Wednesday, 01 December 2010 08:57

The Case Against Project Portfolio Management

Written by Vilmos Rajda

Cropped_Feature_Dec_1Until recently I belonged to the wide-eyed crowd who was excited about the prospects of project management’s new silver bullet: Project Portfolio Management (PPM) software. Hordes of slick sales people from various PPM software vendors, will talk to you about the infinite value of applying their solutions. They will show you rainbow coloured bubble charts, black belt project prioritization features and six sigma resource management functionality. If you are not convinced by the end of their demo, then you probably do not own a cell phone that can make French toast (i.e. living in a cave), or you are a project neophyte who is just not getting it.

Well, not so fast. Before jumping on the bandwagon, stop and ask some questions about the emperor’s new clothes. You may be up for a surprise.

PPM software offerings are available for more than five years, and I am yet to see a reliable study on correlating PPM use with companies’ business success (share value growth, market share gain, or customer satisfaction improvement). Of course the exceptions are the PPM vendors themselves. According to Gartner, the $1.2 billion project and portfolio management market has grown strongly over the last five years.

In the following sections I will describe the most common assumptions that PPM vendors would not tell you, or would downplay in their sales literature. Paying attention to these assumptions can make the difference in successfully delivering business value, measured either in time-to-market reduction, increased resource productivity or improved cost containment.

Assumption 1: Everything You Do is a Project

While most of us working in Project Management would agree with this statement, the reality is that most organizations operate in some shade of matrix structure. Rarely is an organization fully projectized, unless it is a professional services firm. So, how is PPM performing in a matrix organization? Well, there are gaps. There will be employees who do not submit timesheets, who share their time between project and operational activities, and whose reporting relationships do not fit neatly into the PPM database structure. This creates exceptions in the PPM application, and you may just have the perfect solution to a small subset of your problems in your company due to erroneous definition of the real issue.

Assumption 2: Project Managers Have Unlimited Time to Track Project Minutia

Vendors sell you on the claim that, miraculously, real time data will be available on projects and portfolios once a PPM tool is implemented. To use an actual quote from a sales pamphlet: ‘Capture real-time program and project status automatically’. Really? Someone has to input the data into the PPM tool. If Project Managers (PM) spend their time continuously entering up to the minute schedules, budgets, risks, issues, resources, timesheets and status into the PPM tool, then you will achieve real-time data, however, at what expense. PM admin time increases significantly, which leads to job dissatisfaction and lost productivity, besides being distracted from dealing with client, team and deliverable related issues.

Assumption 3: Project Parameters are Facts

A major PPM vendor’s White Paper claims: ‘By comparing objective priority scores (e.g., financial valuation, strategic alignment score) across projects, fact-based decision-making discussions are made possible’. PPM vendors imply that executives can make project decisions based on factual data and not on vague speculative metrics. Let’s not kid ourselves. When a project is initiated, most of the parameters (costs, timelines) are order of magnitude estimates based on anecdotal evidence. Because we enter this into a PPM software, with two decimal places, they do not automatically become facts. NPV, ROI, payback calculations, timelines, budgets and resource plans are still only as good as their originator’s crystal ball. Just because they are captured in a PPM software, and can be presented on the screen in a bar chart, they are still what they are: estimates. Putting too much faith in and assigning too much authority to PPM reports reduces critical thinking and permeates incorrect project assumptions. For brevity, call it learned artificial unintelligence.

Assumption 4: Companies Have Mature Processes

Most of them don’t. And this is great for PPM vendors. They can sell professional services to you until the cows come home. Your company will require customization, configuration, adaptation, business process mapping, data mapping, data exchange interface development, report development and training. If not careful, you will be implementing advanced project management techniques with diminishing value. You may reach the pinnacle of Earned Value Management, and if done so I promise you will have a greater appreciation of the law of diminishing marginal returns.

Assumption 5: One Click Out-of-the-Box Reports

Here is an excerpt from Gartner’s Magic Quadrant report: ‘After seeing more than 30 demonstrations of IT PPM applications as part of the Magic Quadrant process, it is safe to say that the reporting service provided by IT PPM products are generally in need of an overhaul.’ Fear nothing, your friendly PPM vendor is available, for a small fee, to produce useful reports out of your newly implemented PPM application.

The Acid Test

If I still have not convinced you, I will make one more attempt and after that will rest my case.

A few years ago I was managing the implementation project of a leading PPM software at a mid-sized municipal utilities company. The vendor’s PPM application is consistently ranked for years in the visionary & leader quadrant in Gartner’s Magic Quadrant report. The company is US based and their Professional Services Project Manager, Jack (not his real name), came to Canada quite often to work with me on delivering the project.

‘Jack,’ I asked after we got comfortable with each other, ‘are you guys using your PPM application to track these client implementation projects?’ ‘No, we are not there yet,’ he answered with a smirk on his face. Jack’s honesty was refreshing, however, I am still amazed at his answer. Why on earth is a leading PPM software vendor not using its own product for their Professional Services division? I will let you figure it out.

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Vilmos Rajda, MBA, PMP, is the Principal Consultant of ProjectAge Management Solutions, a boutique consulting firm in Toronto. He has over 10 years of experience with delivering PMO maturity, product development, applications development and IT infrastructure projects for telecommunication, financial, utilities and government organizations. He can be reached at vrajda@projectage.com.

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