Best practices in demand management, project lifecycle management, and application lifecycle management

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1 Best practices in demand management, project lifecycle management, and application lifecycle management How HP PPM Center and ResultsPositive create improved business outcomes through visibility into business demand for IT services A ResultsPositive white paper, sponsored by HP Software Business white paper

2 Table of contents Executive summary...3 Major IT challenges facing organizations today...3 Demand and portfolio management processes...4 HP PPM Center Demand and Portfolio Management: an overview...5 Case study 1: drugstore.com...8 Integrated application lifecycle management processes...8 HP PPM Center integrated project and application lifecycle management: an overview...9 Case study 2: Mentor Graphics End-to-end solutions from ResultsPositive and HP Software About ResultsPositive About HP PPM Center To learn more... 12

3 Executive summary Companies in every industry face several growing challenges within their IT organizations. One of the most pressing issues is to find ways to shift more IT spend to strategic projects and less on non-strategic, operational work. Another is to select and prioritize investments in new technologies that will help the company grow and drive revenue while simultaneously increasing operational efficiencies and lowering operating costs. But to optimize their return on investment (ROI), IT executives need a better understanding of their strategic and operational demands. Once organizations gain this visibility, they can apply the best practices of demand and portfolio management to objectively assess, categorize, prioritize, and approve their proposed technology investments. This approach will help them achieve their desired business outcomes. Organizations that establish effective demand and portfolio management practices, governance processes, and supporting technology solutions are taking critical steps toward improving their competitive advantage. However, to further maximize ROI and operational efficiencies, the most successful organizations also understand the importance of utilizing technology solutions that automate lifecycle workflows. By implementing consistent, repeatable, and automated workflow processes, they can more accurately predict operational support costs, and avoid significant maintenance costs associated with implementing ineffective and often expensive ad-hoc solutions. This white paper will examine how the most effective organizations can achieve greater strategic benefits by establishing objective demand and portfolio investment management practices, and gain significant operational improvements by implementing streamlined project and application lifecycle management processes and technologies. It will further explain how HP Project and Portfolio Management Center (HP PPM Center) solutions and ResultsPositive management consulting services can help organizations achieve a level of visibility into the demands of their business that will empower them to make the most effective IT decisions. Major IT challenges facing organizations today To support an organization s business objectives, it is critical to balance investments that maintain and enhance existing applications and infrastructures. In fact, one of the significant challenges that organizations face today is to maximize their investment in capital projects that will drive the largest benefit to the company. To accomplish this, they must work within their existing financial and human resource capacity constraints while selecting the right investment initiatives to meet and exceed corporate expectations. But before they focus on people, process, and technology best practices, organizations should first understand the obstacles to overcome in order to implement effective demand management and project lifecycle management processes. Following are some of the critical risks that many organizations try to mitigate to successfully implement effective demand and portfolio processes: Inability to capture and provide visibility into all IT demand, including service requests, projects, and application change requests Limited ability to prioritize and categorize demand against critical business strategies, goals, and objectives Limited ability to track and report forecasted resource capacity and availability needed to fulfill demand requests Inability to track both project and non-project demand centrally in a single system, with visibility into available budgets and resources Limited or lack of access to workflow solutions that streamline, automate, and continuously improve demand and service delivery processes The need to balance internal and external resource efforts in the delivery of projects and service requests The need to have access to role-based, real-time dashboards that monitor the investment portfolio and performance of active projects and application change requests Lack of alignment with and/or establishment of governance entities with both business and technology leadership members Inability to cost-effectively meet and sustain industry and federal compliance requirements 3

4 Demand and portfolio management processes Leading companies facing constrained resources have at their disposal several processes to answer the common challenges in managing and fulfilling demand for strategic project investments. These include: Demand management Effective demand management entails a streamlined and automated workflow process that assigns priorities or service levels to both operational and project demands based on the available budget and resource capacity. Business and IT can work together to prioritize, approve, or cancel the demand. This optimizes the allocation of resources to critical requests rather than haphazardly trying to fulfill all demand regardless of value to the business. The result is a calculated ranking score that is determined by a set of objective measurements and selection criteria. These can then be used by executives to effectively prioritize and approve initiatives to optimize their capital investments. Portfolio management Portfolio management is the process of taking the aggregated project demand culled from the demand management stage and then objectively determining in which strategic IT investment projects to invest. This is accomplished by having a consistent and repeatable workflow process for developing a business case using cost/ benefit analysis to determine the initiatives that will achieve the best ROI. Portfolio management also establishes and utilizes key value and risk rankings across multiple dimensions to assess the alignment of investments with corporate goals, technology strategies, and associated project risks. The result is a set of objective measurements and selection criteria such as a calculated total ranking score that can be used by executives to effectively prioritize and approve investments to optimize their capital investments. To further maximize the performance and allocation of limited company resources, leading organizations integrate finance and resource management practices with both their strategic and operational demand management practices. Finance management This practice includes managing all capital and operating financial budgets across both strategic project investments and operational change requests. The most critical part of finance management is to provide visibility into the total planned and actual spend for all project and operational demand and then to assess this information against the associated budget and resource availability across all business units and departments. This visibility equips business and technology executives with the information they need to make effective business decisions, such as whether to increase financial investments in strategic growth initiatives. Resource management This practice includes managing the resource demand stemming from proposed and approved projects and service requests against an organization s resource capacity. The most critical part of resource management is to provide complete visibility into resource supply and demand. Executives will then have the information they need to make effective business decisions, such as whether to increase resource capacity with internal or external resources. The next section explores how HP PPM Center helps organizations achieve greater visibility into their strategic and operational demands, giving them sharper insight into their technology investments and resource allocation. 4

5 HP Project and Portfolio Management Center helps you improve key business-to-it processes. HP Project and Portfolio Management Center Executive Scorecard Financial Executive Planning Scorecard and Analysis Dashboard Portfolio Optimization Project Management Portfolio Management Program Management Financial Management Time Management Resource Management Demand Management Center Management for QC/PC PPM Reporting Foundation Workflow Administration Security Web services HP PPM Center Demand and Portfolio Management: an overview HP PPM Center software captures, standardizes, and manages the execution of project and operational activities. It provides critical information in real time to help executives make the right decisions at the right time. With HP PPM Center, organizations can govern their corporate projects, applications, and opportunities with effective collaborative processes. HP Demand Management is a software module within HP PPM Center. It leverages a powerful forms creation and workflow process engine that helps automate business processes. Workflow automation The HP PPM workflow engine is an easy-to-configure engine that underlies each of the HP PPM Center modules, providing process automation that yields many efficiency benefits from improved productivity to streamlined compliance. The engine s drag-and-drop capabilities allow automated workflows to be easily designed and configured, enforcing consistent and repeatable processing of business technology demand. HP PPM Demand Management workflows support the automation of repeatable manual steps, as well as automated system integrations, request categorization, calculations, routing of demand based on approval thresholds, and/or request types or field values. HP PPM workflow also supports parallel and sub-workflow processing, segregation of duties, multiple workflow routing conditions, and complete transaction histories and audit trails. The ease of use and flexibility of the HP Demand Management module for forms and business process workflows is evidenced by the wide range of solutions HP PPM customers use today, which include: New product development IT governance Corporate, SOX, and contract compliance Enterprise risk management HP Demand Management supports a complete demand management lifecycle including both routine and high-volume service requests as well as complex, strategic demand requests. This solution enables the organization to control its front door by using workflow processes that: Assess strategic project proposals Collect, track, and resolve service requests Process application change requests Manage enterprise and project risks, issues, and scope changes Forms creation This capability allows and supports the creation and configuration of customer-specific forms to capture and track projects, application change requests, project issues, risks, and scope changes. The forms engine gives organizations the flexibility to easily create, manage, and process business and technology requests. Many companies utilize the forms creation component to manage compliance requirements related to Sarbanes-Oxley (SOX), the Health Insurance Portability and Accountability Act (HIPAA), International Organization of Standardization (ISO), Six Sigma, and New Product Development. Organizations use this component to implement the best practices prescribed by the IT Information Library (ITIL) and by the Project Management Body of Knowledge (PMBOK ) Guide, published by the Project Management Institute (PMI). 5

6 Portfolio Management Dashboard provides portfolio managers with insights into current and proposed demand against available budgets and resources Users and stakeholders can gain a comprehensive picture of past, present, and future demand. These processes are grouped by demand category so that the demand can be prioritized, assigned, viewed, and distributed for fulfillment across multiple groups or individuals. Operational demand management best practices include the establishment of service levels and associated request categories, impacts, and priorities to enable managers to effectively prioritize and approve operational keep-the-lights-on requests. This practice includes using HP PPM Demand Management dashboards to provide businesses with visibility into operational requests, thereby shifting the level of investment and focus from operational changes to strategic enhancements and project initiatives. Project demand is also visible through this same mechanism, providing stakeholders with a total view of all types of demand. These real-time, role-based dashboards and work queues enable organizations to prioritize and enable effective collaboration between business users and technology at every step cutting costs and accelerating service delivery. The following components within HP PPM Center s Demand Management solution enhance demand, portfolio, and project management processes as they provide greater visibility into an organization s budget and resource availability: HP PPM Dashboard reporting Dashboard reporting provides real-time reporting of metrics gleaned from project investment portfolios, programs, and project performance. These metrics are obtained by analyzing project schedules, financial and earned-value data, and the overall resource capacity and utilization involved in project and non-project work. By using a central data repository via one native application, organizations can have the flexibility to create different views to support effective decision-making by role (such as portfolio, program, and project managers) or by governance entities (such as investment approval boards, IT steering committees, or operational committees). HP Portfolio Management The HP Portfolio Management module enables organizations to govern their corporate projects, applications, and opportunities in real time with effective collaborative processes. Complete lifecycle forecasting capabilities deliver the necessary information to make effective portfolio decisions from proposal initiation, justification, and review to project initiation, execution, deployment, and benefits realization. With the Portfolio Optimization feature, the best mix of proposed projects, active projects, and maintained solutions can be automatically determined based on user-defined criteria. With HP Portfolio Management, executives can look at the total demand for new proposed projects including budgetary and resource requirements and balance those needs with overall availability constraints. And they can perform what-if scenario analysis based on budget and resource availability as they optimize their investment mix to meet their strategic business objectives. 6

7 Executive Approval Board Dashboard used by members of the approval board in making decisions about funding strategic and operational projects HP Financial Management The HP Financial Management module provides a single, real-time view into all financial attributes related to programs, projects, and the overall corporate portfolio. Program and project managers can gain visibility and flexibility to adjust their forecasts rapidly as business objectives change. Capabilities include financial summary analysis, which increases the accuracy of IT investment decisions. Global organizations can take advantage of built-in support for multi-languages and multi-currencies within the application. HP Financial Management offers Statement of Position 98-1 (SOP 98-1) support, which uses a built-in capitalization method to calculate and report capital and operating expenses, and out-of-the-box dashboards and portlets for necessary visibility and control. The availability of real-time portfolio financial forecasts, programs, and project actuals that are filtered by role or governance entity significantly streamlines reporting efforts. In turn, this reduces administrative burdens while freeing up managers and team members to fulfill more project and operational demand. The Executive Approval Board Dashboard depicted at left highlights how dashboard reporting can help decision-makers determine the most effective ways to fund strategic and operational projects. HP PPM Resource Management The HP PPM Resource Management module supports the balancing of resource demand from proposed and approved projects, service requests, and application change requests against an organization s resource capacity. It also provides comprehensive resource analysis that includes both strategic and operational activities at any stage in the work lifecycle. This holistic approach enables a complete understanding of where internal or contracted resources are currently committed and allocated. Thus, executives can quickly respond to changes with a clear understanding of the effects on resource capacity and work prioritization. In summary, HP PPM Resource Management allows organizations to manage resources across project and non-project work, thereby providing complete visibility into resource demand and utilization. 7

8 Case study 1 Demand management practices help drugstore.com accelerate innovation and productivity A leading online retailer of 30,000 health, beauty, vision, and pharmacy products, drugstore.com has 900 employees located in three major North American locations. Founded in 1998, the online retailer launched a Web store in Soon, drugstore.com was looking to improve project quality and performance, and to focus technology spending on innovative business solutions. It also wanted to centralize business access to quality technology services; maximize visibility of technology demand; and balance supply and demand against business priorities, limited budgets, and constrained resources. After deploying HP PPM and ResultsPositive Demand Management solutions, drugstore.com was able to: Increase spending on innovative business solutions Reduce project management administrative efforts Improve on-time and on-budget project performance, resource utilization, and staff productivity Reduce compliance auditing (security and change management) and provisioning efforts for employee on-boarding and off-boarding HP PPM Center Demand and Portfolio Management benefits By automating the demand and portfolio assessment and approval process, organizations can free up funds to invest in strategic initiatives. In fact, the Gantry Group 2008 Benchmark Study 1 revealed that organizations achieved the following benefits by implementing automated demand management processes that utilize HP PPM Center s Demand Management solutions: Organizations saved an average of 6.5% of the annual IT budget by the end of the first year 14% three years after deployment. They saved 7.8% of the average annual IT budget by canceling projects that did not align with corporate goals and after three years, increased these savings to 12.6%. They shaved 20.4% or 8.4 days off the time it took to gain financial sign-off for new IT projects. These organizations also achieved significant compliance and auditing benefits by selecting HP PPM Center, which provides a complete transaction audit trail from the initial technology investment review and approval through project and application lifecycle management processes. Integrated application lifecycle management processes Successful companies drive business value by using end-to-end lifecycle solutions rather than siloed point solutions. Integrated lifecycle solutions multiply business value by compounding efficiencies across demand and portfolio management practices while reinforcing end-to-end service delivery processes. By doing so, they avoid lost business value opportunities associated with the use of siloed, non-integrated solutions. Two leading lifecycle solutions that generate significant business benefits deal with the management of project management and application development lifecycles integrated in project lifecycle management and application lifecycle management (ALM). Integrated project lifecycle management solutions using HP software improve productivity by managing and prioritizing demand and by streamlining lifecycle workflow processes. They also streamline project execution and application development activities. For example, customers using HP software can utilize a self-service catalog solution to submit project requests. These requests are immediately directed to portfolio managers who can assess, prioritize, and approve the requests based on their business value and alignment with strategic objectives. Once the project is approved, all solution development activities and associated qualityassurance actions are monitored and reported via real-time, role-based dashboards. This end-to-end integrated approach has consistently improved on-time and on-budget project performance, increasing investment returns while avoiding costly project cost overruns. Integrated project lifecycle management solutions include: Submitting the project via an IT service catalog Developing the project business case Approving the project via HP PPM Managing the project work plan Forecasting project financials and resource needs Testing and executing the project via quality assurance processes Tracking and monitoring the benefits 1 Source: the Gantry Group 2008 Benchmark Study 8

9 Application Lifecycle Management Dashboard an example of integrated application lifecycle management that provides visibility of both project schedule and quality assurance activities requirements, management, test plans, and current defect status Application lifecycle management solutions assist project, application development, and quality assurance teams in improving on-time release and project commitments. Real-time dashboards provide a single source of project, application development, and quality assurance performance measurements. As shown above, the ALM Dashboard enables any business, technology, or team member to gain access to the project health metrics and updates of every project s application testing and requirements as well as test defects in one consolidated view. HP software provides industry-leading ALM technologies and best practices to facilitate the requirements management, coding, testing, tracking, and release management of application development. In general terms, ALM reduces the time it takes to develop applications that support business initiatives by promoting collaboration, smoother information flow, and simplified integration. ALM solutions help organizations: Invest in the right application projects Capture business requirements properly Ensure that the applications function as intended Develop secure applications that perform and scale under load Establish processes to govern change HP PPM Center integrated project and application lifecycle management: an overview HP PPM Center s ALM solutions consist of an integrated suite of tools and processes that enable organizations to answer key questions regarding application modernization. The effectiveness of this approach is confirmed by industry analysts, who have listed HP ALM solutions at the top of five Forrester Waves and six Gartner Leader Quadrants. The following components within HP PPM Center s integrated ALM solution are designed to help IT organizations manage key application fundamentals and drive better business outcomes: HP Service Manager: HP Service Manager s request management software includes the ability for employees to request services via a self-service portal and service catalog while also supporting the fulfillment of these requests and simultaneously meeting customer service levels. These solutions enable managers to effectively prioritize and approve operational, non-strategic, keep-the-lightson requests. HP s ALM solutions include out-of-thebox integrations between HP Service Manager and HP PPM Center. This enables the automatic creation of strategic and operational demand in HP PPM Center, which provides real-time visibility into all strategic and operational requests. The result is a shift in the level of investment and focus from cosmetic desired changes to strategic project initiatives. HP Quality Center: HP Quality Center enables the management of business requirements, test plans, and associated test cases and test scripts, as well as the tracking and resolution of testing defects. HP s solution includes out-of-the-box integrations with HP PPM Center. These integrations automate the creation of testing requirements and testing projects from PPM Center, along with the reporting of testing status in HP PPM Center dashboards. In turn, this provides complete project health reporting and visibility. This solution also delivers a significant ROI through collaboration and complete project status visibility, thereby avoiding costly project overruns and missed release dates. HP Release Control: HP Release Control provides organizations with the ability to create and manage release calendars across all strategic and operational demand. Governance boards, release management, and change control boards utilize HP Release Control to assess, plan, and approve strategic and operational releases via virtual Change Approval Board capabilities. This is extremely beneficial for virtual teams across multiple geographies. HP Release Control also provides indepth business, risk, and change impact analysis to assist leaders in making informed release decisions. 9

10 This solution also includes out-of-the-box integrations with HP PPM Center to streamline and automate the change and release process associated with managing strategic and operational demand. HP Configuration Management System: HP Configuration Management System (CMS) formerly called HP Universal CMDB includes a rich data model of configuration items, business services, and applications. It also includes associated dependency mapping and federation capabilities that allow users to leverage information in their legacy management systems. The HP CMS also offers extensive visualization, mapping, and reporting, along with the ability to track all project and application changes that can impact business service performance. The inclusion of HP CMS streamlines change impact analysis and prevents release delays and costly production implementation errors, as well as unplanned downtime. Ultimately, HP CMS is fundamental technology that supports a broad range of configuration management best practices and initiatives. These capabilities enable organizations to link business services with the applications and infrastructure elements that support them. These powerful end-to-end lifecycle solutions are enabled through out-of-the box HP PPM Demand Management solutions. They utilize easy-to-use HP PPM configuration wizards for associated project and application change forms, along with automated workflow integrations and digitized lifecycle processes that enable consistent and repeatable performance. HP PPM Center and integrated ALM solutions combine pre-configured forms and workflows, and associated role-based dashboards and reporting metrics (portlets). HP PPM Center integrated lifecycle management benefits According to a Gantry Group ROI benchmark study of eight HP PPM customers, the use of effective ALM solutions using HP PPM Center s demand, portfolio, project, resource, and finance management solutions created significant value within the first year of solution release. Six of the eight companies participating in the study reported a positive ROI after the first year of deployment and achieved the following benefits: Integrated project lifecycle management: The six companies experienced a 45.2% improvement in annual average for project timeliness. Case study 2 Mentor Graphics achieves significant management efficiencies and greater visibility Mentor Graphics, a leader in electronic design automation, has developed engineering products used to design integrated circuits and printed circuit boards since The company needed to ensure alignment between business initiatives and project investments by automating project assessment processes. Mentor Graphics also needed to improve its project and resource management capabilities to enable managers to spend more time on project oversight than on data collection and reporting. In addition, it wanted to establish real-time visibility through Web-based project planning and reporting tools as well as streamline implementation efforts and costs through automated best practices. Mentor Graphics implemented HP PPM Center and ResultsPositive Rapid Start solutions for its corporate IT program management office and engineering product divisions. The company has provided real-time, global visibility into ongoing projects; improved prioritization of projects and product enhancements; and streamlined status reporting. Productivity has improved companywide. Mentor Graphics has also increased its strategic project spending on innovative business solutions as well as increased visibility into demand and cross-project dependencies. They spent 43.2% less IT management time on project status reporting reclaiming 3.8 hours of each manager s work week. They spent 54.7% less IT management time on IT labor capitalization reports, recouping 3.6 hours per report. Integrated application lifecycle management: The six companies saved an average of 6.5% of the annual IT budget by the end of the first year 14% three years after deployment. They saved 7.8% of the average annual IT budget by canceling projects that did not align with corporate goals and after three years, increased these savings to 12.6%. They were able to lower IT labor costs by 4.5% due to reductions in application change requests. 10

11 End-to-end solutions from ResultsPositive and HP Software Implementing effective demand management, portfolio management, end-to-end project lifecycle management, and application lifecycle management processes should also include the integration of multiple software products from the HP Software suite and third-party solutions. For example, ResultsPositive s integrated ALM solutions streamline the application management lifecycle and provide organizations with the ability to significantly improve employee productivity while reducing the time required to implement application changes. ResultsPositive customers using HP software can manage application-development project schedules and resources while simultaneously managing the application build, test planning, and test execution activities. These organizations can achieve even greater productivity and on-time project and change release performances by utilizing real-time dashboards that include project/testing metrics. These dashboards can prevent last-minute release delays that can cause organizations to miss out on millions of dollars of revenue for new products and possibly incur unnecessary rework costs associated with project and change request overruns. that provide both business and technology leaders with the information they need to make the right investments. Organizations that have combined best practice processes from ResultsPositive with HP PPM Center solutions have achieved the following outcomes: Increased funding available to invest in critical strategic and operational initiatives Faster time to market (e.g., improved ontime schedule performance) Improved resource utilization Reduced IT budget/operating costs Reduced auditing efforts Reduced administrative costs (reporting, forecasting, etc.) ResultsPositive offers extensive experience and expertise in process design, process automation, key performance indicator (KPI) measurement, and organizational change and adoption services. These combined capabilities provide organizations with more opportunities to maintain their competitive edge. Proven demand, portfolio, and project management methods and solutions offered by HP PPM Center and ResultsPositive provide organizations with the ability to automate key practices while providing effective capabilities to track, rank, and prioritize project investments. At the same time, they optimize budget and resource utilization through real-time dashboards 11

12 About ResultsPositive ResultsPositive, an HP Software Elite Partner with proven expertise in PPM, has helped many customers establish end-to-end solutions that support the submission of technology demand requests and associated project and application fulfillment solutions. ResultsPositive solutions also enhance ITIL service management, ALM, and PPM practices through a seamless integration of services combined with HP s industry-leading software suite and third-party solutions. ResultsPositive s senior management and technology consultants have considerable Big Four consulting experience in managing and transforming large organizations. The company specializes in providing methodologies that simplify complex processes, organizational structures, and technology solutions. ResultsPositive s approach enhances business value while avoiding unnecessary administration and overhead resulting in increased business innovation and reduced operating costs. These outcomes are evidenced by the business results its customers have achieved. For instance, ResultsPositive has helped its customers: Increase spending on innovation and business growth initiatives by 10% to 30% Reduce administrative and operational costs by 25% Reduce compliance and auditing activities by 50% Increase project and service delivery performance by 10% to 20% About HP PPM Center HP is an industry leader in the PPM space and helps enterprises manage and transform their technology environments. HP PPM Center has been demonstrating both tangible and intangible benefits to industry-leading companies for years. HP continues to expand, improve, and refine the capabilities of this comprehensive, highly integrated solution. HP PPM Center is a way to transform ordinary business activities into extraordinary business outcomes. To learn more For more information on driving positive business outcomes through visibility into business demand for IT services and operational efficiencies via streamlined and automated business process workflows, please contact your HP or ResultsPositive sales representative or visit: Share with colleagues Get connected Get the insider view on tech trends, alerts, and HP solutions for better business outcomes Copyright 2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The only warranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein. 4AA2-1136ENA, Created March 2011

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