alm ppm white paper
TRANSCRIPT
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ALMAND PPMA marriage of convenience or a match made in heaven?
June 2007
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TABLE OF CONTENTS
Executive summary ............................................................................................................................................................ 3
The case for PPM .................................................................................................................................................................. 4
The relationship between PPM and ALM ....................................................................................................... 4WHAT IS THE ROLE OF ALM? ...........................................................................................................................................................5
WHAT IS THE ROLE OF PPM?.......................................................................................................................................................... 6
BRINGING THE TWO TOGETHER ..................................................................................................................................................... 6
ALM and PPM support portfolio management activities.............................................. .................. 7REVIEW THE CURRENT STATUS OF PROJECTS IN MOTION .........................................................................................................7
REVIEW THE APPLICATION PORTFOLIOS IMPACT ON RESOURCES........................................................................................ 8
PRESENT NEW CAPITAL REQUESTS .............................................................................................................................................. 9
REPRIORITIZE THE PORTFOLIO ...................................................................................................................................................... 9
EXAMINE INVESTMENTS FOR EFFECTIVENESS.......................................................................................................................... 10
Serena project and portfolio management forapplication lifecycle management .....................................................................................................................10REVIEW THE STATUS OF PROJECTS IN MOTION ......................................................................................................................... 11
REVIEW THE APPLICATION PORTFOLIOS IMPACT ON RESOURCES...................................................................................... 12PRESENT NEW CAPITAL REQUESTS .............................................................................................................................................. 13
REPRIORITIZE THE PORTFOLIO ..................................................................................................................................................... 13
EXAMINE INVESTMENTS FOR EFFECTIVENESS........................................................................................................................... 14
Conclusion .................................................................................................................................................................................. 15
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Executive summary
Executives and other business stakeholders need objective, actionable data to maximize the business
value of their organizations application portfolio. Project and Portfolio Management (PPM) combined with
Application Lifecycle Management (ALM) deliver whats been missing: application lifecycle data integrated
with business metrics for better portfolio decisions. With the combined power of these two frameworks,
stakeholders and decision-makers gain a comprehensive and up-to-date view of application costs and
benefits, enabling them to manage the organizations application portfolio like a businessfor the benefit
of the business.
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The case for PPM
A companys projects and programs represent an enormous investment of its financial and human capital.
Just as financial portfolio management helps balance a mix of investments to achieve an overall financial
goal, Project and Portfolio Management (PPM) enables organizations to balance the costs and value of IT
investments so they can achieve their business goals.
PPM is growing in importance because companies are focusing more on custom application development.
Today, a customers first experience with an enterprise is often online rather than through a face-to-face
or telephone meeting. Organizations are under pressure to invest in developing innovative and engaging
applications in order to win more business, keep their customers satisfied, and improve their efficiency.
This trend is reflected in data from a recent Corporate Executive Board (CEB) survey, which found that 30 percentof all IT spending in 2006 was related to application development. Also, the survey found that organizations are
spending twice as much on new application development as on maintenance: 70 percent of application develop-
ment budgets was spent on custom applications while only 30 percent went to packaged applications.1In todays
environment, innovation is the value IT most needs to deliver to the business.
While the need for custom application development is increasing, relatively few development projects are
successfully completed, according to SD Timesrecap of The Standish Groups 2006 Chaos Report.2In 2006 only
35 percent of software projects concluded with complete success, while 19 percent ended in complete failure.
The remaining 46 percent of projects failed to meet some of their time, resource, or business objectives.
The shadow of failure is motivating organizations to re-evaluate how they approve and manage projects.According to analyst firm Forrester, Project portfolio management (PPM) provides a fact-based process for
evaluating, prioritizing, and monitoring projects. PPM unites the process of strategic planning, resource and
budget allocation, project selection and implementation, and post-project metrics.3
The relationship between PPM and ALM
How do business ideas become delivered applications? Consider the left-hand box in Figure 1. This represents a
line of business: a sales or manufacturing department, or some other department integral to the business.
This is where the impetus for a new application will come from: someone will propose an idea to help drive
new business for top-line revenue growth or streamline operations to improve the bottom line. On the right
the data center, run by the IT operations group, provides and maintains the environment in which businessapplications run. ALM and PPM together support business and technical team members in taking ideas from
the business and turning them into applications that run in the data center.
1 Corporate Executive Board, Application Budget, Staf f and Portfolio Benchmarks 2006.2 David Rubenstein, Study: Less Chaos in Development Shops, SD Times, March 1, 2007.3 How IT Must Shape and Manage Demand, Forrester Research, June 2006.
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Figure 1. PPM helps organizations manage priority and funding issues to help create applications
that support business ideas
WHAT IS THE ROLE OF ALM?
ALM addresses the entire development lifecycle and ties it together. It combines a set of disciplines (such
as requirements management and simulation, design, version control, build, and release management) with
processes, policies, and procedures to provide reporting and traceability across the lifecycle. This helps teams
to coordinate application development across job roles and development processes, which in turn can helpprojects come in on time, within budget, and to the satisfaction of users.
Figure 2. ALM repositories contain information businesses need to make accurate and timely application portfolio decisions
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ALM helps teams synchronize and automate the relationships and dependencies among development disciplines
including requirements, modeling, development, build, and testing, all the way through to deployment
across global sites, teams, platforms, and methodologies.
WHAT IS THE ROLE OF PPM?
Application development organizations cant operate in isolation. A large organization may have hundreds or
even thousands of custom applications, each competing for time, resources, and skills. PPM helps the business
manage the way it allocates resources to applications in order to gain the maximum value from its investment.
PPM encompasses project, portfolio, demand, application portfolio, and financial management. All work
together to help organizations optimize allocations of scarce IT and application development resources. (See
Figure 3.) Organizations may apply PPM principles differently depending on their internal structure, budget ,
and strategic dependence on IT. However, according to research firm Gartner, PPM typically includes these
five key activities:4
Review current projects and their status
Review the application portfolios impact on resources
Present new capital requests
Reprioritize the portfolio
Examine investments for effectiveness
BRINGING THE TWO TOGETHER
Although PPM supports these activities directly, the data used to make project and portfolio management
decisions needs to come from somewhereand ALM repositories can be an excellent source of this data. But
without integration between ALM and PPM, team members will have to collect and copy these data manually.
Manual re-entry of data is feasiblebut it s slow and prone to error. Integrating ALM and PPM repositories
can circumvent these difficulties, giving port folio decision-makers accurate and timely data within a context
that helps them make vital portfolio decisions.
Figure 3. The disciplines
of PPM help organizationsbalance the demand for
new applications against
the capacity of IT
4 Project and Port folio Management Is a Business Process, Gartner Research, May 2005.
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Figure 4. The combination of PPM and ALM gives decision-makers powerful tools to make
timely and accurate portfolio decisions
ALM and PPM support portfolio management activities
ALM and PPM can operate together to streamline the five standard PPM activities listed by Gartner.
REVIEW THE CURRENT STATUS OF PROJECTS IN MOTION
Within PPM, the role of project management is twofold. First, stakeholders need to know whether the project is
on track with its projected resource usage and delivery time. Second, this activity provides data necessary to
plan for future initiatives or reprioritize initiatives already in process.
According to Gartner Research, Before allocation of new capital can occur, the prioritization group must
understand when resources will be available and which resources (and skill sets) will become available.5
In other words, executives need to understand what resources and skills they have available, what those
resources are working on, and when they will become available to work on other projects.
Organizations that dont have tightly integrated ALM and PPM typically collect this data through meetings,
e-mails, and other manual methods, then copy or paste it into the PPM system. This approach is slow, error-prone,
and unnecessary.
ALM Task Management systems contain information about the tasks people are working on, how much time
has been spent on these tasks, and how many tasks remain for each development resource. ALM Requirements
Management Systems, if they are tightly integrated with the rest of the ALM systems, already have information
5 Project and Portfolio Management Is a Business Process, Gar tner Research, May 2005.
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on the scope of the project, including the requirements that have been completed as well as those that are
still in progress. Issue Management systems can provide information about task closure rates as well as quality
indicators such as find/fix rates.
Instead of trying to gather this data manually, organizations should harvest it directly from the ALM task
management system and use it to provide visibility into core project metrics such as:
The number of requirements targeted for a project
The number of requirements already met in a project
Defect find/fix rates
Issue closure rates
Development resource capacity
Development resource backlog
This unfiltered view gives stakeholders reliable information about the status of projects in motion and allows
executives to confidently allocate resources to future development projects.
REVIEW THE APPLICATION PORTFOLIOS IMPACT ON RESOURCES
This activity draws on the PPM disciplines of Demand Management, Resource Management, and Project
Management. Decision-makers play a what-if game with resources, determining whether new development
projects will jeopardize the quality or maintenance of existing applications in the portfolio.
Gartner says, Often, the people allocated to new projects are also committed to enhancing or maintaining
recently delivered application projects to varying degrees, depending on where those applications are in thei
life cycle.6
So just because a project has been completed, it doesnt follow that all the resources will become available
for other projects. Some contributors may have ongoing maintenance responsibilities.
Decision-makers need to know whether developers will have the availability and capacity to work on new
projects. If a new project requires a skill that only Chris Developer has, then managers must decide whether
to assign someone else to Chriss maintenance tasks, delay the new project until Chris is available, or get
another resource with Chriss skills. To make these determinations, they need to know what Chris is working on.
Fortunately, ALM Task Management systems already have much of the necessary data. The ALM system
tracks which tasks are assigned to Chris, how much time these tasks will take, and how long Chris is expected
to work on these tasks. With integrated ALM and PPM, this data can be pulled into the PPM and used to make
resource impact decisions.
6 Ibid.
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PRESENT NEW CAPITAL REQUESTS
Organizations use the discipline of Demand Management to reconcile the seemingly infinite demand for
IT services with the finite capacity of IT. Demand Management requires that organizations aggregate the
requests for application resources and then allocate resources to meet the demands that are most important
for the business.
As part of this process, business managers hand off capital requests for application development resources
to IT for scoping, feasibility studies, analysis, and estimates. PPM systems work with this data, structuring it
to provide decision-makers with the information they need to make timely and effective business decisions
based on facts and established metrics rather than gut feel or political pressures.
After the organization has approved a project, IT should automatically transition the business requirements
included in the PPM system to the Requirements Management system to avoid mistakes, prevent scope
creep, and track the business alignment throughout the life of the project.
REPRIORITIZE THE PORTFOLIO
Business priorities changequickly. On Monday a shopping cart application may be one of the highest
priorities for an organizations eCommerce business. When the companys fiercest competitor unrolls an
integration with Amazon on Friday, suddenly the shopping cart application is outdated and the organization
must re-evaluate all work in progress in light of this new competitive landscape.
Additionally, as new capital demands and maintenance requests come into the Demand Management system,
executives need to reprioritize the application development queue so that the requests with highest business
value are scheduled before those with lower business value.
The PPM disciplines of Project Management and Resource Management provide decision-makers with the
information they need to make sound reprioritization decisions. When ALM and PPM are tightly integrated,
PPM systems can directly harvest the unfiltered data they need about the current investment level of proj-
ects in motion, projected costs of projects in the queue, and scheduled release dates.
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EXAMINE INVESTMENTS FOR EFFECTIVENESS
When organizations dont have enough budget for innovation, they need to take a hard look at how much
they spend on keeping the lights on. In the words of Forrester Research,
IT is losing its capacity to innovate because of its maintenance burden. Forresters most recent
spending survey of 404 IT decision-makers revealed a disheartening change: The average percent of
budget allocated to maintenance and operations is now 80%, up from 76% in 2005. This is not surpris-
ing, as last years new project became maintenance and operations (MOOSE) in 2006. The unfortunate
result? A smaller innovation capacitythe portion of the budget available to do new work. 7
Organizations should revisit each project within six months to a year after completion to see whether it has
delivered the expected business benefits. This helps in discovering post-project lessons learned and also in
prioritizing future work on the project or similar requests made by the business.
To determine business value, decision-makers need information about the application in production. What
was the total cost of the development ef fort? How is the application being used? How many open defects
are there? Open enhancement requests? Such data provides valuable insights into the usability and usage
of the application. Requirements Management systems can provide information about the number and
priority of enhancement requests that are associated with the application. Issue and Defect Management
systems can tell stakeholders about the quality of the application and how much its maintenance has cost in
IT resources.
This data, combined with the business view of the applications benefits, will support a realistic assessment
of the ongoing costs and value of the application so business stakeholders can make the hard application
end-of-life decisions based on facts rather than opinions.
Serena project and portfolio management for application lifecycle management
Serena is the only vendor integrating software lifecycle data with business, financial, and resource intelligence.
Serena MarinerProject and Portfolio Management (PPM) software enables organizations to balance the
costs and value of IT investments in order to achieve the goals of the business. For the first time, stakeholders
can get objective, actionable data that enables business and IT management to work together to maximize
the business value of the application portfolio.
Through integration with Serena Dimensionsand Serena TeamTrackApplication Lifecycle Management(ALM) tools, Mariner delivers complete, accurate, and timely information about application costs and benefits,
from ideation to retirement. This helps organizations make the right decisions about which new software
projects to undertake and which applications to continue to support. When priorities and needs shift, IT
management can leverage this comprehensive data to adapt quickly, assigning the right resources to the
highest-priority projects to maintain strategic focus.
7 How IT Must Shape and Manage Demand, Forrester Research, June 2006.
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IT organizations continually struggle to optimize allocation of scarce resources between application main-
tenance work and new application development. But they do so without clear data on how developers are
actually spending their time, which resources are the most in demand, and the potential business value of
each choice. With detailed information from Mariner, IT management can optimize return on application
development spending, prioritizing revenue-generating projects and making the most cost-effective
decisions for resource allocation. In addition to keeping projects on time and on budget, Serenas solutions
help ensure that they remain on target with the needs of the business.
Serena Mariner, Serena Dimensions, and Serena TeamTrack support and enable the five PPM activities listed
by Gartner.
REVIEW THE STATUS OF PROJECTS IN MOTION
Throughout the application lifecycle, development process metrics (defects, requirements tested and passed
and change requests) from Serena Dimensions and TeamTrack feed into Serena Mariner which combines them
with cost, schedule, and resource metrics. IT can stay on top of project status at all times, responding swif tly
to any changes.
Figure 5. Tight integrations among Mariner, Dimensions, and TeamTrack provide decision-makers
with vital information about the health and status of projects in motion
Key features:
Integrated reporting provides visibility and project metrics without the need for roll-up
Automated project data collection ensures consistent reporting across projects for apples-to-
apples comparisons
High-fidelity information from ALM systems (find/fix rate, requirements met, etc.) guarantees
unequalled accuracy when reviewing project status and risks
Comprehensive project cost data collection (including development and maintenance costs)
enables teams to understand the overall costs of applications in the portfolio
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REVIEW THE APPLICATION PORTFOLIOS IMPACT ON RESOURCES
Whether its a new application development initiative or a maintenance project, most IT projects end up
competing for a finite number of development resources. Mariner replaces the traditional squeaky wheel
model of resource allocation with strategic resource management. It captures demands from competing
sources and rolls them up to support an objective assessment of total demand versus total capacity. When-
ever demand exceeds supply, Mariners portfolio analytics help organizations appropriately prioritize work
and allocate resources to the highest-value opportunities.
Mariner links capacity planning, resource allocation, utilization, task assignments, and skills data to giveresource managers a holistic view of their entire resource pool and the full spectrum of demands on those
resources. This allows the organization to assess total resource capacity and make strategic sourcing plans
for leveraging the expertise of full-time team members or augmenting staff with contract resources. The
Serena solution leads to fewer bottlenecks, better forecasting of demand, and faster response to changing
priorities.
Key features:
Demand-versus-capacity views help planners anticipate and pre-empt potential bottlenecks
Optimized resource search recommends the best resources for each job based on availability and
the priority of all other work assigned to the resources
Time reports from Dimensions and TeamTrack task and issue management systems automatically
and accurately capture 100% of time worked on all activities
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Figure 6. When integrated with
Dimensions Task Management and
TeamTrack Issue and Defect Tracking,
Mariner Resource Management gives
decision-makers timely and accurate
insights into current and projected
asset usage
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PRESENT NEW CAPITAL REQUESTS
Serena Mariner combines portfolio, project, resource, demand, and financial management to help organizations
optimize IT performance, evaluate initiatives based on value, and build a sound port folio of application
investments. Mariners integration with other Serena solutions helps decision-makers gain visibility into
business requirements and track achievement throughout the project lifecycle.
This information helps businesses assess demand for new applications, the fit between project progress
and business requirements, and IT skills and resource availability. It enables organizations to make informed
choices about whether each application is delivering adequate return on ongoing investment. It also helps orga-
nizations assess the value of each application to the portfolio, or even the value of portfolio-wide decisions.
Figure 7. Serena Mariner, combined with Serena TeamTrack and Dimensions, provides complete visibility to
stakeholders about the status of projects in motion and the queue of demands for application development
Key features:
Top-down portfolio analysis supports strategic rather than tactical decision-making
What-if scenario planning enables teams to investigate multiple scenarios with an easy-to-use
mouse-driven interface
Role-based home pages provide stakeholders with the information they need to make fact-based
and timely portfolio decisions
REPRIORITIZE THE PORTFOLIO
Business changes constantly and the application development portfolio needs to be reviewed to keep up
with those changes. Priorities shift due to fluid business conditions, resource availability changes, project
status evolves and personnel come and go. The expected costs of a project increase or decrease as actuals
come in from development, as scope expands or contracts, and as work estimations solidify. Businesses need
up-to-the-minute information to be sure they are making the most of their portfolio and to make sure the
portfolio continues to have the balance of tactical and strategic focus that is right for the business.
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Serena Mariner shows managers actuals from Dimensions and TeamTrack, and compares them to projections to
help clarify the current and expected costs of all projects.
Once a business can view the real and projected costs and risks of the projects in its portfolio, it can use
what if scenarios to reprioritize the portfolio to make sure it is using application development resources
effectively. Decision-makers can view the current priority list and simply check a box to see what happens to
the portfolio when project priorities are changed.
Key features:
Stakeholders can use a customizable scoring system to view the current priority list based on
variables such as time, money, or resource availability
Managers can rebalance the portfolio to take into account shallow resource availability that will
increase project risk
Decision-makers can adjust project start-times to make most effective use of available resources.
Just because a project has the highest priority doesnt mean it necessarily should be started first
Figure 8. Mariner enables stakeholders to play a what-if game based on resource availability and priority to
make sure the organization invests in the right portfolio balance
EXAMINE INVESTMENTS FOR EFFECTIVENESS
Financial management is critical in selecting the right investments. Mariner allows port folio planners to
estimate full lifecycle costs and benefits for all projects over their entire lifecyclefrom concept through
development and launch, and on through the maintenance and retirement phases.
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Key features:
Standard business case views enable organizations to compare different types of investments,
rolling up total costs and benefits across the portfolio
Time-phased financial rollups allow IT to model and track the financial implications of project
starts, stops, and delays
Conclusion
Application development resources are scarce and expensive, while demand for them increases with every
year. Only through portfolio management can organizations make ef fective use of their development
resources for the benefit of the business.
Serena combines valuable data held in ALM repositories with the rollup, analysis, and reporting capabilitiesof PPM to provide organizations with the industrys first-ever solution that supplies timely, unfiltered, and
accurate information to decision makers so they can make sure the right people are working on the projects
that are right for the business.
serena.com
Copyright 2007 Serena Software, Inc. All rights reserved. Serena, Dimensions, Mariner, and TeamTrack are registered trademarks of Serena Software. All other product or com-
pany names are used for identification purposes only, and may be trademarks of their respective owners. June07
ABOUT SERENA
Serena is the leader in Application Lifecycle Management for distributed and mainframe systems. More than
15,000 organizations around the world, including 96 of the Fortune 100, rely on Serena software to automate
the application development process and effectively manage their IT portfolios. For more information on
Serena software and services, visit: www.serena.com
CONTACT
Learn more about the enterprise-wide power of Serena products by visiting http://www.serena.com or
contacting one of our sales representatives in your area.
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