All About the Customer

Forrester Research Senior Analyst Lewis Cardin on the next generation of project management software.

by Karen J. Bannan, November 2008

Project management has evolved as a discipline to help remove waste and improve processes for all types of projects. But having smart, trained project managers isn’t enough anymore. Today, solid project management also requires tools that can help project members do their jobs by holding down costs, improving documentation, controlling change, and tracking progress. In some cases, these tools make it possible to pass on cost savings to the end user, making the company in question more competitive, something Fujitsu Consulting is planning to do. And overwhelmingly, these tools take the form of project portfolio management (PPM) software, says Lewis Cardin, a senior analyst with Forrester Research.

PPM software, according to a December 2007 ForresterWave report, acts as a continuous process feedback loop that IT departments and project managers can use to absorb and prioritize technology-related demand, allocate capital and human resources, and provide reporting capabilities.

One of the main tasks that project portfolio management software is used for today is prioritization—helping organizations make sure they are making the right moves that will deliver the most economic value or have the best investment worthiness. Putting a PPM solution in place helps enterprises use governance principles in the business, creating what equates to a steering committee for projects and implementations.

“PPM tools give businesses the ability to make informed decisions about prioritization. You won’t find a business executive who says, ‘No, it’s not important for us to do the right project at the right time,’” explains Cardin.

In the technology world, PPM software carries another substantial benefit, says Cardin. “IT needs to legitimately look like it is running itself as a business. In addition, IT needs to be perceived as well aligned with the business,” he explains. “A lot of IT organizations and parts of the business community look at these portfolio management solutions as the ERP [enterprise resource planning] for the IT organizations.”

So PPM software helps IT organizations not only prioritize investment opportunities but also measure the degree to which the investment aligns with the business—how it contributes to achieving corporate objectives. It does this by looking at the risks associated with the achievement of benefits, says Cardin.

There are two other aspects to PPM software as well: resource management and financial management. Both are exactly what they sound like: ways to optimally deploy resources across one or more projects so that the company realizes its objectives and sees benefits on its bottom line. It also helps businesspeople see the value of their own projects.

“What all of these components do is enable the business community to work with the CIO in a much more informed and intelligent way to direct the optimal use of IT across the whole business,” explains Cardin.

“If you’re a large company and you don’t have a portfolio management solution in place, your ability to deal with the business and the ability of the business to get value out of IT is seriously constrained because there is no visibility.”

Today’s PPM software is making IT transparent for the business and enabling a true partnership between the CIO and the business—especially when companies install PPM software that is compatible with their other enterprise software, such as ERP, customer relationship management, accounting, and sales force management applications.

“When everything is connected, IT is not operating in isolation like an island,” says Cardin. “They’re tightly integrated with how the rest of the corporation is doing its business.”

Figuring out which software to buy, however, may be daunting to some companies—especially if they haven’t standardized the rest of their ERP software on one particular vendor or platform. In that case, says Cardin, it’s extremely important to look at exactly what your company wants to get out of the software. This starts, says Cardin, with more than one discussion.

“It’s really important that the CIO engage the rest of the business in all of this decision-making up front so that all of the stakeholders are really architects of the solution,” he says.

“They are also involved with how to implement it—when it’s implemented, how quickly it will take place, and what needs to happen—so there is a minimal amount of disruption when introducing these new kinds of processes and software programs,” Cardin adds.

You can encourage people to get involved by explaining that once they help create a company vision, their involvement will result in a program implementation that’s going to provide informed governance, Cardin says. Because in the end, PPM software helps spur decisions that are based on fact—not assumption.

“One of the big frustrations that a lot of companies have is they put highly paid, high-level executives onto steering committees or governance programs, and then they’re asked to make decisions based on a lot of bad information,” says Cardin. “They’re not comfortable with the information that’s being put in front of them in order to make those kinds of decisions, but they have to make them anyway. PPM software helps people make correct decisions because they get the information they need.”

Optimal deployment of money with controls on gating and funding advances and optimal deployment of resources are just some of the benefits that can accrue from successful PPM implementations. Companies can also expect to receive reporting that assesses and details risks, change, and potential problems, giving executives the data they need to make informed decisions. “That’s pretty compelling,” says Cardin.

For More Information

Oracle Project Management
Project Management Discipline
Karen J. Bannan covers business and technology for publications such as Forbes and PC Magazine.
Oracle 1-800-633-0738