IT Governance and Project Portfolio Management

Given limited IT resources, many organizations are struggling with how to prioritize projects and focus on tangible business benefits. Scientific-Atlanta’s management team responded to the challenge by introducing, in 2002, a process to improve how value-added projects were identified and delivered within the business.


Scientific-Atlanta, a leading broadcast and broadband technology company, introduced the shared services organizational model while implementing SAP during the mid 1990s. SAP replaced multiple legacy information systems and provided the backbone infrastructure for consistent operational and financial business processes. Technology, in this instance, was an enabler for broader changes that lowered operating costs, improved financial reporting, and increased organizational responsiveness. This model continues to be leveraged by applying a consistent business model for acquisitions, facilitating changes in manufacturing operations and improving overall financial controls. As the business shared services model expanded at Scientific-Atlanta, so the IT role within the organization also changed.

IT Evolution

The first step in this evolution was to consolidate most IT functions within the shared services organization and prove the model could provide both lower net operating costs and high service levels. A cost charge-back system was established that provided a transparent view of IT costs and cost drivers. This process is reviewed and improved based on feedback from the business community that ultimately pays for IT. When business conditions warrant a change or a new system is required, both IT and the business can work together to understand the cost implications of those changes.

To address the concern regarding service levels a formalized process was established to measure end user satisfaction on individual systems and for specific categories. While those statistics confirmed improved overall satisfaction levels, IT management continued to place a strong emphasis on customer satisfaction and developed a highly responsive organization. The customer service culture was further supported by the fact that the Corporate IT staff consisted of many people recruited from business operations. This model has progressed to include formal Service Level Agreements (SLA’s) for IT systems and end-user support.

A third driver in the IT shared services model is the concept of providing value-added services to the business. Working groups within the business were established as an outgrowth of the SAP implementation. These groups were used as a means to identify new projects, prioritize initiatives, eliminate roadblocks, and track progress. There are eleven Project Action Committees (PACs) that meet with IT on a monthly basis to manage this project portfolio.

The IT shared services model has been successful and continues to expand in scope, both in terms of systems supported and by the inclusion of IT staff in regional locations. IT has established itself as an organization that provides both a low cost IT utility service to multiple business units as well as a partner in providing value-add services.

IT Governance

In 2002, Scientific-Atlanta senior management implemented a process to improve how value-added projects were identified and delivered. Given limited IT resources a need arose to prioritize projects and focus on tangible business benefits. An IT Executive Review Committee (ITEC) was established to approve all IT projects categorized as value-added. The committee consists of the CFO, COO, the president of each Business Unit, VP of Manufacturing, VP of Procurement, and the CIO.

Projects are presented for approval by business sponsors – not IT. The business sponsor is also required to confirm benefits realized from a project. This closed loop review process is important and has had a significant impact on the level of value provided from IT to the business and the partnership relationship between IT and the business.

Scientific-Atlanta uses a gating methodology for high level project oversight. During each stage in the project a series of questions are evaluated to determine whether to move forward to the next stage. This gating approach is designed to create a funnel of projects with a well defined backlog, and a clear picture of the delivery status of the project portfolio.

The ITEC evaluates projects as Concepts or Defined initiatives prior to approving funding for the project. Upon completion, the ITEC evaluates Launched projects to confirm benefits were realized.

The keys to successful IT projects are strong business sponsorship, measurable business value, and quality project execution. Business sponsors are aware they need to provide sponsorship and a business case. IT is responsible for aligning business needs with appropriate technology options, strong project management execution and a reliable infrastructure.

Project Categories

Projects are categorized in one of five groups in order to set expectations of the potential business value and to assure IT efforts are balanced across multiple business needs.

Direct Cost Savings – This is normally the highest priority project type and requires that tangible and measurable cost reductions will be achieved after the project is completed. Many times this is measured in inventory reductions, headcount reductions, lower material costs, or some other direct cost reduction that can be financially reported. Examples include projects in procurement that helped reduce material costs, manufacturing projects that reduced headcount and material costs, and engineering projects that improved parts reuse in new products eliminating the need to purchase new components.

Business Enabling – These projects enable the business to meet other tangible goals that require IT as an enabler but do not depend entirely on IT for success. Examples include business acquisitions, additional revenue opportunities, or systems implemented in new areas of the business. Two acquisitions were governed by this methodology; systems have been developed that enabled new revenue streams and other initiatives have been undertaken to improve customer service.

Compliance/Security – These projects support regulatory requirements, required business changes, or improved IT security of existing systems. Examples include trade compliance systems, Sarbanes-Oxley and other government reporting, and various IT security activities. Senior management oversight of this project category has resulted in a focused and prioritized approach to managing an increasingly complex area.

Process Improvements – These projects are defined as having indirect business benefits that are measured by an improvement in a key performance indicator. Examples include: faster inventory replenishment, shorter financial closing times, product set up workflow enhancements, and other improvements to business productivity. Traditionally, this has been a "soft" benefit area that consumed a large portion of IT resources.

Infrastructure Investments – These projects are traditional IT infrastructure investments required to maintain existing systems and platforms. Examples include application software and database upgrades, hardware upgrades, system migrations, etc.


A significant trend resulting from this governance process has been a reduction in the number of productivity improvement projects with "soft" benefits. These types of projects are either rejected or sent back to the PACs for further quantification of benefits. Many times these projects become the basis for a more tangible cost reduction or compliance project which is justified on specific business value.

A second trend has been the formalization and visibility of IT infrastructure projects. Traditionally, these projects have not been justified based on their business value. The CIO normally sponsors these projects but the rules for approval remain the same: identifying business value and measuring benefits upon completion. Support from senior management for resources dedicated to infrastructure projects has improved as a result.

Lessons Learned

Joint Responsibility Works – Business sponsors and IT are jointly responsible for the success of projects. Project lifecycle management from definition and approval through launch and benefit realization is the responsibility of both parties. More projects are successful as a result, and projects are more meaningful to the business. The IT staff considers itself empowered and real contributors within the business.

Full Cycle Business Sponsorship is Key – All business sponsors are not created equal. The closed loop benefit confirmation requirement has highlighted business sponsors that will work hard to help sell a project and get approval to move forward. However, they are not always good partners when the time comes to confirm business value. These business sponsors have difficulty the next time they present a project for approval.

Project Definition is Critical – The knowledge that a project will be formally reviewed for the value received after implementation places pressure on the front end project definition and approval stages. Project benefit calculations are defined early, and reporting requirements are considered part of the overall deliverable.

IT Backlog Reduced – There has been a reduction in the number of backlogged IT projects, but an increase in the size and complexity of active projects. Projects that are not justified are combined with others to create a tangible business case or are eliminated. A long list of small projects leads to the ultimate senior management question of "why bother?" This governance approach requires consistent focus on projects that make a difference to the business.

IT Influence Expands – IT influence is expanding as the value proposition is confirmed and communicated. The visibility inherent in the governance review process places pressure to bring forth larger, more significant, initiatives. In addition, the feedback from executives has generated project ideas in engineering, manufacturing, sales, and other areas beyond traditional "back office" systems. IT is evolving beyond a traditional "SAP shop" to encompass more systems in other areas of the business.

Embrace "Shadow IT" Groups – Business units that continue to have local IT staff can participate in this process. The benefit is additional value-added project ideas from local IT teams and improved alignment with business unit executives. This change is most apparent in the manufacturing and engineering areas of the business.

Governance is a Double-Edged Sword – The visibility of value-added IT projects at the executive level will raise the performance bar for IT. This process is a good marketing opportunity for IT to show the value delivered to the business. The process also requires IT to make a consistently strong business case for the money being invested in people and technology.

Next Steps

Scientific-Atlanta continues to make changes to this overall process based on good and bad experiences. Two important changes underway are described below.

1. Project Prioritization and Resource Management – The combination of staff reductions and a formal project approval and closure process by the ITEC has created project priority conflicts. Prior to this process individual PACs had more authority and resources at their disposal to influence IT project priorities. Larger enterprise-wide projects consume IT resources across multiple functional areas. Scientific-Atlanta is now working on a means to improve coordination and prioritization of projects across the organization.

2. Project Delivery – The IT Governance process has focused IT on larger, more complex projects with higher value to the business. These projects now have senior management sponsorship and visibility. This has increased the pressure for quality project management and execution. Scientific-Atlanta’s IT organization is developing a new operational model that supports the dual roles of providing quality support for existing systems and faster delivery of high value projects to the business.

About the Author

Ed DePrimo has worked in the Information Technology field since the mid 1980s. He started his career in technical support and system administration. He has held senior IT management positions and worked with all levels of organizational management to identify, scope and prioritize IT initiatives. His current position is the Director of Software Applications for Scientific-Atlanta in Atlanta, Georgia.

Ed holds a Bachelors of Science degree from the State University of New York and a Masters in Information Systems degree from Boston University.