Portfolio Management and SOA

In the current economic climate, most IT organizations are faced with extremely tight budgets. Yet at the same time, the business is likely to be exploring new opportunities for growth or improvements in efficiency that in turn often increase the demand on IT. Application Modernization for example is not just a simple case of switching old systems off to immediately save money, but more often requires investment in order to improve efficiency of those systems and in the business processes they support in the long term.

You sense that for a long time it has been easier for organizations to take the easy option of giving projects the budget and freedom to do what they want, without regard to the needs of other projects or even the organization as a whole, as long as the project promises success.

However, enterprises of all types, especially the public sector, cannot simply dispense money like this anymore, and now must face up to making difficult decisions to reject project proposals that take such a ‘laissez-faire’ approach, and instead focus on more efficient utilization of the organization’s resources and to “do more with less’ by reducing waste and duplication, whilst increasing sharing and reuse

Consequently, more attention needs to be paid to the portfolio as a whole, rather than the projects in isolation

Service Portfolio Planning

CBDI Forum has long advocated a Portfolio Management approach to SOA, with Service Portfolio Planning (SPP) being a cornerstone of CBDI-SAE. So in a new report, as well as considering the specific case of SPP, I set out to consider other portfolio types and how to extend conventional portfolio management activities.

The following table for example outlines the typical approach to Portfolio Management, together with some of the ways in which this might be enhanced with our CBDI-SAE concepts.

	Typical Approach	CBDI-SAE Enhancements
Portfolio Types	Project Portfolio Application Portfolio	Separation of Asset-based Portfolios Service Portfolio Solution Portfolio (To be) Current System Portfolio (As is)
Decision Making	Financial Funding decisions Costs ROI Risk Strategic Alignment Balanced Scorecard	Architectural integrity Shared capabilities Separation of Concerns Manage cross-portfolio dependency and relationships Asset Agility
Scoping	Project-based Organizational	Asset-based Business Domain

Portfolio Management activity today is primarily centered on projects and applications, or on a program-centric approach consisting of multiple projects and applications

We believe this can be enhanced by additional attention to an asset-based approach, where

• there is finer granularity, and separation of different asset portfolios, rather than just the arbitrary application scope
• projects are scoped around the delivery of assets, with projects focused on different asset types, separating concerns.
• projects delivering shared assets take a business-domain rather than organizational unit perspective
• as well as financial decisions, the portfolios are also managed to
• optimize the delivery and usage of shared assets.
• provide asset agility, by decoupling assets so they are more responsive to change

As a consequence of the finer granularity and separation, the asset portfolios will need to be carefully managed to ensure architecture integrity is maintained.

The following table suggests separating the Application Portfolio into distinct portfolios.  This is not to suggest that an Application Portfolio might not today recognize assets such as Services, or classify assets on an As-Is or To-Be basis. For example, the portfolio management may be based on a meta model such as TOGAF. It is more often the case today that they are not managed as distinct portfolios, and hence the investment may be sub-optimal, and typically Application focused where the Application that gets the funding and scopes the project, not the shared capabilities within it.

Portfolio	Content
Service Portfolio	Services provided by the organization External Services consumed by the organization Rich classification of Service Types (as defined by CBDI-SAE)
Solution Portfolio (To-Be)	The solutions provided by the organization to the business users and/or customers The solutions consumed by the organization The To-Be solutions Business Processes encapsulated by the Solution
Current System Portfolio (As-Is)	The As-Is Systems (Applications)
Platform Portfolio	Technology platforms on which Services and Solutions are hosted ‘Business’ platforms offering a coherent set of Services to solutions

There's lots more guidance in the report, covering the Portfolio Management Process, how to balance the top-down concerns of the CIO with the 'bottom up' needs of the individual projects need to support their business sponsors, as well as considering the relationship between Portfolio and Asset Management,  but sorry, you will need to use our subscription services to read it...