How to Use Software to Plan and Prioritize Projects
That's one reason the demand for project and portfolio management (PPM) solutions has been strong in the face of the weakened economy. PPM software is a term covering many types of software to help in project management—including scheduling, cost control and budget management, resource allocation, collaboration software, etc., that help companies deal with the complexity of large projects.
Many businesses are choosing to implement PPM solutions in order to get an organization-wide view of projects and identify which are mission-critical for the business and to help execute those projects as efficiently as possible.
'You can think of a project portfolio the same way you think of a financial portfolio. Most people use the portfolio concept to see what different kinds of investments they have and they're usually familiar with some being riskier than others and some being safer than others,' says Sandra Richardson, chief marketing officer and co-founder of Métier. 'It's the same thing with a portfolio of various projects. You want to see them together to compare and contrast them in the same kind of visualization you want to see in a financial portfolio.'
PPM software used to be in a class of enterprise software products—such as enterprise resource planning (ERP) or customer resource management (CRM)—that were the purview of only large businesses. But, for small and mid-sized businesses, this category of software tools has become more affordable because many vendors now offer PPM solutions offered as software-as-a-service (SaaS), which can be paid for on a monthly basis and often is maintained and updated by the provider so the business customer doesn't have to add IT staff to support the applications.
This article will review what type of businesses should consider project and portfolio management software, the benefits of PPM solutions, and how to use it and what functionality to expect.
Dig Deeper: The Value of Enterprise Project Management
Businesses That Need Project and Portfolio Management
While businesses across a wide variety of industries can benefit from PPM software and solutions, there are definitely certain types of firms that juggle many different projects that are the best candidates. In general, architecture and construction firms could use these tools to better assign business resources to different customer projects and to determine which are most profitable for the company. In addition, other types of businesses, from educational institutions to non-profits to retail manufacturers, can also use PPM to make sure they are making the best investment decisions and doing the best possible job.
Outside of firms that juggle projects for customers, any business that has an information technology staff or a list of IT projects could potentially use PPM software to best prioritize those projects to determine which are most important to business goals and then manage them to ensure they are delivered on time and on budget. 'Once you start dealing with organizations that are larger than 100 people, typically spreadsheets get out of hand,' says Patrick Tickle, executive vice president for Planview, a PPM software vendor. 'You can't maintain them because there are too many cooks in the kitchen.'
PPM products can help bring structure to an organization so that executives and managers can have a higher degree of confidence that the business is working on the right projects and that the right people are working on those projects. It can also help ensure that a business achieves a return on investment from its limited resources. 'That's even more critical in a small or medium-sized business than in a large enterprise,' Tickle says.
While investments in PPM products can climb to six-figures, these small and mid-sized businesses can get access to sophisticated tools for the lower five-figures—often less than $50,000 per year—by purchasing SaaS services. That delivery model tends to be attractive to businesses that don't have the IT staff to deploy the software, want a lower cost of ownership, and need to deploy the solution rapidly.
Benefits of Project and Portfolio Management Tools
In business, it pays to develop a strategy—either annually or on a bi-annual basis—and communicate it to staff. But how do you know that your company is actually on the right path or that you're meeting your goals with regard to strategy or what investments to make in order to reach your strategic goals?
That's where PPM software can help, vendors say. 'In our software, we have the project management component so that your project managers can track the tasks and resource management and risks and financials,' Richardson says. 'It's that tie-in from the strategy to the execution.'
'If you have people doing really great projects but they're not aligned with strategic goals, what good does that ultimately do for your business? PPM can help an organization determine what projects are essential to meeting those business goals so that they can fund projects that deliver value and then watch the execution of those projects to make sure they are being correctly managed,' Richardson says.
In a nutshell, here are some of the benefits experts say businesses can gain from PPM solutions:
- Metrics to help measure what projects you should undertake in house and what you should outsource
- The integration of the business so that executives can view projects throughout the enterprise, instead of allowing different departments to create 'silos,' which can lead to duplication and wasted resources
- The execution of business goals by standardization
- Better understanding of talent management (people) and project management (processes)
Dig Deeper: Ok, Everybody, Let's Do This!
How to Use PPM Solutions
One example of how a business might use PPM software is in launching a new product or service, Tickle says. In such a case, the implementation of PPM to this process would be broken down into three categories.
At the front end of the process, staff could use the software to submit ideas on what products or services could be developed, why they would be profitable, and how they would be manufactured or sold. 'In small companies, it's important to harness every piece of intellectual capital,' Tickle says. 'You can literally allow employees to submit ideas and say, ‘Here is a new market.''
Next, the PPM tools can be used to move from ideation to more structured planning so that you can look at those ideas and evaluate market potential and determine the amount of investment needed to bring those ideas to market. 'In the planning phase, you can look at all those ideas in the software and score them and take a structured approach to measure the investment potential of those ideas: the cost of the idea, revenue impact, what is the execution risk, do we have people who can do this project, and so on,' Tickle says. The software can help decision-makers look across the business and across business metrics and evaluate ideas on a common set of metrics.
Lastly, the PPM solution can be used to keep track of project execution. In this sense, it is used as a project management solution, including balancing resource management, staffing, budgets, and setting milestones. 'You can see what your people are doing and I can take it all the way down to the most granular depth…you can literally track hours of what people are working on,' Tickle says.
The ultimate payoff comes when a business has integrated the PPM product throughout the business and executives can track an idea all the way through execution. 'Then you can track the projected revenue against the actual ROI,' Tickle says. 'You can measure the output of that investment decision.'