Cloud Computing and Project and Portfolio Management

Project and Portfolio Management

PPM attempts to spotlight on an elementary question: “Should organization be doing this project or this portfolio of projects at all?”

Objective: To determine the optimal mix and sequencing of proposed projects to best achieve the organization’s overall goals – typically expressed in terms of hard economic measures, business strategy goals, or technical strategy goals – while honouring constraints imposed by management or external real-world factors.

Project portfolio management (PPM) is a term to describe methods for analyzing and collectively managing a group of current or proposed projects based on key characteristics like:

• Total expected cost
• Consumption of scarce resources (human or otherwise)
• Expected timeline and schedule of investment,
• Expected nature,
• Magnitude and timing of benefits to be realized
• Relationship or inter-dependencies with other projects in the portfolio

Project management is an integrative endeavour – an action, or failure to take action, in one area will usually affect other areas. PPM attempts to address issues of resource allocation, e.g., money, time, people, capacity, etc.

Cost Structure of PPM Software

Why PPM is under Spotlight?

• Willingness of organizations for project management as a discipline and availability of professional people.
• SaaS and web-based solutions available for project teams, whether simple task management tools, mid-market project and portfolio management solutions, or more complex high end systems for more mature project teams.

Cloud Computing

Project and Portfolio Management (PPM) software emerged in 2009 as a fast-growing market for SaaS, with a compound annual growth rate (CAGR) of more than 40% projected for the next five years according to Gartner. PPM software consumption environments are changing radically, with hosted and SaaS options — as a result, most traditional on-premises vendors are forced to provide SaaS alternatives to counter new entrants and SaaS-only PPM vendors.  Source:  Competitive Landscape: SaaS Project and Portfolio Management Software, Worldwide, 2011 published 6 April 2011.

Total Software Revenue Forecast for SaaS Delivery within the Enterprise Application Software Markets, 2007-2015 (Millions of U.S. Dollars) (Source Gartner: June 2011)

Concerns

Key drivers over the next few years for PPM are

How PPM is useful for Cloud Computing?

Project and Portfolio Management (PPM) solution is fundamental to successful cloud transformation programs and delivering the structure and rigor required to effectively manage the transformation process.

Public cloud adoption increasingly bypassing the control of IT: 33% of respondents obtain public cloud funding outside of IT budgets, will rise to 39% by the end of 2013. Migration to public cloud-based services leads to increased complexity and a greater number of IT projects under management: 41.5% of respondents expect public cloud use to increase IT project complexity

Project and Portfolio Management (PPM) solutions will become increasingly important to managing successful cloud adoption and to providing visibility and control of the cloud services portfolio. PPM is the only product category that will see a significant increase over the next two years (up 13%) when it comes to managing public cloud migrations

IT organization’s transition to the cloud requires planning. Part of that planning process is to consider the risk profile and how it changes with the move to cloud. As with all transformations, an effective and robust decision process aligned to the organization’s strategy and risk profile is to identify the target applications and services that may shift to cloud.

PPM is playing and increasingly influential role in driving forward cloud transformations. More companies are using project and portfolio management to drive cloud projects.

PPM could play a fundamental role in managing the programs, projects, requirements and resources needed as organizations innovate and move toward this cloud transformation and change. Additionally and most importantly, PPM facilitates the planning and decision-making processes that determine the optimum future IT services portfolio and which transformation initiatives will deliver the most business value.

Benefits

• Maintenance to innovation: PPM has the ability to provide a strategic view of IT, and with the help of the public cloud.
• By adopting a PPM approach to IT transformation, organisations can reduce the cost and complexity associated with managing the new processes.
• To preserve visibility and Governance this will ensure the transformative value of the cloud.
• Help to manage IT and cloud transformation programmes, projects and resources that are needed to deliver change. It also facilitates planning and decision-making.
• PPM can help IT to collate data across silos, and then get rid of them.
  • The public cloud is one way of achieving this as it’s about the provision of shared and standardised services.
  • The private cloud protects people’s silos, and they will be reluctant to give them up as they aren’t keen to share services and want to have customised applications.
  • PPM enables organizations to plan and execute the optimal balance of cloud and traditional initiatives for the perfect portfolio, increasing business agility and innovation.
  • A PPM-based approach provides CIOs with the insight, control, and flexibility to turn IT transformation ideas into real value-added business services and the ability to adjust the service portfolio as market or business conditions change.

PPM on Cloud

The cloud is the portfolio manager’s friend, especially when working in an IT environment that is immature or loaded with beaurocracy. The technology landscape is constantly changing and improving, shifting the tools that are available for project and program managers.

Basically, instead of housing the software on-premise, the technology progressed so that a project team could “rent” the application through a SaaS solution provider. Among the first proponents of SaaS were Salesforce.com, offering an online CRM; Project Insight, offering a web-based project management solution; and Quicken, offering its accounting program in a hosted environment.

SaaS has completely taken over as the deployment/business model of choice for Enterprise PPM software and PPM tools. According to Gartner PPM is the fastest growing category of SaaS enterprise software at a 41% CAGR for the 5-year period 2009-2014.

Newer start-ups are exclusively on-demand. Many focus on geographic or functional niches. Traditional PPM vendors such as CA, HP and Oracle are now scrambling to provide SaaS versions of existing solutions or separate SaaS products. Almost all have changed their marketing and go-to-market strategy around a “SaaS-first” message.

PPM Models & Cloud Computing

Multi-tenant, Single-instance

Many PPM customers on 1 application Platform delivering PPM features via subscription based pricing.

Multi-tenant, Multi-instance

Each PPM Customer have own application Platform delivering PPM features via subscription based pricing.

Benefits

• Gain real-time visibility and transparency of proposed investments across all areas
• SaaS deployments are faster and less services-intensive.
• Deployments timeframes can usually be measured in days not months.
• Cost benefits associated with high-priced professional services that are typically required with traditional on-premise or hosted PPM deployments.
• Emphasis on configurable solutions (rather than highly customized systems), usability, and automatic upgrade options contribute to on average lower TCO.
• Zero Capex Model: No need of infrastructure to support multiple, on-premise environments.
• Subscription Pricing, No large upfront commitment of capital.
• As opposed to older client-server applications, web-based task, project and portfolio solutions have the advantage of allowing all team members to access the project schedule, update individual tasks and collaborate on projects from the Internet.
• In the cloud, many PPM vendors are offering companies of all sizes low-cost, agile Software as a Service (SaaS) alternative to traditional enterprise bloatware.
• Implementing a PPM SaaS solution in an environment with several hundred users or less can cost five figures vs. six.
• PPM vendors will configure and deploy your environment to your specifications for a nominal, one-time charge.
• On-line communities that offer a wealth of learning and collaboration opportunities with other Users.
• Web-enabled mobile PPM applications so you can access important information on the go.
• Integration via adapters with other leading enterprise applications, such as ERP systems (SAP, Oracle, MS Dynamics) and CRM systems like salesforce.com.
• Good solutions not only allow users to mass-import data into the system, they also allow you to get all of your information out of the system.
• Multi-tenant architecture that allows multiple customers to coexist (in a secure way) on the same application instance.
• Upgrades and new features are made available on an on-going basis without disruption to the customers. Implementations are a fraction of on-premise software.
• Allows cumulative investments which allows customer to verify the benefits of PPM tool and realize the maturity of it in incremental manner.
• Customized PPM application accessed by Browser.
• SaaS-based PPM solutions provide IT with the evidence it needs to make change more possible and enable the organisation to become more competitive and innovative.

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