Project Portfolio Management (PPM) solutions help organizations align resources with business demands and track projects' costs and employees' workloads. PPM software allows project managers to understand projects' profitability by tracking labor hours and rates. It also ensures the right resources are allocated by providing visibility into employees' availability and schedules. However, companies often purchase overly complex PPM solutions without using full functionality and waste money on partial rollouts. It is best to select a PPM tool scaled to immediate needs through research.

1. Project Portfolio Management and
What It Means For Your Company
Statistics show that the interest in Project Portfolio Management (PPM) solutions
has been steadily growing over the last decade. A recent article in a prominent
financial magazine asserted that the total software revenue for this market grows at
10% annually. Why so much interest? For starters, many businesses still struggle
to, as the writer put it, “align resources with business demands.”
The Definition of PPM
Gartner, one of the leading information technology research and advisory
companies, publishes the Magic Quadrant, an annual report that highlights the
leaders in the PPM market. Gartner defines a PPM solution as one that supports a
majority of the nine areas described in the Project Management Body of
Knowledge (PMBOK) from the Project Management Institute (PMI), which are as
follows:
1. Project Integration Management
2. Project Scope Management
3. Project Time Management
4. Project Cost Management
5. Project Quality Management
6. Project Human Resource Management
7. Project Communications Management
8. Project Risk Management
9. Project Procurement Management

2. Gartner's definition has become rather standard, which has led to the
commoditization of the PPM software industry. There are, however, plenty of tools
omitted by the Magic Quadrant that help customers solve their project portfolio
management issues without a hefty investment or drawn-out implementation time
frame. The key to finding the right solution is knowing what your needs are and
how to meet them without buying more than you need.
Who Needs PPM?
Any organization with multiple projects and resources needs a way to track,
allocate and manage them effectively. Project managers simply cannot keep track
of hundreds of team members and projects without a tool for communication and
data visibility.
SearchCIO-Midmarket.com recently published an article stating that many
companies purchase large, complex PPM solutions with more functionality than
they will ever use or need. The writer noted that these companies wind up with a
partial rollout, while a better option would have been to go with a Software-as-a-
Service solution that they could scale as needed. Imagine how much money and
resource time is wasted by oversized solutions that are only partially rolled out.
Different organizations have different needs for PPM, but there is some basic
functionality that all can benefit from:
Costs and profitability
The main cost for many projects today comes from human resources, meaning that
these costs can only be tracked through labor hours. When team members track
how long it takes them to complete various tasks, project managers can understand
how much the project truly costs overall. One employee's time is more expensive
than that of another employee, and those costs can add up on major projects, so
adding labor rates to the time data is crucial.
Once you understand what projects cost, you will know which projects are
profitable and which are not. This gives you an impressive advantage over your
competitors. They do not know where their profits are coming from, but you do,

3. which is the only way to thrive in a competitive business environment.
Resource allocation
In order to understand who can be scheduled to work on particular tasks, project
managers must first understand each person's current allocation and vacation
schedule. For example, if a software developer is needed for a project but all of the
developers are 100% allocated to other projects, the project manager cannot assign
them to his/her project. This affects the scope and time frame of the project, and
sometimes, it can even affect whether or not the project is taken on at all.
Likewise, if a business analyst is the only one qualified to perform a certain task,
but this person has 6 weeks of vacation coming up, the project manager needs to
know ahead of time and plan accordingly. Simply planning projects without any
real data in hand is foolish.
Think of each person's workday as a 3 layer cake. One layer is vacation, one is
process work, and the other is project work. If you do not know how much
vacation an employee is taking next month, then you do not know which project
tasks you can assign to him. If you do not know how much of his time is spent on
other projects or in departmental meetings and other non-project "process" work,
then you do not know which project tasks he can handle.
Things to Avoid
The fact is that many of the project portfolio management solutions in the Magic
Quadrant involve a hefty investment and drawn-out implementation time frame.
Customers of such vendors can often expect to pay several hundreds of thousands
of dollars for these tools, which is a lot of money for what often ends in a partial
rollout. Some unhappy PPM customers have been known to lament their purchase
of a “million dollar timesheet.” When choosing a solution, make sure that you do
not pay a large amount up front and put your career on the line because the
salesperson told you it will all work out fine. This is why SaaS solutions are so
important – businesses can roll the solution out to one department or group first to
see how it works before committing to a larger purchase, therefore minimizing the
risk.

4. Businesses today are turning to PPM solutions to help them execute projects
successfully and understand their total costs. While many look immediately to the
Magic Quadrant and large PPM vendors to solve this problem, it is important to
remember that other players in the PPM space can offer the functionality you need
for a fraction of the price of more complex solutions. The best way to select a PPM
tool is to first isolate your immediate needs and then research until you find the
solution that will work best for your company.
Reference Link: http://www.hr.com/en/app/blog/2012/07/project-portfolio-
management-and-what-it-means-for_h4iy0hh7.html