PPM – Why Now More Than Ever?

By Lori Ellsworth, Vice President of Compuware Changepoint

The success of any business is directly influenced by the value delivered by their IT organization. And for those IT leaders who are charged with making those results happen, they know that a focused commitment to a formalized PPM initiative is a critical success factor. In fact, an August 2008 Gartner survey of IT leaders (Survey Says Most IT Leaders are 'Heads Down' on PPM Initiatives," by Michael Hanford; September 15, 2008) stated that "IT leaders who responded to an August 2008 Gartner survey indicated that more than half of their organizations are "currently undertaking" major initiatives for portfolio management, the introduction of program management, IT governance implementation or enhancement and/or project management office (PMO), and enterprise PMO formation." The Gartner report also stated that 90% of the respondents feel that their most important topic is portfolio management for projects and applications.

Regardless of the size or industry of an organization, it is apparent that taking a formal approach to the management of IT projects and portfolios is top-of-mind for IT executives. But why? Why would an IT executive add another "layer" onto their mounting responsibilities? And why now, when the economy is struggling and organizations are being asked to reduce costs, not make investments?

It's quite simple. A solid PPM solution delivers what IT executives need: visibility into all IT initiatives, the ability to establish priorities and the ability to keep portfolios in check. These aren't merely "nice-to-haves." In challenging times like these, IT executives face tough decisions, and the impact of these decisions can either boost an organization or lead to its demise. Here's exactly why having a PPM solution is a must have:

1. Ability to see into all IT initiatives.

No doubt, you know of organizations where the only view into what IT is working on was gained through combining manual reports or sitting through status meetings. You still don't know if all projects have been accounted for or what kind of "keep the lights on" type work is underway. No longer can IT afford - from a financial, a resource or even a pure credibility perspective - to work this way. Full visibility into all the work of IT is critical to reduce unnecessary costs and optimize resource allocation.

By using a PPM solution to manage decision making, IT's delivery of strategic projects and KTLO work - and organizational value - is measurable and clear. Management dashboards give visibility across all projects and applications so the decisions IT leaders make in terms of allocating resources across the business units are based on non-biased facts. IT's understanding of the business allows its executives to communicate what IT is doing and, even more importantly, what IT is capable of doing.

Case in Point ...
A large banking customer leverages Compuware Changepoint to gain visibility into capital funding, human capital spending and also the delivery of projects from both a cost and budget perspective. With this level of visibility, the IT organization has uncovered redundant and non-strategic work efforts that will further improve operations and lower costs.

From a resource perspective, another customer uses Changepoint's executive-level dashboards to view all tasks assigned to each IT employee. For this CIO, Changepoint provides the means of making a positive impact on IT - and the business. He can clearly see where and how IT resources and dollars are used and overused--and what advantage or risks they bring to the business.

2. Establish priorities.

Demand for IT services will always exceed supply; without visibility into how the two are balanced or a collaborative approach to making decisions, IT cannot satisfy all its customers. In today's economy, the challenge is even greater to re-evaluate everything that is already underway and to make informed decisions going forward. Your organization needs to make smart decisions about where to continue to invest, where to cut, where to postpone and where to retire. If these decisions are made without the visibility mentioned above, and a clear approach prioritization, you might solve the near-term problem with devastating longer-term implications.

The good news is there is help to make these decisions. IT leaders need to work with line-of-business leaders to agree on the right business criteria, and then drive the process to use this information in a transparent and sustainable fashion. One approach is illustrated in our next "Case in Point."

Case in Point ...
A large financial services organization has already leveraged Compuware Changepoint for several established PMOs that are vertically aligned with business units to enable project execution. Because of the belief in the business value of a repeatable approach to prioritization, the organization applied a dedicated, cross-functional approach to address the next challenge: project prioritization and selection. The Enterprise PMO is championing a sustainable and value-added approach to project prioritization, selection and performance management.

Early work has resulted in the categorization of investments tiers (by cost, duration and impact on the business) and the identification of the level of approvals required at each investment level. This framework sets criteria to evaluate each initiative to drive prioritization. This includes presenting relevant information regarding strategic alignment, risks, costs and resource impacts. Once the foundations of governance, process and practices are in place, leveraging automation ensures this approach remains sustainable and scalable.

By establishing a consistent framework for project prioritization, this financial services firm is improving executive decision making across both IT and the business. Furthermore, it has committed to continuing to refine processes and mature the suite of criteria used for decision making. The enterprise-wide mandate of the EPMO enables continued commitment to establish and scale project prioritization best practices globally over time.

Another customer, who has grown through significant acquisition activity, reduced its prioritization criteria for decision making from over 100 to 11. This criteria is now used across all business units and initiatives to help determine if a project should be undertaken (based on how well it aligns with the business) and what priority it will receive.

3. Keeping Portfolios in Check

What's the quickest path to reducing costs? Our customers tell us one of the earliest benefits they received is through the elimination of redundant or underperforming projects and applications. Without a PPM solution, organizations tend to make reductions across the board with little insight into the consequences these cuts can have to the business.

By keeping portfolios in check, you can immediately identify and remove redundant or non-strategic projects or applications so you can benefit from cost reductions while strategically shifting IT's focus to the projects that provide the most value to the business. The long-term benefits of this approach are:

• ensure the project portfolios remain healthy and aligned
• the ability to manage the application portfolio to reduce costs and drive investment roadmaps
• the investment portfolio drives better decisions by allowing you to weigh the risks and value strategic of business initiatives and KTLO activities.

As the IT executive, you represent the strategic needs of the whole business. That requires you to manage the portfolios from that standpoint. "Unchecked" portfolios introduce costly risks around technology, resource skill sets and customer satisfaction. One of our customers avoided this situation by keeping application portfolios in check, which provided tremendous value to the business.

Case in Point ...
Our customer, a consumer goods company, is growing faster than its competitors and understands the need to better manage its portfolio of applications. A manual exercise to inventory more than 300 applications highlighted the need to link this process to an overall governance plan. The IT organization initiated a more detailed inventory and categorization of all applications. This view drove the company's application decision-making efforts to determine which applications to support and which to retire. Changepoint provides the transparency the company needed to systematically manage this ongoing process and collect accurate key financial information (cost to implement, support, maintenance, etc.). In the end, the company's short-term wins included retiring redundant or unneeded applications to save money and time. Looking forward, this will allow the company to plan a better roadmap for future development.

Where to go from here

Now you know why a PPM solution isn't a luxury, but a necessity for your organization. And the time to invest in a PPM solution is now. In the short term, it will allow you to better respond to corporate direction knowing the cost-reduction decisions you drive are based on facts. And, in turn, these facts can be used to communicate any implications to the overall welfare of the business. This approach truly helps you respond to the business, minimize risk and invest more strategically in the future.

When choosing a PPM solution, look for flexibility that meet your needs now and can grow with you. This includes functionality to serve IT and a broader business community, best practices and other delivery options such as SaaS or on premise. If you're in the market to invest in a PPM solution, I know where you can start your search.