SOURCE: Innotas


February 23, 2009 10:00 ET

Innotas On-Demand PPM Offers Three Keys to Implementing Successful IT Governance Processes

When Economic Conditions Get Tough, CIOs Must Focus on Two Simple Priorities: How to Produce Value and How to Cut Costs

SAN FRANCISCO, CA--(Marketwire - February 23, 2009) - When economic conditions get tough, CIOs must focus on two simple priorities: how to produce value and how to cut costs. Pushed by economic and competitive pressures, IT organizations need to organize their project and application lists as a collection of expenses that they then attempt to balance against priorities, budgets, and available resources.

This process is referred to as IT Governance. And IT organizations that have implemented the most successful IT Governance processes, such as Forbes Media, have included Project Portfolio Management (PPM) as the cornerstone solution to their IT Governance processes.

Says Forbes CIO Mykolas Rambus, "IT Governance and PPM are critical to effectively navigate both lean and growth times. Moreover, PPM is an essential function in how we create value for Forbes -- with PPM we're better able to ensure our IT organization is working on the most important things that either save money or make money."

In today's lean times, CIOs are facing many difficult questions and requirements: "Cut spending by 30%." "Create a contingency plan for 20% less staff." "What are our non-critical projects?" "Which growth projects do we keep?" "What are our resources actually working on?" To that end, a PPM solution can help IT organizations analyze all projects on the table, and make fact- and resource-based decisions about which ones to continue, and which ones to cancel.

However, with drastically reduced budgets, IT organizations are hesitant to spend money on tools, such as PPM, that have a reputation for being very expensive, take months, if not years, to implement, and require expensive and lengthy consulting engagements. Even if a PPM implementation that costs more than a quarter million dollars seem like a good idea, the costs required reduce its viability.

One way successful CIOs, such as Rambus, have gotten around the cost issue is by selecting an on-demand, or Software-as-a-Service (SaaS) PPM tool as a cost-effective and robust way to implement IT Governance. For example, On-demand PPM such as Innotas PPM can be deployed in weeks instead of months, and carries a much lower cost and risk burden than traditional enterprise software.

Rambus, who selected Innotas as his on-demand PPM tool, recommends the following best practices before you implement:

--  Take Inventory - Establish a baseline inventory of major projects,
    applications, resources and demand
--  Prioritize and rationalize - Assess, prioritize and prune the project
    portfolio and rationalize the list of applications and maintenance
    (sustaining) work, all in the context of the organization's business
    objectives, available resources and budget
--  Manage execution and mitigate risk - Track execution metrics to ensure
    resources are in fact working on the highest priorities; that results are
    on track; and that problem areas are quickly identified and addressed

We will drill down on each:

1. Take Inventory

Not many IT Governance decisions can be made without a clear picture of the entire scope of what the IT organization is working on. Questions to answer and document include: What projects are we doing? Who is working on them? Which projects are critical for growth and which for efficiency? What applications are we running? Is anybody using them? How much are we spending (people and money) to support them? How many Java developers do we have, what are they working on? Do we have a software architect available to start a project in February?

For starters, identify all projects in flight. A project is an initiative that is building something new or adding something discretionary to existing systems. Typically companies use either a time or budget boundary to define projects (e.g., longer that 2 weeks, costing more than $10,000).

However, organizations often discover that they have a lot more work in progress than they had expected. Usually a big surprise is how much maintenance spend is not keep-the-lights-on type of work, but discretionary spend that should be treated as a project. Moreover, projects are only 20% to 30% of IT spend; the rest of the IT budget typically is spent on sustaining existing applications and systems.

Thus it is crucial to also take inventory of what major applications the IT organization is supporting and roughly how many resources and costs are allocated to each. A big shocker is often how much time and resources are consumed maintaining existing applications, or maintaining IT budget for yearly software maintenance fees.

Additionally, rationalizing the application and asset portfolio helps retire non-critical and duplicate applications, consolidate services, and/or move high-maintenance software to lower-cost on-demand solutions.

The key to understanding a project and application inventory is having visibility into the project pipeline. Look for a PPM platform that provides project and maintenance work requests so you can standardize this process and gain the required information to categorize and prioritize demand.

2. Prioritize and Rationalize

With the single version of the truth that PPM provides, executives across departments are more apt to make informed IT governance decisions; identify which are the highest priority initiatives; and kill duplicate projects or projects that were funded under different conditions and are no longer a priority.

The remaining high-priority projects and applications can now be balanced against new demand and available resources and budget, while different scenarios can be compared for value and risk.

3. Manage Execution and Mitigate Risk

The performance of projects has a significant impact on the business' economic conditions. With a PPM-based IT Governance solution in place, teams can gain a new level of visibility into status and progress of initiatives and are able to manage scope, schedule, and financial performance.

For example, in a resource-constrained environment, schedule overruns have a collateral damage effect that can ripple through the entire portfolio. An effective IT Governance solution will help mitigate the impact, or even prevent the problem from happening in the first place.

Tom Freeman, CIO at the City of Roseville, was able to shave $2M from the City's project spend with confidence that he was not cutting critical high-priority projects and with clear understanding of the impact.

Tough economic conditions can place extreme pressures on those individuals who are responsible for the financial viability of an organization. Those pressures are real and they generally lead to tough decisions. Cost-cutting measures are a fact of life. The question then becomes "how can we cut costs while retaining our competitive edge?" A well conceived IT strategy and a well executed portfolio of projects and applications is key to surviving tough times so you can come out of them swinging.

About Innotas

Innotas provides the only on-demand ( Project Portfolio Management (PPM) solution specifically designed to meet the needs of IT and IT Services organizations. With Innotas, managers and team members improve collaboration and can more effectively and efficiently manage IT initiatives, projects, and resources. For CIOs and executives, Innotas delivers deep visibility, automation, and analysis of the project portfolio, and improves resource planning and utilization. Our customers, including Crayola, Forbes, Hamilton Beach, Jo-Ann Stores, WorldVision and many others, span a wide range of industries including financial services, healthcare, retail, technology, telecommunications and energy. For more information please visit or contact us at +1 415.814.7700.

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