e-Talk Radio: Rubin, Howard, 18 January 2001


their application in business systems, have to do with their infrastructure, has to do with the physical plans, has to do with the people and the intellectual capital and the processes and all the things…those are the IT assets and that's your asset base, and really what changes the asset base, well the portfolio you're managing is the collection of existing assets and this thing called the project portfolio, and the project portfolio is what changes the asset base, whether it's upgrading equipment or introducing a new business system or enhancements to an application. A project is anything that changes the asset base. So to change the asset base you need a process to do that, and that's where the notion of process maturity comes in, so you can't even manage the asset base effectively unless you have continually improving process management. The process management is really what controls your changing the investment itself or even the mix of investments, so in fact things like the CMM or anything that gives you a structure for assessing process improvement, allowing you to financially engineer what level of process you need to meet your goal so you don't need to over engineer things, it becomes absolutely business critical.

Dekkers: And that's very interesting. The CMM, the product management, it sounds like we have so much to do and so little time and what types of things should we be measuring in this new portfolio management type of model?

Rubin: Yeah, actually the portfolio management model, I guess in some sense…the basics of what you need to measure are critical, some of the best in class companies we look at, what are they measuring around, their chosen thematic measures, of what it is, I mean there's one theme of running IT like a business, what do you measure around that theme, you measure around your efficiency, your effectiveness, your level of customer satisfaction, and your risk in quality management. Those are some basic themes about what it means to run IT like a business, but clearly along with that, what else you need to deliver, what you need to measure, is to measure along your commitments beyond the subjective aspect of customer satisfaction you need to be measuring on your ability to deliver the existing technology promises you've made. And there are a few other pieces. I think we'll get into them in the next segment.

Dekkers: We sure will. And we'll be back shortly with more of Quality Plus E-Talk with Carol Dekkers.

Announcer: Quality Plus E-Talk is back. Now here's Carol Dekkers.

Dekkers: Welcome back. We've been talking to Dr. Howard Rubin about running IT like a business, and just before we went into our last break, he had started to talk about metrics and what we should be measuring and I'd like you to finish that off please Howard.

Rubin: Yeah, it's just to quickly recap, some of the most successful measurement work I've seen now around running IT like a business has been very thematic, and by thematic means the measures are organized around things you need to show and I said the basic things, to back up, is a whole category of sort of running IT like a business, which means you need measures that focus on your cost efficiency which means you need to have metrics which deal with business entities to IT entity ratios, keep business indicators connected to IT and key IT unit costs. You need to understand your cost effectiveness measures, you need to have measures around risk and systems quality, pieces like that,

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