Project portfolio management (PPM) software doesn't pop out as one of those must-have items on a new CIO's shopping list, but Mykolas Rambus, director of IT for Forbes Media, makes the case.
"Here is why it is so important: Portfolio management is about delivering a predictable series of results to an organization. That is make-or-break for an IT department," Rambus said. IT, he added, is "long past" focusing on just keeping the lights on.
Just as with a stock portfolio, an IT portfolio should be managed to ensure the highest possible return on IT investments while mitigating risk. "We have to deliver business value. To do that consistently, you have to start with transparency," Rambus said. "Visibility is the name of the game."
When Rambus arrived at the New York-based media company 11 months ago, opacity was the name of the game. An IT staff of about 65 was juggling 30 to 40 projects a month, with a monthly "churn" of about 10 projects. Projects were managed at the most senior level of the IT organization and most of the tracking was done in Word documents, occasionally Excel. "This was not a collaborative tool for project managers to use but a placeholder for updates on whether projects were active or completed," he said.
Rambus wanted his project teams to collaborate, but first he had to figure out what IT was up to. "You have to crawl before you can walk."
PPM imperative in down economy
Other IT professionals apparently agree, according to Boston-based AMR Research Inc. During the past 12 months, more than half the inquiries from AMR customers were related to portfolio management, AMR analyst Dennis Gaughan said. This is not surprising, given IT's batting average. AMR studies show that 2% to 15% of projects taken on by IT departments are not strategic to the business.
As the economy has soured, companies that already take a portfolio management approach to their IT investments are increasingly looking for software to automate the process, Gaughan said.
'Not a number we wanted to see'
At Forbes, Rambus and his director of technology infrastructure, Filipe Carreira, looked at a number of portfolio management tools, including CA Inc.'s Clarity. The tool "was much more than what we needed," Rambus said, and so was the price for an organization with no prior portfolio management focus.
The IT organization ended up going with PPM software from Innotas, a fast-growing provider based in San Francisco. The software is hosted, so implementation was a quick six weeks from signature to go-live day, Carreira said. Having a dedicated account manager was critical to the speedy uptake, he added.
The revelation? Maintenance projects -- the scorned "keeping the lights on" approach to IT -- accounted for 75% of the IT portfolio.
"Wow, that was not the number we wanted to see," Rambus said.
Nor, likely, did Forbes, where the competition for eyeballs and advertising dollars across its print, online and broadcast portfolio is intense. "We knew we had to do more in terms of bringing value to the organization," Rambus said. The IT team met with each of 16 customer groups within the Forbes publishing family about what IT could bring in costs savings, better processes and innovation.
One major project that came out of those talks is the rebuilding of the company's website, ForbesMedia.com , Rambus said. This is Forbes' online gateway for media buyers seeking information about ad rates, editorial content and so on before deciding whether to advertise with Forbes -- in other words, a linchpin tool for generating advertising revenue.
Allocated for growth
Indeed, the Innotas system has spurred a change in the IT investment approach, Rambus said -- a reversal, actually. Today, close to 75% of IT projects are aimed at generating business value and growth, while 25% are devoted to IT infrastructure and maintenance. That doesn't mean maintenance is ignored, he stressed. "The most important infrastructure gets taken care of first, and the other stuff gets put on the back burner."
We knew we had to do more in terms of bringing value to the organization.
Mykolas Rambus, CIO, Forbes Inc.
The new software also brought a standard template to the IT department for collecting and analyzing project data. Prior to using Innotas, some people would "do deep business analysis" on projects in advance and make sure they obtained the same depth of information from the customer. Others did not. The Innotas system requires everyone to work from the same template, making it easier to collaborate, Rambus said.
Asked to weight the use of PPM in terms of its importance to IT success, Rambus crowed, "It was huge, and I'm not just saying that because we like our partner.
"Portfolio management is right up there with our budgeting and financials."
The next step is putting in a formal governance structure for setting IT priorities. Historically, requests were made of IT and the horse-trading and arm-twisting ensured, with some projects flying through and others languishing as resources became available. "It's not terribly different today," Rambus conceded, "although I think we are able to articulate to our customers in a much more robust way, the capacity that IT has at hand to deliver. We are not in a position where we ever say no, but it is a matter of tradeoffs, and we can now communicate that not only to the customer but also to our senior management."
Rambus said he hopes to have a steering committee of IT and business decision makers in the next six months. "That would be the next evolution for us."
Let us know what you think about the story; email Linda Tucci, Senior News Writer.