Accountability permeates the portfolio-management discussion among CIOs, who point out that IT governance is a prerequisite for corporate governance as prescribed by the financial-reporting requirements of the Sarbanes-Oxley Act. "As a result of these compliance requirements, IT has to validate that everything the CFO reports is correct," Textron Financial's Raspallo says. "You can't do that without a well-defined portfolio-management process."
For some companies, the path to portfolio management can be rocky. Before Sept. 11, 2001, RCCO Ltd., which operates the Royal Caribbean International and Celebrity cruise lines, was focused on enhancing systems that support its three major operations: reservations, employees, and supply chain. The core supply-chain application from J. D. Edwards & Co. supplies 26 Voyager-class vessels around the world--the largest ships in Royal Caribbean's fleet, each with 3,000 passengers and 2,000 crew members--with everything from fuel to caviar. The employee operation, managed with PeopleSoft human-resources apps, is no less complex, with 20,000 employees scattered across the globe. The reservation system is based on Siebel Systems Inc. software customized to handle the unique demands of cruise-ship clientele.
In the aftermath of 9/11, when the travel industry all but shut down, Royal Caribbean switched its IT organization to support-only operations, shedding employees and putting projects on hold. Because it was already using Niku's portfolio-management software, it easily made the switch to a support-only organization. "We already knew what employees were booking their time to and knew precisely what our support load was," says Mike Sutton, VP of IT development at Royal Caribbean.
As Royal Caribbean's bookings have begun to pick up, the IT organization's project portfolio is again expanding. Says Richard Shapiro, who oversees the Niku implementation at Royal Caribbean, "We've gone from a large cruise-ship operator, through the trauma of 9/11, through rapid change to a support-only organization, and back to a robust, growing company."