Planview is a portfolio management market leader, enabling decision-makers across the enterprise to align key resources – people and money – with business strategy. As many large organizations historically have been hindered by poor productivity, paralyzed by crisis and delayed time in bringing products to market. The general consensus among industry executives seems to be “how do we make intelligent use of limited resources and direct them towards priority projects?” Planview sponsored a study to shed some light on the issue.
The recently released Resource Management and Capacity Planning Benchmark Study, commissioned by Planview and conducted by Appleseed Partners and OpenSky Research, found that organizations that commit to mature business practices, technology, and processes solve more strategic problems and experience tangible business benefits. Through the lens of a maturity model created specifically for the survey, the report describes organizations’ pain points and causes, business risks, software use, and best practices. The results show that organizations can move up the maturity scale from a state of chaos to a state of control of their resources.
IntelligentHQ sat down with collaborators Jerry Manas and Maureen Carlson in order to find out why you need to be reading the report, which best practices were highlighted and which characteristics are shared by mature companies that are likely to affect innovation.
IntelligentHQ: Maureen, you are the researcher and author of several benchmark studies sponsored by Planview. In this most recent survey on Resource Management and Capacity Planning how was the data aggregated – can you summarize the process for us? Also, what are the important things you’ve learned along this journey?
Maureen: We set a goal of making it the most comprehensive benchmark report available on the subject. So we started with a qualitative telephone interview of executives and managers responsible for resource management and/or capacity planning, to help us understand the full scope of the issues they deal with. This allowed us to build a meaningful 38-question online survey, which we sent out to people specifically responsible for these areas. The number of people who wanted to participate blew us away! It quickly became clear both how much pain people feel around this area, and how much they want information on how to deal with it in a new and better way.
We screened would-be participants carefully to confirm their responsibility for resource management and/or capacity planning for one or more functional groups at their organization – Product Development, IT, and so on. To ensure the survey’s validity, we varied the questions so that some were open-ended and others were presented with randomized multiple-choice answer options. Participants could choose to be anonymous or to provide contact information at the end of the survey. The online survey is statistically valid and was administered by OpenSky Research, an independent primary research company.
IntelligentHQ: An important concept in the study is the Maturity Level of a company – maturity in both resource planning and management. Could you elaborate a bit on this?
Maureen: Participants needed a way to objectively assess the maturity of their organizations’ resource management and capacity planning practices. This would allow a clear evaluation of their pain points, business risks, best practices, and software-in-use in relation to others. There already exist maturity matrices for other core practices – project management comes to mind – but for this area, nothing existed that was specific to this area. Hence, the creation of the a brand new maturity model matrix for resource management and capacity planning, which encompasses a five-tier grading system from basic to optimized.
One interesting learning, was that a third of organizations have reached a maturity level of level 3, or “Limited.” This is characterized as having gained some visibility into resource utilization. There is a certain irony to this gain: while these organizations now benefit from their improved visibility, they also tend to be more sharply aware of challenges, like those around change and prioritization.
The upshot to the maturity model matrix: the more mature the organization, the more insight they have into demand and the greater the ability to allocate the right resources to more high-payoff opportunities, as a result, the more the organization as a whole benefits. Clearly, moving up the maturity model matrix has tangible advantages.
IntelligentHQ: Now, when mentioning the six characteristics of Mature Companies, resource management via project portfolio management software is an important point on the list. Are managers gaining confidence in digital (i.e. computer technology enabled) tools?
Jerry: I’d say that confidence in resource management and PPM software is evident in the continued and tremendous growth of the PPM market across industries, as more and more companies realize they need enterprise applications to efficiently manage their shared resources. I think what’s happening is that companies see others achieving success and are looking to follow suit. So there’s a confidence level of “strength in numbers.” I think the big opportunity, which we saw spelled out in the survey, is support from executive management, which will ensure that everyone across the enterprise will leverage both the software and the supporting processes.
This gives project and resource managers that “one source of truth” that makes resource management and capacity planning meaningful at the end of the day.
Maureen: The study shows that 60% of mature companies use enterprise software for resource management and capacity planning, whereas nearly 70% of less mature organizations rely on desktop applications like spreadsheets and project tools. To Jerry’s point: enterprise software, and Project/Product Portfolio Management software in particular, is making strong inroads, but executives must support its use to ensure that they curb the reliance on siloed spreadsheets.
To get that one source of truth and ensure that decision making at all levels is based on good data, you absolutely must have everyone singing off the same song sheet. This creates visibility and trust, and delivers the kind of data that executives can use to build financial plans while managers create effective project estimates – it’s a win-win.
IntelligentHQ: Can you name a few unexpected findings in the 2013 study?
Maureen: It was remarkable to learn how many companies are operating in what is essentially chaos when it comes to effective resource utilization. Fully a third of the participants rated their organizations as having little visibility into capacity or demand, having no process for dealing with demand, and having resources that are often overbooked or idle.
In this era of constrained resources and competing projects, this is a huge concern for any business. But, on a positive note, another third of companies have broken through to a managed, controlled, and optimized environment. They shared their best practices and I think it is very encouraging to see that it can be done – and how to do it.
It is also surprising that 80% of organizations share resources across projects and products. This was much higher than we anticipated. To add to it, most of the participants work in highly distributed, multi-country or multi-state organizations with dispersed workers. The use of shared resources is becoming more of a phenomenon in this global, do-more-with-less environment where everyone is seeking economies of scale. According to the qualitative interviews, this is really difficult to do effectively but it’s the future and managers need to use software applications and improved processes to have more transparency, visibility, and on-demand data.
IntelligentHQ: One of the important conclusions of the paper is the fact that optimizing – or doing more with less – has come to define a company’s worth. How is this affecting the way innovation is conducted in such organizations?
Jerry: I see a clear two-way street between innovation and the do-more-with-less concept, in that one strongly influences the other. Let’s look at how innovation affects the resources of an IT organization to examine the impact. On one hand, innovation has played a big role in the ability to do more with less. Innovative processes, practices, work structures, and tools have enabled organizations to accomplish great things with limited resources. If anything, companies’ need to do more with less is a rallying cry for greater innovation.
On the other hand, from a portfolio perspective, there’s an impact from innovation. Demand increases as companies push to do more innovation projects. Now, not only must resources keep the lights on plus handle strategic projects, they’re expected to support innovation projects as well. Obviously, the organization can’t take on everything indiscriminately – so it becomes critical to have a good prioritization, scoring, and portfolio balancing mechanism to allow for innovation projects without overtaxing resources. This means making tradeoffs. That’s where portfolio management comes in.
Maureen: It really underscores why we’re seeing such heavy use of enterprise software growth in the more mature organizations. PPM software, in particular, enables a lot of the key capabilities and best practices that resource managers and capacity planners need to support innovation, especially when resources are tight.
It’s often the organization’s most gifted and experienced people who work on innovation projects. This makes it critical that project and resource managers have the ability to run what-if scenarios and vet the outcomes of potential project and resource changes enabling them to select and resource the right opportunities. No wonder that for mature organizations, performing what-if analysis is the number 1 best practice.
Also – not as directly tied to this research, but tangentially of interest – we know that innovation springs from talented resources having the time and discretion to work “outside the box.” Enterprise software has been proven effective in helping managers develop skills pipelines and manage resource time to avoid burnout or talent misalignment, which can stifle innovation. As most managers report feeling that they have “too many projects for their resources,” burn-out and attrition are a risk, especially for hard-to-recruit top talent.
2013 Resource Management and Capacity Planning Benchmark Study from Planview here
Jerry Manas is the author of the best-sellers Napoleon on Project Management and Managing the Gray Areas. Throughout his career as an author, speaker, and consultant, Jerry has built a reputation for taking complex information and processes and making them clear and accessible. As Senior Editor at Planview, he applies this passion to developing best practices that help organizations achieve breakthrough performance across a framework of processes and roles.
Jerry’s work has been highlighted in a variety of publications and he has appeared on radio programs nationwide. A prominent voice in the blogosphere, he is a founding member of the Project Management Institute’s New Media Council, which keeps abreast of trending topics.
Maureen Carlson, a Partner at Appleseed Partners, has been providing strategic marketing services for 20 years including market research, product marketing, positioning, and how to develop effective demand generation programs. Maureen’s B2B technology experience spans from emerging companies to larger established brands.
Maureen has conducted four research studies sponsored by Planview for product development as well as for other markets, is an active guest blogger, and participates in the development of new market strategies with the company.
Image credit: Planview