission through usage of federation and abstraction into logical units (see below late 1996 presentation).  Added to that were the concepts I had been working on as a side research project during my employment at IBM the 80’s.  This later became a white paper “The body enterprise” where I through the network could become an enterprise’s digital nervous system.  Unfortunately, Hans and I could not get the funding to pursue going any further than simple IT product management.  However, I continued -though through small pieces of other projects- to research how to build a management and control system.  With my Modern IT Portfolio Management R&D at a foreseeable conclusion I’ll be able to build the CIO Workbench I had envisioned years ago.


The unfortunate aspect to this was both IBM and Microsoft had the opportunity to build this out a decade ago but failed to see the vision was achievable. I guess you can chalk it up to other missed opportunities that companies have for not reaching far enough in the future.  I remember hearing internal chatter by Microsoft management when I departed for DMR Consulting this was a dream decades away, though BillG must not have through so or his Ghostwriter wouldn’t have spent so much time interviewing me to included in his book.

IT Portfolio Management: Asset Classes and Portfolios

Multi-order Interconnections of Assets

Comments from yesterday’s post regarding the difference between IT Assets and Traditional Investment Assets I had a tendency to agree with in the past.  However, since the changes in law and the economy the independence between assets no longer exists as once was believed.  As the most recent financial meltdown the economy is still recovering from demonstrates.  This phenomena of interconnectedness pointed out in Albert-László Barabási’s book “Linked” points to the fact that everything is connected.  The issue becomes how these are connected and the depth of the effects of that connection.  This is the area of systems dynamics which I continue to study at the Center for Understanding Change.  My objective is understand the 1st, 2nd, 3rd, etc. levels of consequence to the ever widening web of connection we live in and how to apply it to ITSM and Enterprise as a whole.

Applying these concepts to IT Portfolio Management the relationships between the traditional assets classes under management became first a hierarchy and second not much to my surprise like the taxonomy originally developed for the conceptual underpinning Has Witt and I discussed for Active Directory. This hierarchy points to ITSM (Services) as the bridge between Enterprise concerns and IT Functional concerns.  It is the IT Services which enable the enterprise capabilities which at the corporate level are the assets.

Accounting for temporal relationships

Below is the initial brainstorming of the hierarchy and its relationship to both enterprise and time.  The time dimension in most portfolio management methodologies is limited to the time value of money typically in the form of NPV.  However, not accounting for the effects of time on the various attributes under consideration for the enterprise is where I see the limits to using time in present portfolio management methodologies.  A White Paper, still under development, “The Optimum Path to an Uncertain Destination” is one approach I’ve found to address this situation and is included in the Modern IT Portfolio Management methodology I’ve been creating.

IT Asset Class Hierarchy

Modern IT Portfolio Management: Investment Profiles

Last night I reviewed of my notes interviewing investment brokers, portfolio managers the past few months and delved deeper into my growing collection of Wiley Finance Series of books.  This morning I scanned through “The Art of Asset Allocation” by David M. Darst searching for the next analogs in financial portfolio management to pair up with IT Portfolio Management.  It occurred to me the metaphors currently in usage in wall street: Bulls, Bears and other animals used to characterize investment behavior is close to but not exactly a match for IT Investment.  In a previous White paper I had researched and written for Microsoft’s Services division on Business Continuity and Disaster Recovery I had started to layout a third dimensional grid-work on the organizational decision behavior and environment.   As I re-read the insight I had working on various aspects of decision science I can see how to apply these learnings plus several other insights to IT Portfolio Investments.

Investor Profiles

The only downside to this approach is that most consulting firms prefer to adhere to the 2×2 matrix.  The logic behind such is they feel more than 2×2 or binary decision values confuses management and executives.  A little insulting to their clients if you think about it.  However, the objective is to communicate quickly to the client not show the complexity and nuance behind the analysis.  As such when I develop a more comprehensive tool, I’ll have to have it yield several simple 2×2 views of the decision for ease of understanding.  I did this with the design of the Cloud and APM Portfolio Tool for Microsoft IT Strategy and Enterprise Architecture services division a few months ago.  The feedback I got from my personal CxO advisory panel were very positive.   Expect to have a wireframe of the tool’s output to match the personas I’ve developed ready by end of next month**.  The it becomes a decision on what technology to build.

**I like the advice I got from Alan Cooper a few years back; “Design from the outside in”.  The common sense of it seems apparent, however, so few companies and developers do such.  Today all the rage is teaching developers and consultants to use personas.  Unfortunately, the lessons typically stop at using them as sales tools to justify what has already been built rather than design tools to ensure operation and aesthetics match with the enduser’s needs and desires.

Moderm IT Portfolio Management Workshop

Reaching the end of putting together first of several Modern IT Portfolio Workshops.  Will bench check next week 🙂 .  Have a fairly good assessment of major competitive Frameworks from Microsoft, IBM, etc.  As expected each these looks at Portfolio Management as a Zero Sum Gain stack ranking algorithm in isolation.  However, that was the goal behind developing those methodologies so “they could grab the low hanging fruit”.  Next week’s research and development efforts are to further develop COBIT 5’s “Enterprise Governance of IT” concepts and create the alignment workshop materials.  This weekend I’ll get back to diagraming the overall master process, document the interfaces between the processes, artifacts, and outcomes.  I’m using a similar structure to the Strategy and Market Planning process documentation I used before to create that practice.  The major difference this time will I’ll most likely use SharePoint and/or MS Access as the implementation vehicle.  Had considered Azure over the past several years, however, my resources are limited and since separating from Microsoft recently I don’t have the funding / resources to build there.  I’ve a friend who left Microsoft years ago who has his own company and platform that may be a potential, but it looks to be a learning curve I’ll have to go through on my own to use it.

Modern IT Portfolio Management Methodology

I’ve divided Modern IT Portfolio Management into four major activity groups.  Each group has methods associated with it as well as linkage to corporate functions.  This will enable the process to be integrated into how a corporation really works rather than a blistered on event to the IT budget allocation process as so many of these Portfolio Management methodologies are used for. An example the Prioritization Group takes into account Corporate Values, Goals and Priorities, Enterprise Business Continuity, Disaster Recovery, and Risk Management.  This differs from standard approaches in that instead of evaluating “new technology” investments, tis method evaluates the entire portfolio.  The goal is evaluation of ALL investments as these relate to the Enterprise’s mission and determine one of three several actions: Divest, Hold/Maintain, or Invest –its back to the roots of Markowitz’s original treatise on Portfolio Management.  Additionally, where this methodology is differentiating from the rest of the market is the items managed in the portfolio.  The asset classes (Markowitz) go beyond the simple Software and Hardware (physical assets) into abstract assets that could be considered derivatives and other complex investment vehicles.

The downtime away from supporting the Microsoft Communities has been trying,  I really liked helping the field: It was great to hear back from those on the front lines; “thanks that really helped” or “take a look what I achieved with the materials you pointed me to” or “my customer is really is really pleased with the results I got using your approach”.  Getting feedback like that is addictive it makes you want to help more.  However, after a month away I’m at peace with myself and focused on this and others lines of Enterprise Design R&D.  I’ll still take on a few people to mentor each year, but not to the scale I was building unless I determine to start my own consulting firm.  I had considered that several years ago, thinking joining another startup firm to help it develop would allow me the same experience and freedom.  However, the direction the partners were taking verses the stated goal were decidedly different.  Still in touch with those partners and despite some challenges the company is doing fine in its new reconstituted form which I’m happy about.  I wanted to see them succeed, as I want to see other small businesses do.  There is something really cool about a small business.  I think I may be the personalization aspect to it.

Structure in Threes: Risk Management

Early wakeup this morning.  Researching advanced risk management practices for Modern IT Portfolio management workshop.  Interesting to review previous company practices in the area and how disconnected these are from strategic and project planning.  While the simple models make calculations easier, they also lull staff and executives into thinking they’re covered what’s necessary.  Tomorrow I’ll add risk management justification points to why Portfolio Management section of the workshop and continue to integrated the risk components into the Portfolio methodology.

Structure in Threes: Modern IT Portfolio Management

This morning I’ll tackle the rest of my wiring closet, then local phone company to come by to determine why primary line is continually business which is what kicked off relocating and revising wiring closet.  In the meantime, I’m back to researching using Candlestick Charting as a means for the Modern IT Portfolio Management concepts I’ve been developing the past years.  I’ve been keeping tabs on the options theory materials I’ve deployed at former employers and clients.  The results infer the approach works well; the clients that I monitor have been reporting increased business capabilities at a faster rate than prior and improved business results in the line of businesses that were supported.

I wouldn’t go as far as saying this is conclusive evidence that the portfolio approach I deployed was causal for improved business results –some of the contribution loop training I received long ago– but I do see a correlation and would conclude effective IT Portfolio Management contributes to improved business results.  The South African engagement I supported remotely for a client would have been a good test case; however, we didn’t have the time nor client have the funding to do a baseline for analyzing the effects creating BI and Collaboration capabilities in the enterprise.  I did specify how they could automatically track results and use predictive analytics backwards to create a baseline for analysis later.  I’d be interested in tacking a trip there one day to see the results and add the marketing analytics they wanted to do in phase two.  In the meantime its off to brainstorming about what indicators to use for IT Ecosystem Candlestick charting.

Structure in Threes –Modern IT Portfolio Management: Research

Spent today on a variety of tasks; home and career.  Finished pressure washing back porch, put final coat on souvenir cup rack I built on Sunday, and started brainstorming how I could apply Candlestick Charting to managing Business and IT Portfolios.  I reason that if you can follow trends in the market, a similar set of dynamics may be at work in the business and IT ecosystems.  So far the portfolio research I’ve been doing relating IT functions and its components to business capabilities is proving out.  Last week I when through my project achieve to review the properties and attributes at play in the various reengineering projects I’ve done.  I’ve noticed a few patterns surfacing and now I’ll be working on analyzing these for correlation, then cause/effect.   The results should enhance the Modern IT Portfolio Management methodology I’m writing about.

Tomorrow I’ll go back to reviewing book outline and detailing it to the next level.  Been away from the project long enough to have fresh eyes looking at it.