IT Project Portfolio Management

1. IT Project Portfolio Management March 25th 2014

2. Executive Director of EY TMT (technology, media and telecom) industry performance improvement team in Hong Kong • 15 years of consulting experiences in market strategy, operating model transformation, IT strategy and complex program management • Advised clients in Asia Pacific, Europe and US. • Master degree in Computer Science and Information Systems from The University of Hong Kong • Stanley Yung

3. Agenda • Project Portfolio Management • Real Life Lessons • Measurement of Success

4. How IT is Managed Business Strategy • Drive • IT Blueprint • Portfolio Investment Approach • Project Selection Approach • Business Case • Enable • Capability Development • Innovation • Portfolio Performance Metrics Governance & Alignment Enablement Management & Delivery IT Capability

5. What guides IT decisions • CIO / the “Strategy” unit • Blueprint to direct investment for maximum value • Annual plan to pace with market, priority and organizational changes • Architecture view and initiatives management

6. Agreed Priorities The IT blueprint will be developed and updated annually based on business priorities agreed with business leaders and endorsed by steering committee.

7. $ $ $ $ $ $ $ BU 1 BU 2 Subsidiary 1 Subsidiary 2 $ $ $ $ Different models of project selection $ $ $ $ BU 1 BU 2 $ $ $ $ Tightly Controlled Integrated Model Holding Company • Distributed investment. • Investment in common IT at enterprise level. • Investment in specific business applications at BU level. • Heavier investment at the smaller bank or BU level. • Investment in a few common areas at enterprise level. • IT investment is centralized at enterprise level. • Minimal IT investment and spending at the BU levels.

8. IT Spending is Tracked • Discretionary expenditure refers to investment for business value creation. • ERP Solution • CRM Platform • eCommerce • Non-discretionary expenditure refers to expenses on operations, and must-do IT spending. • Data Center Operation • Helpdesk Operation Discretionary CAPEX Discretionary CAPEX Non-Discretionary OPEX Non-Discretionary OPEX Company Benchmark

9. Business Case Driven Project Selection • Business cases must be developed before any investment can be made in IT. • The business case must be owned by a business leader and monitored to real value the investment delivers. • Business cases is usuallyevaluated based on urgency, value, risk and dependencies.

10. Business Case • Key Components – Current State, Purpose, Scope / Time, Cost of capital, Capital investment / start up costs, Useful life, Operating expenses, Benefits to be realized • Right Metrics – ROI, Payback periods • Users owned benefits drivers • Simple math with few key assumptions

11. No One Size Fit All Tracks Differentiation Upgrade Review Required review steps Conditional review step

12. Balanced Project Profiling All IT Projects Classification Criteria Full Track Review Group Project Profile Filters • Hardware + Software + Services > US$ X, or • Insource Effort > 50 Man Month, or • Project Duration > 1 Year, or • Cross Application Division, or • Introduction of New Technology, or • Strategic (determined by IT Directors) IT Project 1 (Division A) Match any of the criteria IT Project 1 (Division A) IT Project 2 (Division B) IT Project 3 (Division B) IT Project 2 (Division B) IT Project N (Division A) Fast Track Review Group Match none of the criteria IT Project 5 (Division A) IT Project 6 (Division B) IT Project N (Division A) IT Project 7 (Division B) IT Project 10 (Division A) IT Project 8 (Division B) IT Project 9 (Division B) IT Project N+1 (Division C) IT Project 4 (Division B) IT Project N+1 (Division C)

13. Portfolio is Managed • IT executives are measured by CAPEX / OPEX target • IT executives actively drive usage of discretionary spending to achieve goals agreed with business • Strategic goals • Enabling tools • Sustain enhancements Discretionary CAPEX Strategic X% Non-Discretionary OPEX Enabling Y% Sustain Z%

14. Agenda • Project Portfolio Management • Real Life Lessons • Measurement of Success

15. Lesson #1 – Human Factors • Facts • Decisions are made by human • Decision = bias • Enterprise and personal goals not always align • Strategies • Consider human factors • Build in success factor to kill 2 birds with 1 stone

16. Lesson #2 – Enterprise Factors • Facts • Most enterprises are partially business case driven • Initiatives are prioritized predominately based on budget, difficult to approve big work in one go • Strategies • Challenge yourself what needs to be done minimally • Structure initiative into phases • Get into the door to demonstrate the benefits

17. Lesson #3 – User Factors • Facts • IT is here to support business • Least appealing projects are purely IT capability projects • Strategies • Find business buyers on your idea • Test and build business needs • Have business users initiate the needs

18. Lesson #4 – Government Factors • Facts • Non-public Sector – Drive revenue and minimize cost • Public Sector – Drive revenue and keep cost • In conglomerate as well • Strategies • Know previous year budget • Know what has been left before proposing

19. Lesson #5 – China Factors • Facts • Western – IT is top-down • China – IT is bottom-up and then top-down • Strategies • Create needs in working level • Get executives to hear from internal channel

20. Lesson #6 – Wrong in Right • Facts • Having the wrong project approved is worse than having the right project not approved • Enterprise lost US$ M and personal credibility damned • Cherish your own brand and career • Strategies • Receptive to opposite ideas • Always ask for second opinion

21. Lesson #7 – Selling & Exchanging • Start a question with options • Start a request with an offer

22. Agenda • Project Portfolio Management • Real Life Lessons • Measurement of Success

23. Measurement of Success • PMP’s definition of project • A project is a temporary endeavor undertaken to create a unique product, service or result. • Quality • No More • No Less • Fit for Use

24. Discussion

25. Home for Dinner Now