Commonwealth Technology Portfolio Overview and Analysis

1. Commonwealth Technology Portfolio Overview and Analysis CITS briefing July 18, 2007

2. Purpose To provide an introduction to the Commonwealth Technology Portfolio (CTP) and to establish future portfolio management direction.

3. Presentation Outline • Portfolio Overview • Current Portfolio Analysis • Portfolio Maturity: Next Steps Discussion

4. Portfolio Overview

5. IT Investment Portfolio Management Tool Why Portfolio Management? Business Plans & Needs Commonwealth Strategic Planning Process What proposed IT investments potentially solve business needs? Pre-Select Which IT investments best meet the business needs? Investment Results Evaluate Select Did the selected IT investments deliver the expected business value? Are the selected IT investments performing as planned? Control

6. What’s in the Commonwealth Technology Portfolio? Portfolio Currently Contains: • Major and Non-Major Projects • Procurements Portfolio Currently Does Not Contain: • Assets • Services Commonwealth Strategic Planning Process Assets (Future) ITIM Processes Projects IT Investment Portfolio (ProSight) Procurements Services (Future)

7. Assets (Future) Existing Portfolio Commonwealth Strategic Planning Process ITIM Processes Projects IT Investment Portfolio (ProSight) Agencies are required to update Major and Non-Major Projects and Procurements during the IT Strategic Planning cycle Procurements Services (Future)

8. Future Portfolio Commonwealth Strategic Planning Process Assets ITIM Processes Projects IT Investment Portfolio (ProSight) Agencies will be required for the first time during this upcoming strategic planning cycle to provide Assets and Services costs Procurements Services * All information is self reported from the agencies

9. 2008-2010 Biennium Portfolio Commonwealth Strategic Planning Process Assets ITIM Processes Projects Agency Projected Total IT Budget will include Projects, Procurements, Assets and Services for a more comprehensive view of the 2008-2010 Biennium investment costs IT Investment Portfolio (ProSight) Procurements Services

10. Current Portfolio Analysis

11. Governor’s Priorities & Strategic Initiatives Secretariat & Agency Priorities COV I.T.Strategic Plan(Collaboration) CommonwealthInvestments Council on Virginia’s Future SecretariatInvestments SecretariatInvestments AgencyInvestments AgencyInvestments AgencyInvestments How are the Investments Currently Analyzed? Selection Phase Alignment to Investment Views Analyze investments and identify opportunities Rank & leverage investment Establish a picture of investments

12. Selection Analysis - Supporting the Objectives of Council on Virginia’s Future Pre-Select Select RTIP Weighting: 4 RTIP Possible Points: 28/257

13. Selection Analysis - Alignment to the Governor’s Initiatives and Priorities Pre-Select Select RTIP Weighting: 4 RTIP Possible Points: 40/257

14. Control Analysis - Balanced Scorecard Approach Control

15. Control Analysis - Projected ROI for Chartered Major and Non-Major Projects Control Return on Investment for Current Active Portfolio (Majors and Non-Majors) is 1.97% • Major Project ROI is 1% • Non-Major ROI is 61% • ROI is based on a 5 year period and calculated from agency-submitted Proposal and Charter documentation. • Total Costs include both implementation and O&M costs (when provided by agency.) • In cases of a modified baseline, ROI is calculated using updated costs and original benefits. • Intangible benefits are not included in ROI calculations.

16. IT Investment Portfolio Management Tool Post-Implementation Analysis Evaluate Closeout Reports and Post Implementation Reviews are evaluated at a Project level, but little evaluation is currently done at the Portfolio level. Visibility is lost once a project is completed and the finished product becomes an asset. What proposed IT investments potentially solve business needs? Business Plans & Needs Commonwealth Strategic Planning Process Pre-Select Which IT investments best meet the business needs? Investment Results Evaluate Select Did the selected IT investments deliver the expected business value? Are the selected IT investments performing as planned? Control

17. Portfolio Maturity: Next Steps

18. Portfolio Maturity Criteria Maturity advancement requires adding the element of portfolio performance against established goals to the organization’s control process activities CTP is generally around Stage 2

19. Choose an investment classification model (Gartner, MIT, etc) that incorporates risk factors Classify all investments (projects, procurements, assets and services) and measure current baseline Perform “what-if” analysis to determine appropriate investment mix Establish a target investment mix across the classifications Measure performance of investments each year and realign target mix as needed Determining Investment Goals 16% 14% 13% 57%

20. Review - Presentation Outline • Portfolio Overview • Current Portfolio Analysis • Portfolio Maturity: Next Steps Discussion

21. Committee Discussion of Next Steps To achieve Stage 3 maturity: • Complete Investment Portfolio • Support capture of asset and service inventory • Portfolio Development • Determine model for investment classification, classify investments and baseline • Choose target goal date for achieving Stage 3 maturity To achieve Stage 4 maturity: • Portfolio Performance Evaluation and Improvement • Establish target investment mix and evaluate year over year performance • Choose target goal date for achieving Stage 4 maturity To achieve Stage 5 maturity: • Leverage IT for Strategic Outcomes • Framework for Investment Process Benchmarking • Choose target goal date for achieving Stage 5 maturity

22. Contact Information Constance Scott Manager IT Investment Office 804-371-5927 constance.scott@vita.virginia.gov Nicole Helmantoler ITIM Analyst 804-225-2528 nicole.helmantoler@vita.virginia.gov