Technology is a small piece of the project portfolio management (PPM) system puzzle. As with the deployment of any new system or technology, organizational change management is a critical success factor. I’m not going to go in depth into organizational change management, as there are others much more skilled and experienced on this topic. I would like to, however, provide the perspective from a user and project manager of PPM systems.

Is your organization ready for the change? Who are the key stakeholders? How are you communicating with them? Do they welcome the change? Will they resist it? Will they adopt it? These are questions that any organizational change manager will ask.

In the context of a project portfolio management system, you have various key stakeholders you need to make sure are on board.

Project sponsors are the primary consumers of the data from this system. Is the data accurate and timely? Is it presented in a concise, useful and succinct format? Is it being used as an input into strategic decision making? A negative answer to any of these questions jeopardizes adoption.

Project managers are on the front line. They are making projects happen. No portfolio has any hope of being managed if it is not delivering value to the business. Project managers are the leaders of the different components of the portfolio. They will provide key inputs into the PPM system.

Project teams – If project managers are on the front line, project teams ARE the front line. By providing a compelling and useful online collaboration system, you ease the input of real time project status data. You can shift from email to online repositories where not only can teams collaborate, but project outputs gain visibility and transparency, allowing opportunities for data aggregation and analysis.

So from project teams to project managers to project sponsors. Is the data flowing in both directions? Not only are sponsors getting the data they need, but project teams should be getting feedback and direction. Are teams following a standard delivery methodology? Are project outputs producing consistent results that can be aggregated?

If every project reinvents the wheel in terms of outputs and reporting, producing a portfolio report would be as difficult as assembling a puzzle blindfolded. And there are few things as demoralizing to a project team than producing outputs that no one uses or appreciates. Project sponsors play a key role in not only consuming the data, but in giving project teams feedback and encouragement.

The usual suspects of durable training, quick reference guides, an effective support model, all need to make their mandatory appearances to contribute to the success of the deployment. The principles of organizational change management are very applicable and effective, and critical to this effort.

The choice of technology needs to match the level of organizational maturity, technology skill, and come with strong vendor and user community support. Add to this a clear understanding of your key stakeholder groups, and a strong message from your organization’s leadership about the importance of project reporting, and you will have the key ingredients for the successful deployment of a PPM solution.

Choosing the right tool for project portfolio management among all the available options today can be a daunting task. Technology has obviously changed the way we do business, and how we use it to manage projects is one of the key challenges facing project management professionals these days. There’s a multitude of tools and options, and choosing the right one for your organization can be difficult. Choices range from the ubiquitous Microsoft Excel to the more sophisticated enterprise tools like Microsoft Project Server or Clarity.

Using tried and true principles of requirements gathering, software acquisition, and software deployment will only get you so far. The key ingredient for making the “right” choice is your organizational discipline. Dashboards and portfolio valuation tools are great, but you need the discipline to consistently capture accurate and relevant data, and you need senior leadership consuming and demanding this data. You need teams with the discipline to record and track their time spent on project tasks, and the Project Managers with the disciple to update and maintain accurate project estimates, forecasts and actuals.

I just used the word “discipline” four times in that paragraph. Yes, it’s that important.

You need organizational discipline, and you need leadership support. Without them, the implementation of any portfolio management tool is doomed to fail.

If leadership consumes the data and routinely uses it to make strategic portfolio decisions, then project teams will be more motivated to produce the data. Without that motivation and a culture of discipline around project status data collection, these fancy portfolio management tools quickly become the graveyard where status reports go to die.

If you consider the entire continuum of tools available for project portfolio management, from good old pen and paper (or the digital equivalent of Microsoft Office tools) on one end, to the most sophisticated web-based, enterprise tools like Clarity or Microsoft Project Server on the other, the “right” choice for any given organization may be anywhere along that line. Many good Project Managers use Microsoft Excel to great effect, while other more mature and complex organizations have been able to successfully leverage enterprise tools to manage their portfolios.

The “right” tool is entirely dependent on the level of organizational maturity, project management discipline, and leadership consumption and demand for the output from these tools. Using sophisticated tools takes a great deal of money and effort, and will only succeed if the value derived from that investment outweighs the effort and cost required to implement it.

If you are unsure about the level of discipline and support for portfolio management technology in your organization, a phased approach might be the answer. Leveraging tools like Microsoft SharePoint allows the use of “starter” tools with a relatively low cost of development and implementation. Can you muster the support to maintain a master project list? Can you maintain a basic set of key performance indicators consistently updated? If you can’t even do that, then investing time and money on an enterprise tool would be a waste. On the other hand, if you are able to move your organization away from Excel and into an online, collaborative model, then you could take the first step into a more sophisticated and mature way of managing your project portfolio.

As project management gains more acceptance as a dedicated profession, its value as a billable service becomes even more important for professional services organizations. Sometimes viewed as “a cost of doing business”, project management is a critical success factor in delivering products and services to external customers. More of the responsibility for delivering these products and services is shifting away from sales people onto professional, certified project managers, and the cost of providing these services places an even greater burden on the bottom line. The cost of not having a professional project manager lead the delivery of a product or service is often much higher in the form of a failed project.

Project management has gained almost universal acceptance within the internal IT and Finance shops of large organizations. It has also made significant inroads in other departments, such as Marketing and HR, where the realization that a professional approach to managing projects is preferable to the ad-hoc approach of assigning whoever is available to lead a project that has some free time.

When it comes to delivering products and services to external customers, some sales organizations are having difficulties justifying the additional expense to their customers. This is paradoxical since these same customers have internal PM functions and often understand the value of project management, but to hear the sales reps tell their side of the story, you would think that these customers expect the delivery of a product or service to “just happen” or to be managed by the sales rep.

The typical sales rep, while extremely skilled in many areas, may not always have the same level of proficiency in delivering projects as a trained, certified professional project manager. Assigning such a skilled resource to a project incurs a significant cost. That cost has to be borne by the customer, either as a separate labor line item in the bill of sale, or somehow included in the cost of the product or service being delivered. There is no such thing as “free” project management. Some professional services organizations would also like to make a profit selling project management as a service. Imagine that!

As a customer, I would be very concerned if I am not seeing a project management expense in the quote for a product or service being delivered to my organization. Who will lead the delivery? Will it be the sales rep? Will a project manager be assigned? What is the experience level of this project manager? Is he or she certified? Project Management is a critical success factor in the delivery of any product or service. The application of project management knowledge, tools and techniques to service delivery activities will help ensure the successful outcome of the project. Yes, that is a very valuable thing, and yes, it is worth paying for.

As a professional services organization, have I formalized my project management function? Do I have dedicated, trained, certified and experienced project managers? Do I have a product and or service delivery methodology that I can articulate to my customer to prove to them I have done this before, successfully, and I can do it again? Yes, this is a very valuable thing, and yes, it is worth billing for.

There are many similarities between project management performed as part of an internal corporate function and project management as a service. But there are also some key differences. Professional services organizations wanting to sell project management as a service need to focus on value added processes and activities, and invest time and resources on developing, maintaining and marketing a PM methodology that can be easily understood by customers and applied to projects. The traditional approaches to IT project management may prove to be not nimble or responsive enough for many paying customers.

If the expectation is that a customer will pay for project management services, the value of these services must be clearly articulated as part of the sales cycle. Traditional marketing concepts come into play here as with any other billable service. The customer needs to understand exactly what they are paying for, what they will be getting, and why project management is important enough that they need to pay for it. This last one needs to draw on the almost universal acceptance of the value of project management as a necessity for the successful delivery of projects. Draw on, but not solely rely on. A simple but robust methodology, a strong and fully staffed project management team, and an unwavering commitment by the sales management staff are also important factors in closing this sale.