Enterprise users who haven't already invested in project and portfolio management (PPM) software aren't in any hurry to do so, new SearchCIO.com research shows. They say it's either too expensive or doesn't address their biggest PPM pain points -- resource allocation and cost-benefit analysis. So, many are using Microsoft Project and SharePoint to manage their IT projects and portfolios.
With that data just in from CIO interviews and our PPM and governance survey (see box), some industry experts counter that there are affordable options for PPM software and that the latest versions are more configurable than users realize.
Here, we look at what respondents to our project and portfolio management survey say they need to manage and prioritize their project queues, and what PPM vendors are offering today. In many cases, there is a disconnect between perception and reality.
Disconnect No. 1: PPM software is not affordable
Cost often comes up as a deterrent for investing in PPM software, especially in this economic recession. Companies are often overwhelmed by the high costs and sophisticated functionality of robust PPM software packages.
"It's just not affordable," said Vince Fattore, CIO and director of IT at Senior Lifestyle Corp., a Chicago-based senior living specialist company. "You need a dedicated staff to maintain it. It's almost like you're buying another ERP system in a way."
Fattore looked at a number of PPM software solutions and decided they were just too expensive and not flexible enough for his needs. Instead, he invested in customizing his Microsoft Project and SharePoint systems to address PPM. This approach was less expensive and easily integrated with the other Microsoft products across the company, he said.
Though a full-fledged PPM solution can cost from $500,000 to $1 million or more, PPM software is available through the Software as a Service (SaaS) model from most vendors today, which provides users with a more affordable option to get started.
In the SearchCIO.com survey, of the 65 respondents who knew what their organization had paid for its PPM software, 14% paid less than $50,000 and said they had purchased a product from Microsoft, Innotas, Oracle Corp. or Daptiv Inc.. Another 26% said they paid $50,000 to $100,000 for software from Microsoft, CA Inc., IBM, Hewlett-Packard Co., Oracle, Primavera or Daptiv. Many of these were for on-premise or hosted versions.
While those options still might not be in one's budget for this year, they do show a more dynamic marketplace for PPM solutions than some users believe is out there.
"Don't think PPM is too big and heavy," said Margo S. Visitacion, vice president at Cambridge, Mass.-based Forrester Research Inc. "There are options out there. You just need to understand what you can and need to adopt."
Disconnect No. 2: PPM software doesn't calculate ROI
Another area where users don't think PPM software meets their needs is in ROI projections and cost-benefit analysis.
ROI and cost tracking are the main features Rose Noxon, IT portfolio manager at CACI International Inc., is looking for in a PPM software solution. CACI provides professional services and IT solutions for defense, intelligence, homeland security and federal civilian government arenas.
Noxon, who currently uses a custom SharePoint site for project and portfolio management in her 150-person IT shop, said she would consider PPM software that featured a way to gauge how much staff time and other costs are required to enact a change.
"I think PPM software is most lacking in the ROI measurement area," Noxon said. "You can build just about anything in-house these days to track and do workflow -- but ROI is complicated and PPM software that could walk you through forecasting and then reporting ROI would be better than anything we could build in-house."
Many of the tools in the marketplace today do offer cost savings calculations, according to Visitacion. Some PPM tools allow you to use key performance indicators from financial applications to track revenue and cost savings. And a number of vendors offer templates and content right out of the box to assess and perform ROI calculations. Some of these vendors also offer tools for surveying and measuring.
The problem with the ROI calculations is more of a company process issue, according to Visitacion. After a project is completed, someone has to go back and capture the actual cost savings, not just the projected ROI, she noted.
Disconnect No. 3: It's difficult to track and manage resources with PPM software
Resource allocation is just one of the areas that Timothy Ruland, chief IT security officer for the U.S. Census Bureau, said he hopes a new PMO and a potential investment in PPM software will address.
An investment in formal PPM practices and software "might take a lot of the real management PM functions off the plates of the more technical people," Ruland said. "They'll still be involved in the process but can then concentrate more on what they're good at."
Resource allocation remains the leading pain point for companies doing PPM. Do today's PPM software offerings tackle this issue?
"The vendors have offered resource allocation with PPM software for years," Visitacion said. "The problem was there was a difference between PPM tools and work management tools."
In the past, PPM software only allowed you to track everything as if it were its own individual project. But this didn't meet user needs, especially when it came time for recurring tasks, maintenance, application support or even project enhancements. These types of tasks were actually nonproject work -- they didn't have a specific start and end date.
Vendors today have addressed this issue by offering users a way to manage and allocate resources for both project and nonproject work.
In addition, some of the leading vendors are adding functionality that allows users and resources to communicate effectively. "Planview, Microsoft and Serena offer innovative ways of allowing occasional users to stay connected with the project teams while remaining in familiar environments," Visitacion said.
Although PPM software now offers a differentiation on how to manage projects and work, companies still need to have their resources track their time and efforts, Visitacion suggested.
Disconnect No. 4: Microsoft Project and SharePoint are all you need for PPM
Many companies are using PPM software alternatives, like Microsoft Project and SharePoint, to meet their project prioritization needs.
Noxon said she is satisfied with her company's custom SharePoint system. It allows business service portfolio managers to enter concepts and track the activities and artifacts of new and changed services through the site.
"It's fully customized to the nuances and culture of the company," Noxon said.
But it does lack some of the functionality found in products designed specifically for PPM . Noxon said the system would be much better if it had resource allocation that tied into IT manpower work plans and cost tracking that directly interfaced with accounting.
Fattore, who also uses a customized SharePoint system, agreed that the system is not perfect. "You can only take it so far with those products," he said. If money weren't an issue, PPM software would do a better job at meeting the company's needs, he said.
Yet for his organization, simplicity wins out over function. "We just don't want to integrate such a new, huge system into the culture," Fattore said. "My users are much more comfortable using what they know and what's simple. Which is Microsoft products, in this case."
Visitacion cautioned, however, that larger organizations would be wise to consider a more robust PPM system. "The larger the organization, the more distributed and more siloed they are, SharePoint or Project just aren't enough.
"If you have 1,500 dispersed people putting up individual pages on a SharePoint site, you're missing the boat," Visitacion said. "Your team is your universe. When you're one to two degrees removed, you have lost 80% of the context."
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