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Trading Technology

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Lauren Gibbons Paul
Lauren Gibbons Paul
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Project and Portfolio Management

The Challenge: As IT budgets have soared, firms have increased efforts to wring business value out of IT. Project and portfolio management software can help strengthen IT governance, better aligning tech initiatives with business goals and improving resour

Like so many financial services companies, Russell Investment Group's IT spending had gotten a bit out of whack in the late 1990s. As IT budgets soared with the approach of Y2K, senior management at the multi-asset manager-of-managers began to question whether all this spending translated into value for the business. It was a fair question, according to Rick Len, director, program management office for Tacoma, Wash.-based Russell Investment Group.

"Our roots are in providing sound investment advice to top-tier portfolio managers," says Len, who joined Russell in 1997 to start up the company's first program management office. "We needed to identify the optimum investment strategy for technology within Russell." It was time, Len relates, for Russell, which now manages $167 billion in assets, to solidify the link between IT and strategic business objectives.

After outgrowing in-house developed tools, Russell implemented project and resource management software from Pacific Edge Software in 2000 as a way to manage change and strengthen IT governance processes. Now, Russell's IT organization uses the software to execute IT investment strategies that are as valuable to the bottom line as its financial investment advice is to clients. Central to this approach is the ability to quickly deploy Russell's 100 full-time IT personnel and 50 contractors to projects for which they are most suited, or to help them obtain needed skills rapidly, thereby increasing employee satisfaction and retention in the process.

Tighter IT Governance

When Len joined Russell , his mission was to help IT review its projects to ensure they were in line with business objectives. "There was great scrutiny over the alignment, IT's value to the business, the ability to effectively manage what was one of our biggest expenses," says Len, noting that Russell was spending nearly 10 percent of its 2005 operating budget on IT, the largest operating budget in the company.

Despite the significant expenditures, the company was overwhelmed by the increasing demands for IT projects, which were growing by double-digit percentages every year, Len relates. To get a handle on IT's workload and understand how these projects translated, if at all, into value to the business, Len implemented Pacific Edge's Project Office software (now called Mariner). "It's a way of understanding all the demands coming in from the business units and mapping those to IT's capacity to deliver real value," explains Bill Yaman, vice president of marketing at Bellevue, Wash.-based Pacific Edge.

While Russell's program management office initially used the Pacific Edge solution for project management, Len soon discovered the tool's strength in portfolio management. In 2001, when recently hired CIO Jim Wallace called for Len's group to review every project under way at the time and rate them against metrics such as quicker time to market, cost reduction and revenue generation, Len tapped the Project Office software.

As a result of the review, "We accelerated some initiatives, we pulled some back and we put them together as an entire portfolio," says Len. "We established the official record of what IT is doing for the company."

Len's work paid off handsomely in June that year, when he told Wallace that, thanks to better awareness of IT projects and resources, he could return $1 million from the IT budget to the corporate coffers. Wallace asked him to hold off on making that announcement, just to be sure it was true.

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