capital expenditures

Using PPM to rationalize software investments

Wed, 16 May 2007 20:01:38 -0400

Although it's not the primary use of project portfolio management (PPM), it can be useful to use a PPM approach for rationalizing software investments. First, make sure you have a good understanding of the business area's work flow. Create a technical architectural blueprint and direction, which is critical to successful software evaluation, and understand the technical architectural target, which is required to enable migration from one application to another. Group applications are needed to satisfy the business needs of a specified business area and to evaluate them within the context of business value and technical quality. Then, define the software modernization strategy by prioritizing each project and by placing projects on a high-level timeline to illustrate sequencing, interdependence and estimated delivery time frames. Next, estimate the resources required to execute the plan in terms of internal and external IT human resources, business unit human resources, and capital expenditures. Finally, bring everything together into a structured strategy document that describes a comprehensive execution approach that manages all of the individually identified projects as a coordinated program.

Learn more about starting a software portfolio management practice with PPM:
- read the article at CIO Update

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- read this on IT portfolio management
- and this on the key to PPM success

Capital budgeting insights

Sun, 13 May 2007 20:01:39 -0400

The capital budget is critical; a company's capital budgeting decisions define its strategic direction and the results of capital budgeting decisions continue for many years, reducing flexibility. Carefully developed capital projects can save operating expenses by creating more efficient ways to provide services or by introducing energy-saving measures. The impact of capital expenditures on the operating budget should be carefully considered before capital budgets are made. For certain types of projects, a relatively detailed analysis may be warranted. For others, simpler procedures should be used. The cost of capital is affected by a number of factors. Those beyond a company's direct control are the level of interest rates, the market risk premium, and tax rates. But a company can control its cost of capital through its capital structure policy, its dividend policy, and its investment (capital budgeting) policy.

Learn more about capital budgeting and the CIO:
- read the article at CIO Update

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- read this on why IT budget confidence in sorely lacking
- and this on presenting your IT budget

Study: Poor governance = project failure

Wed, 28 Mar 2007 20:01:39 -0400

IT governance initiatives are generally deployed only within the IT department, leading to a lack of coordination between the IT part of the project and the overall management of business transformation initiatives. This type of poor IT governance leads to project failure, increased costs, data security risks, problems with regulatory compliance and inefficiency, according to a report from consultancy Butler Group. Much of this, the report says, is due to a lack of awareness of IT in boardrooms, although it is generally believed to be the board's responsibility to ensure that large capital expenditures are managed properly. The solution is creating a separate IT governance committee with non-IT executives to oversee and scrutinize large IT projects. This committee can also ensure that risks are identified and mitigated and that transparency exists.

Learn more about the effects of poor IT governance:
- read the article at Silicon

ALSO: read this on the importance of IT governance

Integrating Service-Oriented IT and Infrastructure as a Service

Mon, 26 Mar 2007 20:01:38 -0400

Now that applications developers and IT operations have embraced service-oriented delivery, the next IT area ripe for a service-orientated overhaul is infrastructure, including equipment, facilities and management systems. Traditionally, integration between these elements has been limited, as the form factor for computing has remained mostly static. But if IT infrastructure elements could be integrated and the functions of those elements could be delivered over a network connection, the result would be enterprise IT functions that are more responsive, cost-effective, manageable, reliable, secure and compliant. This is possible today because of the maturation of virtualization technology, integrated functional management systems and best practices architectures and frameworks. The IT infrastructure as a service model presents a compelling alternative to conventional approaches such as "do-it-yourself," which often requires high up-front capital expenditures and long lead times, and traditional outsourcing, which can be difficult to manage and scale.

Learn more about infrastructure as a service:
- read the column at CIO

Breaking the rules

Tue, 20 Mar 2007 20:01:38 -0400

When it comes to dealing with software, sometimes breaking the rules makes sense. For example, forget the idea that software must always be financed from the capital expenditures budget rather than from operational expense. Forget the convention that software should use a floating license solution, or the notion that every new software release will run more slowly than the previous release. You don't have to accept bugs in the first release of a software program and you should expect 100% uptime for enterprise applications. Don't always choose commercial software instead of open-source. Insist on support for end-of-life software. And don't assume that you always get what you pay for.

Read on for dozens of software rules that should be broken:
- read the article at Optimize

ALSO: read this on navigating software problems