VideoSEN's project team does not actually manage projects, but instead helps determine whether they are worth doing at all. In the pat nine months, the team has evaluated 12 proposals and given the green light to 3. The number has been kept fairly low, since SEN is now in the middle of installing a massive SAP ERP system.
Vital support for the effort comes from Roland Meinzer, CFO of Siemens Information and Communications Network, SENS parent company. Previously Meinzer was CFO of Siemens Canada, which went through what he describes as a "traumatic" SAP implementation. Determined to avoid that in the U.S., Meinzer says that one key to success is the involvement of people not working directly on the project. "Business owners are often blind to process improvement because they live in the day-to-day- world, while the CIO is very often driven by his IT tools," he explains. "You almost need to have somebody who brings a different view."
Even more ambitiously, parent company Siemens AG is working to create a companywide project team that would not only prioritize and coordinate all major IT projects, but also set standards for software tools and procedures, as well as streamline global processes.
Siemens isn't alone. Ballou of Meta Group estimates the market for project-portfolio management services and license revenues is now a sizable $450 million and growing, with most that now going to consulting firms — in fact, Meta has been a vocal champion of the approach. "The will be, how quickly do people see results they can build on?" she says.
The point is well taken, because simply installing a project portfolio team does not guarantee success.
For one thing, the IT community seems unable to settle on a definition of what a project office does. Late last year, when Interthink Consulting, a project-management firm in Edmonton, Alberta, asked more than 180 PMO executives what drove them to create a PMO, the answers varied enormously. Thirty percent of respondents cited the need to create a consistent approach. Another 28 percent said it was to establish a single point of contact for project management. Preventing project failures was cited by 25 percent. And just over 20 percent pointed to the need to support strategic initiatives.
This lack of agreement on the PMO's basic mission seems to be creating some dissatisfaction with the results. In the same survey, fewer than half the organizations surveyed by Interthink said their PMO is a major component of project success. Worse, 12 percent said it has made no real contribution at all. "The world is still split on whether a PMO delivers value," says Interthink's president, Mark Mullaly.
Software's Hard Results
If organizational structure doesn't succeed, technology may. A growing list of software vendors offer products that aim to help IT departments manage, track, evaluate, prioritize and generally improve projects. These products range in size and scope from PC-based tools for individual users, such as the ubiquitous Microsoft Project, to web-based suites that serve an entire enterprise from less well-known vendors, including Changepoint, Fortera, ITCentrix, Niku, Prima-vera, Pacific Edge, PlanView and ProSite.
These tools have become one of the software industry's fastest-growing sectors. The market for all packaged project-management software is currently worth about $1.5 billion, estimates Dennis Byron, a market analyst at IDC, and sales are growing at roughly 10 percent a year — twice the 5 percent growth rate for the overall packaged software market.
It's a world that Byron describes as "Microsoft and everyone else." Microsoft controls an estimated 43 percent of that $1 billion, and shows no sign of ceding any ground soon.
A second category of software aims far higher: it would help entire enterprises manage their IT project portfolio. Some of these packages are designed for senior executives, while others serve a broader swath of the enterprise by providing different views for people in different job functions.
One such package is TeamPlay from Primavera, which lets IT professionals objectively measure how close a given project is to completion. Again, it's one of those problems you'd think IT folks had figured out long ago. But the truth is, estimates of completion are often meaningless to anyone other than the person making them. That's what Mort Goldman, CEO of technology assurance software vendor Fortera Inc., calls an expectation gap: "We're 80 percent done, but still have 80 percent of the work left to do."
Shine a Little Light
TeamPlay lets users define "completion," then apply that measure to all projects. That also helps managers catch troubled projects early — and, if necessary, shut them down. "History says that if a project is 20 percent off at 20 percent of its life cycle, it's never going to catch up," says Michael Shomberg, Primavera's vice president of product marketing. "So we try to help customers catch it early."
James Lester, CIO of American Family Life Assurance Co. (better known as AFLAC), in Columbus, Georgia, and a user of TeamPlay software, hasn't canceled any projects yet, but after about six months of running the software, he says visibility on the company's 60 ongoing IT projects has improved measurably." I feel like I'm not flying in a fog anymore," he says. "It's great to be able to see what's going on."
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