How PPM Provides Direction in Uncertain Economic Times

In a recent article, From the Project Manager's Desk, Industry Observation, Alex Hankewicz discusses how Project Portfolio Management (PPM) can provide direction in uncertain economic times.

Hankewicz explains that, "PPM is a process to obtain project management information of all resources, time, budget, and labor skills in order to align, manage, and review these elements–and to ensure deliverables are being met in terms of project milestones, in accordance with the work breakdown schedule".

In times of economic and business uncertainty, PPM may be the prescription to obtain successful IT project management results. However, Hankewicaz advises that, IT departments in many organisations are viewed by some in senior management circles as a huge money pit, a kind of necessary evil that generates little in terms of ongoing business development or growth.

As a result, it’s comes as no surprise that organisations take the reflex action to rapidly slash IT projects and budgets. However, Hankewicaz argues that, "without tools such as PPM to fully analyse the return on investments of IT projects, the organisation could be faced with even greater financial risk by either cutting badly needed IT infrastructure improvements or by maintaining costly legacy applications that in some cases are expensive to support".

Hankewicaz notes that as business looks for ways to reduce operating expenditures during the current economic slowdown, delaying and reducing IT project spending may not be the best long-term approach. He adds that a PPM solution equips an IT manager with the ability to measure an organisation’s available resources against pending projects, and align resources with business objectives, in order to fully measure return on investment (ROI) prior to launching a project.

In using a PPM tool, Hankewicaz believes that an organisation has the ability to position IT initiatives into a lexicon that key non-IT-management personnel can understand. Project spending can be viewed as way of analysing from both the total cost of ownership (TCO) and ROI perspectives and understanding how these projects relate to overall business strategy initiatives.

To conclude, Hankewicaz advises that PPM tools have been on the market for at least ten years, and economic slowdowns are not the only criteria to demonstrate PPM’s benefits. For example, the information collected from managing past projects can be used for estimating and planning future projects. If one can reduce subsequent project costs by as little as 5 percent spending on redundant processes and testing, then the cost savings can be significant. In some organisations, IT spending represents as much as 50 percent of the overall capital budget and it is with this mindset that PPM can respond to determining the value on how those investments will generate a return to support business objectives. One of the limiting factors of PPM, however, is that although it has provided business with a view to evaluate the value of IT projects, it can only focus on new project investment. If project spending represents 25 percent of an IT budget then this means 75 percent of an IT organisation’s existing infrastructure may not be measured using this tool.