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Project portfolio management software helps CIOs cope with budget cuts

Project portfolio management software helped one CIO survive a $1.5M budget cut and helps others prioritize and optimize IT projects. ROI nears 600%, says one study.

As companies struggle with scarce resources in a tough economy, more CIOs are looking to project portfolio management (PPM) software for organization and efficiency, whether or not they have a project management office (PMO).

PPM software solutions found a convert in Phil Bertolini, CIO of Oakland County, Mich. Faced with a $1.5 million budget cut, Bertolini and his team found their PPM solution, CA Inc.'s Clarity, to be essential in determining priorities.

"With the PPM, we know what we're doing from the administration to discretionary projects," Bertolini said. "When new development began to shrink and we had to reduce, we were able to look at the project list, find the lowest priority on the list and make the reduction."

Indeed, Bertolini has made strong project management a priority; his organization has had a PMO since the mid-1990s. Initially regarding the process of using the PPM software as "bureaucratic," Bertolini said he quickly realized the benefits of incorporating it into his overall project management scheme.

Project portfolio management software is aimed at improving project management efficiency by cataloguing all the projects in the IT queue and generating automated conclusions based on input information (spending, time frame, employee resources needed, etc.) to prioritize and organize projects on the table. Bertolini said these conclusions then help in managing IT budget cuts and carry weight in budget discussions with business users.

"I have more leverage to get what I ask for, because we can prove where the budget is being spent and provide a status update every quarter," he said.

Bertolini said Oakland County's PMO investment has more than paid for itself. It cost about 1.5% of a total IT annual budget of $40 to $45 million, he said.

The ROI of project management

Bertolini is not alone in reaping the benefits of project portfolio management software. Last fall, IDC commissioned a study of 13 companies that had implemented PPM software, analyzing the events leading up to the implementation and the benefits realized by the organization after deployment of solutions from CA, Microsoft, Compuware Corp. or SAP AG. Those surveyed cited payback in an average of 7.4 months after deployment, with a return of $5.57 for every dollar invested -- a 557% ROI based on a three-year analysis.

With 10% to 16% fewer IT resources available now as opposed to three to six months ago, PPM solutions are even more critical, according to Melinda-Carol Ballou, principal analyst, IT Executive Service at IDC in Framingham, Mass.

"There is a tremendous amount of money lost in poor project management planning," Ballou said. "Companies must prioritize effectively in order to survive, especially at a time when they don't have the leeway to fail and are expected to do way more with fewer resources."

We survived because of the PPM.

Phil Bertolini, CIO, Oakland County, Mich.

Survey respondents found one of the biggest benefits of project management software was project optimization. The IDC survey found that before PPM implementation, 31% of projects failed and 28% were redundant. Those numbers dropped to 13% and 6%, respectively, after the PPM implementation.

Carl Landers, vice president of marketing for CA Clarity PPM, said recognizing and eliminating failing and redundant projects early frees up staff resources and budget allocations. PPM solutions like Clarity discover and highlight such problems while bringing visibility to the situation quickly, keeping the department focused.

"Rather than retrench, IT should be positioned to grow," Landers said. "Smart CIOs are looking at this as an opportunity to enable IT for an agile response, keeping projects catalogued all in one spot and clearly articulating strategic alignment."

Who should have a PPM?

PPM solutions are proving indispensable in a difficult economy, according to Ballou, who has seen companies use them for optimization and organizational efforts even as the organization goes through a bankruptcy.

"PPMs can be used by any company -- post-bankruptcy, post-acquisition. It provides project managers with the information they need to make it through," she said.

For smaller companies unwilling to invest in PPM software, Ballou recommends investigating Software as a Service (SaaS) options, which allow CIOs to get up and running quickly without a large up-front investment. "The SaaS options provide the flexibility to swap vendors if they don't turn out to be a good fit and the expenditure is operational rather than capital," Ballou said.

PPM software is available via SaaS from a number of vendors, including Innotas, Daptiv Inc. and VCSonline, as well as CA and Hewlett-Packard Co., among others.

And Bertolini? He remains a PPM fan.

"We survived because of the PPM," Bertolini said. "This is a process that will save you long term. If you start having multiple failures, you're asking to be privatized, or let go."

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