Project Server Brings Project Portfolio Management to Small Businesses

No matter what size your business is, the decision of where to allocate your resources to meet your business goals is complicated.  A lot of factors come into play, and what may look like an obvious decision on the surface may not actually align with your goals in the long run.  This is where Microsoft Project Server 2010 can help.

If you have a leadership role in a small to medium sized organization, chances are you wear a lot of hats.  It’s natural to try to handle resource allocation in an ad-hoc manner.  Common wisdom says, only big firms can justify spending the money for portfolio planning and management processes and tools.  However, Project Server is a surprising resource for small companies.

With Project Server 2010, Microsoft has brought project portfolio management to the masses.  Before the 2010 release, portfolio prioritization was only available to highly structured, very mature organizations, but with Project Server 2010’s simplified web user interface, Microsoft walks any user through the process of capturing their business drivers, prioritizing those drivers against each other, establishing portfolios, etc. Once that is done the software applies a mature calculation process which evaluates the information you have already entered to produce charts, graphs, tables and other objective data to help you determine where you should focus your energy and resources.  There is no need for complex financials or other types of data.

Here’s an example of where this could be useful:

Suburban Plastics, Inc. – a fictitious company

Current business:  “Suburban, Inc.” produces sheet plastic for the local market.  The company is set in a suburban environment which provides the employees with a very comfortable area to exercise and a safe place to come to work.  “Suburban, Inc.” isn’t large enough to have a company fitness program.  The company would like to grow but not at the cost of its culture or history.

The business drivers, as decided upon by the leadership team, are as follows:

1. Grow Revenue
2. Diversify Market
3. Provide a healthy and happy work environment
4. Provide the highest quality product

After doing a pairwise comparison (shown below) of the drivers the following priority order is calculated and agreed upon by the leadership team.

After evaluating each driver against each other the following results were calculated by Project Server.

1. Provide the highest quality product                                          % 42
2. Grow Revenue                                                                         % 28
3. Provide a healthy and happy work environment                      % 19
4. Diversify Market                                                                       % 11

A proposal is presented to the leadership team to grow the business by entering into the manufacturing of plastic widgets.  This will most likely grow the annual revenue and it will certainly diversify their market.  On the surface this looks like a good way to invest in the future of the company.

However, after adding this initiative to the Portfolio it is easy to see that the initiative does not support the #1 business driver since this requires new machinery and new processes.  It scores high for #2, there is some risk so it only gets 80% credit for that driver.  To expand the business footprint, Suburban will have to relocate to an industrial neighborhood so it again does not support a business driver, this time #3.  For #4 the initiative is fully in alignment.  This means that the initiative gets full credit for supporting that driver.

Using Project Server the initiative scores a 33.4 % alignment.  This is very low and shows the leadership that while this sounded like a good idea, it is not very well aligned with their corporate priorities and therefore should not be undertaken.

This simple, structured method helps businesses eliminate preconceptions from the decision making process by providing objective data that is created around your company’s priorities, rather than an emotional response.  Essentially using Microsoft Project Server 2010’s portfolio management capability will help any organization stay true to its beliefs and goals.  You will not be driven by the passion of the moment to make your business decisions.

If you have questions about how this can work for your organization, feel free to contact me at davidd@adaquest.com .