Project portfolio management (PPM) is a process to obtain project management information of all resources, time, budget, and labor skills in order to align, manage, and review these elements–and to ensure deliverables are being met in terms of project milestones, in accordance with the work breakdown schedule.
In a time of economic and business uncertainty, PPM may be the prescription to obtain successful IT project management results. However, IT departments in many organizations are viewed by some in senior management circles as a huge money pit, a kind of necessary evil that generates little in terms of ongoing business development or growth.
In view of this type of prevailing logic, it’s no wonder that organizations take the reflex action to rapidly slash IT projects and spending. However without tools such as PPM to fully analyze the return on investments of IT projects, the organization could be faced with even greater financial risk by either cutting badly needed IT infrastructure improvements or by maintaining costly legacy applications that in some cases are expensive to support.
Removing the Guesswork from IT Spending
IT project managers have duties that can range in diverse areas from increasing storage capacity to rolling out a complex business application such as a new ERP system. The financial implications of these tasks require that the IT managers be aware what resources are available to complete a task at any given time. As business looks for ways to reduce operating expenditures during the current economic slowdown, delaying and reducing IT project spending may not be the best long-term approach.
A PPM solution equips an IT manager with the ability to measure an organization’s available resources (primarily, time, labor, and budgets) against pending projects, and align resources with business objectives, in order to fully measure return on investment (ROI) prior to launching a project. In using a PPM tool, an organization has the ability to position IT initiatives into a lexicon that key non-IT-management personnel can understand. Project spending can be viewed as way of analyzing from both the total cost of ownership (TCO) and ROI perspectives and understanding how these projects relate to overall business strategy initiatives.
PPM tools have been on the market for at least ten years, and economic slowdowns are not the only criteria to demonstrate PPM’s benefits. For example, the information collected from managing past projects can be used for estimating and planning future projects. If one can reduce subsequent project costs by as little as 5 percent spending on redundant processes and testing, then the cost savings can be significant. In some organizations, IT spending represents as much as 50 percent of the overall capital budget and it is with this mindset that PPM can respond to determining the value on how those investments will generate a return to support business objectives. One of the limiting factors of PPM, however, is that although it has provided business with a view to evaluate the value of IT projects, it can only focus on new project investment. If project spending represents 25 percent of an IT budget then this means 75 percent of an IT organization’s existing infrastructure may not be measured using this tool.
The Outlook for PPM
In the near term the outlook and demand for PPM software solutions remain strong, according to the recent Gartner-sponsored “Project & Portfolio Management Summit (June 2008)”: “PPM spending will exceed annual revenues of $1 billion in 2009.”
Given the strong market potential for PPM software products despite a sluggish global economy, here are a few selected vendors featured in the TEC Vendor Showcase that are worth looking at:
Deltek provides an integrated toolset for PPM with Deltek PPM and EVM Products. Modules include portfolio analysis, risk management, planning and scheduling, project collaboration and complete earned value management (EVM). This modular, integrated suite provides selective information to project participants from CEOs to project managers to team members.
Epicor for Service Enterprises is an comprehensive enterprise service automation (ESA) solution. It manages bid management, engagement delivery, and resource management, project accounting, portfolio management, and other components of the service organization. Epicor for Service Enterprises 8.1 adds enhanced project portfolio management (PPM), contingent workforce management, and advanced collaboration and customization capabilities.
OpenAir Professional Services Automation (PSA) automates and integrates business operations, such as staffing resources, managing projects, tracking time and expenses, project accounting, and billing and invoicing. It provides users a web-based user interface that can be accessed from any browser or a variety of mobile devices. OpenAir’s PSA solution offers modules for project and resource management, time and expense tracking, project accounting, knowledge management, reporting and billing, requires a browser only, and supports a variety of mobile devices.
A Final Thought
As organizations look to retain market share and weather the storm in a grim economic period, a PPM solution remains a critical software to have in place to analyze and plan what projects should either be accelerated or delayed. Without these tools an ad hoc approach may ultimately be further detrimental to remaining competitive. A business-savvy CIO, along with the right tools and initiatives designed to add value, may very well be the best insurance in a tight economic marketplace.
Gartner’s magic quadrant for PPM solutions shows the leaders to be Compuware Changepoint, CA Clarity, & Planview. The folks mentioned aren’t typically known as PPM solutions.
While I agree with the premise the author puts forward, he misses the point of doing PPM in the context of a broader PfM effort. PPM is focused on maximizing the benefit projects bring to the goals of an organization. However, it’s only one step in a broader PfM effort which looks at ALL investments and does take into account the fund expenditure on the other 75% of spend.
The major players in the field based on strengths of offering are Oracle/Primavera/ProSight, CA Clarity, Serena Mariner, and Planview. While Gartner ranks Changepoint in the leader quadrant, their solution is actually rather weak for most true PfM applications.
Gartner certainly doesn’t know everything. I wouldn’t count out other players like AtTask, which offer sound solutions with a much more realistic implementation map and price than a Clarity or Primavera. Howver, it is funny that an article like this would mention the ones it did, since they really aren’t considered even mid-size players in the PPM world.
Charles: Although I do not speak for Gartner as I am employed for TEC I do know that in Gartner’s Magic Quadrant report they list almost 20 vendors of which many are in the TEC database as well. The companies mentionned do have a PPM software commercially available Chris: In your opinion what do you think is an important characteristics of a PPM solution?. Adam: Your quite right no one analyst can lay claim to be the ultimate authority on any one particular subject matter ultimately it’s the people like you in the field which guage both your likes and dislikes,in this article I also not only try to mention the known players in a given knowledge space but some other potential solutions that are deserving of honorable mention.
The missing link from PPM systems is the ability to evaluate and manage the “expected” economic value of projects and portfolios. Score cards, check lists and other subjective measures do not cut it. Value-Based Optimization deals with the technical and commercial risks and uncertainties that create economic value. Portfolio Navigator™ by SmartOrg is a web-based system that addresses uncertainty head on. It is used by serious portfolio managers at companies like Chevron and Dow AgroScience to select, prioritize and manage value throughout development. Portfolio Navigator™ can stand along or integrate with SAP RPM to provide economic value optimization as well as resource optimization. The software’s legacy stems from the pioneers of decision analysis at MIT, SRI International, Stanford University and Strategic Decisions Group.
The statement “without tools such as PPM to fully analyze the return on investments of IT projects” reflect some of the best and worst of the approaches to PPM. If I have to “fully analyze return on investement” to get value from PPM, then it gets really complex, and loaded with outcome measurement assumptions real quick. Most of the IT world seems to need a ppm solution that gets them beyond tracking projects in Excel, something that could even start with tracking across people and projects to verify if they get projects done on time, within resource hours estimated and within budget. Pair that up with an estimate of ROI and you have some quick, powerful numbers that you can do more with than substantiate your department’s existence. ManagePro is an example of a lighter, but more universal accesible approach to PPM. http://www.managepro.com/itmanagement.html
PPM does not say about non-measure that impact some input of PPM. It’s true PPM is useful once you put in the right and proper facts. What happend if your primary data is incorrect like TimeSheet that is used by team just to complete their duty but ignore its correct content. PPM will be useful and give result effectively only when it’s implemented with a good practices and good prcedures.
All of the major project management tools are flawed and the narrow definition of what is project management by Gartner is misleading. Forrester (The Forrester Wave™: Project Portfolio Management Tools. Q4 2007) identified a number of significant limitations of ‘point’ or stand alone project solutions – many of which have been identified in the above posts. It is instructive to analyse these limitations and comment and reason why it is not just about project management – success is underpinned by not only project services but by a broader collaborative approach that includes project services – the following are attributes of a platform that does this:
1. Reporting of events – to address this requires a real time platform that can be integrated into multiple support systems – information that is feed to reports provides up to date views of events, changes, tasks, activities, etc;
2. Resource allocation – the system needs to provide a forwarding looking view of resources allocated against projects, programs, etc. Having a forward view of all resources enables issues to be addressed in near real time;
3. Interaction across the organisation – the system must be capable of being used across the enterprise (and with external parties) (project driven enterprise) and support projects driven activities all areas – project drive maintenance/asset management, corporate planning, ICT services, product/solution development, etc;
4. Make the solution as intuitive as possible – provide a complete portfolio of menus and be driven by class leading work flow that is ‘humanistic’. That is it understands business objects, actors, processes, supporting systems, information sources, etc. It can be adapted and configured for a business – The platform should adjust to an organisation rather than you having to work around any ‘hard coded’ limitations as is the case with ‘point’ solutions. The platform can ‘neutralise’ multiple supporting systems (expenses, ERP, HR, etc) by integrating them into a broader and higher operational framework underpinned by ‘human’ workflow capabilities that represents the enterprise itself. It is very granular being person centric – providing a project/information view for each user.
5. Integrated IT has become a reality – recognises that collaborative business performance is very important to business success. Provide insight not only into all ICT spend but all other types of project information across an enterprise.
6. Going extra Enterprise – be an enterprise and extra enterprise solution – a pure Internet architecture enables project collaboration not only across complex and geographically spread organisations but also with multiple external organisations – customers, partners, suppliers, etc;
This type of solution underpins success by:
A. Delivering a rich workflow and configuration capability that fully supports a business need;
B. Avoids a ‘big bang’ approach – the application can be rolled out in discrete stages and against business objectives/ROI opportunities;
C. Provides very rich and deep governance – all activities within the platform are tracked and auditable
Thanks for your comments I agree there is always a method to improve upon an existing concept or refine it further. Recently I have been readingabout a concept which was adopted over the past two years called Manufacturing Operations Management the acroynm M.O.M. which was introduced by the organization called ISA International Society of Automation as part of revising their five part standards ANSI/ISA-95
http://www.isa.org/ Essentially this standard calls for a tighter integration of areas like PPM,ERP,BI,APS it essentailly revises the MES concept (Manufacturing Execution Systems) and fuses it with the business systems allowing for rapid changes.I will be writing about this in the near future in this space. In the interim Wikipedia has a good explanation of the concept
of what ANSI/ISA95 is and how it relates to the MOM concept.Your point is well taken Nexus I think that many vendors are starting to listen how the tighter integration is required of tools that work in support of one another.
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