Managing Increasingly Complex Project Portfolios

REDMOND, Wash., October 29, 2007 –Successfully managing complex scientific, engineering and design projects takes teamwork, observes Dr. Amjad Farooq, head of business improvement at British defense technology firm QinetiQ.

“We’re basically a science and technology company with 13,500 employees in the UK and overseas that do scientific research,” explains Farooq. “The nature of every one of our projects is pretty much unique. We don’t make soap; everyone’s trying to solve big problems that haven’t been solved before.”

For Farnborough, Hampshire-based QinetiQ (pronounced as in ‘kinetic energy’) a leading international defense and security technology business, projects come in all shapes and sizes, from conceptualizing new equipment for Britain’s Ministry of Defence, then drawing up design blueprints, advising on manufacturers and being retained as a consultant – protracted engagements that can last up to 20 years – to discrete three-month contracts in which the firm’s called in by a carmaker, for instance, to troubleshoot a specific problem.

But the common denominator is the need to coordinate a collaborative effort reaching across an often far-flung interdisciplinary network of experts.

“In the nature of solving technical problems we need to involve large numbers of diverse people from different fields to contribute,” says Farooq.

The project management challenges faced by QinetiQ mirror those gripping the world of business at large amid the growing imperative for organizations to foster collaboration across an increasingly global and mobile workforce.

With individual scientists juggling up to 20 to 30 projects located across a sprawling geographical footprint spanning some 50 sites in the UK alone, the company found its existing project management mechanisms at times operating at full stretch.

“Information would stay on project managers’ hard drives or sit on a server,” Farooq says. “Project management was done, but it was fragmented. Every project manager had their own [way] of managing projects. There was no central repository, which was a big issue when we wanted to aggregate data from a number of projects. People had to use multiple systems to find out what was going on.”

In April, QinetiQ turned for relief to Microsoft Office Project Professional 2007 and Microsoft Office Project Server 2007 to put its project management on a standardized footing, enhance executive oversight, and enable earlier detection of prospective problems.

The firm wanted to effect change in its business processes, recounts Farooq, and Office Project provided the “lever” to bring this about. “We wanted more professional project planning through better, more efficient tools and to give executives a better handle on projects with earlier visibility into [those needing] intervention.”

QinetiQ is in the vanguard of a growing movement of organizations now embracing the recently retooled Microsoft Office Enterprise Project Management (EPM) Solution — encompassing Microsoft Office Portfolio Server 2007, Microsoft Office Project Standard 2007, Microsoft Office Project Professional 2007, Microsoft Office Project Server 2007 and Microsoft Office Project Web Access 2007 — as a robust and indispensable enterprise management tool.

Key to IT excellence

The utility of project management software is perhaps best understood in relation to the project-intensive world of IT management, where it functions as a sort-of enterprise resource planning (ERP) system for IT professionals.

Good project governance forms a cornerstone of effective IT management and Project is a pillar of Microsoft’s Dynamic IT initiative intended to empower IT departments to manage complexity and become more nimble and customer-responsive.

“All too often IT departments find themselves constrained by the demands of maintaining existing infrastructure at the expense of embracing new opportunities,” notes Mike Angiulo, general manager, Microsoft Project Business Unit.

“By automating tasks that don’t need human input — freeing up IT staff for higher-order, more valuable work — and bridging the disconnect between IT projects and business need, Project helps expand the horizons of IT departments beyond maintenance and cost-containment,” he says. “We want to stand the 70:30 ratio of maintenance to innovation typical in most IT organizations on its head, so IT can live up to its full potential to drive business value.”

Growing enterprise-wide adoption

But with 600-plus partners expected to unleash a new wave of Project-compatible solutions based on the 2007 release, Project’s appeal is rapidly spilling beyond IT departments into the wider enterprise as a way to enable designated employees, from entry-level new recruits to executives, to participate in project workflow.

The spiraling complexity of project management and its corresponding emergence as a key strategic consideration for corporations is reflected in the field’s evolution as a discipline and career path in its own right. Membership of the Project Management Institute, the professional association for practitioners, has spiked from barely 17,000 in 1995 to more than 240,000 today. Beyond this, increasingly roles without project manager in the job title now include a project management component. It’s a situation that’s stoking heady demand for sophisticated project management tools.

The Microsoft Office Project family is now pushing approximately 20 million license sales , with a diverse customer base — from boutique firms to multinational corporations (roughly 80 percent of Project Server customers are organizations with more than 50,000 employees) — running into the thousands. In June, Microsoft was positioned by Gartner in the “Leaders” quadrant of the 2007 IT Project and Portfolio Management Applications Magic Quadrant report.

Underscoring its commitment to customers, Microsoft launched the Microsoft Office Project 2007 Certification program last year to provide project management professionals with training and accreditation in key competencies and best practices to enable them to get the most from Project.

Delivery on business goals

The business case for deployment has perhaps never been so clear-cut than with the new release.

Fully scalable from simple one-off projects to complex cross-company programs, Office Enterprise Project Management 2007 offers end-to-end governance of projects through their lifecycle, from their inception, at the idea-generation stage, into subsequent execution to maximize the prospects of realizing forecasted benefits.

To ensure organizations start out on the right footing, Project Portfolio Server 2007 employs rich analytic capabilities that transform the process of determining which projects to commit to in the first place — hitherto largely a haphazard exercise in trial and error — into a science. With Project Portfolio Server, organizations can see how project proposals map to business objectives — factoring in constraints like budget — enabling them to pinpoint which ones to pursue to get the most bang for their buck.

“Project Portfolio Server 2007 permits holistic project planning that allows organizations to arrive at the optimal project mix in support of business objectives,” says Angiulo.

U.S. bank Wachovia Corporation found its previous practice of sketching out the relative merits of projects on a spreadsheet increasingly outpaced by an ever-burgeoning array of possible projects spanning such disparate fields as product development, technology implementation, regulatory compliance and capital development, before rolling out Project Portfolio Server across its corporate and investment banking business in 2004 and upgrading to the latest version earlier this year.

“What we’re trying to select as a business is what we should be doing,” explains Samantha Dunbar, managing director and head of the project management office in the corporate and investment banking division of Charlotte, North Carolina-based Wachovia. “We needed to prioritize and select.”

But the quandary managers faced was that they were often called upon to compare apples with oranges. “How do we compare an infrastructure project for improving our business with a compliance project? To prioritize was hard. Project Portfolio Server gives you a scorecard [with which to rate projects]. This helped us implement a [methodology] and a mindset,” Dunbar says.

The product has enabled Wachovia to take a far more discerning, discriminating and rigorous approach to project selection, weeding out proposals that don’t strictly align with business goals. This has helped in turn to inculcate a tighter grasp of business priorities among employees, adds Dunbar.

It’s proved invaluable too in exposing certain home truths; specifically, the need to bring innovation more to the fore, she says. “We found our portfolio wasn’t as balanced as we’d have liked…we were light in revenue-generating [new] products.”

The product has also allowed Wachovia to factor variables like risk, which had previously been difficult to account for, into project considerations, with an eye to the so-called “efficient frontier,” the optimal balance of risk versus expected return. “It’s allowed us to introduce this dimension into portfolio discussions, [considering] for instance the risk of overloading our sales force on a particular project, and to establish a risk comfort-level,” Dunbar says.

Once projects are operational, Office Project allows organizations to consolidate disparate project data into a single repository that furnishes them with a panoramic view across their portfolio to drive timely, informed decision-making.

Quick return on investment

Just six months into QinetiQ’s rollout, this capability is already generating handsome cost-savings, says Farooq, toward projected ultimate savings equivalent to 50 full-time employees a year. These are workers who have hitherto been tied up tracking down data scattered across disparate silos, for instance, but who will soon be able to focus on more important and higher-value project delivery work, he explains.

Moreover, using Office Project, executives with overall responsibility over projects, requiring them to stay abreast of progress — but without the capacity to get immersed in the nitty-gritty of the immediate project loop — are furnished with timely status reports.

Meanwhile the ability to plan out processes systematically allows regulatory compliance to be built into every step, ensuring safety protocols or documentation requirements are met; while, to assist forward planning, managers can plot out speculative scenarios to anticipate the impact of pursuing hypothetical courses of action.

Microsoft Office Visio is another tool at managers’ disposal to create visual representations of data to facilitate understanding and graphically bring home project status and performance.

Utilizing Office Project’s dynamic work environment, business managers can also drill down into individual project performance, allocate resources between projects, track progress against organizational objectives, key milestones, performance metrics and deliverables, and keep tabs on timelines and budgets to determine which projects run the risk of coming in over budget or late, requiring special attention.

The comprehensive meta-view of work groups afforded by Project also allows executives to anticipate resource bottlenecks and identify where strategic goals and resource allocation are out of kilter.

One highly prized feature is the use of color-coded indicators to flag incipient problems with projects early on and alert managers to take matters in hand before they escalate and become intractable.

The ability to catch problems in their infancy while they’re still retrievable was a key selling-point for QinetiQ, says Farooq. “What typically happens is the project manager does their best until the last minute to figure out what to do, then says, ‘I can’t do it,’ [by which time] it’s too late to do anything. Business managers want early warning when projects start going [awry].”

Like QinetiQ, leading IT services provider Computer Science Corporation knows all about the challenges of managing multiple highly-complex projects. With 87,000 employees in 92 countries, El Segundo, California-based CSC’s clients include leading multinational corporations and government agencies.  

It too has turned to Project Server for assistance, rolling out Project Server via Project Professional and Project Web Access to nearly 3,000 employees spanning the globe.  CSC’s deployment plan reaches to all of its project management resources across the company.

“We have many large programs — involving thousands of people with many moving parts,” explains Ryan Jackson, Director of the Enterprise Program Management Office (EPMO) within CSC.  “By utilizing Project Server, we are able to collaborate more effectively while reducing the time it takes for project managers and staff resources to update their schedules and report on progress, issues and risks.  Traditionally, for some projects, we are talking about 30-40 percent of a project manager’s time that can be spent updating schedules and reporting status.” Jackson says. “We needed a way to reduce project management overhead so more time could be spent concentrating on client needs and project execution.”

“Office Project Server is now an integral part of our project management practices,” adds EPMO Deployment Manager Jim Marhoefer. “One of our goals with Office Project Server is to help drive project management best practices and consistency across the company.”

 “There have been huge efficiencies in having everyone consolidate all project information in the same place,” he says.  “This capability improves our portfolio and resource planning abilities and allows us to communicate key details that lead to better decision making.  Without Project Server that would be very difficult and time consuming.”

Deep integration with Office applications allows broad participation in project workflow

One of the key distinctions of the 2007 release of Office Enterprise Project Management is its deep integration with other Office applications, Windows SharePoint Services 3.0 and, via connectors built using PSI (allowing transmission of tasks, timesheets and other data), non-Microsoft line-of-business applications such as SAP, offering convenient, seamless points of entry into it from the applications in which staff already work. Tasks assigned to team members within Office Project can be viewed through Microsoft Office Outlook and Project is automatically updated when these tasks are updated in Outlook.

At QinetiQ, the benefits of Office Project are resonating company-wide far beyond the immediate 800 seats the Project Professional desktop application is currently being rolled out to, opening out project management functionality beyond dedicated project managers to other staff.

“The rest of our staff don’t use Project 2007 directly, but they interact with it using Microsoft Office SharePoint Server, a collaborative environment they use day-in day-out and with which they’re familiar,” says Farooq.”All their work happens in SharePoint, they never touch Project.”

Employees can check in on the status of projects they’re working on through dedicated SharePoint sites that serve as project hubs, to which all documentation is posted.

At Wachovia, which is planning to pilot Project later this year, Dunbar has observed a similar effect. “We still have a limited number of users [of Project Portfolio Server 2007], but a huge community that leverages the data and results.”

That’s music to the ears of Angiulo at Microsoft.

“We’re working to reduce the barriers to entry for participation in project management workflow,” he says. “Project enables employees at all levels to become instantly vested in project outcomes.”

Gartner, Inc., “Magic Quadrant for IT Project and Portfolio Management, 2007” by Matt Light and Daniel B. Stang, June 15, 2007

The Gartner Magic Quadrant is copyrighted June 2007 by Gartner, Inc., and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner’s analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the “Leaders” quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

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