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This description of the application of the RAND Corporation's PortMan portfolio analysis and management method for the National Security Agency (NSA) Information Sharing Services (ISS) division demonstrates how PortMan (1) enables the data-driven analysis of project portfolios and (2) provides a means for monitoring the progress of potentially high-value projects and associated risk-mitigation strategies.
RAND developed two sets of metrics to help ISS estimate the expected value of the projects in its portfolio, one for research and development (R&D) projects and one for operations and maintenance (O&M) projects. Metrics were based on elicitations of the important components of value and risk from ISS staff and an analysis of documents provided by ISS management. RAND also conducted a Delphi consensus-building exercise with subject matter experts from ISS's Senior Leadership Group (SLG) to estimate both the value and the probability of successful implementation of each project. PortMan allows for the inclusion of value, risk, and cost in the portfolio analysis, and RAND used a linear programming model to select a portfolio of projects that delivers the maximum portfolio expected value for the available budget.
This analysis generated reproducible and auditable data to support programmatic decisionmaking within ISS; it also provided a venue in which ISS leadership could identify areas of consensus and non-consensus and debate the latter. Finally, it provided data and analysis of expected value versus program budget and expected value-to-cost ratios of individual projects that can be used by program managers and directors in discussions with supervisors and senior management.
Preface iii
Figures vii
Tables ix
Summary xi
Acknowledgments xvii
Abbreviations xix
Chapter 1 Introduction: The Basics of Portfolio Management 1
Applications of Portfolio Management for the National Security Agency Information Sharing Services Division 2
Organization of This Monograph 4
Chapter 2 The RAND PortMan Method 5
Expected Value 5
Metrics 6
Research and Development Programs 6
Operations and Maintenance Programs 7
Value and Risk Estimation 7
Portfolio Analysis 8
Consensus 8
Risk Versus Reward 9
Cost Analysis 11
Chapter 3 PortMan Evaluation of the NSA ISS Portfolio 13
ISS Project Descriptions 13
Questions for Evaluating Value and Risk Metrics 14
Research and Development Questions 14
Operations and Maintenance Questions 14
Consensus Analysis 15
Analysis of Value, Risk, and Portfolio Balance 15
Cost Analysis 20
Chapter 4 Conclusions 27
Appendixes
Project Descriptions 29
Research, and Development Questions 31
Operations and Maintenance Questions 35
Delphi Exercise Results by Project and Question 41
Bibliography 43
Overview
This description of the application of the RAND Corporation's PortMan portfolio analysis and management method for the National Security Agency (NSA) Information Sharing Services (ISS) division demonstrates how PortMan (1) enables the data-driven analysis of project portfolios and (2) provides a means for monitoring the progress of potentially high-value projects and associated risk-mitigation strategies.
RAND developed two sets of metrics to help ISS estimate the expected value...