Defining PPM and the Tools for PPM

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Getting a clear, unified definition of PPM and PPM tools is virtually impossible. Consider this statement from a leading consulting firm (one of many on this topic):

We define PPM as software that streamlines outward functions and inward processes of project-intensive departments, industries and organizations. Integrating multiple business processes and point solutions into one application suite, PPM features integrated management of pipeline, scope, time, resource, skills, cost, procurement, communication, reporting and forecasting, and risk management functions.

I propose a different definition:

PPM is a set of processes, supported by people and tools, to guide the enterprise in selecting the right projects and the right number of projects, and in maintaining a portfolio of projects that will maximize the enterprise's strategic goals, efficient use of resources, stakeholder satisfaction, and the bottom line.

Although PPM does not directly encompass the traditional PM processes and tools mentioned in the first statement, they are part of the process flow. PPM is integrated with these processes and tools and relies on inputs from them for its success.

First, we note that PPM is a set of processes, supported by tools, rather than being the tools themselves. Second, the PPM tool set (in my definition) includes software that helps us to automate specific PPM processes. There are many other tools used in the process of managing projects or the business operations of the enterprise that would also be used in conjunction with PPM tools to serve the entire operations and projects needs. That these various tools work together is a major objective of implementing a PPM capability.

In discussing the software for PPM, we describe several configurations of tool sets. Although each category contains powerful and valuable capabilities, none of them offers every capability that could be used to support PPM. Yet most of these are being advertised as PPM solutions.

Software for Project Management and PPM. Tools for PPM are being offered in many varieties and from various vendors who have focused on different needs. Among the traditional offerings (before adding support for PPM) are the following:

• Critical Path Scheduling (CPM) programs. These are the basic tools for scheduling and tracking projects. They allow you to define the project work items, define task relationships, assign task dura tions, assign resources, and calculate base critical path schedules and resource-constrained schedules. These programs also usually have excellent support for work breakdown structures (WBS) and simple applications of EVA. All offer multiple means of reporting plans and status. Additional features may include simplified risk planning and tracking, issue tracking, and time keeping.

• Critical chain project management (CCPM). This is a variation on traditional CPM methods, focusing on methods for sharing contingency. CCPM has created almost a cult following of adopters who praise its benefits. As with the traditional CPM advocates, CCPM supporters are also moving to embrace PPM. (See Chapter 8.1.)

• Earned value method (EVM) programs. These support advanced EVA applications, especially for defense system projects and other programs where EVM is mandated. These EVM programs have a strong focus on cost control and strong support for multiple WBS's (used for directed cost buckets).

• Risk management programs. These usually go well beyond the skeleton risk capabilities in traditional CPM programs. These are valuable where a highly structured, proactive risk-management culture is required. There are two quite different foci to risk management. One is often called the PERT approach. It addresses only schedule risk and uses three time estimates per task and Monte Carlo simulation to determine project durations and probability of meeting specified completion dates. Currently more in vogue is the risk assessment and management approach. This calls for identification of potential risk events, an assessment of the probability that the event will occur, and the probable impact of the event if it does occur. The user is then expected to consider mitigation options to contain the risks.

• Slice-and-dice software. Originally created as separate software, these capabilities are commonly found in most project management tools. The objective is to access and present large volumes of data in meaningful ways. Many of these use online analytical processing techniques.

• Enterprise resource planning (ERP) tools. ERP software combines integrated support for project management and many business operations. The most common components (for project management applications) are accounting and human resource software. Customer relations management (CRM) and opportunities management modules can also be integrated with the PM systems.

• Professional services automation (PSA) tools. This is another integration of project management and business components. Developed primarily for firms that provide outsourced IT services, PSA components include project management, billing, time accounting, CRM, engagement management, and cross-charging. There are several terms being used for this class of tools, including enterprise services automation (ESA).

• Structured objectives planning software. This is an unusual program that helps to structure a statement of strategic objectives. Starting with the strategic plan, you can build down to individual objectives and align them with projects or parts of projects. When integrated with traditional project planning software, the project work can be associated with specific strategy-based objectives.

• Analytic hierarchy process (AHP). AHP is a mathematics-based decision-making process. It has been used in a wide variety of applications and is now being applied to PPM. It uses voting groups using pairwise comparisons to create weighted rankings for multiple objectives.

Adding PPM Software to the Mix. Do you remember the old story about a group of blind people attempting to describe an elephant? Each person surveyed a different area of the elephant by feel, and each came up with a different description.

Trying to describe PPM software is not unlike describing the elephant. In this case, the vast majority of PPM tool vendors had already been market players with tools that provided capabilities as noted above. In some cases, PPM capabilities were added to the existing tool sets. In other cases, the product line was revamped and refocused to center on PPM.

So what we have are CPM vendors offering PPM tools, ERP vendors offering PPM tools, PSA vendors offering PPM tools, AHP vendors offering PPM tools, data presentation (slice-and-dice) ven-

dors offering PPM tools, and so on. No single vendor is providing 100 percent of the functions that are available for PPM. But many come very close and offer an extensive set of capabilities.

The primary additions to the capabilities (to support PPM) include:

• A repository for proposed and active projects

• Guidelines for presenting project proposals for ranking and selection

• Project selection criteria

• Decision engines to develop weight factors for selection criteria

• A repository for financial and resource allocation data

• Tools to assist in computing potential project benefits, including the ability to incorporate the impact of costs and risks

• Tools to support project prioritization and ranking

• Tools to display ranking results

• Tools to aid in project selection

• What-if capabilities to explore alternatives

• The ability to integrate these capabilities with other operations and projects tools

Examples of an Integrated Tool Set

From the various configurations noted earlier, I have selected a few representative vendor offerings for the purpose of providing illustrations of integrated tool sets. The selection of any of the vendors for these illustrations is not an indication of my preference for any specific solution. Each firm should evaluate and choose software to meet its specific needs.

The Welcom Family of Tools. Welcom offers a suite of five tools that support the PPM process. These are two recent additions, WelcomPortfolio and WelcomRisk, which join WelcomHome,

Open Plan, and Cobra. In addition, Microsoft Project can be substituted for Open Plan (for planning and control). The complete PPM process uses all five tools, with WelcomPortfolio serving as the primary repository for the portfolio data.

Projects to be considered for the portfolio would be initiated in WelcomPortfolio, and capabilities within this tool are designed to facilitate data collection and manipulation leading to evaluation-based rankings. Additional capabilities will display this information to facilitate selection decisions.

WelcomRisk can produce risk scores for the candidate projects and feed this data into WelcomPortfolio. However, risk values can also be determined outside WelcomRisk and entered directly into WelcomPortfolio.

Open Plan (or Microsoft Project) can be used in two ways to support portfolio planning. It can help with capacity planning by calculating and holding data relative to the maximum project pipeline size and the available resource pool. It can also be used to produce preliminary, high-level plans to compute schedule, resource, and cost data needed for the portfolio evaluation process.

WelcomHome can be used throughout any of the processes as a global communication tool. WelcomHome facilitates collaboration by supporting bidirectional communication among all parties. It would be used to publish the project charter and to officially open the project to all interested parties.

Once a project is approved, detailed planning would begin, using Open Plan (or Microsoft Project). Project plans would be maintained, and data affecting capacity planning would be fed back to WelcomPortfolio.

Once the project is in progress, we will need to monitor project performance as well as reviewing the criteria used for selection. A key performance measuring technique is EVA, supported in its simplest form by Open Plan (and Microsoft Project) and at an advanced level by Cobra. The PMO monitors project performance with these tools and feeds information and recommendations to the governance council when such information indicates that the status of the project should be reexamined.

Coming full circle, recommendations regarding active projects will be routed back into WelcomPortfolio to produce an updated list of ranked projects.

The entire process is dynamic and ongoing. All Welcom components are used as needed to support the process, with periodic WelcomPortfolio outputs being provided to the governance council for portfolio decisions.

Oracle, SAP, and PeopleSoft. Leading ERP vendors Oracle, SAP, and PeopleSoft have added PPM attributes to support project ranking and selection, skills analysis and resource deployment, collaboration, and the popular dashboard and bubble chart display modes. These capabilities are integrated with all of the other previously integrated functions for projects and business management that are typical in the ERP models.

Niku and Other PSA Vendors. Niku is one of the original providers of PSA software. Its package featured integration of several business components linked to the Workbench Results Management package (project management) that it acquired from ABT. It was developed primarily for firms that provide outsourced IT services. Niku 6 components included a collection of project management and financial management modules, resource management, demand management, opportunity management, and work flow and collaboration facilities. Niku 6 also introduced Niku's first portfolio manager module.

Upgraded and rebadged as Clarity 7 in 2004, it covers a wide span of capabilities with eight modules. Portfolio Manager, upgraded and moved up to anchor the system, is a repository for project evaluation data and is used to develop and display data for ranking and selection. There are three choices for project management: a new Web-based Project Manager module and the ability to use Workbench or Microsoft Project. The Resource Planner is used to help assign resources, balance capacity and demand, and identify and track skills information. The Financial Manager handles charge backs, billing and invoicing, cost and rate management, and financial reporting. The

Process Manager features a work flow capability to automate business processes and standardize them.

Similar integrated offerings are available from vendors such as Lawson and Changepoint (now called "Compuware IT Governance by Changepoint").

IT Governance. Several project management and PPM vendors have specifically focused on IT applications. It is not that their offerings could not be used for other applications. However, these have been packaged and advertised for the IT market. Many of these choose to label their solutions as IT governance solutions, containing PPM and allied functions. Niku and Changepoint fall into this group. Others are ProSight, Mercury Interactive, and PlanView. Even PeopleSoft, with a wide market, has packaged its integrated PPM solution as ESA (Enterprise Services Automation) for IT.

ProSight. The centerpiece of ProSight is a portfolio analysis and prioritization tool that provides strong data manipulation and presentation. This is an example of a PPM product that is not attempting to cover a wide range of project management and PPM capabilities. Rather, it prefers to act as a hub for data that it then processes to support portfolio analysis. Any project management functionality is provided through a bridge to Microsoft Project Server.

Expert Choice and United Management Technologies. United Management Technologies (UMT) and Expert Choice go deeper into mathematical engines to assist with assigning collaborated weights to the selection criteria and supporting prioritization and selection. In Expert Choice, this is accomplished through the use of the analytic hierarchy process, an effective decision support tool.

These capabilities are integrated with components that help to optimize resource use and to evaluate and select projects. Strong presentation components are featured. Neither product has a project scheduling engine. UMT has a gateway connection to Microsoft Project Server. Expert Choice connects through Microsoft Access or SQL Server.

Project Management with Expanded PPM Processing and Displays. Primavera, PlanView, and Sciforma are long-time key players in traditional project and resource management software systems. PlanView has added an extensive set of PPM functions anchored by its PRISMS for IT Governance and Resource Management process set. Primavera and Sciforma offer extensive user configuration of database and computational functions that effectively support PPM needs. Their key strengths (as with Welcom) are strong traditional scheduling and resource engines and good support for EVA, risk analysis, resource allocation, and reporting.

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