Project Portfolio Management yields results

I have been involved with PPM domain for quite a few years now. I have seen the very beginnings of the project portfolio management when we had to not only write software that would enable PPM but had to go out and educate customers on the importance of PPM tool. That was the time around 2001-2002 when companies were strapped for cash. Also around the same time, Sarbanes Oaxley was just getting defined and corporate IT folks did not know what changes it really meant for them.

There were just a few players in the PPM domain and many of them simply grew out of their project management, rather than have a vision for top down portfolio management and setting up a PMO practice/processes.

Fast forward to 2008, and finally I am seeing studies that validate the usefulness of a PPM tool. See an in depth article, ROI study: Product portfolio management yields results” posted to ZDNet.

The entire post on ZDNet is worth reading. But here is the most important section of it,

Key findings from the study include “savings of 6.5% of the average annual IT budget by end of year one and 14% (NPV) over a three year deployment period.” In addition, the PPM software examined:

  • Improves the annual average for project timeliness dramatically by 45.2%.
  • Reduces IT management time spent on project status reporting by 43.2%, reclaiming 3.8 hours of each manager’s workweek.
  • Reduces IT management time spent on IT labor capitalization report by 54.7%, recouping 3.6 hours per report.
  • Decreases the time to achieve financial sign-off for new IT projects by 20.4%, or 8.4 days.

Notice that not only it says that PPM tool will give you savings in terms of dollars but it also improves projects delivery by 45%. Sometimes people focus too much on the direct dollar benefits from a PPM tool and they miss out on the benefits such as increasing project timeliness etc.

I am very glad to see such reports coming out which validates my belief in the rigor of having PPM processes and tools in an IT organization.

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