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Issue Date: February 2007

75% of organisations are lost

7 February 2007

Seventy-five percent of companies do not possess clear, ongoing oversight of their organisation’s project portfolios, according to the latest PPM forum's research study. In this new economy, where people continue to lose their jobs and capital funding is severely rationed, this lack of oversight seems criminal. Most CIOs continue to steer project funding ad hoc, project by project, with little thought for the entire investment picture. Perhaps they just do not realise how powerful the strategic benefits project portfolio management (PPM) is when it is integrated into an organisation and what a great payoff it provides for such little investment.
PPM is about ensuring you have a group of projects focused on achieving strategic business goals. It is about being able to respond quickly to changes in the environment. It is about short projects that give quick wins. It is about the business setting direction and then creating a series of steps to get there. PPM benefits to the organisation include fairer decisions about funding. Both initial project approval and ongoing management are based on an holistic view of total investments prioritised by relative benefit to the enterprise - not on a project sponsor's political muscle.
It ensures an optimal mix of investment risk and reward. Portfolio management facilitates the balance of riskier, higher-reward projects versus safer, lower-reward ones because it categorises, prioritises and monitors new and ongoing investments. PPM ensures better communication between IS and business leaders. Portfolio management gives IT and business leaders a common language and platform for communication because it is a financial model.
There is greater understanding and cooperation over funding allocation, and everybody sees where the funds are flowing and why. As well as ensuring greater business accountability for investments. Portfolio management can be used to assign responsibility to appropriate leaders. Through correctly applying PPM methodologies, it strengthens the alignment between IS and the business. Portfolio management dictates that technology investments map to corporate strategic objectives. Misaligned projects surface quickly and informed decisions can be taken on the future of the given project.
Organisations will see more efficient use of human resources. The number of IT staff and managers allocated to various projects becomes more visible and comparable. Organisations will have fewer redundant and overlapping projects. The portfolio view exposes redundancy. Costs in time and resources need to be controlled as this is often under estimated and it takes time to take inventory of all ongoing and proposed projects, sort them into categories and populate the portfolio.
In conclusion organisations need to take a detailed needs analysis including people, processes and technologies, whereafter a detailed business case needs to be produced, including the expected ROI. Doing a needs assessment assists organisations to obtain the full potential from their existing products and ensure a return on new IT investments.
Paul Viviers, director of PMSight
Paul Viviers, director of PMSight
For more information contact Paul Viviers, PMSight, +27 (0)11 656 0980,,

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