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Archive for the ‘financial management’ tag

It’s time for the PMO to focus on the big picture

Written by Hubie Sturtevant on May 29th, 2015 at 12:16 pm

No, the UMT360 team didn’t come up with the theme for this year’s Gartner PPM & IT Governance Summit. But we certainly could have. Because from our perspective, the event’s theme — Thriving on Digital Chaos: Innovation, Agility and Collaboration — sounds exactly like what we’ve been telling our clients for years now. Read the rest of this entry »

Managing Investments – That’s Your Real Project!

Written by Mike Gruia on May 15th, 2015 at 8:14 am

We met a lot of folks at the Microsoft Ignite Conference in Chicago last week. And while everyone we spoke with had unique and specific challenges, one common thread ran through our conversations. Most organizations we spoke with used Microsoft Project Online or Project Server as their PPM tool, yet still wanted a more efficient and effective way to manage their projects.
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Just What is a Strategic PMO?

Written by Paul Rosien on September 29th, 2014 at 7:26 am

UMT360’s recent webinar schedule has focused on enabling PMOs to be strategic. Great topics, with some world-class PMO professionals including Learning How to Establish a Strategic PMO with Carl Souchereau from SNC Lavalin T&D, and Changing the PMO Status Quo with Frank La Rocca from ConEd. In fact, we’ve seen so much interest in the Strategic PMO idea that we’ve created a local breakfast series, starting initially in Chicago and Houston.

But we also thought it would be good to step back and define just what makes up a strategic PMO. We reached out to some industry folks to get their views, and one response stood out in particular. Andy Jordan is the president at Roffensian Consulting, and has over 20 years within the portfolio, program, project and PMO space. Andy’s response aligned very closely with our view, and so we thought we’d let Andy share directly! You can reach Andy at andy.jordan@roffensian.com, and we thank him in advance for the guest post! – Paul

Just What is a Strategic PMO?

By Andy Jordan

In the last few years PMOs have been asked to take on much more ‘business critical’ functions. Some have embraced this opportunity, some have not. The idea of a project focused central services style PMO (people, process, tools, training) is rapidly losing favour because it is not delivering business results. Instead, the idea of a PMO more aligned with the business is gaining traction, and that is what PMOs should always have been. A Strategic PMO is a project centric business department and should be structured and managed in the same way as other business departments – goals and objectives set by enterprise leadership that help the organization as a whole succeed. That’s what we expect for sales, or operations, or fill in the blank other department, and that’s what we should expect of PMOs.

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Key Issues Shaping IT Investment Strategies: Interesting Results from Recent Webcast Polls

Written by Mike Gruia on August 4th, 2014 at 1:23 pm

As the enterprise performance crisis pushes IT investments back to the top of IT leadership concerns, we ran three surveys aimed at understanding where the market is at with respect to IT investment strategies.

The questions, asked during the live webinar, Why Integrated IT Portfolio Management Matters, conducted on July 29th, 2014, focused on the key issues shaping today’s IT investment strategies.

The first poll asked about the factors contributing to an organizations struggles with respect to digital investment models. 37% of respondents believe that agile investment and resource allocation is key to the success of the IT investments. UMT360 believes this is one of most underused drivers of effective IT investments, and our research shows that high-performing organizations are more likely to focus on this area of investment management agility. But this agility isn’t possible without portfolio integration and financial maturity. Without this foundation, organizations will struggle to achieve the dynamic reallocation and optimization of investments.

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How to Overcome IT Investment Roadblocks

Written by Mike Gruia on June 22nd, 2014 at 6:00 am

Many of today’s processes and methods for managing technology investments were not designed for networked organizations operating at high speeds. Financial management best practices  were not created for programs, portfolios and assets.

In a recent webinar, we polled attendees and asked them about which factors are most important in overcoming IT investment management roadblocks. The top top answers, Siloed Investment Thinking and Lacking Enterprise Roadmaps, together accounted for more than half of the total number of responses. This tells me that there is still a significant amount of siloed thinking when it comes to planning and implementation.

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What is Portfolio Management?

Written by Ben Chamberlain on June 5th, 2014 at 6:00 am

Ask ten people to define portfolio management and you’ll likely receive ten different answers. Of the various definitions, most will focus on some sort of aggregate reporting across portfolios or highlight alignment of spend with strategic priorities and selecting the optimal project portfolio under varying budget constraints.

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The Trifecta of Business Value Erosion

Written by Ben Chamberlain on April 4th, 2014 at 7:00 am

Despite significant investments in PPM, it is failing to deliver the anticipated results.  Both Gartner and the Standish Group have reported low project success rates and UMT360 research finds that today companies are failing to realize up to 46% of the planned business value from project portfolios.

UMT360’s Chief Product and Marketing Officer Ben Chamberlain refers to the causes of that lost business value as the “Trifecta of Business Value Erosion.”  He says there are three  main areas of concern.

  1. Innovation & Estimating
    Most organizations have adopted an annual planning methodology, where analysts spend a couple of months ahead of each new fiscal year evaluating competing project requests to select a portfolio that best aligns with strategic priorities and maximizes ROI.  There are inherent problems with the traditional annual planning process that results in business value erosion.

      •  Innovation – During this annual planning exercise, business units submit their project requests / ideas. These ideas are analyzed, prioritized and optimized and projects are then either included or excluded from the investment portfolio. There is a significant risk that utilizing a bottom up approach to innovation results in analysts just selecting the best projects from a sub-optimal bunch of investment alternatives. The quality of the requests / innovation obviously will impact the business value delivered by the resulting portfolio. By adopting Enterprise Portfolio Management techniques, companies move from a “project to product-based investment approach” which involves linking business and IT assets and projects to key capabilities or “products” that power your business. Analysts then analyze these capabilities and will base investment decisions on critical changes to improve business performance. This top down approach improves the resulting demand / innovation before you start to utilize optimization techniques to select the best initiatives.
      • Estimating Accuracy – The other inherent problem with annual planning is that often the cost and benefit estimates are inaccurate. Unreliable estimates can have a significant impact on portfolio value. When project cost estimates are too high, which is often the case, projects are excluded from the selected portfolio during the annual planning window. Unless you’re revisiting those decisions throughout the year, that value cannot be recaptured.  Under-estimating means you’ll select more projects during the annual planning exercise and have to cut them as you go through the execution year leading to an erosion in business value.
  2. Project Success Rates
    Industry analysts all agree that many companies struggle to deliver projects on time and within budget. Although they don’t agree on the exact statistics, there is consensus that a problem exists.  The Standish Group says that: 18% of projects fail to get implemented and 43% of projects are challenged (late and over budget).  Gartner states that 1 out of 3 completed projects  experience cost overruns and even the PMI says that 33% of projects fail to deliver their planned business value.   Obviously project success rates have a significant impact on the resulting value realized from the portfolio. If you fail to implement a project, you will not realize any business value. Cost overruns result in PMOs cutting scope and cancelling projects to stay within the budget constraints, again, eroding the business value.
  3. Budget Utilization
    Surprisingly, many organizations fail to spend all their budget allocated during the year, instantly impacting the planned business value from the portfolio. Common reasons for the under-spend are:

      • Due to resource shortfalls they simply did not start planned initiatives
      • Projects that slip into the next planning year; also known as unplanned carry overs. These projects fail to  utilize the allocated budget and worse, they consume funds from the next year’s budget.
      • Over estimating projects often results in Project Managers holding funds hostage meaning the PMO cannot  reallocate to inflight or new initiatives
      • Project Managers often aggressively re-forecast that their projects will spend all funds and then late in the year (i.e. Q4) confirm that they don’t require all the funds. This leaves the PMO no time to reallocate funds.

Once you understand “why” value is being lost, how do you respond to capture the planned business value?  One way is for the PMO to view projects as business investments and move toward integrating financial management with PPM so that the business is better able to gauge the economic impact of poor project performance and take corrective action.  In a recorded presentation, UMT360’s Ben  Chamberlain discusses how UMT360 is helping businesses do that and more.  He shows you how to:  

  • Eliminate the need for Excel and standardize investment governance controls across the PPM lifecycle
  • Streamline capital planning and build stronger business cases
  • Automate financial tracking and variance analysis and move to an agile re-planning process
  • Establish a benefits realization framework

Click here to access the complimentary UMT360 presentation.

The PMO of the Future

Written by Ben Chamberlain on April 3rd, 2014 at 7:00 am

In a recent presentation, Gartner Research VP Donna Fitzgerald told a standing room only crowd that PMOs must start change the way they see the landscape and understand that their improvement depends on an ability to deliver value.  She explained that 80% of her company’s clients are below level 3 on Gartner’s 5 point maturity scale and that getting to level 3 depends on two things.  “One is truly, deeply understanding what value means and the other is everything in the world comes from follow the money…it’s really what ‘s important.”

Her presentation is now available online and includes her rules for measuring both value and financial management capabilities and well as how she sees the PMO of the future and what steps need to be taken today to prepare.  Click here to view the presentation “The Most Important PPM Trends for 2014.”