Assessing Your PPM Capability

Nearly half of the CFOs surveyed in a 2003 study by CFO Publishing Corporation cited weak or no alignment between IT and business groups. This perception is in spite of the fact that IT departments have made substantial efforts and invested significant amounts of resources to get their spending and projects aligned with company goals.

However, the success of the “project selection” approach is truly an unknown for most companies despite a renewed interest and investment in training. This research study illustrates that managing the project initiation process is as critical to project success and overall perception as any other critical success factor.

You may believe that you have the proper policies and procedures in place to manage the unending flow of project requests from your user community. Yet, it is only through the careful examination of your company’s project selection and prioritization processes that allow you to determine if you have the right system in place and if this system is being executed properly in your organization.

In an effort to resolve this gap between IT departments and business groups, CIOs have been turning to the practice known Project Portfolio Management (PPM).

PPM is specifically about aligning projects, technology investment funds and the associated IT resources with organizational priorities. While there is no “one right way” to manage IT project selection and prioritization, there are fundamental items that make up every successful PPM practice.

Pieces of the Puzzle

PPM represents an orderly and continual discipline with many interdependent activities. The first step of a PPM assessment is determining where to begin, what to produce, and how to produce it. An effective approach is to decompose the evaluation effort into the following seven essential areas:

  • Business partnership
  • Portfolio structure
  • Project screening
  • Investment analysis
  • Project selection & prioritization
  • Portfolio monitoring & communication
  • Benefits realization
  • This deconstruction provides an excellent framework to specify and communicate the gaps, risks, constraints, opportunities, and resulting recommendations identified.

    Do You Need This?

    Similar to a physician trying to determine what ailment to treat, fixing your project selection and prioritization process begins by identifying all of the symptoms and working backwards from there. For instance, do projects in your organization tend to miss deadlines and exceed the budget? If so, this “symptom” is most likely just one issue from a series of interrelated issues, such as:

  • projects that experience “false starts” that then cause … ;
  • a continuous redeploying resources due to changing organizational priorities that then cause … ;
  • missed project deadlines that then cause … ;
  • a large backlog of requested IT projects that then cause … ;
  • a strained relationships between business units and IT that then cause … ;
  • a lack of shared participation and a lack of shared accountability that then cause … ;
  • wasted time and money.
  • Problematic IT project environments, such as the one described above, tend to stem from the root cause of your organization’s struggle to properly and succinctly prioritize projects and the resources needed to deliver them.

    What to do Next?

    Use this downloadable self test as an aid to identifying your overall Project Portfolio Management needs. This test can help you identify how well, or how poorly, your company manages the essential process of IT investment. Likewise, a good self-test exposes your areas of greatest concern.

    Jeff Monteforte is president of Exential, a Cleveland, OH.-based information strategy consulting firm, which specializes in IT governance, information security and business intelligence solutions. He can be reached at [email protected] .