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Tracking The Best-Laid Plans

Companies are managing multiple projects as diligently as their investments and finding it pays.
Features that can help IT departments manage their own project portfolios include the ability to analyze resource use and availability for multiple projects, perform what-if analysis to see how changes in scope or schedule affect project outcomes, and identify options for addressing at-risk projects by providing models that show the impact of changes to all projects' schedules and resource assignments.

But Microsoft says it doesn't want to barge into niche areas such as vertical-market specialization and financial analysis that are handled by strategic partners and hundreds of value-add vendors--at least not yet. "We're always looking for the 90% [of the market] solution," says Zena Girdler, Microsoft Project's product manager. Still, a strategic partnership Microsoft has with Business Engine permits Microsoft to replace the analytics and financial tools it licenses from Business Engine with Microsoft-developed code.

Nicolas Dubuc, collaborative project manager at Rhodia Inc., a $6 billion-a-year worldwide manufacturer of specialty chemicals, is using Microsoft's software to develop project-management templates and methodologies that can be adopted by any or all of Rhodia's 18 divisions. "We're designing a platform for rapid product development that will enhance opportunities for innovation," he says.

Dubuc gets his direction from Rhodia.com, a committee consisting of the CIO, select IT staffers, research and development teams, and marketing executives from Rhodia. Rhodia.com's mission is to recommend E-commerce, collaboration, and innovation products for the rest of the company, but it isn't forcing any division to adopt a specific product or project-management methodology until it's ready. In the meantime, the low cost of Microsoft 2002 Project Server and Project Professional ($179 for Project Web Access, $799 for Project Server, and $999 for a Project Professional license) make them a good place to start.

The project-portfolio management market, especially as it relates to IT project management, is maturing through partnerships, acquisitions, and the entry of big enterprise software players such as PeopleSoft Inc. Other vendors in this arena include Artemis International Software, Changepoint, Lawson Software, Niku, Pacific Edge, PlanView, and Primavera (also the dominant large-scale project-management software). SAP and Oracle also are entering with project-management and project-portfolio management tools with tight ties to their enterprise resource planning products. Almost every vendor has links to or builds vertical or niche applications for Microsoft Project, or does both.

The cost of entry can be steep. Licenses for robust systems, excluding installation and upgrades, start at $200 a seat for low-end users and $1,000 or more for a power user, so software will typically cost $50,000 or more for a midsize company. Consulting and integration add another $50,000 to $200,000. When you add more power seats, bring in management-practices specialists to develop good governance, and provide training to all levels of users, it becomes a million-dollar investment.

But if project-portfolio management is rolled out, well, like a project, the benefits can be impressive. Estimates link project-portfolio management efforts to about a 30% return on investment over the first full year. At Horizon, the company hasn't killed any projects yet, but Miller hopes that's because of the rigor that managers have to go through to get projects approved. "There's a visibility and accountability now that wasn't there before," she says. "Some people don't like it; they feel it cramps their style. But the results have been great."

Illustration by Peter Bennett