Title: Maximizing Project ROI
Author: yprado
Last saved by: TCS
Company: headstrong

The CIO's Challenge - Creating business value with information technology
Realizing strategic value for business from IT Investments requires integrated management of Six Key Areas at the nexus of Enterprise Architecture and Program Management
By Amit Mitra, Senior Manager, TCS Global Consulting Practice.

Enterprise Program Management creates business value by implementing and continuously monitoring a group of tightly integrated projects, which collectively deliver the strategic business benefit envisioned by the program. There are several practical business and technological challenges that must be overcome to make the EPM successful.  This paper addresses the critical nexus between Enterprise Architecture, Project Portfolio Management and EPM.

The CIO’s challenges – why the CIO needs Enterprise Architecture coupled to program Management
The six principal challenges every CIO faces hinge on creating business value with the application of information technology (IT): 

1.	To create value, CIOs must align IT with business. This alignment should start at a strategic level to create strategic value.  The challenge often is that the business strategy is either missing or does not have the requisite clarity to facilitate IT alignment, and the CIO is not influential in the planning process. EPM coupled with Enterprise Architecture can increase the CIO’s influence by demonstrating that IT can add measurable strategic value to the business.
2.	Even if the planning process is adequate, alignment of IT and business strategies is not enough. To realize envisioned business values, strategy must be implemented through Programs. Each programs is an action plan for implementing and delivering a cluster of one or more tightly coupled values envisioned by the business. Each program is implemented by a collection of interdependent projects. Thus Program Management has a strong nexus with project portfolio management (PPM). Implementation of strategy through interdependent projects is complex, and requires clear, accurate and timely communications: project progress, health and evolving risks must be continually monitored and communicated, issues must be tracked to closure, changes and solutions must be coordinated across projects and senior business managers must be involved when risks can impact customers or external stakeholders.
3.	In the real world, risks, expectations, goals and the business environments continually change. The Enterprise Architecture must align IT and business strategies and create programs to realize business value. Program management provides the mechanism for communication, and an early warning system to address change, identify and manage risk at the program level. This enables an organization to manage change, risk and return from IT decisions in terms that are meaningful to the business.
4.	Management of change is by far the most complex issue and the single highest contributor to overall risk. Change throws an organization from its comfort zone into uncharted waters. The risks are not easily quantified and recognized. They flow from the panoply of complex, hard to quantify interactions: cultural, structural, process, procedure, policy, technology, people, infrastructure, business environment, etc. Because of its complexity and the difficulty in quantifying it, management tends to plan for, execute and manage change inadequately. A good solution is not enough: to make a difference. It must be utilized and accepted. The architecture of change is therefore a critical, but often neglected component of Enterprise Architecture. It is arguably the riskiest component of an architectural program that is often ignored or addressed cursorily at the organizations peril. Robust program management that will manage communications, address risk and bring architectural programs to successful conclusion so that they realize values that satisfy or exceed business expectations must support the Enterprise Architecture. 
5.	Before concluding a program, the organization should measure the value actually realized from the customer’s perspective. The program should communicate lessons learned so that they may be institutionalized. This begs the question, who is he customer and how do we measure value? Business managers/strategists, Architects and Program Managers must jointly define the customers and ultimate beneficiaries of their programs. How value will be measured should be determined in conjunction with the customer or, when that is not practical, with someone who directly represents the customer’s interests. The Voice of the Customer is critical. 
6.	Despite the high risk of change, it has become riskier not to change: Agility has become the key to successful business because market accessibility and profitability are under relentless pressure from competition, innovation and regulation. Businesses that do not adapt will not succeed. This has created new change management challenges.
Architecture is the key to agility because automation is woven into the fabric of business. Resilience and adaptability have become critical for products and processes. In the past automation was often a major bottleneck in adapting to change. The true cost of this is not accurately reflected by the cost of making changes to existing automation, but by the revenues, profits and customers lost/not acquired in the time taken to implement change. Businesses cannot afford IT bottlenecks. IT must become the facilitator, not controller of change. To do so IT must become the implementer of business transformation through focused entry points. Enterprise architecture is the key because it aligns IT with business. 
Enterprise architecture establishes a set of principles, standards, processes, frameworks (high level models) and evaluation criteria that should drive IT value creation. Program Management implements the vision and values, envisioned by the architecture, through a set of focused programs. Therefore Enterprise Architecture and Program Management must work in tandem to realize business value. Enterprise Architecture must clearly enunciate desired values, goals and priorities; it must address the design of resilient business processes supported by agile automation, prioritize values, programs and projects. Program Management must manage the timely delivery of value through interdependent, prioritized projects, continually tracking progress and feeding back risk and performance information to the Architectural Alignment and Portfolio maintenance processes. These will enable requisite adaptation and course correction. They are two sides of the same coin.

The nexus between Enterprise Architecture and Program Management         
Strategic benefits flow from strategic alignment: Business strategy must drive architecture. Application Development, Package Implementation, and Infrastructure Enhancement projects cannot be effectively and efficiently executed without a clear vision and understanding of the target Enterprise Architecture. Figure 1 shows how enterprise architecture aligns these with business strategy. Mutually supportive subsets of business process engineering, package implementation, systems development and technology infrastructure projects, aligned and coordinated with the values envisioned by the business, will be parts of programs envisioned by the Enterprise Architecture. Enterprise Architecture must align the principles, frameworks, standards and processes, criteria and priorities in multiple business and technology domains. The program must ensure that they work in tandem to deliver business value. Each domain is a sub-architecture. Collectively coordinated and mutually aligned by business drivers, they form the enterprise architecture.

Figure 1
Figure 2 identifies these sub-architectures. Note that adaptation, migration and change management is a common theme driven through all sub-architectures. The drivers are business opportunities and risks.

Figure 2
Each program is a subset of well orchestrated architectural components in figure 2. In order to succeed, organizations must be capable of managing risk across large scopes, diverse organizational units and complex interactions. Organizations must build the ability to orchestrate change and align principles, models, standards, components, processes and evaluation criteria across business domains and the sub-architectures in figure 1. Program management is the key to developing this capability. 
Some organizations may not be capable of addressing large scopes at first. For such organizations, investing in developing large scale architectures may not result in requisite returns. How well organizations will be able to coordinate architectural components will be different for different organizations. The ability of each to coordinate components and absorb change across large scopes will depend on the maturity of its processes, its culture and the capabilities of its people. 
Program management must continually assess and clearly communicate performance, risk, change and coordination capabilities to enable an organization to adjust its ambitions in step with its evolving ability. Program Management must also implement a model for measuring, building, institutionalizing and continually evolving process maturity. 
Organizations may then determine feasible and achievable targets in step with their plans and capabilities. Directed evolution will drive their plans. Each plan will continually track performance against its history, the changing business environment and developing competition. Plans will adapt and make course corrections as needed. Figure 3 shows how architecture can evolve through increasing levels of complexity in step with organizational capability. It is a model of architectural progression into broader and broader scopes. The definition of the organization’s programs should track its ability to address coordination and progressively realize the different levels of architectural sophistication.
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Figure 3
Conclusion
Complexity increases exponentially with the size and diversity of the organization. Programs are conduits through which IT can deliver strategic value to business. Program risk is commensurate with process maturity. Mature processes and good governance give the organization the ability to integrate and coordinate values and issues over broad scopes. To be successful, the scope and sophistication of a firm’s programs must match its architectural sophistication and scope. The scope and extent of integration of programs and architecture should track the maturity of the organization’s processes. The program office should implement a plan for measuring, maturing, institutionalizing and communicating the effectiveness of its processes. Then the organization will not only realize measurable value from its investment in enterprise architecture, but also build the capability to continually escalate the business value of its programs. Programs must also include a feedback mechanism. Key to making programs work is executive sponsorship, clear, accurate communication and a clear understanding of the customer. 

About the Author
Amit Mitra is a Senior Manager in TCS Global Consulting Practice and the author of three books on engineering business agility. The books are available from the Cambridge University Press, IGI Publishers and Artech House Publishers. He is also visiting faculty at the University of Arizona and his work is taught in the UCSD. Amit was invited to address the OMG steering committee in 2005. He led the BPMI round table on Business Agility.in 2006, and was invited to address the Wharton School of Business’ EMTM program in 2007. Amit is also a former Assistant Vice President of the American International Group, where had worldwide responsibility for the corporation's Information Systems methodology. He started an initiative for developing a strategic business knowledge architecture that cut across all of AIG's lines of business, spread over its 250 subsidiary corporation operating in more than 130 countries across the world. Amit also initiated an R&D program for developing a discipline for encapsulating business knowledge in reusable, technology independent artifacts that can facilitate applications development. He left AIG to take up the position of Director of Systems Architecture in NYNEX, then America’s second largest telecommunications company. He was a part of NYNEX’s leadership team, responsible for integrating the architecture of its many departments, divisions and subsidiaries. In that role he extended and tested the new disciplines he had helped create in AIG. Amit has also been a Manager in KPMG’s e-commerce and architecture consulting practices and the Manager for Information Systems Planning unit of AGS, NYNEX’s IT consulting subsidiary. Recently he was the Senior VP and head of GalaxE Solutions Enterprise Architecture and Process Improvement practice. As a consultant, Amit has been engaged by several Fortune 500 corporations for various IT process improvement, measurement and strategy initiatives.  Amit is also a Vice President of the Data Management Forum. He holds a Black Belt certification in the Six Sigma nd is an invited speaker at several domestic and international conferences.