Business leaders are struggling more than ever to gain visibility into their portfolio investments. Visibility is just the beginning. Without a clear understanding of how the business is performing overall based on the metrics provided, leaders are unable to make key business decisions that could result in greater business value. We have all heard the expression “do more with less.” This expression has become a required discipline in the Project Portfolio Management (PPM) market. Economic conditions have greatly intensified the need to ensure that every initiative is performing to expectations, is bringing optimal value, and tightly aligns with business strategy to ensure competitive advantage.
So how do you know if implementing a PPM system is right for you? Here are some of the benefits realized from PPM systems and the impacts they could potentially have on your organization:
Benefit #1: Increase project delivery success. Unsuccessful project delivery leads to project failure. Project failure can be caused by many factors such as cost overruns, schedule delays, poorly defined requirements, mismanaged resources, lack of strategy alignment, unresolved issues, or technical limitations. PPM allows organizations to ensure these factors are minimized within project delivery.
In recent years, various research firms have surveyed organizations and showed that successful PPM tools enable organizations to execute on approximately 30% more projects and reduce project failure rates by up to 60%. PPM tools provide organizations with the functionality they need to more accurately plan their projects based on resource capacity, score projects to ensure strategic alignment, better estimate project costs, and increase the success of project execution resulting in overall increased value to the business.
Benefit # 2: Reduce overspending. Even successful projects can reflect overspending. Overspending can be caused by numerous factors such as poor project estimating, inaccurate scheduling, improper resource allocation, and no visibility into project data. Forrester reported that organizations can expect a decrease overspending by 10% on average, sometimes more if utilizing a PPM toolset. PPM tools provide the estimation tools needed to ensure that projects are estimated more accurately and the right resources are put on the right work at the right time.
Benefit #3: Faster project turn times. There are many reasons why PPM can reduce project turn times by an average of 10%. Governance, workflow, and standardization tend to reflect repeatable processes that are proven. These defined processes that have been aligned with PPM technology allow team members to keep the work flowing and will typically increase productivity because it takes the mind work out of the question “what do I do next?” As we all know, strategically aligned projects should always result in business value. With shorter time to market, this value can be realized sooner and in many cases can give businesses a head start on their competition.
Benefit #4: Reduce “no value” projects. Project portfolios should reflect a group of high value projects and or work that align with strategic objectives and produce individual business results. In many organizations, some projects may be defined as duplicated efforts when compared to other initiatives within the same portfolio. PPM is critical for project selection. PPM tools allow you to track the overall value of each project, its estimated benefits, ROI, and other key decision factors. Based on scoring and ranking of key performance indicators, projects can then be selected or cancelled. As projects are cancelled, other projects may be affected and as projects are introduced, other projects that have already been selected may be compromised. Business leaders need PPM to ensure they are making the right decisions for the most profitable portfolio.
Benefit #5: Streamline data and increase collaboration. Many businesses today still rely on manual tools for project planning and reporting. Many are still using excel worksheets. These tools are typically located on a client’s computer and are not intended for enterprise use. Data that is transferred and updated through email or other means is not considered to be real-time information and can become out of date quickly leading to project conflicts and inconsistencies. Project transparency is critical for proper decision making and improved project performance. With PPM, users can access real-time data, giving them the insight they need to get work done. Team members no longer have to rely on hallway conversations or meetings to give project status. Reduction of resource time can also be significant when leveraging an enterprise PPM system. Centralized data leads to insight and effective real-time collaboration leads to increased productivity. Managers can potentially decrease their administrative tasks by 25% with an effective PPM tool in place.