Tracking The Best-Laid Plans - InformationWeek

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Software // Enterprise Applications
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3/4/2003
02:07 PM
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Tracking The Best-Laid Plans

Companies are managing multiple projects as diligently as their investments and finding it pays

Horizon finally settled on IT portfolio-management software from Business Engine Inc. Data is collected through standardized templates created for Microsoft Project, stored in an enterprise database, then fed into Business Engine's analytical tool, called Ben. There, each user, as permitted, can view and manipulate spreadsheets and graphs, share documents, track revisions, and run what-if scenarios in a personalized dashboard view.

The idea behind offerings such as Business Engine's software is to help companies manage IT projects and assets as if they were investments, tracking their performance against business goals, assessing their individual return and value to the company, and helping sort out which deserve more attention and resources and which can plug along with reduced resources or be put on the back burner, or perhaps even pulled.

Certainly, Horizon is treating its IT project plans with the same scrutiny it gives to other efforts. Horizon's CEO holds quarterly operating review meetings with Miller and CIO Chuck Emery, as well as other direct reports, to analyze the company's 39 largest projects--all of $1 million or more in cost--over the preceding quarter and the next quarter. Reviews by deliverables, dollars spent to date, and function or strategy are made of existing projects. The software yellow or red flags projects that are failing to meet cost or schedule goals. Then, when forward-looking scenarios are input, flags also pop up if there appear to be problems with human resources, budgeted funding, or scheduling.

But the 39 largest projects make up only about 15% of the total numbers in the system. So meetings that echo the format of the CEO's quarterly operating review are held at each of the company's 18 divisions as well as at the project level.

Miller has set up project-approval methods with a similar rationale: Major projects require project definition and project-management discipline documents, net present value, and return-on-investment analysis, while the smallest projects, typically 90-day fast-track efforts, require just a project plan and a budget.

The result: Horizon is ahead of schedule on its legacy-reduction effort, and it has developed repeatable and reportable methodologies with responsibility up and down the company.

Not all business-technology executives have embraced the idea of aligning and managing their projects, resources, and budgets to achieve greater return on their portfolios of investments. Eight out of 10 respondents in a study of 130 senior executives on portfolio management say a lack of financial skills in the IT department makes it difficult to track IT investments' value, according to Northwestern University's Kellogg School of Management and management-consulting firm DiamondCluster International (see "IT Staffs Lack Financial Chops For Project Analysis," March 24, p. 20).

Some of the players in the traditional project-management software market are aiming to help their customers feel more comfortable in the new world of portfolio management. Microsoft dominates the desktop project-management market with Microsoft Project, which has more than 8 million users and about 80% of the market share. Microsoft last year launched Microsoft 2002 Project Server and Project Professional, which together make up the vendor's Solution for Enterprise Project Management. The software, which is XML-ready, aims to be a driver of new, more efficient global strategies, such as just-in-time inventory management, total-quality management, and rapid-application development. It's also a way to stretch the ever-more-constrained IT budget.

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