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How PPM Provides Direction in Uncertain Economic Times
How PPM Provides Direction in Uncertain Economic Times
January 6 2009
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.
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