"We are going through a global economic transformation," said Mike Rollings, a senior analyst at Midvale, Utah-based Burton Group Inc. "As a result, portfolio management [can offer] increased transparency as to what's actually happening, [encouraging] greater attention to ROI and metrics guiding future use of resources."
By organizing project categories and resources into various portfolios, each carrying its own timeline and level of priority, midmarket organizations can focus not only on the projects that will deliver the most immediate value, but also on those areas of the business that will carry it forward once the recession subsides.
"If you cut the wrong thing and then come out of the recession, where are you going to be?" Rollings said. "The people who can plan effectively the things to dial back or kill altogether will come out of this and be at an advantage."
Just 28% of the 236 survey respondents report having more than one project queue, whether they use PPM software or not. Yet the criteria for project approval has changed in the past 12 months, with respondents reporting an increased focus on fast ROI and revenue and profit outweighing such criteria as meeting a critical or strategic business need. Concerns also include enabling the organization to meet regulatory or legal requirements and having the expertise and resources available (see chart).
As many organizations reconsider IT priorities, putting discretionary projects on hold or canceling them altogether, "the silver lining is that it's created some time for IT shops to figure out where their priorities are and make value assessments, as they're under a lot of pressure to reduce costs," said Chris Howard, vice president and director of the executive advisory program at Burton Group.
Sanjeev Pal, who oversees the project and portfolio management practice at Framingham, Mass.-based advisory firm IDC, said his company tracked 8.1% growth in the PPM software market in 2008. Although the firm expects that figure to drop to 3.8% growth in 2009, "that's a really good sign," Pal said, given across-the-board software-spending cuts imposed in many midmarket organizations.
In the SearchCIO-Midmarket.com survey, 7% of those organizations without PPM software plan to buy it, about half of them this year. Overall, 17% of respondents have PPM software in place, and of those, 26% implemented it during the past year.
Midmarket companies warming to PPM
Landson Li, supervisor of business systems at Fleet Canada Inc., a 120-person firm headquartered in Fort Erie, Ontario, that provides manufacturing support for the aerospace industry, uses Microsoft Project for project management. He said
"I don't think senior management has any formal PPM training, so everything is in my hands right now," Li said. "I'm going to have to drill down and look at why one would be better than another."
Jon Clayton, director of IT at Ben Hill Griffin Inc., a 450-person agricultural company based in Frostproof, Fla., heads up a two-person IT shop that maintains a half-dozen primary, purchased applications.
The company also uses Microsoft Project to organize meetings, and capture stakeholders and the like, but unless the company grows significantly in the near future, Clayton said he doesn't expect to purchase specific PPM software.
"We have not recently done any large software or hardware projects where we had much need for that," Clayton said.
|A majority of survey respondents who reported changes in project approval criteria say that financial criteria are more important than in the past. How have the following criteria for IT project approval changed in the past 12 months?|
|Its impact on revenue.|
| The financial case for it in general
(ROI, internal rate of return, etc.).
|Its impact on profit.|
|It meets a critical or strategic business need.|
|It can be completed in less than six months.|
| It will enable the organization to meet
regulatory or legal requirements.
| We have the expertise to do it and the
|It is a required upgrade to a system.|
|The business owner has a lot of clout.|
Balance of respondents answered "no change."
Source: SearchCIO-Midmarket.com survey, May 2009.
Let us know what you think about the story; email: Rachel Lebeaux, Associate Editor