PPM solutions for IT Governance

The user perspective

the way we see it

Capgemini Nederland B.V.Papendorpseweg 100Postbus 2575 - 3500 GN UtrechtTel. 030 689 33 66

www.nl.capgemini.com

PPM solutions for IT Governance

The user perspective

the way we see it

Tjie-Jau Man

Erwin Dunnink

Table of Contents

Foreword 3

1 PPM–AchievingGovernance 5

2 Areuserssatisfied? 11

3 GettingthemaxoutofPPM 17

4 AbouttheSurvey–IntentionandMethod 19

AppendixA 23

Foreword

Achieving goals through projects and business (improvement) program-mes is popular. Organisations operating in various industry sectors strive to professionalise the way in which they manage these temporary endeavours.

Besides adopting various methodo­logies, such as PRINCE2 and MSP, organisations also consider the imple­mentation of software tools to be an important enabler for the improve­ment of their project portfolio man­agement (PPM) performance.

We define PPM as the discipline focusing on the strategic alignment, prioritisation and governance of initiatives, projects and programmes.

The purpose of this survey is to explore the views of leading organisations on the use of PPM solutions as a means to improve their (IT) Governance. How are PPM solutions used? What business processes are being enabled by these tools? Are the users satisfied? What are the objectives of leading organisations in implementing such tools? What lessons can be learned from these organisations?

The survey is based on responses from 32 organisations, from 5 countries, re­presenting all major industry sectors. It is the latest publication in Capgemini’s Project Performance Improvement series, which sets out our point of view on project­based management. This user survey is an excellent complement to our 2005 solution study, in which we created transparency in the market for PPM solutions.

In order to assist organisations with the professionalisation of their PPM processes and the implementation of supportive tools, Capgemini offers skilled support through its global network of Project Performance Improvement (PPI) practices.

We would like to express our sincerest thanks to all participants for taking

the time to share their experiences and opinions with us. Our report offers value to the vendors of PPM solutions (some of the functions and features of their solutions are barely used) as well as ideas on strategies which user organisations might con­sider when they seek to enable their PPM processes with a supporting solution.

The survey was conducted by Erwin Dunnink (erwin.dunnink@capgemini.com) and Tjie­Jau Man (tjie­jau.man @capgemini.com), both from Capgemini in the Netherlands.

We hope this publication stimulates thoughtful discussions on the usage of PPM solutions.

Utrecht, spring 2008

Rudolf Laane Vice President

�

the way we see it

�

After focusing on project efficiency, it is now time for organisations to step beyond it and glance at the effective­ness of the projects they are undertak­ing and adapt a governance approach to the complete portfolio of projects. The impact of projects has become enormous over time and organisations cannot afford to waste any of their limited resources. This is the main reason why organisations must no longer consider ‘if’ they should apply PPM but rather ‘when’ and, most im­portantly, ‘how’ they should do so.

PPM is about prioritising and facilitat­ing all running projects/programmes to maintain their effectiveness. In order to take these decisions, organisations require information. Besides the col­lection of decision­critical informa­tion, organisations also have to find the means to manage it.

In recent years, organisations have begun to see the benefits of imple­

menting software solutions to improve their PPM processes. The figure below shows that between 2004 and 2007 the number of PPM implementations at our respondents has grown rapidly (Figure 1). Although they are called PPM solutions, they also provide func­tionalities in support of other IT Governance processes.

Based on our experience, we have chosen to focus on the following pro­cess areas in this survey, as they are the most relevant to project­based management:

n Portfolio managementn Programme managementn Project managementn Resource management

1 PPM - Achieving Governance

the way we see it

Figure 1: PPM software implementations

0%

80%

100%

20%

40%

60%

before 2000

% o

f res

pond

ents

’00 - ’03 ’04 - ’07

PPM asks the critical question: “Are we doing the right things?”

PPM is here to stay

Portfolio managementPortfolio management concerns the identification, selection, prioritisation, financing, monitoring and maintenance of the desired set of projects or pro­grammes, in order to meet organisa­tional goals. It is about control of in­vestments (i.e. projects/programmes) to gain maximum performance.Portfolio management is a cyclic itera­tive process, comprising four steps:

n collect all relevant project or pro­gramme initiatives

n analyse the various portfolio scenariosn decide which scenario to favour andn effectuate the decisions by adapting

the portfolio.

When looking at the complete project portfolio of the respondents (20,764 projects), it is found that only 25% of the projects are governed as a port­folio using the PPM solution.

The majority of the organisations do not use software tools to support their portfolio management processes (Figure 2). However, around 25% of the respondents cited portfolio man­agement as one of the process areas which they wish to support with soft­ware in the near future. This reflects the increasing awareness of the impor­tance of aligning projects and pro­grammes with the business strategy and goals. In 2005, PPM solutions were found to show low functionality coverage1 scores for some portfolio management processes. The studied solutions scored 60% and 40% for the ‘analyse portfolio scenarios’ and ‘adapt the portfolio’ processes respectively, which was relatively low compared to other portfolio management processes. This limited functionality support may be one of the reasons why organisa­tions seem to be slow in adopting portfolio management.

Programme managementOn a lower abstraction level than portfolio management, programme management focuses on the realisation of the business vision and strategy, involving significant business and IT changes, multiple projects and services across various business areas. Adopting the processes defined in Managing Successful Programs (MSP)2, programme management comprises the following activities:

n identifying a programmen defining a programmen governing a programmen running a programme andn closing a programme. In contrast to portfolio management, more than half of the participating organisations indicated that they use

� PPM solutions for IT Governance

Only 19% of organisations use a PPM solution to support portfolio management

Figure 2: Usage of portfolio management

Use PPM solution

Use other tool(s)

Don’t use tools

Use combination ofPPM and other tools

56%

19%

19%

6%

Increased awareness of Business Strategy alignment

1 A functionality coverage score is the percentage of functionalities covered by the studied solutions on average for specific processes.

2 Managing Successful Programmes is an approach to programme management developed by the Office of Government Commerce (OGC) in the UK.

�

their PPM solutions to support their programme management processes (Figure 3). The functionality coverage score of the solutions for programme management was 64%.

From a solutions point of view, pro­grammes and projects are very much alike. It is therefore surprising to see that 35% still do not use PPM to sup­port programme management.

Project managementProject management in this study covers the processes in the following three process areas: n Project execution management n Project cost managementn Control & alerts management These areas are part of the core compo­nents of a typical PPM solution. The solutions study in 2005 showed that

most of the studied solutions offered the basic functionalities and more for project management. They scored par­ticularly high for functionalities sup­porting the definition of projects and managing project capabilities (72.5%).

As depicted in Figure 4, most orga­nisations use their PPM solutions to support their project execution man­agement processes.

The most surprising aspect of Figure 4 is that 10% of the organisations do not use their PPM solutions to support project execution processes. Further examination showed that or­ganisations within this 10% use PPM to support portfolio management, resource allocation management and project cost management processes.

Tracking the progress by expenditures and physical scope accomplishments

the way we see it

More than half of the organisations use PPM to support programme management

Figure 3: Programme management support

Use PPM solution

Use other tool(s)

Don’t use tools

Use combination ofPPM and other tools

35%

53%

6%

6%

70% use PPM to support project execution management

Figure 4: Project execution management support

Use PPM solution

Use other tool(s)

Don’t use tools

Use combination ofPPM and other tools

10%

10%

10%

70%

the most suitable resources to tasks (within the constraints of availability). Recording personnel and administer­ing their competences were processes for which the PPM solutions scored relatively high (70.7% and 72.9% respectively). Organisations in the Manufacturing sector appear to favour PPM solutions most in supporting these two processes. 60% of the re­spondents in this group indicated that these two processes are supported by their PPM solution. More than 30% of the organisations use other tools to manage their human resources. In many cases an interface is realised with an HRM solution.

Processes relating to the allocation of registered resources are well support­ed by solutions. On average, more than 60% of the organisations use PPM solutions to support their re­source allocation activities (Figure 6).

PPM cost management: well supported, barely used

Over 30% use multiple solutions for resource management

� PPM solutions for IT Governance

Figure 6: Resource allocation management support

Use PPM solution

Use other tool(s)

Don’t use tools

Use combination ofPPM and other tools

6%

16%

16% 62%

is also essential. Assessing the prog­ress allows the manager to adjust the project approach and the environment within which the project or programme is being conducted.

The highest functionality coverage score was found in the project cost component of PPM solutions (76.6%). Nevertheless, a significant number of organisations indicate that they are using other tools (in combination with their PPM solution) to support this process area (Figure 5). This could be explained by the fact that integrations with financial systems are often realised to cover functional­ities for project cost management pro­cesses.

Resource managementFrom a solutions point of view, the key is being able to register the infor­mation needed to allocate and assign

Figure 5: Project cost management support

Use PPM solution

Use other tool(s)

Don’t use tools

Use combination ofPPM and other tools

23%

13%

16%

48%

�

When combining the figures of the 2005 solutions study with the 2007 user survey, we can see that most participating organisations use PPM solutions to support project execution, resource allocation, project cost and programme management. As for the remaining four areas we investigated, few organisations appear to use PPM solutions to support them, despite the broad coverage of functionalities offered.

This figure shows that many functions and features available in solutions are not used by the respondents.

On the other hand, it is interesting to note that 43% of the organisations indicate that they use other tools to complement the functionalities of the main PPM solutions.

the way we see it

Figure 7: Software support usage and functionality coverage

0% 30% 40%20%10% 50% 60% 70% 80% 90% 100%

Knowledge mgmt

Control & alerts mgmt

Portfolio mgmt

Resource mgmt

Programme mgmt

Resource allocation mgmt

Project cost mgmt

Project execution mgmt

Use of PPM solution to support process area (2007 user survey)

Functional coverage (2005 solutions study)

The core PPM functionalities are used extensively

An important aspect in user satisfac­tion is the extent to which the objec­tives of implementing a PPM solution were met after the implementation.

When the organisations were asked to state the three most important objectives for implementing their PPM solutions, most of them selected ‘Planning & control’, ‘Standardisation’ and ‘Transparency’. This corresponds to a trend mentioned in 2005, where­by organisations seek enterprise­wide project transparency and control. Aside from the ‘Other’ category, the achievements of these three objectives are also the highest compared to other objectives, with average percentages around sixty. This category includes ‘gaining insight into supply and de­mand’, ‘replacing a dysfunctional solu­tion’ and ‘integrating the back­office teams in India with the front­offices & early visibility of potential overruns’.

The respondents were also asked about the benefits of using PPM solutions in terms of cost reduction. About half of the respondents an­swered this question, and it emerged that more than 90% of them did not achieve any reduction in costs. In addition, none of the respondents provided precise figures. This might be due to the fact that IT investments are one of the most difficult types of investment in which to determine the payoff. One important reason for this is that IT investments often entail sig­nificant changes in business processes and communications between depart­ments and employees. Expressing the value and benefits of these changes in monetary terms has proved to be very difficult for organisations in general. Looking at Figure 8, we see that cost reduction was not even one of the most important reasons for imple­menting a PPM solution.

2 Are users satisfied?

11

the way we see it

Top 3 PPM implementation objectives: nPlanning & Control nStandardisation nTransparency

Figure 8: Objectives of PPM implementations and achievement after implementation

0% 30% 40%20%10% 50% 60% 70% 80% 90% 100%

Quality Control

Other

Time-to-market

Cost reduction

Coordination &Communication

Standardisation

Transparency

Planning & Control

% respondents selecting this objective

% achieved after software implementation

Cost reduction is not the main reason for implementing PPM

Of course, there were good reasons for the organisations to implement a PPM solution, although the benefits were not fully quantifiable. When considering the professionalisation of project management, the concept of maturity is often cited as an important benefit. The agenda of every project­based organisation includes the achieve­ment of higher maturity in its project management processes and skills. This aim is based on the promise that higher maturity leads to better busi­ness performance. In this survey, respondents were asked subjectively whether they perceived any develop­ments regarding maturity after the im­plementation, and the majority (69%) indicated that the use of a PPM solu­tion does contribute to achieving a higher project management maturity level. An important reason could be that organisations which use a PPM solution usually have stricter gover­nance in place for projects.

Overall, respondents are satisfied with the support provided by the software they are using. The respondents rate their satisfaction with tools other than their PPM solution higher than with

the PPM solution itself (Figure 9). This may explain why organisations use a combination of the PPM solution and other tools to support their PM pro­cesses. The complementary tools men­tioned most often are Microsoft Excel and home­grown applications.

Software qualityThe respondents in the user survey were asked to indicate the software quality as they perceive it. Three characteristics of software quality were covered in the survey:

n Functionality Does the solution provide the desired functionalities? Does it perform in accordance with user expectations? Does it adhere to application standards?

n Usability Is it easy to learn to use the solu­

tion? Is it easy to operate? Is it clear to the user what he/she can do with it?

n Maintainability Is it easy to identify causes of fail­

ures? Is it easy to modify or clear faults? Is it easy to (re)establish its running status?

PPM solutions contribute to organisational maturity

Most organisations are satisfied with PPM solutions

12 PPM solutions for IT Governance

Figure 9: General satisfaction - PPM solutions and other tools

0%

10%

20%

30%

40%

50%

Very dissatisfied

% o

f res

pond

ents

Very satisfied

PPM solution Other tools

Each respondent was asked to indicate the extent to which he/she agreed with the statements underlying these three aspects.

After aggregating the results, we found that most respondents agree that PPM solutions fare quite well in terms of the functionality aspect. When dis­cussing software usability, opinions are divided equally. Finally, it appears that with regard to the maintainability of PPM solutions, user organisations believe there is a lot of room for im­provement (Figure 10). The PPM so­lutions have very low scores for main­tainability. Since we have investigated off­the­shelf solutions, the respon­dents are partly dependent on the vendors’ ability to solve deficiencies in the software which affect maintain­ability. This is because there is a de­pendency between this aspect of soft­ware quality and solution vendors.

Two interesting findings in this part are the 20% of respondents stating that their solutions do not offer the desired functionalities and an even higher percentage of respondents

1�

the way we see it

Figure 10: ‘PPM solutions do well in terms of...’

Maintainability

Agree Disagree

Usability

Functionality

0% 40%20% 60% 80% 100%

Usability and maintainability need to be improved

view of a number of the respondents on PPM solutions. Despite the possi­bility of configuring PPM solutions to fit the situation within organisations as far as possible, more than 90% of the respondents indicate that there are implemented functionalities which they do not use. There is a need for greater adaptability in existing solu­tions. One way to do this is by devel­oping a ‘light’ version of a PPM solu­tion, as was requested by one of the respondents.

The implementation processMost of the respondents indicated that achieving the objectives is to a large extent related to how the imple­mentation of the software was han­dled. An interesting coherence was found when we examined the rela­tionship between the scores given for the support provided after imple­mentation and satisfaction with the software in general.

indicating that it is not performing in accordance with users’ expectations. It is therefore not surprising that 59% of the respondents give positive answers concerning the need for additional functionality. This score seems to point to a well­known ‘disadvantage’ of off­the­shelf software: it will never be completely aligned with the needs and wishes of every individual organi­sation.

The purpose of introducing PPM solu­tions is to provide an integrated soft­ware solution for the different yet related processes underlying project­based management. A certain degree of complexity in these solutions is therefore inevitable. However, not all organisations are ready or find it nec­essary to implement the full­blown offering of functionalities embodied by PPM solutions. The well­known phrase ‘Less is More’ appears to be ap­propriate to describe the present­day

Additional functionalities are needed

Complexity undermines maintainability

14 PPM solutions for IT Governance

Figure 11: Importance of support after implementation

Very dissatisfied Very satisfied

Imp

lem

enta

tio

n su

pp

ort

rat

ing

Software satisfaction

Poo

rE

xcel

lent

1�

the way we see it

A significant, positive correlation was also found between the rating given for the quality of support after implemen­tation and the contribution of the soft­ware to achieving the objectives of the implementation. This clearly shows that managing the organisational change is an important factor for the success of the implementation. The respondents also indicated that support by a third party is seen as highly valu­able in this regard (Figure 12).

Figure 12: Implementation satisfaction - by support party

Implementationsupport

Organisationalchange

Dis

satis

fied

Sat

isfie

d

Support afterimplementation

By software suppplier By third party By both

Do not underestimate the implementation process

The findings show a gap between users’ expectations of PPM solutions and the func-tionality offered. This creates an opportunity to bridge this gap over the next few years.

Most users do not require broader functionality but are looking for an improvement in existing functionality and usability. The users’ message to the vendors is clear: they must make sure that: n user­friendliness is improved by

offering user­focused functionality; n clients must be able to use modules

without having to implement the full­blown functionality;

n project management methods are clearly supported by offering solu­tions with the appropriate termino­logy on the screens;

n core functionality must be suppor­ted in greater depth before additio­nal (non­core) functionality is con­sidered. The respondents indicated that they primarily use the core functionality and are not (yet) interested in other functionality.

Where the vendors have one item to focus on, i.e. functionality, the user survey presents a more varied picture of users. The main topics are: n Not all functional areas are imple­

mented, although the functionality is present. This offers a big opportu­nity for users to extend the existing implementation focused on project and cost management and resource allocation to other adjacent areas such as portfolio management and resource management. In this way additional benefits will be achieved.

n PPM implementation offers broader benefits than anticipated by many users. The main goals defined prior to implementation are planning & control, transparency and standar­disation. In most cases these three goals are attained, together with goals in other areas such as cost reduction, quality and control and time­to­market.

n Success of the implementation depends to a large extent on sup­port of end­users during and after implementation.

n Implementing a PPM solution improves the PPM maturity of an organisation.

PPM is a business area that is impor­tant in today’s business. Many efforts are managed in a project­based way. Alignment of approaches, setting up a supporting organisation and imple­menting a solution are equally impor­tant to enable an organisation to im­prove on its project­based management.

This survey again stresses the impor­tance of a well thought­out approach to implementing PPM solutions. The solutions available offer a broad range of functionality. The challenge in implementation projects is how to make the best use of the possibilities offered. A combined approach of processes, organisation, people and a supporting PPM solution are essential in this regard.

3 Getting the max out of PPM

1�

the way we see it

1�

When conducting a study of the use of PPM solutions, it is important to explore first the backgrounds of the user organisations. We therefore col­lected some key figures relating to the characteristics of projects and the allo­cation of resources at the participating organisations.

The participants in the user survey are classified into four industry sectors. These are:n Public services

This group comprises governmental organisations such as tax authorities, ministries and local government.

n Manufacturing Manufacturing companies and retail

companies belong to this group. n Financial services This group covers banks and insu­

rance companies.

n Telco & Consulting This group consists of telecommu­

nications organisations and those operating in the consultancy sector.

Some of the results in this report are presented on the basis of these four sectors. The distribution of respon­dents among these industry sectors is shown below (Figure 13).

We trust the information presented in this paper will provide effective sup­port for organisations planning to im­plement a PPM solution from scratch or those who are planning to optimise the implementation and extend the support of the solution to other pro­cesses.

This report contains the results of the user survey, which was based on an online questionnaire containing 51 questions. It provides insights into the satisfaction with and use of PPM solu­tions. A total of 32 user organisations (one participant each) were willing to share their experiences.

On average, the participating organi­sations initiate around 400 projects each year. However, when looking at the individual amounts, we observe large differences, with one organisa­tion initiating only five projects and another up to 2,500 projects per year.

4 About the Survey - Intention and Method

the way we see it

Figure 13: Number of respondents by industry

Public Services

Manufacturing

Telco & ConsultingFinancial Services

13%

25%

40%22%

400 new projects are initiated each year on average

In addition to the number of projects initiated each year, it is also interest­ing to consider the number of projects that are active at a certain moment in time. The total amounts to 20,764, which is on average around 650 pro­jects per respondent. This number in­cludes the projects which continue for more than one year.

A closer examination of the project duration shows that in all four sectors the majority of projects are completed within a year (Figure 14). This is not surprising, since a shorter duration makes projects more manageable. It also reflects a trend we have identi­fied among our clients, who wish to define projects with clear objectives to be achieved in a short time period in order to optimise the manageability of projects.

Figure 14: Average project duration by industry

Manufacturing

Less than 1 year More than 1 year

Telco & Consulting

Financial Services

Public Services

0% 40%20% 60%

% of projects

80% 100%

Most projects are completed within a year

650 active projects on average

20 PPM solutions for IT Governance

21

The participating organisations were asked to provide the percentages of employees working part­time in projects. It emerged that fewer than 50% of employees are allocated part­time to projects in all four sectors.

With regard to the number of emplo­yees usually participating in a project, the Public Services and Telco & Consulting sectors are the two sectors in which organisations allocate more than fifty employees to a project. On average, most of the organisations al­locate between five and 25 employees to a project (Figure 15).

Figure 15: Average number of employees in a project

< 5

5 - 10

25 - 5010 - 25

> 50

6%

13%13%

39%

29%

the way we see it

40% of resources work part-time in projects

Project team consists most often of 5-25 resources

2�

the way we see it

About Capgemini PPICapgemini’s Project Performance Improvement (PPI) practices are globally present in the Netherlands, Belgium, Germany, Austria, Sweden, Poland, Spain, France, the UK, India and the US. These practices serve project­based organisations with the professionalisation of executing and governing projects, programmes and portfolios. PPI is a full service provid­er in this market space: Consulting, Technology, Outsourcing.

The main business issue addressed by PPI involves organisations that are not in control of the execution of their projects, programmes and portfolios. n PPI Consulting offers services such

as project managers’ assessments, organisation assessments (OPM3, CMMI), setting up or running Project Management Offices, imple­menting PRINCE2, MSP and Project Portfolio management (PPM).

n PPI Solutions is focuses on optimising the Project Portfolio Management (PPM) processes in an organisation with the support of the right tools. PPI Solutions has thorough implementation know­ledge of the PPM solutions available in the market.

n PPI Global Services Centre is a highly industrialised delivery centre for PPM­application management and PPM reports and interface development.

For more information on PPI see www.nl.capgemini.com/PPI/ (in Dutch)

Appendix A

dr/8

F-09

3.27

/100

0

24 PPM solutions for IT Governance

Colophon

Capgemini Nederland B.V.Postbus 2575 - 3500 GN Utrecht Tel. + 31 30 689 76 25

Copyright © 2008 Capgemini. No part of this document may be modified, deleted or expanded by any process or means without prior written approval from Capgemini.

Capgemini, one of the world’s foremost providers

of consulting, technology and outsourc-ing services, enables its clients to trans-form and perform through technologies. Capgemini provides its clients with insights and capabilities that boost their freedom to achieve superior results through a unique way of working - the Collaborative Business Experience -

and through a global delivery model called Rightshore®, which aims to offer the right resources in the right location at competitive cost. Present in 35 coun-tries, Capgemini reported 2006 global revenues of EUR 7.7 billion and employs over 83,000 people worldwide.

More information is available at www.capgemini.com

About Capgemini

PPM solutions for IT Governance

The user perspective

the way we see it

Capgemini Nederland B.V.Papendorpseweg 100Postbus 2575 - 3500 GN UtrechtTel. 030 689 33 66

www.nl.capgemini.com