Fiona S., the chief operating officer of an multi-national industrial parts manufacturer, listens to Wayne, the vice-president of sales, present his group’s capital investment proposals for the coming year. Among the planned initiatives Wayne describes is the development of an online sales quoting tool. As Fiona listens to Wayne run through the list of proposed features that the tool will include, a thought occurs to her:
Didn’t the Customer Service group propose a CRM initiative that touched on similar things just last week?
After the meeting, Fiona asks her assistant to get her a copy of Customer Service presentation from the prior week. Indeed, some of the features and data of Wayne’s quoting tool seem to match those of the CRM initiative, but from reading only the written descriptions it’s difficult to be sure if these items are the same or related. Fiona is faced with a challenge that is common for any leader responsible for managing a portfolio of operational investment opportunities: It is difficult to make “apples to apples” comparisons of ideas and proposed initiatives that originate from different parts of the enterprise, because they are often expressed at inconsistent levels of detail, and not within the context of an enterprise-level operating model. Fiona, or any leader, would benefit from an architectural approach to developing, presenting and managing a portfolio of operational investments. The following outlines a basic approach to using business architecture to support portfolio management activities
The Architectural Approach to Portfolio Management Express operational investment opportunities in consistent architectural terms.
Good proposals typically provide a summary and comparison of current and future states as a way of describing the scope of the effort. Establish notation standards for business architecture artifacts (including process maps, context diagrams, business requirements, business rules and data elements) and use them to frame ideas in a consistent way across business areas. Doing so provides the portfolio manager with consistent reference information for comparing the scopes of various initiative proposals.
Establish a foundational architectural model, based on business capabilities, and relate all initiatives to it.
Adopt a reference model that includes a comprehensive list of the full range of capabilities of the enterprise (e.g., product management, customer management, accounting management, etc.). “Map” the proposed initiatives to the enterprise capability reference model, by “tagging” each proposal according to the capabilities they address. When initiatives are mapped to a capability model, portfolio managers now have a preliminary basis for sorting and comparing initiatives. When the complete portfolio of initiatives is mapped to a business capability model, portfolio managers are able to reference the model to find initiative overlaps and gaps. It is also possible to identify initiative priorities, dependencies, and to generate “roadmaps” that include an optimal sequencing of initiatives.
Getting Started. Achieving consistent architecture artifacts across an enterprise may take considerable time, and involves establishment of standards and lots of leadership, communication, training and governance. Begin by implementing the basic concept of expressing initiatives through their relationship to a common, foundational, business capability model. Doing so encourages your people to plan and scope initiatives with the “bigger picture” in mind. Reference the model and mapped initiatives to enable portfolio management conversations about scope, priorities, dependencies, and timing. Make it intuitive and easy for participants in the proposal development process to relate to the model. Use basic mapping reports to quickly identify the initiatives that might include overlapping scope. From there, engage initiative sponsors to provide more details. Remember that the mapping and identification of common capabilities is only the beginning of the conversation. With experience, maturity and the implementation of technology (including a relational database that provide for multiple views of a portfolio), organizations can execute a deeper level (perhaps at the requirement level) of mapping and achieve more detailed insight into portfolio overlaps.
The Payoff. Integrating business architecture into the operational investment portfolio management process provides improved visibility and reference for the portfolio manager. Ultimately, adding the discipline of business architecture to portfolio management can provide a improved rate of return on the entire portfolio, through better sequencing of investments and elimination of redundant scope.
