Author: Ramgathi, Sandesh
Supervisor: Professor Pierre Gerber
Date: September 2009

There is a trend for large Corporate organisations to define long term strategies (often over five years) to position their businesses within a desired market segment. Annual business plans are then developed to direct the implementation of the strategies and because business directions change with market demand, there is a need to continuously revisit and revise these strategies and plans. Included in the business plans are a series of investment programs and projects mostly Information Technology (IT) based that lead to the achievement of the organisation’s strategies over time. The near total dependence of banking and financial services enterprises on IT, for the delivery of products and services to customers, mandates efficient IT infrastructure and timely completion of projects. Demand and expectations by customers and enterprise executives for innovative, instantly available services, pose challenges for senior IT and Change executives to manage infrastructure upgrades and systems development while ensuring continuous operations and enhancements with no disruption.

One of South Africa’s largest financial services groups listed on the JSE Limited offering a complete range of banking, bank assurance and wealth management products and services faces similar challenges. Lending woes, gyrating net-interest margins and stagnating fee income have, pressured the banking industry to limit discretionary spending on strategic projects and are now seeking to develop more effective ways of evaluating information technology projects.

The emphasis was on selecting and prioritising those projects that provided a realistic prospect of financial return, or a selective enhancement of customer service. It was in this challenge that also exposed a key vulnerability to Absa Bank Ltd. in its Personal Banking sector. The metrics, reporting processes, governance structures and other tools needed to effectively assess the value of current technology projects were not formalised in the change governance process and as a result, was adversely impacting on the organisation’s corporate strategy objectives.

This formed the basis for research with the key objective to formalise the project selection and prioritisation process within the Personal Bank Change and Systems sector and introduce a common set of prioritisation criteria that could be applied when making prioritisation and strategic value decisions. It became increasingly crucial to select and prioritize projects on their benefit contribution to internal and external customers, as well as to assign skill-appropriate people to work on them. The critical success factors identified for research in this study included aligning Business and IT strategies for improved project prioritisation, introducing a set of prioritisation criteria and standardising the project selection process to operate within an established set of governance, as well as introducing project portfolio   anagement (PPM) to enhance the effectiveness and alignment of projects that supported the corporate strategy of Absa. This then defined the scope of the research which was conducted in the social world being theoretical in nature following qualitative and quantitative paradigms.

In support of the research paradigms identified, the mixed methodologies (methodological triangulation) research methodology was adopted in the form of questionnaires which was then surveyed within the target population selected and the results thereof were presented. There were clear indications that as a result of poor organisational structuring, business and IT strategies were not aligned in Personal Bank and confirmed the need for these two areas to be integrated for improved project selection and prioritisation. Also, the financial methods applied

in the existing business case calculations had proven to be inefficient in the existing project selection process which presented the need for implementing a scoring model with an agreed set of prioritisation criteria. Personal Bank Change & Systems was in absence of a mechanism to align value to the business; manage executive and user expectations and implement projects. Project risk vs. return calculations were not considered in portfolios when making project selection decisions which further resulted in Personal Bank not having the correct mix of investment projects in their portfolio. This led to the recommendation that the principles of PPM had to be embraced complimented by the use of an appropriate PPM tool.