Portfolio Rationalisation : The 10000 Feet View

Modified on Fri, 08 Oct 2021 08:29 by Biswajit Dash — Categorized as: 10000 feet view, digital transformation, enterprise architecture, know-how

Problem Statement

What is Portfolio Rationalization, and why does an organization require this? What are the aspects to be considered from a 10000 feet level?

Table of Contents [Hide/Show]

Problem Statement
Solution Abstract
   What? Why?
   The Essential Method
      The 10000 Feet View
         The Stages
         The Building Blocks
      The Process Model
Glossary
References

Solution Abstract

What? Why?

What is Portfolio Rationalization?
It is the act of streamlining an organization's existing portfolio to improve efficiency, reduce complexity, and lower TCO. The portfolio spans people-process-technology, and consists of hardware, software, data, and process.

Key points worth noting. It's about -

streamlining the existing portfolio;
improving efficiency;
reducing complexity;
lowering TCO of the portfolio;
people, process, technology; and
all assets - hardware, software, data, process.

Most often a portfolio rationalization process is composed of :-

rationalization of applications;
rationalization of IT;
rationalization of processes;
rationalization of data;
rationalization of infrastructure.

Why is Portfolio Rationalization needed? What are the benefits?
The key goal is to :-

reduce operations cost;
reduce maintenance cost;
reduce innovation cost; and
increase savings.

An effective rationalization process can help -

finding capital which can be re-invested;
optimize IT budget in operations and maintenance areas; and
enable organization remove its Tech-Debts and become future ready.

The Essential Method

The 10000 Feet View

The Stages

At an abstract level portfolio rationalization consists of multiple stages, i.e., :-

assessment, i.e., assessing organization's as-is portfolio and building the asset repository;
evaluation, i.e., ; evaluating the portfolio's current state, and defining the target state;
planning the rationalization;
executing the rationalization; and
establishing governance and continuity.

The Building Blocks

The below mind-map depicts the essential building-blocks and aspects involved in a portfolio rationalization process.

(High Resolution Image)

The Process Model

Portfolio Rationalization is a perpetual journey, and not an one-off project.

A successful rationalization needs a process model, which can achieve the immediate rationalization goals, and establish continuity. A well defined model consists of multiple elements, including :-

the mechanism to detect the business need for a rationalization;
the scope which is well defined and achievable;
the phase to assess the portfolio and build the as-is asset inventory;
the phase to evaluate portfolio's health;
the target-state definition;
the rationalization plan consisting of budget, people, timelines;
the phase to transform the portfolio to target-state; and
a well defined governance process which can track the transformation, and provide continuity.

The sketch depicts the high-level process model.

(High Resolution Image)

Glossary

Title	Description
TCO	Total Cost of Ownership
Tech-Debt	The inefficiencies in People, Process, and Technology aspects.
10000 Feet View	A high-level abstract view of major components of a system or process, but no specific implementation details.

References

Paper Code: TWP_1009.10, Version: 1.0, Author: Biswajit Dash, License: CC-BY-ND, Published: Aug-2021