These days, many companies are finding that an effective way to evaluate the entire portfolio and control costs is to use a Project Portfolio Management (PPM (News - Alert)) solution, which make it easier to look at projects as an aggregate collection of expense buckets to determine where excess fat can be trimmed.

 

For example, with PPM, organizations can more easily determine which projects add the most value to the business, and find areas where they can eliminate duplication of projects and effort.

 

“In tough economic times, leaders need to streamline the project portfolio in order to get leaner while still maintaining their ability to produce value. But without an integrated PPM solution, the entire exercise of prioritizing the project portfolio can become uninformed guesswork,” says Keith Carlson, CEO of on-demand PPM vendor Innotas.

 

Moreover, with the emergence of web-based, software-as-a-service (SaaS (News - Alert)) solutions, PPM is now available at a fraction of the price of installed solutions. Instead of requiring commitment to costly and inefficient enterprise-wide site licenses, SaaS PPM solutions can be deployed on a subscription or per-seat basis, and users can be added or subtracted at any time. SaaS solutions are also faster to implement and carry a much lower risk burden than traditional enterprise software. 

 

“With SaaS, organizations no longer have to put off implementing a PPM solution due to cost. More important, because SaaS PPM solutions are implemented in days or weeks, organizations can begin analyzing the project portfolio and begin the process of cost containment and cost savings almost immediately,” Carlson says.

 

Whatever type of PPM solution an organization chooses – installed or SaaS – here are five key steps to evaluating the project portfolio and analyzing which projects are the most valuable or which may be the best to cut or reduce in scope.

 

For example, Hamilton Beach Brands recently deployed an on-demand PPM solution from Innotas. “Before we implemented Innotas, we suspected that we had about 20 identified projects. Once we cataloged all our projects, we learned that there were more than 60. We were surprised by the size of the variance,” says Jerry Hodge, senior director for information services at Hamilton Beach Brands.

 

Secondly, compare high-value projects to decide on the right combination to fund. Next, evaluate and rank which projects are the most valuable to the organization. With PPM, redundant projects can be consolidated, or projects that should never have been started in the first place can be eliminated.

 

Thirdly, look for ways to allocate limited resources to the most important projects by ensuring high-value projects are properly covered and the delivery process is in place to ensure happy stakeholders. If not, then the leadership team may need to make additional tradeoff decisions on where to make further cuts.

 

The fourth way is to look for opportunities to merge projects and gain efficiencies. Ask how projects relate to each other, has the company developed a consistent and holistic view of the overall project portfolio and can these projects be combined into one integrated initiative.

 

Lastly, monitor project performance closely to get better control of potential cost overruns. Project performance can significantly impact company performance and profitability. In some projects, cost overruns can be disastrous. In a resource constrained environment, these overruns have a collateral damage effect that can ripple through the entire portfolio. With PPM in place as a centralized, visible management framework, these kinds of unforeseen meltdowns can be avoided more easily. 

 

“Portfolio management and project management are about delivering business value to the organization; IT departments need to run the project portfolio like any other division – like a business. By using Innotas we have the transparency into the project portfolio and can determine which projects are bringing the most value to the organization as a whole,” says Mykolas Rambus (News - Alert), IT executive at Forbes.

 

Innotas recently released a white paper, “Focus Under Pressure: Why Project Portfolio Management Becomes Mission-Critical in a Down Economy,” which defines five key steps to evaluating the project portfolio with an eye for cutting costs and doing more with less (http://www.innotas.com/resources/whitepapers.html).