As organizations fight tenaciously for every inch of market share, IT departments have had to deploy technology that assists these dynamic organizations to remain competitive. One of these technologies is project portfolio management (PPM): a set of processes to analyze, recommend, authorize, activate, expedite, and monitor projects to meet organization improvement goals. Figure 1 provides a visual of these processes and how they flow during a project.
According to The AMA Handbook of Project Management (2nd edition), PPM, when used to its full potential, can assist organizations to realize the following goals:
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an estimated 20–30 percent reduction in the time it takes to develop new products
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significant improvement in completing projects on time and on budget
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improvements in research and development (R&D) productivity
How Organizations Should Support PPM
To support a PPM system, organizations must have an internal process for each of the following:
1. Governance—the executive role in the decision-making process, usually conducted by a C-level executive who determines
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what projects to approve or reject, as priorities are determined
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when to activate projects, and establishes their completion dates
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what resources are required (both capital and human), and sets the project budget
2. Management—the process that monitors a project to ensure it is fulfilling its stated goals and that it is running on time and on budget. Such monitoring is usually the responsibility of the project manager (PM) and the project management office.
3. Administration—the management and updating of project portfolios according to their deliverables and resources (planned and used) in order to document the project status, note key milestones, and ensure adherence to the schedule for project deliverables. Usually the mandate of the PM.
The Democratization of PPM
Long before the digital age, British novelist G.K. Chesterton wrote: "You can never have a revolution in order to establish a democracy. You must have a democracy to start a revolution."
This paradox holds true when you consider the modern business landscape, which has seen the decision-making process transform from being the responsibility of a mere handful of top-level executives, to include a greater number of people across many departments and levels within the organization. To a large degree, this transformation has occurred because of the ever-increasing number of methods corporate data is collected and processed to allow greater visibility for management and to support the business process.
The average small to medium business (SMB) has many of the same strategic needs as Fortune 500 organizations have for processing data into information. Consider an SMB's need to integrate technologies to support its manufacturing and supply chain issues, which affect the organization's ability to generate revenues. These SMBs may sell to larger organizations, which demands greater integration with these organizations' business processes and systems. The requirements have an impact on everything from product design to engineering, to sourcing and procurement, to sales and distribution, coupled with greater compliance issues and regulatory concerns.
The mid-market has limped along with rigid systems and processes that were developed on platforms and architecture now about 20 years old. As a result, organizations have had to create a variety of ad hoc reports by using spreadsheets, replete with the constraints of inaccurate and static data. When managing projects, spreadsheets are a poor way to track changes, as they leave no audit trails, and they are an inadequate medium for interpreting data.
Until recently, PPM was viewed as a solution only larger organizations could benefit from, the logic being that PPM was time-consuming and costly to deploy. For SMBs, the cost of software licensing, hardware, and consulting services, as well as disruption to a business's day-to-day operations during implementation of PPM, were simply too high.
So what alternatives to using spreadsheets, with all their inherent flaws that risk the loss of valuable revenues to increasing global competition, do SMBs have?
The Hosted PPM Alternative
Many PPM vendors that originally sold on-premise solutions have made a transition into the on-demand marketplace. The primary reason for this change is that they have realized the potential value of this untapped market space, as software as a service (SaaS) offers a number of advantages to the client in the SMB market:
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No software needs to be installed.
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No infrastructure is required to support the application.
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The SaaS vendor manages all network issues and all software version updates.
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SaaS applications result in a lower total cost of ownership (TCO). On-premise software can cost a substantial amount in implementation fees and user support.
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SaaS applications allow scalability. Many of the features designed for an on-premise PPM system may be too robust for the small business user. But users can derive the benefits of a PPM system with an on-demand application, even if at first they are using only the parts of the software they require. Features and functionality can be added later, as users become more familiar with the application.
A Snapshot of Some PPM Solution Providers in the SaaS Space
1. Genius Inside
Established in 1997 and headquartered in Lausanne, Switzerland, Genius Inside creates and sells enterprise project management solutions, known as Genius Project.
With over 70,000 North American users and close to 400 installs worldwide, Genius Inside also has a vast network of resellers, and the company is a certified IBM Business Partner. The software is designed for the Lotus Domino Collaboration server, and has won numerous awards, such as the 2008 Lotus award for Best Mid-Market Solution. The product is a comprehensive set of integrated applications across ten modules.
Genius Project: Features and Benefits
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User-friendly software with a customizable user interface.
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Numerous standard templates, such as Project Management Institute (PMI), PRINCE2, and Six Sigma, which easily integrate to an organization's existing processes within its enterprise resource planning (ERP) system, such as procurement, accounting, etc.
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A complete project management solution, including portfolio management, project tracking, cost and budget tracking, planning tools, etc.
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A resource management system, with user-friendly and customizable time- and tracking-sheets, advanced reporting, process and workflow support, a document management system, and the ability to use rich collaboration.
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A cross-industry solution that can be used in both process and discrete manufacturing environments, and that is scalable to both large global locations and small offices having two or three users.
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Reports that can be exported to MS Project, and vice versa.
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Project information work breakdown schedule (WBS) that can be displayed in Gantt chart format.
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Multi-project milestones and key performance indicators (KPIs) that can be displayed and that support rich analytics using online analytical processing (OLAP) tools through a business intelligence (BI) interface.
For more information on this vendor, please visit www.geniusinside.com.
2. Innotas
In 2000, this Silicon Valley, California (US)-based vendor was acquired by venture capital firm Com Ventures, and formed a joint venture with Arrow Path Venture and Cedar Circle. This venture provided the seed capital to launch the Innotas solution, which made its market debut in 2006. The success of this product was recently documented by Gartner in its June 16, 2008 edition of Magic Quadrant for IT Project and Portfolio Management, a notable achievement for an organization in its early stages. As stated in Gartner's report,
PPM prospects small and large (based on the number of potential PPM end users) increasingly are considering SaaS/on-demand as an alternative option for deploying PPM technologies, which will lead to more market consolidation and more competitive pricing.
Innotas's main thrust is in the area of managing IT project portfolios, which can differ in some respects from non-IT-based PPM. SaaS model PPM isn't usually the most obvious choice for outsourcing, given the complexities of managing large-scale projects. However, Innotas, with its product known initially for being a tool to manage projects within the IT sphere, has recently announced that its new application's management capabilities will permit the vendor to broaden its industry and customer base.
Innotas Features and Benefits
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Three core modules that fall under the portfolio management umbrella.
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Project Portfolio Management permits organizations to select and indicate the priority of various project portfolios, to align themselves with strategic business goals.
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Application Portfolio Management helps firms determine what the costs are according to budget and resource allocation in order to support critical processes and work flows and which applications not supported further beyond strategic objectives.
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Project Portfolio Management and Application Portfolio Management include flexible and structured hierarchy-based portfolios that permit users to integrate their business process change scenarios according to customer-driven KPI metrics or relationships.
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Resource Management gives a global, macro, and micro view into overall resource capacity for staffing projects and applications, both at the project development stage and while the project is in progress.
For more information on this vendor, please visit www.innotas.com.
3. Meridian Systems
Meridian, based in Folsom, California (US), provides software solutions for construction projects and to facilitate physical infrastructure improvements. Meridian has been ranked as the market leader for project management software within the construction industry by Constructech magazine, which also ranked the vendor's solutions as top products in March 2008.
Meridian Product Features and Benefits
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Provide both on-premise solutions and on-demand solutions.
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The Project Portfolio Management module is the focal point of this vendor's service offering, and it is designed to manage project scope, schedules, budgets, contracts, and resources.
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The Facility Management module is designed to help the user manage all physical assets and service requests.
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Business Intelligence is an embedded part of the software, designed to permit senior management visibility into the entire portfolio of projects and view their status based on KPIs, dashboards, and drill-up and drill-down reporting.
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Business Process Management offers the ability to create and automate best business practices and processes across the enterprise.
For more information on this vendor, please visit www.meridiansystems.com.
A Final Thought
If your organization doesn't have a PPM system yet, then your team may be asking what PPM means: "Why do we need this? What can it do for me?"
I know it's not always best to answer a question with more questions, but in this instance, it is highly appropriate. Here is my answer—the team needs to create a snapshot of its portfolio, and then step back and ask three basic questions: "What are we doing? What could we be doing? What should we be doing?" If these questions cannot be answered in a timely, complete, and structured manner, then the organization needs to cross the divide and consider a PPM solution.
SOURCE:
http://www.technologyevaluation.com/research/articles/how-project-portfolio-management-can-deal-a-winning-hand-to-the-smb-project-manager-19410/
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