Project-Portfolio Management 101

Updated: April 30, 2009

Keeping tabs on IT projects can be a time-consuming and complicated endeavor. After all, with duties that range from increasing storage capacity to rolling out a new HR application, IT managers are often hard-pressed to know which workers and how many resources are being dedicated to a particular project at any given time.

"Most IT departments handle the management of work in a haphazard way. That's because the tools that they use to manage and track these projects aren't really designed to support the management of work," said Dan Stang, a research analyst with Gartner Inc.. Even worse, a recent Gartner survey reported that most IT departments spend 70 percent of their annual budgets on projects that have no direct business impact. "And that's probably the best-case scenario," lamented Stang.

Enter PPM (Project Portfolio Management) technology. PPM solutions measure a company's available resources — such as time, manpower and money — against proposed projects and align them with business objectives. The result is an automated system that can perform feats spanning from anticipating labor shortages to planning operations expansions to gauging the effect of new systems to evaluating how an IT project adds value to a company.

A New Focus

Although PPM technology has been available for some time, the landscape is rapidly changing. Several years ago, PPM solutions were primarily used to help companies juggle a wide range of projects. In today's tough economy , however, the technology focuses on enabling IT departments to scale back operations.

"You need visibility [into your project pipeline] even more now, especially during an economic downturn when you want to make sure that you're making investments wisely," said Stang. ""If you don't know what you're spending time and money on, then how do you know you're spending it on the right projects?"

In addition, by accounting for the ways in which ""an IT department accepts, manages and executes on work," said Stang, PPM technology can also help alter an IT department's reputation as a corporate money pit. After all, stated Stang, "IT departments are viewed as a cost center , but they're not just a black hole that you dump money into. IT is absolutely a strategic component."

On-Demand Visibility

An economic slowdown isn't the only factor that's changing the way that companies use PPM technology. Many vendors now offer on-demand versions of PPM solutions, which allow companies to sample the technology before deploying it on an enterprisewide scale. Other benefits of the on-demand approach to PPM include faster implementations, lower costs, no need for infrastructure investments and a quicker return on investment.

"The market has matured to a point where it's opened up more business opportunities for vendors that want to provide a more cost-effective solution using alternate deployment methods, and that's where the SaaS [software as a service] players have found a place for themselves," said Stang.

The Players

Here are just a few vendors that provide on-demand PPM solutions, as well as brief information on what they have to offer:

Daptiv PPM: This solution allows users to select, staff and manage projects across teams, departments and divisions. Employees and team leaders effectively collaborate on day-to-day tasks via a Web interface, while business managers and executives gain visibility into project, program and portfolio execution.

Innotas: Innotas prioritizes the portfolio of IT projects and applications according to business objectives; responds to changing conditions by rapidly reallocating resources with a full understanding of the impact; and identifies what employees are working on and makes clear business decisions on establishing priorities and how resources are used.

CA Clarity IT Portfolio Manager: This solution extends beyond basics — such as time tracking and project and resource management — for rich collaboration, knowledge management and best-practice methodologies for cross-functional work teams across the extended enterprise. Resource-planning capabilities also provide the forward-looking view that senior managers need to achieve optimal resource usage.

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