How Does PPM Help You Optimize Resources?

Situation: You want your PPM efforts to improve resource utilization.

CA, the folks that bring you CA Clarity PPM, recently sponsored an IDC Survey - Organizations Optimize Resources with PPM.  We were lucky enough to ask IDC researcher, Randy Perry, a few questions about the survey and what it really means to you.  By asking these questions, I tried to draw out some areas that you might want to focus on when conducting these types of efforts.
 


Q:  At the beginning of the report you offer a summary of benefits that participating companies experienced.
•    Number of projects managed increased 35%.
•    Cost per project was reduced 37%.  
•    Redundant projects dropped 78%.
•    IT staff productivity increased by 14%.
•    Project failure rate dropped 59%.
•    The total annual benefit per 100 users is $83,500.
•    Payback occurred in 7.4 months.
Which of these mattered most to these companies? (perhaps a top 3?) and why?   Did the most important results line up with the way they sold the efforts in the first place?

Randy Perry, IDC:
The first two key benefits experienced by companies were reduction in number of redundant projects and reduction in the project failure rate. Roughly 40 percent of total savings came from reducing failed or redundant projects. Prior to the implementation of PPM software, companies, on average, had nearly 40 percent of their projects fail or deemed redundant.  The primary cause of failed and redundant projects occurs in the planning stage due to issues with governance, IT demand, prioritization and selection.  Most of the projects that failed should never have been initiated in the first place because they were not aligned with business goals or IT did not have a clear set of goals at the outset.  Redundant projects would never have been initiated had all stakeholders had visibility into project prioritization.

The third benefit most appreciated by companies in the study was the reduction in per-project costs.  Per-project costs were reduced by 37 percent, which was primarily a result of better project and resource management. Better management allowed for a reduction in the time it takes to complete projects and also led to optimization of project staffing.  Twelve of thirteen companies reported a reduction in project time by 13-63 percent (an average of 35 percent).  Most companies used this time savings to complete projects that had been put off due to lack of resources.




Q: You talk about organization measuring itself in the following areas:
•    IT governance
•    IT demand assessment
•    IT demand prioritization and selection
•    Business relationship management
•    Project management
•    Resource management
If you were to come up with a forced ranking, how would you rank these in terms of their importance to an organization’s productivity?  In terms of organizational effectiveness? (and Why?)

Randy Perry, IDC:
These areas are not entirely distinct and benefits of one tend to spill over into the others. For instance, IT governance is critical to an organization; it drives most of the other benefits. Prior to deploying PPM, 54 percent of the companies in the study had no IT governance program. In other words, their IT departments operated independent of the businesses they were supporting (budget setting notwithstanding). The business had no way of translating its goals to the IT department, no way of measuring the success of projects or IT, and, therefore, no real control of IT resources. Implementing IT governance establishes the link between business goals and IT budgets: it measures IT projects by their contribution to businesses’ strategic initiatives and ties changes in the business to changes in IT priorities. IT governance ensures that every project undertaken by IT has been approved by a board of stakeholders. Project goals are set and project successes can be measured. No one can later say: “Why are you doing that?” 

Resource management is the second largest benefit driver, accounting for 16 percent of total savings. Like IT governance, this is a planning area. PPM provides a way of looking at all the project-related requirements and then prioritizing people and other resources. 

Project management, perhaps the third most important driver, contains the knowledge loop that enables process improvement and optimization. Each project becomes a knowledge resource, enabling each successive project to be more efficient.  Over time, projects are completed quicker with exactly the resources needed – no waste. 




Q: Clearly tools, coupled with process, have an impact in the following areas:
•    IT governance.
•    IT demand assessment.
•    IT demand prioritization and selection
•    Business relationship management
•    Project management.
•    Resource management.
Are there particular tool functions that are important in each of these areas?  Are there tools (specific tools or classes of them) that you know of that are particularly effective in any of these areas? 

Randy Perry, IDC:
We really do not have research specific to a single function or tool. We covered a wide variety of tools – looking at seven different vendors. We found that one third of the participants used tools from multiple vendors.




Q: At the end of your report, you categorize the study participants by industry, noting their maturity before and after PPM efforts.  Which industries benefited most (and least) from PPM efforts?   Why do you think that is?

Randy Perry, IDC:
The top three companies that saw the greatest benefits were financial institutions; the top two of those three were also among the most mature, so it’s all related. Financial organizations tend to have a greater reliance on their IT infrastructures than organizations in other industries do and, as such, their IT operations are more mature. 
Technology merely enables processes and policies. Companies at maturity level three (those with standardized processes, procedures and PPM tools) experienced 50 percent higher benefits than organizations at maturity level two (those with automated, but not standardized, processes and procedures) and 58 percent higher benefits than companies falling between ad hoc and automated, but not standardized processes and procedures.


On a related note,  IDC’s PPM Maturity Value Calculator, which was developed from the same IDC research. The calculator provides a personalized PPM maturity and benefits assessment.  After using it, individuals can request a detailed action plan by email. The calculator is meant to give an overview of the benefits and next steps needed to build a PPM business case.