IT project portfolio governance

Abstract

Today's information technology (IT) organizations are under pressure to meet or improve IT service levels for critical business functions. Various industry standards, such as the IT Infrastructure Library (ITIL) and the Controls Objective for Information and Related Technology (COBIT) standard, have gained wide acceptance as comprehensive methodologies for improving the effectiveness of IT management.

This paper aims at conducting a detailed analysis of available literature in order to identify the most appropriate competencies and necessary skill sets that will be needed by an operation manager for strategic business alignment. It will address the desirable features of modern operation manager, and the impact of such features on the management performance of the IT operations management main activities in order to optimize benefits from the products or services and bridge the gap between IT strategy and business strategy.

Introduction

It is widely argued that the information technology (IT) leadership function has undergone fundamental changes over the past decade. Most senior executives are now well aware of the critical role IT plays in enhancing organizational competitiveness.

In modern days, the executive responsible for IT throughout the corporation should possess strong leadership skills, power, and business expertise (Applegate & Elam, 1992).

The role of IT operations management is subsequently changing from a component orientation (such as networks, systems, storage, database and applications) to managing business-oriented, end-to-end IT services. A new profile for the operation manager will be described through a set of competences, coherently with the widely accepted theoretical framework introduced in the 70s that today still represents the basis of competence analysis models that defines the concept of competence through three main “dimensions”: Know how to be, defined as interpersonal skills, effective leadership, and work ethics, factors linked to personal identity; Know what, defined as knowledge of the work, tasks, own role, the context, the company, the business; Know how, defined as knowledge of the practices and solutions, the technical expertise and skills required to perform IT operations management activities.

Conceptual Framework

Researchers and practitioners in the human resources management field have been devoting an increasing interest in managerial competence models (Boyatzis, 1982). In fact, the ever-changing environment requires the evolution from a hierarchical to a flat organizational structure, thus modifying the traditional definition of organizational roles. In this context, the concept of competence, meant as an essential characteristic of business and organization, represents the basis for a new approach able to synthesize the design and management of organizational and human resources (Boyatzis).

The operation manager profile will be described through a set of competences, coherently with the widely accepted theoretical framework that defines the baseline list of competencies required for operations management performance through three main “dimensions” (Boyatzis, 1982; Igbaria, 2003): Know how to be, defined as mental, physics and basic attitudes, factors linked to personal identity; Know what, defined as knowledge of the work, tasks, methods, own role, the context, the company; Know how, defined as knowledge of the practices and solutions, the technical knowledge and skills required to perform IT management activities.

Operation Manager Features

The operation manager profile is described through a set of competencies, in accordance with the widely accepted theoretical framework that defines the concept of competence through three main “dimensions”:

Know How to Be:

1. Interpersonal skills: The ability to establish and maintain effective relationships and written/verbal communication inside the company (with any staff member, regardless of his or her organizational level) and toward possible external consultants, and customers (Delisi, Danielson et al., 1998; Feeny & Willcocks, 1998; Lee & Trauth, 1995).
2. Holistic vision: The ability to see the organization as a whole where all the people involved in running the organization have an active voice in forming this vision, all pursuing the same aims (Delisi, Danielson et al., 1998).
3. Long-term vision: The ability to evaluate the consequences of long-term decisions and the strategic opportunities given by innovative technologies and to convey this vision in a credible and plausible manner to staff (Earl, 1993; Feeny & Willcocks, 1998).
4. Effective leadership: The ability to empower, motivate, and organize people to achieve a common objective. (Applegate & Alam, 1992; Feeny & Willcocks, 1998; Delisi, Danielson et al., 1998).
5. Propensity to innovation: The inclination to keep oneself up to date in order to interpret the add-value of innovative IT to the business as technology (equipment, software, hardware, and infrastructure) continues to advance rapidly, and change becomes imperative (Feeny, Edwards & Simpson).
6. Work ethics: The ability to serve staff with integrity, competence, and objectivity, using a professional approach at all times while enforcing departmental rules and procedures.

Know What:

1. Managerial knowledge: Knowledge of managerial models and tools (i.e., business critical success factors analysis, NPV, IRR, ROI, balanced scorecard) (Benbasazt, 1980; Delisi, Danielson et al., 1998; Feeny & Willcocks, 1998).
2. Internal business knowledge: Knowledge and/ or experience of business processes: information flows, staff competencies, business activities (Applegate & Alam, 1992; Feeny & Willcocks, 1998; Delisi, Danielson et al., 1998).
3. External business knowledge: Knowledge of competitive environment. (Delisi, Danielson et al., 1998).
4. Technical knowledge: Theoretical knowledge of IT opportunities and Functionalities (Benbasazt, 1980; Feeny & Willcocks, 1998).

Know How:

1. Technical expertise: Practical expertise of IT use and application (Benbasazt, 1980; Feeny & Willcocks, 1998; Lee & Trauth, 1995).
2. Planning capabilities: The ability to plan and enhance the IT services strategy in order to maximize the value derived from current and future IT investments (Benbasazt, 1980; Feeny, Edwards & Simpson, 1992).
3. Organizational impacts assessment capability: The ability to estimate the IT organizational and economic impacts and capability on company processes, functions, and organizational roles (Applegate & Alam, 1992; Benbasazt, 1980; Feeny & Willcocks, 1998).

The Information Technology Business processes

We categorized IT activities into eight sub-activities:

1. IT human resource management: The activity of hiring IT staff, training both IT personnel and end-users, assessing IT staff performance, and developing IT human resources.
2. IT relationship management: Increasing the levels of trust and reciprocity with the business people, promoting communication levels and mutual understanding with corporate level, line management and endusers, consultants, and promote the value of IT services to the business.
3. IT organizational management: The activity of contributing to organizational development, improving the effectiveness of the delivery of IT products and services to internal and external customers and reviewing the IT organizational structure to adjust staffing requirements and responsibilities and accountability for meeting the organization's business needs.
4. IT technology management: The activity of designing, building, and integrating processes to achieve optimum IT service levels and infrastructure capacity in order to meet targets for security and business continuity of the IT infrastructure.
5. IT risk management: The practice of identifying key risks to service provision, defining mitigation measures to reduce the probability of occurrence and providing contingency plans for business continuity in case the risk event actually occurs.
6. IT quality management: A management approach to effective operations management, particularly continuous improvement of processes, products, services to meet or exceed a customer's expectations for that product or service.
7. IT financial management: The sound management of monetary resources in support of organizational goals. It includes budgeting, cost accounting, cost recovery, cost allocations, charge-back models, and revenue accounting.
8. IT procurement management: The activity of acquiring and maintaining IT resources including people, hardware, software and services that respond to the services delivery strategy, integrated/standardized IT applications and infrastructure, and reducing IT procurement risk.

The complete set of IT operations activities related to the above business processes is found in Appendix A.

Conclusion and Managerial Recommendations

IT influence on company performance is without doubt one of the most debated subject for both IT researchers and practitioners, as the rapid and continuous development of innovations constantly pushes companies to increase IT investments. Assessing how IT supports business aims and needs is a challenge for many organizations. An improvement of a operation manager's ability to transparently communicate with internal as well as external people (suppliers, vendors, consultants, etc.), also called interpersonal skill, could have a positive impact in developing effective relationships with top managers, his subordinates, customers and suppliers. Improvements in leadership (the ability to define objectives and to lead people to their achievement) could positively influence the diffusion of trust and commitment among top managers, peers, and subordinates (Igbaria, 2003).

This study will be set to investigate one of the most researched IT management issues: the influence of the operation manager competencies and IT sub-functions management on the overall company performance. My future work will focus on two main aspects: the competencies an operation manager should possess in order to correctly manage the IT sub-functions and their influence on the overall company performance.

References

Applegate, L. M., & ELAM J. J. (1992, December). New information systems leaders: A changing role in a changing world. MIS Quarterly, 16(4), 469-491.

Benbasat, I., Dexter A. S., & Mantha R. W. (1980). Impact of organizational maturity on information system skill needs. MIS Quarterly, 4(1), 21-34.

Benjamin, R. I., Dickinson, C., & Rockart, J. F. (1985, September). Changing role of the corporate information systems officer. MIS Quarterly, 9(3), 117-188.

Bharadwaj, A. S. (2000). A resource-based perspective on information technology capability and firm performance: An empirical investigation. MIS Quarterly, 24(1).

Blanton, J. E., & Watson, H. J. (1992). Toward a better understanding of information technology organization. MIS Quarterly, 16(4).

Boyatzis, R. E. (1982). The competent manager: a model for effective performance. New York: John Wiley and Sons.

Brown, S. (2004). Strategic operations management. Jordan Hill, UK: Elsevier Science & Technology Books.

Crosby, P. (1980). Quality is free: The art of making quality certain. New York: McGraw-Hill, Inc.

Evans, J. (1997). Production/operations management – Quality, performance, and value. 5^th edition. Minneapolis/Saint Paul: West Publishing Company.

Gerson, R. F. (1993). Measuring customer satisfaction: A guide to managing quality service.

Menlo Park, CA: Course Technology Crisp.

Curtis, B., Hefley, & W. E., & Miller, S. (2001). People capability maturity model® (P.CMM®) Version 2.0. Pittsburgh, PA: Software Engineering Institute.

Delisi P. S., Danielson, R. L., & Posner, B. Z. (1998, Jan/Feb). A CEO's-eye view of the IT function. Business Horizons, 41(1), 65-75.

Dale, B. G. (1994). Managing quality (2^nd edition). Prentice Hall.

Dale, B. G., & Ockland, J. S. (1994). Quality improvement trough Standards (2^nd edition). Stanley Thornes Publishers.

Wustenhoff, E., Moore, M. J., & Avery, D. H. (2005). Operations Management Capabilities Model. Sun Educational ServicesSun BluePrints™ OnLine. Revision 1.0, 1/14/05Edition.

Freeny, D. F., & Willcocks, L. P. (1998). Core IS capabilities for exploiting information technology. Sloan Management Review, 39(3), 9-22.

Grembergen, W. V. (2003). Strategies for information technology governance. Hershey, PA: Idea Group Inc.

HP. (2003). The HP IT service management (ITSM) Reference Model.

IBM. (2004). Service level management using IBM Tivoli service level advisor and Tivoli business systems manager.

Igbaria, M. (2003). Strategies for managing IS/IT personnel. Hershey, PA: Idea Group Inc.

ITGI. (2007). Control objectives for information and related technology (CobiT) 4rd edition.

Juran, J. M. (1983). Quality and costs. Blacklick, OH: McGraw-Hill Professional Book Group.

Juran, J. M. (2001). Quality in customer service. Blacklick, OH: McGraw-Hill Professional Book Group.

Juran, J. M. (2001). Total quality management. Blacklick, OH: McGraw-Hill Professional Book Group.

Juran, J. M. (1998). Quality in operations. Blacklick, OH: McGraw-Hill Professional.

Juran, J. M. (1998). Quality in a high-tech industry. Blacklick, OH: McGraw-Hill Companies.

King, W. R. (1997). Strategic systems success. Information Systems Management, 14(4), 57-60.

Lapointe, J., & Parker-Matz, J. (1998). People make the system go... or not. HR Magazine, 43(10), 28-32.

Lee, D. M. S., Trauth, E., & Farwell, D. (1995). Critical skills and knowledge requirements of IS professionals: A joint academic/industry investigation. MIS Quarterly, 19(3), 313-340.

Li, E. Y. (1997). Perceived importance of information system success factors: A meta analysis of group differences. Information and Management, 32(2).

Martin, W. (1989). Managing quality customer service: A practical guide for establishing a service operation. Boston, MA: Course Technology Crisp.

Microsoft. (2005). Financial management. Service management function. Microsoft Corporation.

Microsoft. (2005). Team model for operations version 3.0. Microsoft Corporation.

Microsoft. (2005). Risk management discipline for operations. Microsoft Corporation.

OGC (2007). ITIL lifecycle publication suite (ITIL lifecycle suite), third edition. TSO.

Project Management Institute. (2002). Project manager competency development framework. Newtown Square, PA: Project Management Institute.

Rockart, J. F. (1982). The changing role of the information systems executive: A critical success factors perspective. Sloan Management Review, 3-13.

Rockart, J. F., & Bullen, C. W. (1982, December). Future role of the information systems executive. MIS Quarterly, special issue, 1-14.

Rockart, J. F., & Earl, M. J. (1996). Eight imperatives for the new IT organization. Sloan Management Review, 38(1), 43-56.

Sanders, N. R. (2001). Operations management. Somerset, NJ: John Wiley & Sons.

Slack, N., Chambers, S., Johnston, R. (2004). Operations management, fourth edition. New York: Prentice Hall.

Walters, D. (2003). Operations strategy. Gordonsville, VA: Palgrave Macmillan.

Appendix A

IT Resource Management

IT Relationship Management

IT Organizational Management

IT Technology Management

IT Quality Management

IT Risk Management

IT Procurement Management

IT Financial Management