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PPM - Project Portfolio Management Software
In the business software industry, a three-letter acronym (TLA) prevails. And PPM (project portfolio management) and EPM (enterprise performance management) are just the tip of the iceberg. PPM can represent the software for portfolio management. EPM can also use business programs for the same tasks. The products of these different names are often sold by the same supplier, let’s go deeper in the nuances to see the difference.
Does the Manufacturer Today Really Need the PPM Software too?
Ideally, PPM and EPM should be part of a single ERP solution. However, the vendor still sells stand-alone PPM software, independent EPM software, independent ERP.
In order to provide a suitable business computing environment for on-demand engineering manufacturers, engineering contracting, construction contractors or other project-focused companies, each of these applications is complex, dangerous, and must be integrated by a very high-level development.
This section explains the differences between PPM, EPM and ERP and the extent to which the same system provides them, eliminating completely the need for PPM software.
After all, if a single application can play the role of three separate applications, this means significant savings in software licensing costs.
It is always challenging to maximize the efficiency for management of the portfolio presentation. In order to perform the most advantageous project, to discard the hypothesis, eliminate confusion, managing projects that are qualified you need to be able to demonstrate skills without micro-management of the trunk. Even the simplicity of the plan is better than excessive administration. All cases included in the portfolio must follow professional principles.
But there is a basic question to ask before starting the portfolio plan.
- Does the organization accurately capture all proposed or ongoing deals?
- Which cases contribute quantitatively to the objectives of the organization?
- Do you understand the relationships and dependencies? Which is truly unique and independent?
- Redundant elements between projects that save time and effort?
- Does the organization have the greatest value of its resources or do you need to consider alternatives such as various initiatives and outsourcing outsourcing?
- Is the portfolio's performance monitored? Is there an appropriate document to encourage decision making?
- Are all approved cases responsible for the purpose of the meeting, as well as the budget and the deadline?
- Does top-level management have all the relevant information and policies to clearly end the fate case that apparently fails?
All these ideas play an important role in maintaining a portfolio in which you can establish guidelines for a more efficient use of resources and time. A portfolio of projects with real commercial value can provide better results. It turns out that the organization obtained only part of the value due to inadequate planning, decision or lack of support. The portfolio is an important tool to determine which cases coincide not only with the commercial objectives, but also with the expected ROI.
Problems of the Companies Involved in the Portfolio Management
We discussed the PPM problems earlier. In summary, the companies that participate in the management of portfolios are usually attacked by the following problems:
- A large number of concurrent cases that lead to resource containment, bottlenecks and delays
- The proposed project does not accumulate to support the business objectives of the entire company
- The case is delayed on a large scale and negatively affects revenues and ROI.
- Demonstrate the merit of portfolio management software.
- This is the place where the right tool can help ensure the necessary efficiency of the company.
EPM is designed to facilitate provisioning of day-to-day projects and management, so PPM is different from running related applications such as EPM.
PPM visualizes the performance of the current project and the demand for resources with diverse instrumentalization, but also shows the cases that are programmed to bid, sell or launch in the future. This will allow senior managers to organize the appropriate resources, meet their commitments and ensure that the company makes the growth forecasts.
The general definition of PPM suggests that it includes:
- Management of the pipeline
- Resource optimisation
- Financial optimisation
- Crisis management
All these characteristics are very desirable for organizations with multiple mission critical programs, projects or product management processes.
When comparing general PPM products and PM tools, it is suggested that many PPM tools have gaps in the field of actual management.
PPM software may not be compatible with milestones, Gantt charts, budgets, calendars, timesheets required for daily project management, etc.
This is the strength of EPM and manages the structure of breakdown of activities, schedule and work. Add multiple cases in a PPM solution to manage the overall priority of the organization.
In many cases, software users can exchange data between different EPM applications and PPM applications.
But where does this information come from? Where is most of the work done? What is the true recording system of the company? In many cases, this is an ERP application.
At what point can you run a single application that provides EPM and PPM functionality, that ERP system?
Such a unified approach is desirable because the project is not a burden on the organization. Projects can affect the organization from a financial point of view, and many organizations consolidate applications in ERP from a financial point of view.
But what about other dependencies between the case with other companies? How are they explained?
People who manage business often need talent visibility to assess resource skills and competencies across international borders.
The inventory and management of the supply chain are also essential for the timely completion of the project. In addition, even if the PM tool includes an inventory management function, functions and data are duplicated from another ERP application. In addition, the PM seems to have enough details to track it without fulfilling the role it should play in the purchasing and supply chain departments.
Therefore, the powerful ERP applications turn out to be more attractive than the individual ERP and EPM applications.
But what about PPM? Can ERP cover the functions of the portfolio management solution? Can we take the finances into account in such a way that we can manage the risks and financial resources of the portfolio? The answer to that question is "Yes."
Since the manager wants to manage the priority immediately, who will do what activity and at what time? Sometimes, finance wants to have a slightly different view to determine where the recognition of costs and revenues takes place.
One way to reach PPM through ERP is Corporate Performance Management (CPM). By incorporating the functions of CPM into ERP, you can fully coordinate the commercial strategy from start to finish within the solution and mark the activities that do not comply with the strategy and the general objectives of the company.
PPM for risk management is particularly important for industries such as oil and gas, engineering purchases and construction contracting, and fields that require accounting for heavy deals, such as aerospace and defense. As all these companies execute multiple projects that contribute to the risk of the organization, the administrator must be able to determine the current level of risk according to the change in the portfolio of projects. The use of CPM ERP allows executives to determine what level of risk the organization can accept and use predictive analytics to ensure a healthy development of the organization.
The difference between the different aspects of EPM and PPM is relatively clear: EPM is compatible with the daily routine. PPM supports the general administration of current affairs and pending projects.
The definition is not very clear, even if we look at the role that ERP plays in providing PPM, EPM or both functions.
In fact, not all ERP products will be sufficiently focused on projects to replace or eliminate the need for an independent software.
However, project-led organizations perform more optimized operations and reduce the total cost of software licenses by selecting and introducing ERP that can satisfy most or all of the project and portfolio management needs. There's a chance.
Traditionally, when corporate experts discuss the return on investment, they mainly thought of "financial" benefits. Nowadays, organisations must also consider "non-financial" investment gains.
Financial gains include the budget and the financial impact of the organization, including cost savings and increased revenues.
Non-financial income is the so-called "intangible", "soft" or "non-quantifiable" investment benefits. Unlike financial returns, there may not be widely accepted standards for organizations to apply them. However, our company can build custom software that will have a positive impact on your business performance and mission results. This includes improved customer satisfaction, more accurate information and a shorter cycle time. Contact us to discuss details of your project portfolio management software case.