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Project Portfolio and Project Portfolio Management (PPM) are well established terms used in many industries and heavily by software vendors. Accordingly, there are some standards and a number of software solutions that support the planning and controlling of ideas, initiatives and projects. But do these approaches and tools really meet the actual needs of organizations?

Reasons for New Projects
There are different reasons to initiate a project. Maybe an existing application requires enhancements, a new product has to be launched, processes need to be optimized, current infrastructure has to replaced or an organizational change is necessary. Despite all these different reasons projects have a lot in common and realizing such projects most often involves IT and its systems.

Portfolio Prioritization Process
Because of the limited resources of a company and even more of of it’s IT organization usually a portfolio prioritization process is in place. The idea’s or project’s importance and feasibility are weighted. Among others that could be through it’s

• strategic alignment,
• costs,
• quantitative benefits,
• qualitative benefits
• risks,
• resources needed,
• organizational impact.

During the entire prioritization process often complex processes, analysis, mathematical methods and risk matrices are implemented and specialists are involved. Frequently the results of these weightings are summarized in a business case. Using a funnel with several prioritization steps helps to reduce the amount of planned and executed projects to make sure that the organization’s resources are used in an effective and efficient way. At this point the question comes up if the defined criteria really can be weighted precisely enough. Is the necessary data available or is the organization starting a blind flight into a foggy data sky?

Impact of Projects
During the prioritization process the impact on the different departments and the expected resource needs are estimated. Usually, the IT organization and its limited and for this reason highly critical resources, e.g. experienced CRM developers or SAP specialists, build a bottle neck. But what is exactly the basis for such estimations of future efforts?

Weighting becomes an issue
How do IT organizations plan their resources, asses their risks, identify interdependencies and forecast their future efforts? The best process is useless if the relevant data is not available. Unprecise or wrong estimates during the prioritization result in overtime orders, scope reduction and reduced testing during the project execution. In many cases projects for this reason have to be canceled, or roll-outs lead to failure and breakdowns are predictable.

Critical resources – the crux of the matter
Limited resources, often highly specialized employees with key know how and experience, cannot start working on new initiatives. They are blocked by work on delayed projects. Additionally, they very often have to support operations after official project closing. These efforts were not considered during planning. And here the vicious circle starts. The organization reacts lethargically and inflexibly on new requests and therefore cannot satisfy the (market) demands in time.

Impact Analysis – Critical Success Factor for Project Planning
How can this problem be solved? Precise Impact Analysis is the key advantage of the IT organization and of the overall portfolio prioritization process. Tool-based Impact Analysis needs to be integrated into the processes and the data management of IT. Its data needs are supported through a Comprehensive CMBD (Configuration Management Database), which is embedded in the lifecycle of all applications (Application Lifecycle Management, ALM), That enables IT to point out impacted organizational (business units, roles, security, etc.), technical (programs, transactions, change requests, etc.) and descriptive (documentations, concepts, test cases, etc.) objects and their interdependencies.

IT management gets a tool to early estimate new initiatives more detailed, assess risks and actions more precisely, can point out interdependencies and assign resources effective and efficient. The organization reacts more effectively and creates lasting solutions resulting in advantages for future projects. Through the information loop the information content gets better and better and the estimations become meaningful.

Appropriate processes, specified weighting criteria and defined responsibilities as well as authorities build the basis for a successful project portfolio prioritization process. Through continuous improvement the process maturity can be increased.

However, to enable the IT organization to make precise and significant estimations, necessary tools for keeping of data and so-called Impact Analysis have to available. Those build one module of an ERP4IT that supports IT management and enables it to contribute to the company’s vision and strategy in a more optimal way. And that should already start at the early planning stage on basis of useful information. Otherwise the prioritization does not really make that much sense.

Stimulated by HP’s limiting use of “Portfolio Management” in the new name of its powerful IT Governance solution HP PPM, we already covered the often misinterpreted and ambiguous use of the term “Project Portfolio” in earlier blogs.

Confusion around PPM
Similar vagueness as for “Portfolio Management” can be observed for “Project Portfolio Management”. Software vendors trying to ride the trend waves do their best to reinforce such vagueness. Market players do not hesitate to call their solutions “Project & Portfolio Management”, abbreviated as PPM. Now even Gartner in its most recent study uses PPM to categorize Project & Portfolio Management, bundling two disciplines, PPM (Project Portfolio Management) and PM (Project Management).

Obviously, Project Management tools with low Portfolio functionality such as prioritisation or project funding are suddenly called PPM.
Every simple project management solution qualifies itself nowadays PPM. Project Portfolio Management is to important to be diluted like that. It is clearly defined:

“Portfolio management is the centralized management of one or more portfolios, which
includes identifying, prioritizing, authorizing, managing, and controlling projects, programs,
and other related work, to achieve specific strategic business objectives” (Project Management Institute, The Standard for Portfolio Management, 2006, S. 5).

Contrary to Garntner’s use Project Portfolio Management does not cover the implementation aspects of projects and programs. As a discipline it covers activities like:

• Assessment and evaluation of project ideas and requests
• Support for business case and feasibility studies
• Analysis of dependencies between planned and ongoing projects
• Prioritization of project requests
• Approval or rejection of project requests
• Grouping of projects in portfolio structures
• Controlling of current projects and programs
• Superordinate risk, quality, time, resource and cost management
• Evaluation of project portfolio regarding it’s alignment with strategic business goals
• Collection of empirical project data
• Definition of guidelines for new projects

Project Portfolio Management’s is the managment discipline of business management with the goal to implement the right projects at the right point in time with the right resources in the right organizational environment. It is key to distinguish this business critical discipline from project management.

In all other beteo blogs like “Project Portfolio – Hype and More” or “PPM – Alibi Without Impact Analysis” we use PPM in above sense. Maybe one day Gartner will start to call it’s category P&PM: not as sexy but less ambigous.

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After the acquisition of Mercury HP has changed the product name of Mercury ITG to HP Project Portfolio Management Center, HP PPM. Dieter Steiger criticized this new naming already in his blog “Lifecycle Management – HP BTO makes it happen!”.

Unfortunately, by changing the name of their Software Suite to HP Project and Portfolio Management Center (HP PPM), HP have removed the reference to the true strength of their product from its name. Therefore, the name situates the product only in reference to one Gartner IT quadrant : Project & Portfolio Management (PPM), while the former name Mercury IT Governance (Mercury ITG) reflected very well how strong the product is.

So the question to raise is in how far HP PPM eventually supports the project portfolio.

What is a project portfolio?
The term portfolio is nowadays heavily used in many different industries and for different disciplines. Talking about portfolio is simply trendy, so it is used too often. Like that there are many types of portfolios: equity and stock portfolios, real estate portfolios product portfolios, customer portfolios and for sure project portfolios. For this reason it is important to clearly define the term project portfolio. Although there are many different interpretations there is one clear definition.

The set of all initiatives and projects
The project portfolio of an organization is the set of all its planned initiatives, active projects and programs. At the latest with the approval of a project or program it enters the project portfolio. After its official end it is retired from it. The project like that maps the overall project lifecycle of all different types of projects. This overall view allows for an optimized planning of all upcoming initiatives and projects.

Structured by criteria
A project portfolio is structured by multiple criteria. Budget, duration, subject area, owning department are examples of criteria often found. Key for categorization are often indicators like the project’s contribution to business goals, project’s estimated risk, project resources, financial measures (net present value, return on investment, cost reduction) or more qualitative measures like risk reduction, legal compliance needs or opening of a new business opportunity.

“Defined, a portfolio is a collection of projects and/or programs and other work that are grouped together to facilitate the effective management of that work to meet strategic business objectives. The components of a portfolio are quantifiable; that is, they can be measured, ranked, and
prioritized” (Project Management Institute, The Standard for Portfolio Management , 2006, p. 4).

Clear structures and meaningful database
A project portfolio is qualified by its structure and database and it delivers decision criteria and instruments for project controlling. It is not compulsory that components of a portfolio are related. What they have always in common is a higher level strategy, prioritization and the contribution to the overall goal. Through the portfolio view it is possible at any time to understand why an initiative has been planned and executed.

HP PPM through its modules for Project Portfolio and Demand Management meets all these requirements and criteria, despite the fact that it offers a lot more functionality.

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This article shows how Application Lifecycle Management can be implemented for large SAP installations. A description of the respective software components can be found on HP’s BTO website.

Complex SAP systems landscape
The subsequent chart illustrates how complex a comprehensive SAP Business Suite can be, with its various systems landscapes that can consist of development, quality assurance and production systems.

Business processes proceed through various ABAP systems, i.e. SAP CRM, SAP ERP and SAP BW. Consequently, a sales activity will be registered in SAP CRM, while then through SAP ERP, the whole preparation, delivery and financial editing of data will be executed. Finally, corresponding ABC analysis will be run in SAP BW.

If needed, the user will be offered further front-end functions by means of the role-based SAP Portal – created with SAP NDI (SAP Netweaver J2EE Development Infrastructure).

In order to save investments, operations and development of such all-encompassing and technically complex systems must be ensured longterm. This calls for specific provisions. The required environment and its components are highlighted in blue in the chart below.

SAP Application Lifecycle Management with HP products
For this reason, a Lifecycle Management Environment has been created for large SAP environments, based on HP’s software products. In the following lines, the roles taken over by the individual products and their integration are described.

1. Comprehensive support of all stages in the development cycle
The actual development cycle is supported by the HP products shown in the chart. In addition, ARIS is used for modelling of the business processes and their visualisation.

Quality Management (HP Quality Center)
HP Quality Center, which is integrated into the Lifecycle Management environment by means of HP PPM, ensures proactive testing. Thus, the data relevant for the testing is collected, changed and validated at the adequate moment. At the same time, the respective test objects are managed by HP Quality Center.

Business Service Management (HP BAC)
HP BAC is integrated into the development process so that information regarding every single business-service can be obtained at every single stage of the development. On the level of business-service, multidimensional impact analysis can be undertaken in all phases of development and test. Furthermore, any related descriptive, organizational and technical objects can be elicited per Business Service.

SAP Solution Manager
Integrating SAP Solution Manager into the Lifecycle Management Environment ensures that the appropriate objects can be transported into the SAP systems landscapes. In so doing, the integrity of ABAP and non-ABAP objects of different SAP systems can be ascertained by means of the combinatorics of HP PPM.

SOA Management
By integrating Web Services Monitoring data of HP Systinet, access to the data about a Business-Services running in production is guaranteed at any time.

2. Driving the development process
HP PPM is utilised, employing all its functionality, to digitize, integrate and automate the processes. The strengths of HP PPM lie specifically in the execution of tasks for which the integration between process and tool are key: it drives all processes and is capable of communicating with every software used in the development cycle.

Unfortunately, by changing the name of their Software Suite to HP Project and Portfolio Management Center (HP PPM), HP have removed the reference to the true strength of their product from its name. Therefore, the name situates the product only in reference to one Gartner IT quadrant: Project & Portfolio Management (PPM), while the former name Mercury IT Governance (Mercury ITG) reflected very well how strong the product is.

• It can be used to effectively reduce, if not eliminate, manual or as well as technical interfaces and communication levels. Duplicate and manual data entry by the user may be removed, so that the risk for failures may be minimised and the efficiency maximised.
• HP PPM combines organisational process stages with technical ones. By this means, it is possible to automate process stages and to include quality assurance measures directly into the process.
• HP PPM allows to integrate SAP Solution Manager as a sub-process engine.
• Thanks to HP PPM, all IT business processes can be formulated, digitalised and optimised in one and the same manner.

3. Integration of the lifecycle data
By means of integration across the various data stores of the tools, all used services and their dependencies can be monitored at any time. Comprehensive impact analysis is possible. For any change using HP BAC integration it is possible to determine all effected Business Services from the very beginning.

Using HP PPM as an integration tool allows to reference and provide the necessary descriptive and organisational objects for every tool or user, while a defined process garantees the consistent integration all the results. This integration of the data of HP PPM into the Lifecycle Management Environment facilitates the complete reuse of the process information across the application lifecycle.

Does HP promise too much?
At least in the context of an SAP environment, the promise of HP BTO’s marketing messages holds true in a very realistic manner. HP BTO facilitates the pragmatic setup and successful operation of an Application Lifecycle Management.