Although Enterprise Debt Ratio™ is defined for each project,
it can also be combined to produce an EDR for a group of projects in a program
or an overall EDR for the entire Project Portfolio. Of course, when combining
EDR you need to weight each individual EDR to get a balanced view.
While Enterprise Debt Ratio™ for the entire Transformation
Portfolio provides a useful metric at a point in time, it is more useful to
track it over time. A sensible view might be that over time, an Enterprise
might like to see the amount of work that is Compliant increase and the amount
of work done in a Non-Compliant way decrease - since doing work in a Compliant
way is generally the most effective, most efficient and least risky manner of
In Year 0 - the year of adopting PEAF (and hence Enterprise
Debt™) it is more than probable that a lot of work will still have to done in a
Non-Compliant way. However we make the necessary plans to do a decent amount of
Remedial work the following year.
In Year 1, while still having to do a lot of work in a
Non-Compliant way, we perform the Remedial work we planned the year before,
which lays the groundwork for Year 2.
In Year 2, we can now start to do more work in a Compliant way
(because of the remedial work we did in the previous year) and less work in a
Non-Compliant way, while still doing some Remedial work, both of which lays the
groundwork for Year 3.
In Year 3, doing work in a Compliant way is now beginning to
outweigh doing work in a Non-Compliant way (because of the remedial and
Compliant work we did in the previous year) and this, in addition to a little
Remedial work, lays the groundwork for Year 4.
In Year 4 we are doing most work in a Compliant way and only do
work in a Non-Compliant way when really necessary.
This is only an example of course and will vary from
Enterprise to Enterprise and will be influenced by many factors such as the
fiscal climate and current Enterprise Strategy.
However, the examples provided illustrate one of the
indicators of increasing EA Maturity in that Enterprises that are more “mature”
are the ones who spend a greater proportion of their resources doing work in a
Compliant way rather than a Non-Compliant way and therefore need to spend
little on remedial work.
The key point is:
If You Never PLAN To Do Transformation
In A Way That
Complies With Guidance,
You Will Never DO Transformation
In A Way That
Complies With Guidance.
Unless you planned for it, time pressures (the incessant
need for quick wins for example) will always force you to do work in a
Non-Complaint way rather than in a Compliant way. The key is breaking the
Another thing to consider is that the choices being made
when formulating the Transformation Portfolio should perhaps aim to do less,
better. What we mean by that is that it might be a better approach to doing
less things in a Compliant way (spending the money and time you save on
allowing those initiatives to execute in a Compliant way (thereby incurring no
Enterprise Debt™) rather than doing more things in a Non-Compliant way (thereby
incurring Enterprise Debt™).
What is the EDR for your
currently executing Transformation Portfolio?
How do you want that to change
What do you need to do to make
What will you do to break the cycle?