UMT360 Blog

Blog Posts from the Leader in Enterprise Portfolio Management

Archive for the ‘innovation’ 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 »

Strike & Maintain the Right Innovation Balance

Written by Mike Gruia on June 7th, 2014 at 6:00 am

IT and the business knows:    The year-to-year viability of a company depends on its ability to innovate.

We have learned over the years that innovation comes from three sources.

  • Top Down – Driven by management imperatives (i.e. we have to be in the cloud)
  • Bottom Up – Can originate anywhere in the organization, everyone participates and offers new ideas (i.e. start with a blank piece of paper)
  • Middle – This core innovation represents efforts to make incremental changes to existing applications and incremental inroads into new markets.  Such innovations draw on assets the company already has in place.

Read the rest of this entry »

The Magic Ingredients of Managing IT

Written by Ben Chamberlain on April 14th, 2014 at 2:13 pm

Businesses today are challenged with ways to fund innovation as budgets remain flat or increase incrementally.  The inability to efficiently invest in the future is one of the reason’s IT is becoming less relevant.  It’s imperative that organizations make changes and not only gain a greater understanding of their spending dynamics but also adopt a new approach to decision making, one that focuses on strategic investments and their ability to create competitive advantage.  How do you get started?

Read the rest of this entry »

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.

Should You Shift from a Project to Product-Based Investment Approach?

Written by Ben Chamberlain on February 27th, 2014 at 5:00 pm

It’s been a topic of discussion by industry analysts in recent days – businesses making the move from a project to product-based investment approach. What’s the difference? In his latest white paper, UMT360 CEO Mike Gruia explains why the project-focused project and portfolio management (PPM) processes which organizations have used for the last decade are no longer up to the task of winning in a fast-paced world. In fact, he asserts, they can impede attempts to compete in a marketplace where the speed of innovation and product discontinuities are more frequent and problems arise continuously.

Click here to read the white paper and learn why it’s important to begin a move toward a product-based approach, the differences between the two approaches and how your organization can begin the transition.