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United States Marine Corps

Effectively managing an IT portfolio requires sustained commitment, clearly definedgoals and high-level support, but the rewards include greater fiscal responsibility,streamlined logistics operations and near real-time visibility.

Smart warfare. We never stop trying to fight battles better – to increase the effectiveness and lethality of our Marines when confronting the enemy. By doing so we accomplish our missions faster and save lives.

At the opposite end of the spectrum from the battlefield, on a much less visible front, we never stop trying to fight the battle of confusion, unnecessary redundancy and waste in the IT systems and support operations necessary to deliver smart warfare. Smart portfolio management is one of the requirements to fight this battle.

Portfolio management is just starting to take shape in the Marine Corps stemming from a program called logistics modernization. This multifaceted, multiyear and multimillion-dollar program, with its many implementations of new technologies and integration with legacy systems, is helping drive our model of a portfolio management process and environment that will meet the Department of Defense’s mandate for all military services.

Getting to where we are today, at the brink of portfolio management adoption, has required much learning and collaboration. But it has helped us determine what we believe we must have to take the first steps toward implementing a successful program. I hope that by sharing our thoughts, we can help others save time and avoid pitfalls in setting up smart portfolio management.

In the Beginning: A Need for Logistics Modernization

Currently, the Marine Corps has operating forces in Iraq and Afghanistan fighting on what is described as an irregular, as opposed to traditional, battlefield. This means there is no clear line between good guys and bad guys. Today, the enemy – and our battlefield – is 360 degrees around us.

Also on the irregular battlefield, the enemy is most often not a state, but a group or groups of insurgents or other hostile organizations easily equipped with readily available advanced communications technology that increases their intelligence capabilities. Their size and flexibility allows for rapid transport that necessitates our ability to extend forces, and the supply lanes that support them, further and faster than ever before to keep our Marines in the fight.

Many of the Marine Corps’ technology platforms and logistics systems in place today were designed for traditional warfare versus the irregular battlefields we now confront. Fortunately, this warfare evolution was learned from the first Gulf War, Operation Desert Storm. Much groundwork has been done in recent years to set the stage for our Corps’ logistics modernization program.

Logistics modernization focuses on integrating people, processes and technologies to create a logistics support environment that provides our operating forces near real-time logistics data that is more accurate and more reliable. This will allow for faster and better decision making regardless of where our Marines are or when they need information.

The commandant of the U.S. Marine Corps, Gen. Michael W. Hagee, recently pointed out that, “the most important weapon on any battlefield is a Marine that is well-trained, educated and equipped.” Logistics modernization is our Corps’ commitment to equipping our Marines on the front line with the best logistics information possible to plan and support their efforts.

The technology centerpiece of logistics modernization is our new Global Combat Support System – Marine Corps (GCSS-MC). When fully implemented, GCSS-MC will provide our forces a single point of entry for all logistics support instead of having to access multiple systems as we do today. Use of proven technologies, including new applications for RFID, satellite communications and a ground-based tactical data network will facilitate Web-based capabilities and give our Marines unprecedented visibility of order processing and inquiry management across the battlefield and around the world.

The need for logistics modernization and GCSS-MC technology is unquestioned. The environment created by its development presents the Marine Corps the perfect opportunity to begin meeting the need for portfolio management.

Logistics Modernization Drives USMC Need for Portfolio Management

As early as 1999, the need for better investment control of Marine Corps IT projects was recognized, and an initial effort to reduce the number of information systems in the logistics portfolio was begun. Using a process called systems realignment and categorization, more than 45 legacy systems were eliminated, yet that still left a portfolio of 175 systems.

While this was a good start, the Marine Corps’ system development and acquisition continues to be driven by a strict compliance process that requires end-to-end steps to design, develop, field and maintain a technology solution. There is little opportunity for cross-functional coordination and no alignment to define complementary enterprise business objectives. This results in a collage of technology applications and infrastructure that is vertically positioned and costly to maintain.

Furthermore, public law, resulting from the Clinger-Cohen Act, requires all federal entities to have a usable process to manage IT investment. The law streamlines IT acquisition prioritization and emphasizes life cycle management of IT as a capital investment. It also encourages incremental acquisition IT systems and commercial off-the-shelf products wherever possible.

Cost savings and lost productivity are huge factors. As Mark Jeffery and Ingmar Leliveld noted a year ago in their article, “Best Practices in IT Portfolio Management,” from the Spring 2004 MIT Sloan Management Review, “an estimated 68 percent of corporate IT projects are neither on time nor on budget, and they don't deliver the originally stated business goals." As much as $100 billion to $150 billion in U.S. IT projects failed between 2002 and 2004.

Shrinking budgets, continued proliferation of new technology acquisitions and a legal mandate to manage such acquisitions more effectively have certainly set up clear needs to begin portfolio management now. Logistics modernization is providing the perfect environment in which to get started and execute smart portfolio management. But what else must we have to get portfolio management off on the right foot?

Here are seven portfolio management components we believe to be critical in laying the foundation for success:

A Senior-Level Advocate – a single program owner. If this is not in place, the well-intentioned work of individuals managing the IT portfolio will never get off the ground. The portfolio management owner and advocate should not be confused with its managers. The advocate needs to be a strong voice to ensure buy-in among the various customers affected by portfolio management and a strong voice for those customers when bringing legitimate needs and issues to the portfolio management table. The advocate is also the source for clear direction to the portfolio manager, interpreting requirements for desired capabilities and representing them to the manager. For logistics modernization in general, and GCSS-MC in particular, there is only one advocate: me.

Establish a Common Baseline – This means that operating folks and financial folks, or whatever groups are involved in the process, must look at options from the same perspective. This is the old adage of comparing apples to apples instead of apples to oranges. One of the most important fundamentals in establishing portfolio management is for an organization to define and understand its business goals and objectives, the capabilities required to support those objectives, and key performance metrics for measuring progress.

Although establishing a baseline may never completely eliminate individual biases affecting the process, it will go a long way toward minimizing their impact. While this is certainly an ongoing activity, the Marine Corps has done this well for our logistics modernization program.

Strong and Committed Governance – Any portfolio management initiative requires a governing board to select, control and evaluate IT investments. It must do so in accordance with established overarching objectives and also prioritize those investments that are approved. Howard A. Rubin, executive vice president at Meta Group said, “portfolio management without governance is an empty concept.”[1]

We have created a charter for our portfolio management board that will serve this purpose for logistics modernization. Its evaluation of investments must ensure that they are not only high quality and cost-effective, but also support our new logistics operational architecture that facilitates streamlined processes for our operating forces. It must also look at the risks posed by the investments it approves – not only from a technical capability standpoint, but also from a people and change management perspective. How much re-engineering will be required?

The board’s composition is also important and will include a complementary mix of visionary leadership, technical experts and functional managers. An important consideration here is not only selecting the best and brightest for evaluating IT investments, but also selecting individuals who can make the necessary commitment to ensure both thoroughness and timeliness of the portfolio management process. Usually the most senior people do not have the time available to make this work.

Additionally, a review process for the governance participants in the same manner as the review process for the entire portfolio should be included. This will simplify the de-selection of individuals who are not meeting performance requirements to drive the program forward.

Clearly Defined Portfolio Management Process – Fortunately, we have a Department of Defense four-step model to guide us. This involves:

• Step 1: Select the best systems – Using a screen, rank and score process;
• Step 2: Control quality – Monitor progress of system implementation and performance to ensure it is delivering expected results and take corrective action as needed;
• Step 3: Evaluate – Conduct reviews, make adjustments and apply lessons learned to maximize benefits of the acquisition; and
• Step 4: Analyze the portfolio management process – Measure its impact and adjust accordingly to make sure it is remaining on target and closely aligned to business objectives.

Your own process may require a few tweaks here and there to work effectively within your organization and achieve objectives. As indicated in step four of the DoD model, analyzing and modifying the process is an important part of ensuring it will remain workable and lead to success. The important thing is not to follow this particular model, but that such a model is in place from the beginning to assure quality in the IT investments approved by the portfolio management process and to protect the integrity of the process itself.

New Projects Moratorium – This is a tough undertaking for any organization and one we are still determining how to address. With the rapid advancement of new technologies and constant demand for faster and better capabilities, it will be difficult to tell those groups with funding in hand and deliverable deadlines to meet that they must wait until the new portfolio management process is up and running at full speed.

Logistics modernization is giving us the opportunity to follow what many portfolio management analysts have suggested – to phase in the process instead of starting with an enterprisewide effort. By confining our process with only the logistics modernization initiative, the remainder of our enterprise efforts can continue as usual until we have gained both speed and a satisfactory comfort level, and demonstrated clear benefits that help accelerate its adoption for other initiatives.

Change Management Plan – The portfolio management process is clearly counter to the Marine Corps culture. It’s a significant leap beyond what its process has been for new IT acquisitions – basically generate requirements; pass to our Marine Corps combat development command for review and validation; try to get funding; and if successful, pass the initiative on to our Marine Corps systems command to design, develop, implement and sustain.

While much of this will remain in the new portfolio management environment, the upfront process to select, control, evaluate and analyze new acquisitions will undoubtedly require change management support to develop sponsors and change agents to champion the process. It will require a major effort to ensure concise communications before and during its adoption and strategies to address the pockets of resistance and naysayers that will surely exist.

Willingness to Make the Investment – This “must have” reiterates some of the points already included in the “must haves” mentioned above, but it is important enough to re-emphasize. There is a price to pay for effecting change – in time, dollars and mindset commitment to the process. In lining up the senior advocate, the governance organization and the change management and communications support, there must be an understanding of, and commitment to, investing in the process to improve overall IT investments and overall enterprise performance.

Time and time again, throughout all levels of an organization, we see excitement and a pledged commitment at the start of an initiative that quickly wanes when other priorities begin to compete for time and money. While sustaining the required investments for successful portfolio management is part of the change management effort, getting a commitment to keep the portfolio management process viable – from beginning to end – will greatly help to reduce any program obstacles.

Excitement is building throughout the Marine Corps over the many benefits our young Marines on the battlefield will experience as a result of logistics modernization over the next several years. But we are equally excited about the promise of effective IT portfolio management that logistics modernization, with its many new advanced technology requirements, is helping to drive.

We know implementing a portfolio management process will neither be fast nor simple. And we are acutely aware that there is no one correct model for setting up successful portfolio management. But we are working methodically to ensure the “must haves” are in place from the very beginning to make a difficult job somewhat easier.

Logistics modernization cannot wait. The increasing demands for greater fiscal responsibility, smarter investments and doing more with ever-shrinking budgets mean the benefits of IT portfolio management cannot wait either. Smart portfolio management allows us to capitalize on reduced technology costs while freeing up funding for other high-priority initiatives.

On the battlefield Marines are known worldwide for smart warfare and their resolve to complete the mission. We intend to demonstrate this same resolve delivering both logistics modernization and smart, successful portfolio management for our Corps.

Endnote

1. Datz, Todd, “Portfolio Management: How To Do It Right.” CIO magazine (May 1, 2003).