How do midsized organizations manage IT project governance, and how many use project and portfolio management (PPM)...
software in those efforts?
Recently we asked readers those questions in our first comprehensive survey of IT project governance and PPM. The findings: that IT governance is an informal process at many midsized organizations. About half of the midmarket companies responding reported having either an IT governance board or steering committee (36%) or a project management office (PMO) (22%) to help set priorities and align projects with business needs, according to the 236 respondents from organizations with 100 to 1,000 employees.
About 17% reported using PPM software, two-thirds of them for three years or less.
Yet interviews showed that it wasn't the level of PPM maturity or use of PPM software that made a difference -- the existence of a governance structure determined how successful an organization would be in terms of IT project efficiency, customer satisfaction and project completion.
IT governance without PPM software
For example, Exclusive Resorts LLC, a 200-employee luxury destination club that was founded in 2002, adheres to agile methodologies for software development, which promote frequent inspection and adaptation of code and requirements throughout the project management process. It does not use PPM software.
However, it does have a PMO that manages projects and a technology advisory committee of all C-level executives. That group meets once a month.
The advisory committee, made up of seven executives, has the final say on any project proposal. Taking a roundtable approach to rationalizing the benefits of a prospective project, the Denver-based company looks for the biggest bang for the buck, said Charles Livingston, senior vice president of technology.
Although effective and straightforward, this approach is not without its drawbacks. "We all have very strong personalities," Livingston said. "It can be a challenge controlling the amount of cheerleading one person might give for their project."
To get around this and enable more objective decision making, Livingston said every project representative must provide the quantifiable benefits of each proposed project, right from the start.
"Providing this detailed analysis coupled with the 'This will save or will generate X dollars a month' component puts a much clearer lens on each proposed project," Livingston said. "You don't have one outspoken person saying [the project] will be the best thing since sliced bread without facts and estimates that the entire group can review."
Livingston takes a critical view of each project proposal and considers its implications on other projects. "I tend to think, if we engage on this project then what else will we not be able to do as a result," he said. "I look at all of the options, including phased projects, and weigh the risks and benefits."
Livingston has explored PPM software tools but found "they were expensive when we were looking at them," he said. "And for what we need, our existing tools still meet the demand." Those include Excel spreadsheets, agile scorecards and ScrumMaster dashboards.
More maturing IT project governance, with PPM software
Oakland County, Michigan, has a slightly more robust PPM governance structure than Exclusive Resorts, including four leadership groups with representatives from each major department. It's also had PPM software in place since 1996, and 1.5% of the overall IT budget goes toward project management.
It can be a challenge controlling the amount of cheerleading one person might give for their project.
Charles Livingston, senior vice president of technology, Exclusive Resorts LLC
Its more mature PPM process means the initial hurdles sometimes associated with added governance structures -- cultural pushback, lack of executive sponsorship -- are no longer relevant, CIO Phil Bertolini said. At this stage in the game, Bertolini is pleased to admit, he makes some tweaks here and there, even removing some procedures. That happened recently to a step where IT operations was required to meet with groups for an official signoff before proceeding -- even after the project had been approved. "We're at a place where we can lighten up," he said.
Back in the mid-1990s things weren't so smooth. Bertolini said he remembers being on the customer side and dealing with 900 backlogged orders in IT. "There was no way to manage it -- we couldn't get our arms around these projects," he said. "Our PPM software took care of that."
And although his current tool, CA Inc.'s Clarity, takes care of it all now, Bertolini warns other companies to understand PPM software before taking the plunge. "All PPM tools have different functionalities," he said. "I would stress that when someone is looking for PPM software, that they understand what they want to achieve and see it as a way to enable change."
IT project governance fundamentals
Steve Romero, IT governance evangelist at CA Inc., agrees that it's less important how an organization slices and dices IT governance committees than what objectives it decides to follow.
"It's an overused statement, but it's true; there are two dimensions of IT success to look at: Are we doing the right things, and are we doing them right?" Romero said.
Once approved, a project should be constantly evaluated, a step that many governance committees don't take, according to Romero. "Once the project has been OK'd, the next questions are 'How's it going?' and 'Are you done yet?'" he said. "But these committees need to know ASAP if it was a good decision or not and react accordingly."
As for PPM software, "The best tools are the ones that are completely flexible and allow your organization to grow and change," he said. "A tool can't turn an organization on its ear, but it should work in even a chaotic environment."
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