Additional details about the book

The description of the book available on Amazon.com is below. I'm also happy to report that the book will contain five great case studies on organizations who are leveraging a CPM strategy & discipline. The case studies will be of the following organizations:

1. American Express
2. Cisco Systems
3. Hewlett Packard
4. State of Oregon: Department of Human Services
5. TransUnion

As you can see from the list, there is great diversity amongst the types of organizations chronicled. As you will see in the case studies that ultimately will be developed, each organization has undertaken CPM in different ways with all, however, realizing significant benefits.

Let me thank the following practitioners who helped make these case studies happen. Bill Bien of Cisco Systems, Michael Menke and Kevin Yorks of HP, Dennis Wells of the State of Oregon, and Piyush Sanghani of TransUnion. These are the people who are out 'in front' of the still burgeoning space of Corporate Portfolio Management - the pioneers. I'm indebted to each for their time, insights and openness. I learned a great deal and thoroughly enjoyed our interactions.

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The book's description as given on Amazon.com is given below.

Optimizing Corporate Portfolio Management: Aligning Investment Proposals with Organizational Strategy goes beyond the typical plain vanilla discussion of corporate portfolio management (CPM) and its many benefits to actually offer a set of pragmatic and proven steps to help executives, managers and current and prospective practitioners understand and ultimately bring this powerful strategic discipline to their organizations. Step by step, this book shows one how to build a CPM discipline within their organization based on their organization’s strengths/competencies and development areas. The book eschews simplistic one-size fits all approaches to detail a dynamic capability that can be deployed across organizations of various sizes, industries and readiness.

The book’s foreword is also written by a major proponent of CPM – Gary Crittenden, CFO and EVP of American Express.

Optimizing Corporate Portfolio Management details how the CPM discipline can be applied to an entire company or specific functional areas including information technology, marketing/A&P, capital expenditure, R&D/innovation, salesforce and virtually any area grappling with where to invest discretionary investment dollars. Finally, Optimizing Corporate Portfolio Management demonstrates actual utilizations of CPM within several prominent and diverse organizations through case studies which help readers see firsthand how CPM is enabled, utilized and the benefits it imparts.

The book draws on portfolio management expert Anand Sanwal’s years of research and work in this area at American Express where he led the deployment of CPM across the entire company. The practice known as Investment Optimization within American Express is patent-pending. He has been a featured speaker on this topic to many individual companies and at many seminars and conferences held by the CFO Executive Board, Beyond Budgeting Roundtable, Gartner, Enterprise Portfolio Management Council and others. The discipline he has helped spearhead has also garnered several external awards for its significant and tangible impacts to American Express. His knowledge is further enhanced through best practices research and discussions with other leading organizations engaging in CPM.

Within this essential corporate portfolio management resource, Sanwal methodically covers CPM offering the following:

1. A description of Corporate Portfolio Management and its importance
2. A framework for CPM success
3. The seven and a half deadly sins of CPM
4. A detailed four step process to bring CPM to any organization
5. Utilizations of CPM within various functional areas including IT, Innovation/R&D, Marketing/A&P, Capital Budgeting/Capital Expenditure, Salesforce
6. Case studies of leading organizations using CPM including American Express, Hewlett Packard, Cisco Systems, TransUnion, State of Oregon: Department of Human Services
7. Several additional resources and tools available with the book and at http://www.corporateportfoliomanagement.org

Followup on Gartner ITxpo 2006 Program & Portfolio Management panel

I had the opportunity yesterday to participate in a panel at the Gartner ITxpo on the topic of Corporate Portfolio Management. I was pleased (and surprised) to see the room was standing room only so obviously the area of corporate portfolio management is a hot one. The focus was, of course, on IT portfolio management given Gartner's deep expertise and relationships with IT professionals.

Besides myself, there were 3 other panelists who I had the pleasure of meeting including: Michael Menke of HP, San Retna of Transformaction and Mark Stabler of AAA of Northern California, Utah and Nevada. Each of us were asked to speak about our own organizational efforts around CPM and then we had a lively session of Q&A facilitated by Matt Light of Gartner.

A couple of observations from the discussion:

• Many organizations are still defining their portfolio management efforts around IT.
• Organizations seem focused on governance first and process second. So I heard much alphabet soup around PMOs and various IT councils, but this seems counter-intuitive. If the process is well-defined, the governance can then be established around this. If you don't what you are trying to enable, governance structures are pointless. Additionally, much of the governance structure seemed bureaucratic.
• I received a couple of questions about how American Express' Investment Optimization effort is enabled, i.e. what technology/software are we using? Again, as previously mentioned in prior posts, technology should not be your first concern. Understand the process and change behavior. But it seems that there is still a huge focus on "what tool should I use?" Matt Light probably summed up the over-focus on tools with his statement - "A fool with a tool is still a fool."

All in all, it was a great session, however. It was nice to see so many people in attendance who are also passionate about Corporate Portfolio Management. I also had the opportunity to meet many trendsetting prospective and existing practitioners moving their organizations towards realizing the benefits of CPM.

For anyone in attendance at the panel, were there any other insights you gleaned from the session that are worth highlighting?

Speaking at the Gartner ITxpo/Symposium 2006

A note to others that I will be a speaker on a panel about Program & Portfolio Management at the Gartner ITxpo/Symposium 2006 being held in Orlando, Fl on October 10, 2006. The conference is targeted at the IT community, and I'm looking forward to hearing what other panelists and the audience have to say about Corporate Portfolio Management. If you will be in attendance at the panel discussion, please do come up and say hello. I'm looking forward to the event and meeting any of you there.

Taking Corporate Portfolio Management beyond IT

I remain amazed at how the entire portfolio management discipline has become largely focused on enabling corporate portfolio management for IT investments. Granted, most organizations do struggle with their IT expenses. Many (most) do not even fully understand that these IT expenses are in fact investments, but this fixation on IT is a bit stifling - as it minimizes the impact that CPM can have on an organization.

Corporate Portfolio Management should be used for any area where discretionary expenditures and hence investments are occurring including advertising & promotion, innovation/R&D, operations, sales, IT, capital expenditures, etc. This means looking past just your capital expenditures but also looking at operating expenses which, today, maybe considered business as usual, but which in fact, can be highly discretionary.

Conversations with numerous companies shows that 25-40% of a company's operating expenses are in fact discretionary (industry dependent). While the added scrutiny will likely not appeal to people who've become used to a certain size treasure chest to play with, this huge percentage does underscore the massive opportunity organizations have before them if they can optimize their portfolio. For owners of these expense pools, CPM lets you articulate where you are spending your money from the lens of an investment - not as a discretionary expense that should be cut if and when the environment requires.

At American Express, we've defined anything that is not required to keep the machine running as an investment and so are able to introduce tweaks to our portfolio within and across business segments as well as functional areas. Why limit oneself to optimizing within one narrow mini-portfolio of the organization? Starting with a mini-portfolio might be the right way to start and pilot the concept of Corporate Portfolio Management, but ultimately, CPM is about thinking and achieving BIG.

I'd love to hear from those who've successfully introduced Corporate Portfolio Management to other areas of their organization and the successes and challenges you've faced. Also, if someone can articulate why IT seems to be receiving all the attention around CPM, that would be very useful to understand. It seems to me that this has been driven by the ecosystem of consultants and software vendors that have emerged, but I'd love to hear other insights and thoughts in this regard.

Book to be released on Corporate Portfolio Management

I am happy to announce that I will be releasing a book entitled Optimizing Corporate Portfolio Management: Aligning Investment Proposals with Organizational Strategy. The book will be released in April/May 2007, and my intention is to create a guide executives and CPM practitioners can utilize to build a robust CPM discipline within their organization. Gary Crittenden, Chief Financial Officer and EVP, has graciously agreed to write the foreword to the book, and I anticipate having numerous case studies on organizations who've deployed CPM.

More details to come.

CFO Executive Board session to discuss American Express Investment Optimization

Today, I hosted and convened the first of three tele-conferences to talk about resource allocation and our Investment Optimization efforts at American Express in conjunction with The CFO Executive Board (CEB).

The presentation entitled "American Express' Optimal Resource Allocation Process" was very well-attended and spurred some useful discussion. There were several questions from participants about the organizational change required to enable CPM. The realization that CPM is about impacting organizational behavior is a fairly astute observation as many often worry solely about the process elements or worst yet, many think that CPM is an effort which just requires a software tool in order to be enabled.

For those interested in seeing the presentation, please email me, and I'd be happy to send it to you. Also, let me say thanks to Roisin Ryan and Eisha Tierney Armstrong of CEB for their outstanding efforts and support in putting this presentation together.