When KeySpan Corp. purchased an IT portfolio management system last summer, it expected the software to help it better rank and monitor IT projects as part of its budget planning efforts. But it ended up doing more: It has also helped the electric and gas utility"s IT department gain the trust of senior management, thanks to improved transparency into IT project decision-making criteria.

Before adopting the portfolio management techniques, "there was little trust and a great deal of uncertainty about our alignment with the business," said Frank La Rocca, acting CIO at KeySpan. But by applying the management techniques and software to its last two discretionary IT project budget cycles, "there was much less skepticism about the value of the projects and a richer dialogue about IT and business strategy," he said. "I think it"s re-established our credibility and trust and has allowed senior officers to get engaged with IT at a much more strategic level."

KeySpan began a pilot of the software from New York-based UMT in August 2003 to help it develop its 2004 discretionary IT project plans. KeySpan then purchased the software under an ASP-style hosted software agreement last July and recently had the system implemented on UMT servers. That allows between 10 and 15 KeySpan business relationship IT managers to access the system via Web browsers, according to Joe Nogan, director of strategy and architecture planning at KeySpan.

LaRocca placed the licensing and implementation costs at about US$450,000.

The system has yielded several technical and strategic benefits. The hosted software approach is cheaper than running the software in-house, and it has helped KeySpan limit the number of servers it needs in its data centers, said La Rocca. And the portfolio management software and methodology allowed the company to better rank and prioritize IT projects.

Under the 2004 IT budget planning process, "we tried to include IT infrastructure projects in the project portfolio and found they tend to get ranked low in terms of strategic priority," La Rocca said. So for its 2005 IT budget preparations, KeySpan used a separate set of processes to prioritize infrastructure projects while it was planning discretionary IT projects.

KeySpan had evaluated four other IT portfolio management systems before choosing the UMT system, La Rocca said. "We felt that we had the Cadillac of systems," he noted. While some of the other systems KeySpan evaluated were strong in areas such as demand management and resource optimization, none of them could deliver the breadth of mathematic calculations -- including reverse costing analysis and efficient frontier analysis techniques -- offered by the UMT software.

KeySpan "has developed an extremely rich approach to IT project portfolio management," according to Howard Rubin, executive vice president at Stamford, Conn.-based Meta Group Inc. Meta worked with KeySpan and UMT to optimize the system"s performance and the portfolio management methodology put into use.

The IT project portfolio effort turned out to be so successful that KeySpan"s gas business unit has adopted the UMT software and methodology. And the system is being eyed by other business divisions, including the company"s human resources department, La Rocca said.