1. ISA 301 Advanced Enterprise Information Systems Acquisition

2. March 2012
Lesson 2 - Capital Planning & Investment Control / Portfolio Management (CPIC / PfM)
LESSON INFORMATION*************************************************************************************************** *Lesson Point of Contact: *                      Name: Michael Denny *                      Phone: *                      *Length of Presentation: *                       Prework (hours):  0.0 *                       Presentation + Exercise (hours): 4.0 *ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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ELOs (99.x.y.z) will change to Standard LOOMS numbering when validated.
Evaluate the utility of OMB and DoD business case analyses and other assessment tools in support of the CPIC process.
Assess the role of portfolio management (PfM) within the CPIC process (architecture, risk management, return on investment) to support achievement of critical business objectives.
Recommend the applicable statues, policies, regulations, guidance, and best practices for incorporation into an IT acquisition.
Note: If you have spent more than 30 minutes to present the PowerPoint slides, you have talked too much.
Follow the notes pages of each slide!
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)
ISA LSN 2 (CPIC & PfM)

3. March 2012
Today we will learn to:
Given an Enterprise IT investment scenario, assess activities used to inform IT investment decisions
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
CPIC in concert with PPBE provide the necessary information for defensible IT invest decisions. Business Case Analysis supports CPIC and thus Portfolio Management which helps in achieving critical business objectives.
Key Questions to Ask and Anticipated Answers:
Q:? A:
Terms \ Definitions \ Acronyms:
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)
ISA LSN 2 (CPIC & PfM)

4. IT investment management overview
March 2012
Lesson Plan
IT investment management overview
Applicable Statutes and Policies
DOD Portfolio Management (PfM)
UPS Case Study
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
We need to understand IT investments, the applicable laws, regulations, policies, and guidance involved in investment management and how that supports effective Portfolio Management
Key Questions to Ask and Anticipated Answers:
Q:? What is a Portfolio?
A: [Not looking for a dictionary definition] Generate a discussion of what is and isn’t in a portfolio. And why that impacts management of it and related investments.
Terms \ Definitions \ Acronyms:
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM) 4
ISA LSN 2 (CPIC & PfM)

5. Project A: Project B: Project C: Project D: The Problem
March 2012
Project A:
Introduce a new IT initiative
Project B:
Expand Manufacturing Plant
Project C:
Develop new product
Project D:
Acquire Company XXX
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
We can do it all!
We cannot afford everything we may want or need!
Key Questions to Ask and Anticipated Answers:
Q:? How do we decide what gets funded? To what extent? When?
A: [ Generate discussion, and some examples of want versus need]
Terms \ Definitions \ Acronyms:
Generally, there is not enough capital available to meet all IT investment needs
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)
ISA LSN 2 (CPIC & PfM)

6. Different investments have differing outcomes
The Problem (cont.)
March 2012
Project A:
Introduce a new IT initiative
Project B:
Expand Manufacturing Plant
Project C:
Develop new product
Project D:
Acquire Company XXX
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
Overview Slide only!
Key Point: To determine what to invest in, we must somehow quantify the “goodness” of its outcome to the business.
Supporting Points:
1. A project’s value is it’s worth to the organization.
2. ROI is only one estimate of worth. What may be others?
3. It is also wise to quantify a project’s risk. A high risk project certainly certainly has a way of off-setting its “value”.
Transition: So, what process do you use to allocate your investment budget to the various projects to maximize return to the organization?
Key Questions to Ask and Anticipated Answers:
Q:? A:
Terms \ Definitions \ Acronyms:
Different investments have differing outcomes
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)
ISA LSN 2 (CPIC & PfM)

7. The Problem (cont. 2)
March 2012
How do you allocate your investment budget to the various projects to maximize return to the organization?
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
Slide text question is the MAIN point!
Key Questions to Ask and Anticipated Answers:
Q:? A:
Terms \ Definitions \ Acronyms:
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)
ISA LSN 2 (CPIC & PfM)

8. Portfolio Management (PfM)
March 2012
What is a portfolio?
IT Portfolio: A grouping of IT investments by capability to accomplish a specific functional goal, objective for mission outcome. Source – DoDD
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
Given the provided definition, highlight the relationship (Venn diagram) and hierarchy of Portfolios.
Key Questions to Ask and Anticipated Answers:
Q:? Who determines 'Importance'? 'Goodness'? 'Relationship'?
A: Program Manager, Portfolio Manager, Enterprise Manager
Terms \ Definitions \ Acronyms:
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)
ISA LSN 2 (CPIC & PfM)

9. Balanced Portfolio What does it mean to have a “balanced portfolio”?
March 2012
What does it mean to have a “balanced portfolio”?
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
Balance comes through addressing the various levels of the Mission Area hierarchy in the context of the over-arching Portfolio outcomes desired.
A mission area would want to ensure they have the right mix of investments focused on the future.
Key Questions to Ask and Anticipated Answers:
Q:? A:
Terms \ Definitions \ Acronyms:
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)
ISA LSN 2 (CPIC & PfM)

10. Applicable Statutes and Policies
March 2012
Lesson Plan Status
IT investment management overview
Applicable Statutes and Policies
DOD Portfolio Management (PfM)
UPS Case Study
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
We need to understand IT investments, the applicable laws, regulations, policies, and guidance involved in investment management and how that supports effective Portfolio Management
Key Questions to Ask and Anticipated Answers:
Q:? What is a Portfolio?
A: [Not looking for a dictionary definition] Generate a discussion of what is and isn’t in a portfolio. And why that impacts management of it and related investments.
Terms \ Definitions \ Acronyms:
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM) 10
ISA LSN 2 (CPIC & PfM)

11. Applicable Statutes and Policies
March 2012
Government Performance and Results Act of 1993
The Clinger-Cohen Act of 1996
OMB Circular A-130,
OMB Circular A-11, Preparation, Submission and Execution of the Budget
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
Capital Planning and Investment Control is influenced by several legislative documents.
Supporting Points:
1. CFOA and FFMIA require accountability of financial and program managers for financial results of actions taken, control over the Federal government's financial resources, and protection of Federal assets.
2. The GPRA laid the ground work for strategic planning and measuring performance and provides the basis for the investment process - Strategic Planning, identify long-term goals and objectives, make Annual Performance Plans, and produce Annual Performance Reports.
3. The Paperwork Reduction Act of 1995 requires that agencies perform their information resource management activities in an efficient, effective and economical manner.
4. The Clinger-Cohen Act of 1996, requires agencies to use a disciplined capital planning and investment control process to acquire, use, maintain and dispose of information technology.
5. OMB Circular 1-30 sets the expectations for IT Investment Management:
“Agencies shall establish a comprehensive approach to improve the acquisition and management of their information resources by: performing information resources management activities in an efficient, effective, economical, secure, and privacy-enhancing manner; focusing information resources planning to support their missions; implementing an IT investment management process that links to and supports budget formulation and execution; and rethinking and restructuring the way work is performed before investing in new information systems.” pg. 4
Additionally A-130 requires agencies to ensure that:
a) All IT resources (see “Information Technology Resources” definition) are included in IT investment planning documents or artifacts;
b) Decisions related to major IT investments are supported by business cases with appropriate evidence;
c) IT investments implement an agile development approach, as appropriate;
d) IT investments support and enable core mission and operational functions and processes related to the agency’s missions and business requirements;
6. President’s Management Agenda (PMA) further drive results based management and specifically require budget and performance integration.
7. OMB Circular A-11 – OMB guidance for planning, submitting and executing agency budgets. Includes section on Agency IT Portfolios Note: Follow this link to latest information;
Transition: How do these various policies interact?
Key Questions to Ask and Anticipated Answers:
Q:? A:
Terms \ Definitions \ Acronyms:
Legislative drivers tell us we must use a disciplined IT portfolio management process
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)
ISA LSN 2 (CPIC & PfM)

12. DOD Portfolio Management (PfM)
March 2012
Lesson Plan Status
IT investment management overview
Applicable Statutes and Policies
DOD Portfolio Management (PfM)
UPS Case Study
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
We need to understand IT investments, the applicable laws, regulations, policies, and guidance involved in investment management and how that supports effective Portfolio Management
Key Questions to Ask and Anticipated Answers:
Q:? What is a Portfolio?
A: [Not looking for a dictionary definition] Generate a discussion of what is and isn’t in a portfolio. And why that impacts management of it and related investments.
Terms \ Definitions \ Acronyms:
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM) 12
ISA LSN 2 (CPIC & PfM)

13. DoD Portfolio Management Governance
March 2012
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
Governance addresses both DOTmLPF-P changes an non-IT investments in relation to the Enterprise Portfolio and its underlying portfolios.
Key Questions to Ask and Anticipated Answers:
Q:? A:
Terms \ Definitions \ Acronyms:
WMA = Warfighting Mission Area, BMA = Business Mission Area, DIMA = Defense Intelligence Mission Area, EIEMA = Enterprise Information Environment Mission Area
DoDI , Oct 2006
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)
ISA LSN 2 (CPIC & PfM)

14. IT Portfolio Management
March 2012
DoDD , Oct 2005
DoDI , Oct 2006
IT investments shall be managed as portfolios … using the GIG (Global Information Grid) architecture … risk mgt techniques, capability goals and objectives, and performance measures
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
DODD 8115 is how we do Portfolio Management within DOD.
Supporting Points:
This is a fairly new process. The individual services are (or have) built more detailed guidance for managing this process.
The Clinger Cohen Act requires we measure performance and conduct alternative analysis is how we do it for IT Systems.
Transition: We’ll talk about what a portfolio is, portfolio governance in DOD, and the process involved in their managements.
Key Questions to Ask and Anticipated Answers:
Q:? A:
Terms \ Definitions \ Acronyms:
Portfolios shall be managed … to minimize duplication
Of DoD and Government-wide initiatives.
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)
ISA LSN 2 (CPIC & PfM)

15. IT Portfolio Management Example
March 2012
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Point: This is a simplified approach illustrating analysis and selection, transition and Implementation
Supporting Points:
Defining Capabilities (upper left quadrant) is usually done in the analysis phase in concert with the JCIDS process.
Map Systems to Capabilities and select portfolio Investments (upper right quadrant) illustrates how a portfolio is categorized (modernize, legacy, new start), it’s relative score based on selection criteria (red, yellow, green) and how it maps against required capabilities.
Transition Plan – Capability Roadmaps (lower left quadrant) give a visual picture of the systems and capability changes over time
Implementation (lower right quadrant) Shows the capability improvement wrt the acquisition plans.
Transition: Before getting to the process lets look at the overall governance within DOD
Key Questions to Ask and Anticipated Answers:
Q:? A:
Terms \ Definitions \ Acronyms:
DoDI , Oct 2006
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)
ISA LSN 2 (CPIC & PfM)

16. IT Portfolio Management Process
March 2012
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
Analysis provides the directional foundation for Selection which chooses the best mix of investments which undergo Control via periodic performance reviews and Evaluation/measurement of attaining the expected benefit!
Key Questions to Ask and Anticipated Answers:
Q:? A:
Terms \ Definitions \ Acronyms:
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)
ISA LSN 2 (CPIC & PfM)

17. UPS Case Study Lesson Plan Status IT investment management overview
March 2012
Lesson Plan Status
IT investment management overview
Applicable Statutes and Policies
DOD Portfolio Management (PfM)
UPS Case Study
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
We need to understand IT investments, the applicable laws, regulations, policies, and guidance involved in investment management and how that supports effective Portfolio Management
Key Questions to Ask and Anticipated Answers:
Q:? What is a Portfolio?
A: [Not looking for a dictionary definition] Generate a discussion of what is and isn’t in a portfolio. And why that impacts management of it and related investments.
Terms \ Definitions \ Acronyms:
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM) 17
ISA LSN 2 (CPIC & PfM)

18. UPS Case Study As a team, review the case study & the DODI 8115.02.
March 2012
As a team, review the case study & the DODI
Prepare and deliver a 5-10 minute presentation to the class that discusses how UPS managed their IT investments and what lessons you could apply in managing DOD IT investments.
Compare and Contrast the UPS IT investment activities with the activities described by the DOD Portfolio Management Process
How might you apply the successful aspects of the UPS IT investment activities to your organization's IT investment process?
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
Over the past 15 years UPS migrated from a “bricks and mortar” to a “clicks and mortar” company. In
doing so they have developed a world class e-business and supporting infrastructure.
Exercise Instructions:
Read the case study
Analyze the six questions/topics (all teams)
Each team will prepare a 5-10 minute presentation on the following:
- One of the PfM process (Govern, Analyze, Select, Control, or Evaluate)
- Answer one of the questions/topics (instructor will provide the specific question/topic)
Key Questions to Ask and Anticipated Answers:
Q:? A:
Terms \ Definitions \ Acronyms:
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)
ISA LSN 2 (CPIC & PfM)

19. Lesson Review
March 2012
Generally, there is not enough capital available to meet all IT investment needs.
Legislative drivers tell us we must use a disciplined IT portfolio management process.
The DoD Portfolio Management Process, DoDI , provides high level guidance for governing, analyzing, selecting, and controlling our IT investments.
Both industry and DoD use portfolio management to guide investment decisions.
SLIDE INFORMATION****************************************************************************************************************************
*Slide Type(Content or Exercise): Content
*ELO ID (Use a Comma to separate ELOs if more than one is addressed): , ,
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Key Points:
Review what we have learned!
Key Questions to Ask and Anticipated Answers:
Q:? A:
Terms \ Definitions \ Acronyms:
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)
ISA LSN 2 (CPIC & PfM)

20. Today we learned to:
Given an Enterprise IT investment scenario, assess activities used to inform IT investment decisions
Capital Planning & Investment Control / Portfolio Management (CPIC/PfM)