IT project portfolio governance

the emerging operation manager

Conference Paper Portfolio Management, Governance, Information Technology 19 May 2008

Bouraad, Fatat

How to cite this article:

Bouraad, F. (2008). IT project portfolio governance: the emerging operation manager. Paper presented at PMI® Global Congress 2008—EMEA, St. Julian's, Malta. Newtown Square, PA: Project Management Institute.
 

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. 5th 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 (2nd edition). Prentice Hall.

Dale, B. G., & Ockland, J. S. (1994). Quality improvement trough Standards (2nd 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.

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

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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).

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

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Appendix A

IT Resource Management

Activities Authors Key Performance
IT HUMAN RESOURCE MANAGEMENT Manage human resources Applegate & Elam, 1992; CMM, 2001; Gapon & Glazer, 1987; Rochart, 1982; SUN, 2005
  • Provide the physical working environment for individuals to perform their tasks effectively
  • Review periodically staff performance
  • Remunerate individuals for their contribution to the organization value
  • Identify and quantify the competency-based processes
Hire staff Delsi & Danielson, 1998; Microsoft, 2005; ITGI 2007; SUN, 2005
  • Institutionalize staffing practices to recruit qualified individuals
  • Identify workgroup competencies to perform the business activities
  • Assess the level of skills, knowledge and processes within the workgroup to perform the committed work
  • Provide a foundation for individuals to continuously improve their capabilities for performing competency based processes
Develop core IT skills Lee, Trauth, & Farwell, 1995; Ginzberg & Baroudi 1988; Igbaria et al., 1994; ITGI, 2007; Microsoft, 2005; Niederman et al., 1991; SUN, 2005
  • Train people to close the gap between an individual's current skills and those necessary to perform his or her assignments
  • Help individuals achieving his career goals
  • Enhance skills development practices
  • Mentor the transfer of knowledge and expertise of more experienced individuals with scarce skills to other members
Manage intellectual capital through knowledge management Microsoft, 2005; SUN, 2005
  • Capture the knowledge, experience and artifacts developed in performing competency-based processes within the organization
  • Identify needs for new practices and technologies

IT Relationship Management

Activities Authors Key performance
IT RELATI0NSHIP MANAGEMENT Enhance interpersonal skills DeLisi & Dalieson, 1998; Feeny & Willocks, 1998; Lee & Trauth, 1995
  • Engender trust and confidence among superiors, peers, and subordinates
  • Create mutual confidence, harmony of purpose, and successful communication among people
  • Motivate skilled technical people to carry out their jobs
Develop effective relationship with corporate level, boards, executives, project managers Applegate & Elam, 1992; Benjamin et al., 1985; Feeny & Willocks, 1998; King, 1997; Rockart & Earl, 1996
  • Build informed strong Business/IT relationships at the executive level
  • Educate top management and key users about the potential impact of IT operations services on their company
  • Build together in constructive dialogue people found it difficult to talk to each other
  • Communicate his/her actions to the top management through a very simple language, without any technical slang
Develop effective relationship with line management Applegate & Elam, 1992; Benjamin et al., 1985; Feeny & Willocks, 1998; Rockart & Earl, 1996
  • Strengthen contacts with line managers
  • Develop strong, on-going partnerships with line managers
Develop effective relationship with end-users and stakeholders Applegate & Elam, 1992; Benbasat, 1980; Benjamin et al., 1985; Blanton & Watson, 1992; Feeny & Willcocks, 1998; Lapointe & Parker-Matz, 1998; Rockart & Earl, 1996
  • Develop user's understanding of IT potential
  • Help users and specialists to work together, and ensure user's ownership and satisfaction
  • Communicate the user's needs and priorities to the IT department
Manage vendor partnerships Feeny & Willcocks, 1998; Grembergen, 2003; Li Eldon, 1997; Rockart & Earl, 1996
  • Make the required decisions about the scope and nature of the outsourcing relationship and the type of IT services to be outsourced
  • Maintain good relationship with outsourcing organization
  • Ensure adequate interface for managing the contract management and account management functions

IT Organizational Management

Activities Authors Key Performance
IT ORGANIZATIONAL MANAGEMENT Contribute to organizational development (IT strategic planning) Rockart & Earl, 1996; Delisi & Danielson, 1998
  • Redesign operational processes
  • Reengineer support processes
  • Rethinking Managerial Information flows
  • Redesign and manage the federal IT Operations management organization
Contribute to process innovation Brown, 2004; Lee & Trauth, 1995; Rockart & Earl, 1996
  • Create or reengineer new IT processes for competitive advantage
  • Assess of new information system and consider radical changes to business processes as well as to technologies
  • Focus on process reengineering to define new ways to conduct business
Define and communicate the OM organizational structure Benbasat, 1980; Raghunathan & Raghunathan, 1989; Rainer, 1995
  • Align IT operations to the needs of organizational functions / activities and roles
  • Establish a culture for openly sharing information among staff
  • Define common function cluster (workgroups) used to perform standards activities
  • Align workforce activities and performance results with business strategy and objectives
  • Provide individuals an understanding of the organization goals
  • Prepare individuals to work independently within the constraints of the organizational goals and objectives
  • Integrate competency framework for individuals
Identify data and system ownership ITGI, 2007
  • Provide the business with procedures and tools to address responsibilities for ownership of data and information systems
  • Help owners to classify information and systems

IT Technology Management

Activities Authors Key Performance
IT TECHNOLOGY MANAGEMENT IT projects managing ITGI, 2007; OGC, 2007
  • Help defining and reviewing a test strategy and an operational test plan methodology
  • Advise on the business and technical requirements repository for accredited systems
  • Deploy test environment and conduct final acceptance tests
  • Recommend promotion to production based on agreed accreditation criteria
IT technology infrastructure management Feeny & Willcocks, 1998 HP, 2003; IBM, 2004; ITGI, 2007; Lee & Thrauth, 1995; OGC, 2007; Rockart & Earl, 1996; SUN, 2005
  • Ensure infrastructure resource protection and availability
  • Align the infrastructure maintenance with the organization's change management procedure
  • Ensure a feasibility test environment
  • Provide guidance and control to ensure that solutions are operable at the appropriate level and to optimize timing for new solution design and changes
  • Ensure that the infrastructure in use, including the technology and common application portfolios (e.g., standard desktops) is aligned to the business strategy and direction
Deliver and support management ITGI, 2007; OGC, 2007; IBM, 2004; HP, 2003; SUN, 2005
  • Define and manage service levels
  • Review periodically current performance and capacity of IT resources
  • Manage the changes relating to infrastructure and applications within the production environment
  • Ensure continuous service
  • Ensure system security
  • Educate and train users
  • Manage service desk and incidents
  • Ensuring the integrity of hardware and software configurations
  • Manage problems
  • Ensure the quality, and availability of business data
  • Manage the physical environment
  • Manage operations
Third-party Services management ITGI, 2007; OGC, 2007; Rockart & Earl, 1996
  • Manage the contractual and service level agreements between the IT services provider and the client
  • Define the procedures for interaction between the service provider and the client
  • Create and maintaining SLAs with the IT services provider
  • Monitor the effectiveness of the IT services provider

IT Quality Management

Activities Authors Performance Criteria
IT QUALITY MANAGEMENT Conduct quality planning Crosby, 1980; Evans, 1997; Slack et al., 2004; Zeithhaml, 1990; Evans & Lindsey, 1996; Juran, 1998; Dale, 1994; PMI, 2002; ITGI, 2007
  • Develop product/service quality dimensions and ensure they are aligned with the organization's quality policy
  • Utilize standard quality tools and techniques
  • Develop quality metrics and performance criteria
  • Advise of a quality management plan
  • Evaluate service quality control, assurance, and improvement issues
  • Communicate quality-related inputs of the delivery process, and the related effects on other services planning processes to the customer
  • Promote quality culture inside the Operations management organization
  • Define clear roles for the quality assurance processes and quality control procedures
Focus on customer satisfaction Gearson, 1993; ITGI, 2007; Juran, 2001; Martin, 1989
  • Deliver services meeting quality standards
  • Demonstrate high respect for the customer
  • Educating the customer/market about the new technology
Service process continuous improvement Dale & Ockland, 1994; ITGI, 2007
  • Review periodically of service achievements and maintenance of SLAs
  • Implement process adjustments to ensure quality improvement efforts
  • Improve the efficiency and effectiveness of service level management
Quality measurement, monitoring and review IBM, 2004; ITGI, 2007; Juran, 1998; Juran, 1998; Juran, 2001; PMI, 2002; Slack et al., 2004; Sun, 2005
  • Monitor IT processes results to ensure compliance with requirements (relevant quality standards)
  • Utilize quality tools to aid in the evaluation and identification of potential problems and their associated costs
  • Perform inspections, reviews, and walkthroughs to ensure that items are properly documented as accepted, rejected, or identified for rework
  • Implement process adjustments to ensure quality improvement efforts

IT Risk Management

Activities Authors Performance Criteria
IT RISK MANAGEMENT Alignment risk management with business requirements ITGI, 2007; Microsoft, 2005; OGC, 2007; PMI, 2002
  • Identify and review organization's risk management policies and procedures
  • Establish a risk management discipline to be an integral part of the overall operations framework
Risk identification ITGI, 2007; Microsoft, 2005; OGC, 2007; PMI, 2002
  • Identify potential risk events related to service process
  • Identify the sources of possible internal/external risk events
  • Develop flowcharts to determine the causes and effects of risk
  • Classify potential risk events, the ranges of possible outcomes, and risk interactions anticipated during various stages of the IT service life cycle
Risk assessment ITGI, 2007; Microsoft, 2005; OGC, 2007; PMI, 2002
  • Document the manifestations of risk events
  • Confirm stakeholder risk tolerances
  • Estimate risk event probability, consequence, and frequency
  • Estimate risk event value and related range of possible service costs
  • Develop probability/impact risk rating matrix
  • Develop list of prioritized risks
Risk response planning ITGI, 2007; Microsoft, 2005; OGC, 2007; PMI, 2002
  • Work with stakeholders to develop risk responses
  • Determine procurement feasibility as a risk reduction tool
  • Develop contingency plans, implementation criteria, and alternative strategies
  • Determine insurance coverage needs
  • Determine risk events warranting responses.
  • Assign risk owners
  • Identify other processes affected by risk planning iterations
  • Estimate the price of non-conformance to identified risks
  • Determine and document the appropriateness of specific risk event strategies
  • Determine contingency reserve amounts needed
  • Develop a risk response plan
Risk monitoring and control ITGI, 2007; Microsoft, 2005; OGC, 2007; PMI, 2002
  • Create workarounds for unplanned risk events
  • Quantify actual risk events (for comparison and evaluation with the risk plan)
  • Complete risk event updates as part of the service control process
  • Complete risk response plan updates, including adjustments to risk probabilities and risk values

IT Procurement Management

Activities Authors Performance Criteria
IT PROCUREMENT MANAGEMENT Align IT procurement policies with established policies and procedures at the corporate level ITGI, 2007; PMI, 2002
  • Be familiar with the organization's procurement policies and procedures
  • Procure in compliance with established procedures
Supplier evaluation/selection ITGI, 2007; PMI, 2002
  • Define and utilize payment/invoicing terms
  • Conduct contract negotiations
  • Evaluate and select source of procured resources, and award
Request supplier responses evaluation ITGI, 2007; PMI, 2002
  • Conduct solicitation activities to obtain bids/proposals from prospective sellers
  • Conduct bidder/contractor conferences
  • Develop advertising to support solicitation
  • Collect proposals for evaluation

IT Financial Management

Activities Authors Performance Criteria
IT FINANCIAL MANAGEMENT Cost accounting ITGI, 2007; Microsoft, 2005; OGC, 2007
  • Identify all IT costs and map them to IT services to support a transparent cost model
  • Understand the differences between cost estimating and cost pricing
  • Align the cost model with the enterprise's cost accounting procedures
  • Identify performance measurement techniques
Cost budgeting ITGI, 2007; Microsoft, 2005; OGC, 2007
  • Allocate operational costs to individual IT services
  • Utilize a chart of accounts to associate quantitative cost assessments with related resource requirements
  • Develop a cost baseline to determine cost performance
Project investments appraisal Microsoft, 2005; OGC, 2007
  • Evaluate project investments
  • Identify appraisal methods for decision-making process
Cost recovery ITGI, 2007; Microsoft, 2005; OGC, 2007
  • Establish and use of IT costing model based on the service definitions that support the calculation of chargeback rates per service
  • Verify the charging for services is identifiable, measurable and predictable by users to encourage proper use of resources

©2008, Fatat Bouraad
Originally published as a part of 2008 PMI Global Congress - EMEA

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