As organizations fight tenaciously for every inch of market share, IT departments have had to deploy technology that assists these dynamic organizations to remain competitive. One of these technologies is project portfolio management (PPM): a set of processes to analyze, recommend, authorize, activate, expedite, and monitor projects to meet organization improvement goals. Figure 1 provides a visual of these processes and how they flow during a project.
Figure 1. The flow of PPM processes.
According to The AMA Handbook of Project Management (2nd edition), PPM, when used to its full potential, can assist organizations to realize the following goals:
an estimated 20–30 percent reduction in the time it takes to develop new products
significant improvement in completing projects on time and on budget
improvements in research and development (R&D) productivity
How Organizations Should Support PPM
To support a PPM system, organizations must have an internal process for each of the following:
1. Governance—the executive role in the decision-making process, usually conducted by a C-level executive who determines
what projects to approve or reject, as priorities are determined
when to activate projects, and establishes their completion dates
what resources are required (both capital and human), and sets the project budget
2. Management—the process that monitors a project to ensure it is fulfilling its stated goals and that it is running on time and on budget. Such monitoring is usually the responsibility of the project manager (PM) and the project management office.
3. Administration—the management and updating of project portfolios according to their deliverables and resources (planned and used) in order to document the project status, note key milestones, and ensure adherence to the schedule for project deliverables. Usually the mandate of the PM.
Long before the digital age, British novelist G.K. Chesterton wrote: "You can never have a revolution in order to establish a democracy. You must have a democracy to start a revolution."
This paradox holds true when you consider the modern business landscape, which has seen the decision-making process transform from being the responsibility of a mere handful of top-level executives, to include a greater number of people across many departments and levels within the organization. To a large degree, this transformation has occurred because of the ever-increasing number of methods corporate data is collected and processed to allow greater visibility for management and to support the business process.
The average small to medium business (SMB) has many of the same strategic needs as Fortune 500 organizations have for processing data into information. Consider an SMB's need to integrate technologies to support its manufacturing and supply chain issues, which affect the organization's ability to generate revenues. These SMBs may sell to larger organizations, which demands greater integration with these organizations' business processes and systems. The requirements have an impact on everything from product design to engineering, to sourcing and procurement, to sales and distribution, coupled with greater compliance issues and regulatory concerns.
The mid-market has limped along with rigid systems and processes that were developed on platforms and architecture now about 20 years old. As a result, organizations have had to create a variety of ad hoc reports by using spreadsheets, replete with the constraints of inaccurate and static data. When managing projects, spreadsheets are a poor way to track changes, as they leave no audit trails, and they are an inadequate medium for interpreting data.
Until recently, PPM was viewed as a solution only larger organizations could benefit from, the logic being that PPM was time-consuming and costly to deploy. For SMBs, the cost of software licensing, hardware, and consulting services, as well as disruption to a business's day-to-day operations during implementation of PPM, were simply too high.
So what alternatives to using spreadsheets, with all their inherent flaws that risk the loss of valuable revenues to increasing global competition, do SMBs have?
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