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June 2012

The Role of Spreadsheets in a Long-Range Planning Process -- Part 1


On a recent Webcast, a finance professional asked me about the use of spreadsheets in the planning process. Because this is such a common theme, (over 70% of respondents said they use spreadsheets for their planning process) I decided to add my observations to the conversation.

Telling a finance person that they should not use spreadsheets is like telling a mason not to use mortar. Spreadsheets are so integral to the role of finance that we cannot live without them. The fact is, (despite what you may hear from some vendors) it is appropriate to use spreadsheets at many stages of the long-range planning (LRP) process. There are also certain places in the LRP process in which a better tool can and should be used. A good planning tool will not seek to replace spreadsheets but instead will help make the most of their functionality.

Because Finance is so accustomed to using spreadsheets, we tend to force them to commit unnatural acts. For example, using spreadsheets to align organizational budgets generally starts to breakdown when a company reaches any kind of organizational complexity. By the time an organization is matrixed, the purpose for the spreadsheet has reached its breaking point and intensive manual maintenance is required to sustain the resource alignment request. The spreadsheet approach relies on the creation and population of finance templates, followed by corporate parsing and redistribution of the relevant information to the relevant groups, and then the process repeats itself until alignment is achieved. There are Fortune 100 companies who still attempt to rollup resource requests this way. These companies often ask senior financial analysts to spend significant cycles to manage this process. In this case, a better solution is a centralized repository with access controls sufficient to let organizations manage their own alignment. This solution frees up financial resources to analyze data requests rather than simply monitor them. Even here, there is still an important role for spreadsheets.

Spreadsheets serve as an organizational database for financial planning and have become a common reference format to collect and analyze data. Because spreadsheets have exporting capabilities and functional templates that serve to help consolidate information, I recommend selecting a planning tool that will easily import and export data from spreadsheets. And to make the most of spreadsheets, a centralized planning repository needs to make it easy to get data from the spreadsheets into the system. After all, like a brick wall without mortar, a planning process without complete data falls apart.

In part two of this series, we will examine another instance in which it is appropriate use spreadsheets in long-range planning and how the right planning tool can enhance their functionality. For more on this topic, register and listen to the 15 Common Pitfalls for Financial Planning Webinar and get your very own copy of the paper.

How important are spreadsheets to your long-range planning process and where exactly do they fall short? Share your experiences by posting a comment below.

Blindsided: Why Service-Driven Organizations are Unprepared for Swings in Demand


In my last blog post, SRP and PSA -- There IS a Difference, I discussed the major differences between Services Resource Planning (SRP) and Professional Services Automation (PSA). In short, SRP addresses the capacity and demand issues that drive resource decisions and revenue forecasting, whereas PSA focuses more on the mechanics that drive the quote to cash process, such as order processing, billing, and so on. Both are needed to effectively run a project-based service organization.

Most service-driven organizations have the front-end and back-end "mechanics" system (often PSA or a customized ERP system) in place but few have mastered the ability to synchronize demand with delivery capacity. Perhaps this is why so many service-driven organizations struggle when the inevitable swings in demand happen, sending them scurrying to get a handle on their resource situation.

To begin with, let's look at the typical pain points service-driven organizations tend to experience.

Service-Driven Challenges

In speaking with numerous Operations VPs and staffing directors about their business challenges, the following points hold true in virtually every organization:

  • Unreliable forecasting means incoming demand is always a surprise
  • Poor visibility of resource utilization; to find the resource information they need they must look in multiple spreadsheets or make multiple phone calls
  • Specialized, higher cost resources are consumed on low margin engagements and activities
  • Project execution methods are inconsistent, wasting resources on rework often cause delivery delays and customer satisfaction problems

For these organizations, it is critical to be able to optimize the global resource pools because the resources are the business. Specifically, service-driven businesses need to be able to accurately synchronize demand with delivery capacity. They must drive operational excellence and maximize their revenue by optimizing the timing vs. availability vs. profitability equation to improve the management of their global resource pools. The last piece of the puzzle is to establish financial transparency into the true cost of service and project delivery to improve forecasts and develop reliable proposals for future projects. Without these items in place, all of which SRP helps address, the organization is at a disadvantage.

In my next post, we will look at a few real world examples of how different services organizations have struggled with the similar challenges and how Services Resource Planning is changing the way they do business. For more information about Services Resource Planning, download a copy of the latest IDC Executive Brief titled, Service Resource Planning: Systems for Effectively Managing a Project-based Business.

I want to hear from you! What are some of your challenges your organization is facing? Share your experiences by leaving a comment below.

Related post: SRP and PSA -- There IS a Difference

New PMO Directions Explored at Gartner 2012 PPM: Reasons Why You Should Rethink Your PMO


In my presentation at the Gartner 2012 PPM Summit, I discussed "Delivering What Matters: Focusing the PMO on the Big Picture." I presented a number of themes, all of which, to my delight, aligned quite nicely with the collective keynotes and presentations at the conference.

There's no doubt that the role of the PMO is changing, and it was nice to see this issue play such a prominent role at the summit.

Seven common themes that emerged include:

  1. Gartner PPM SummitEmbrace Multiple Approaches -- Project management is no longer about a one-size-fits-all methodology. There's a right time for an agile approach and a right time for a more directive waterfall approach. Even large programs can take the directive path or be more adaptive. An enlightened PMO will have guidelines for when to use which.

  2. Agile is Here to Stay -- Especially for efforts with high uncertainty, or where exact requirements are not clearly definable, more and more organizations are moving to adaptive and iterative development methods. It's reached a critical mass, and the PMO can no longer afford to stick its head in the sand concerning Agile. Equally, the PMO must be aware of the culture shift it requires and manage change accordingly.

  3. The PMO is a Vital Component of Managing Change -- Constant change is the new normal. But when an organization has their vital information segregated across multiple spreadsheets and systems, it becomes nearly impossible to adjust the sails when the wind changes. The PMO is in a unique position to provide the knowledge, processes, and tools that support alignment and integration across strategy, operations, and finance. As such, it can no longer afford to keep a narrow focus on project execution methodology.

  4. The PMO Can Foster Innovation -- To thrive in today's dynamic environment, an organization needs to allow room for a number of higher risk innovation projects, within reason. The PMO can help create effective portfolio management and governance methods to aid the organization in achieving a balanced strategic portfolio of projects, products, and services.

  5. It's Not Just About Projects Anymore -- The handwriting is on the wall. Gartner's saying it. Other industry analysts are saying it. And I've been saying it for a few years now. An organization is an ecosystem, and the best way to organize work and resources is byproduct, not project. That's not to say you shouldn't manage projects, but those projects must tie to products (internal and external). In other words, value definition lies with products. But don't think of products as "hard goods and soft goods" as much as a certain set of functions, features, and capabilities that allows the end user or customer to function effectively, which takes us to our next item…

  6. Think in Terms of Capabilities -- In the olden days (i.e. the last few decades), IT and other service delivery functions were focused on solutions. In the extreme, solutions were conceived with a misguided view of what the providers "thought" people wanted or needed. Now trends are showing a shift toward speaking to business and functional capabilities. You're no longer implementing a software product; you're implementing the ability to xyz (pick the function of your choice).

    In the context of portfolio management, you may be implementing the ability to capture ideas, filter demand, govern intake, prioritize investments, assess resource capacity, and so on. And in the context of software projects, you might be implementing the ability for the business or the end users to achieve some measurable benefit. The key is that projects (aligned with products) must deliver certain capabilities, which are tied to measurable outcomes, which takes us to…

  7. It's the Outcomes, Stupid -- At the PMO Symposium in Orlando late last year, and at the recent Gartner PPM Summit outcomes and benefits realization were prevalent themes. Outcomes, both at the business/functional level and at the enterprise/strategy level are how we measure the value delivered through optimal use of constrained resources and funding.

    Indeed, there were a number of sessions at the Summit that talked about value mapping, and Mark Langley, President and CEO of PMI, spoke of the importance of benefits realization. Astute PMO leaders are quickly recognizing the need to bridge organizational gaps, and promote outcomes-based and capabilities-based thinking across all sectors. This is where the PMO can earn their proverbial seat at the table.

Speaking of seats at the table, in my white paper, A Seat at the Table: Making your PMO More Relevant in Times of Change, I discuss many of the above themes including the PMO as a change agent and integrator; the shift to capability and outcome-based thinking; and the importance of thinking of the organization as an ecosystem (bridging projects, products, services, and more).

It's refreshing to see the industry converge on these themes, as was definitely visible at Gartner PPM Summit. I'd love to hear your thoughts. Is your organization recognizing any of these shifts, and if so, what steps are being taken to get ready?

If It Looks Like a Cloud, Talks Like a Cloud…


Cloud-based solutions are clearly here to stay, which is a really good thing for enterprises and consumers. In the enterprise, software-as-a-service (SaaS) offerings have been the dominant cloud-based solution in recent history. More and more organizations are reaping the economic benefits of adopting SaaS offerings across a broad range of software categories.

While this mega-trend continues to gain momentum, there is an ongoing back-channel conversation that is oblivious to most of the business consumers of SaaS offerings. The architects, software developers, CTOs, industry analysts, and even investors have been engaged in a dialog about the best way to build SaaS solutions.

Planview Hybrid Model Benefits: Overview of the SeriesAt the end of last year Gartner published research defining three styles of cloud-based solution architectures -- cloud-hosted, cloud-optimized, and cloud-native¹. The previously mentioned conversation has been somewhat cloud-native biased in the past, at least within the Independent Software Vendor (ISV) community. "Real SaaS" meant multi-tenant. That was absolutely the case in the early days of SaaS as it was the only viable option. Today ISVs have a wide range of advanced technologies, including virtualization that brings a completely new set of vendors and solutions to the SaaS game.

The cloud-hosted approach has represented a powerful agent of change for Planview. Over the past two years we have seen approximately half of our new customers choose our SaaS offering. This has brought a new level of value to our customers as well as transformed the economics of our own business model in a positive way. Cloud-hosted technologies have allowed us to combine a proven enterprise software solution with the economics of SaaS -- a powerful combination for both our customers and Planview.

As we have gone through this transformation we have learned a lot and gained new insights from our customers. Some of these insights relate to the unique capabilities that a virtualization-driven SaaS offering can enable. Over the coming weeks, check out our YouTube channel as we touch on these benefits:

  1. Market leading solution with SaaS economics, today
  2. Deployment flexibility to meet your business needs
  3. Ultimate configurability to support your business processes
  4. Security of your own instance
  5. Rapid implementation for all deployment models
  6. Upgrade on your terms

It is important to note that in a technology industry that is always ready to battle based on strong platform allegiances, that is not our intent (it appears that we can count on Larry Ellison to fight this one for us). Consumers are the ultimate winners, regardless of the cloud deployment model, but we felt it was worth taking a few minutes to talk about some of the relative advantages of virtualization and cloud-hosted technologies.

We look forward to hearing what you think. What cloud framework works best for your organization and why? Share your thoughts and experiences by leaving a comment below. Subscribe to the Planview YouTube Channel and watch more videos related to this topic.

¹ Gartner, Inc. (Eric Knipp), "Creating Cloud Solutions: A Decision Framework, 2011" Sept 6, 2011.