Project Portfolio Management software and tools come with various capabilities from Project Management to Resource Management, from Pipeline Management to Portfolio Simulation. According to the Forrester Research report on the ROI of PPM tools, “A comprehensive PM tool investment can provide an ROI of more than 250%.”
At the strategic level, PPM software delivers two key benefits: 1) clear visibility to all projects and resources in the portfolio, and 2) continuous alignment of the business strategy with operational capability. At the tactical level, PPM software supports stage-gate definitions and reviews, project selection and prioritization, and portfolio optimization. And, at the operational level, PPM software enables collaboration, tracking, and progress updates of resources, costs, and schedules.
Important considerations for evaluating and choosing PPM software are:
- Functionality – For the most part, PPM software functionality is mature with flexibility to support different applications such as New Product Development, IT, or Six Sigma and Lean.
- Deployment timeframe – Is it short like 2-8 weeks? Or, does it take several months to a year?
- Implementation Approach – Some PPM products can only be implemented as a stand-alone solution disassociated from whatever PPM software systems or applications are being used for project execution. Others are coupled and/or otherwise sold in conjunction with an execution-side PPM system. Ideally, you want the ability to support both implementation approaches.
- Total cost of ownership (TCO)- Consider first year’s costs including initial deployment support and training as well as the annual recurring costs such as maintenance and support. Is the TCO under $100K, $100K-$500K, or more?
- Vendor track record – Since it is a significant investment, vendor reputation, proven track record, and support are really important.
- Delivery options – Is the software Offered as On-premise, Hosted, or SaaS? Some products are offered with all delivery options. Others just on-premise or hosted. Yet, others are simply Software as a Service.
SaaS and hosted solutions typically offer lower TCO, shorter implementation timeframes such as 3-4 weeks, and shorter contract requirements (12-24 months) as compared to on-premise solutions.
PPM Software Products and Providers
There are over 30 software providers that offer Project Portfolio Management products. Leading PPM software providers and their delivery options are:
|MSFT – Project Server 2010||On-premise, Hosted|
|Planisware||On-premise, Hosted, SaaS|
|Planview Enterprise||On-premise, Hosted, SaaS|
|ProModel – EPS||On-premise, SaaS|
One of the unique tools in this list is ProModel’s Enterprise Portfolio Simulator. This software focuses on strategic portfolio planning using predictive analytics technology and is very easy to implement.
ROI of PPM Software
The ROI assessment starts with quantifying the PPM benefits. They include:
- Reduced cost of resources wasted on projects that are technical or commercial failures,
- Reduced project cost overruns on projects that are technical or commercial successes,
- Increased project throughput,
- Reduced administrative effort.
Total cost of ownership includes the initial year and recurring year costs for software, hardware, implementation, training, maintenance, and support. Typically, benefits and costs are evaluated using a 3-year planning horizon for ROI analysis.
The ROI of PPM software can easily exceed 200 percent over a three year window. Even with a conservative savings of 10 percent in each benefit category and a total cost of ownership around $150K-$250 for a small to medium scale deployment.
Check out Gartner’s MarketScope for Project and Portfolio Management Applications or reports from IDC or Forrester Research for more detailed analysis of PPM products.
View Technology Multipliers’ free webinar on Project Portfolio Management to learn more about PPM.