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Warning: Talent Cliff Ahead -- Part 1.5


Written by Jeanne Urich, Managing Director, Service Performance Insight (SPI)

Jeanne Urich

The Looming Technology Workforce Shortage Continued: The Challenge for 2013

A preface from Planview

In part 1 of this series, SPI Research describes the "trifecta of external forces that are creating the talent cliff". According to the 2013 PS Maturity™ Benchmark for professional services, this is becoming an increasingly important and urgent topic. This post is a continuation of the original that qualifies this sense of urgency.

Part 2 of this article actually continues on the SPIglass Website in Warning: Talent Cliff Ahead ‒‒ Part 2. Planview sincerely thanks SPI Research for this informative contribution.

In professional services with IT, software as a service, hardware, networking services and management consultancies depending on individuals with strong technology backgrounds, the talent cliff becomes the most important issue facing the market.

As evidenced in the 2013 PS Maturity Benchmark, talent management is the most important challenge according to 234 companies that completed the survey in the 4th quarter of 2012. The No. 1 challenge in 2011 of "supporting rapid growth and expansion" has been surpassed in 2012 by "talent management," as outlined in Table 1.

Two years ago, PS executives were mainly concerned with sales, given the prior three years of the economic downturn. Last year, with improved sales and record year-over-year revenue growth of 13.5 percent, the focus turned to service execution. That meant efficiently delivering more projects, which led to higher revenue growth. In 2012, because of the success of the previous two years, the foremost challenge shifted to talent management. The ability to find, hire and engage a high-quality consulting workforce has become the primary concern.

Year-over-year Change in Talent Management Challenges (image version)
Table 1. Year-over-year Change in Talent
Management Challenges (image version)
Year-over-year Change in Talent Management Challenges (text version)

The second-most critical challenge found in this benchmark is improving quality and consistency. Higher-quality services require high-caliber consultants, and generally required skills are based on problem-solving abilities, typically found in individuals with a STEM (Science, Technology, Engineering and Math) background.

Populations in the U.S. and other developed nations continue to grow. Educational systems continue to graduate students, and thousands of people immigrate to the U.S. and other developed countries every day. Unfortunately, the balance of supply and demand for individuals with the skills necessary to succeed in technical disciplines is lacking, and without a major commitment from federal, state and local agencies, developed countries, especially the U.S., will suffer over the long-term.

Insights and Preventive Actions to Consider in Avoiding the Talent Cliff

Continue reading this article on SPIglass in the article, Warning: Talent Cliff Ahead ‒‒ Part 2.

A Prolog From Planview: Additional Materials for Project-Based Service Organizations

In the continuation of this article, SPI Research describes best-practices in personnel enlistment and talent satisfaction. For those involved in consulting services and operations, recruitment will be a stop-gap but not necessarily a solution. For individuals looking to combat the talent cliff with purpose-built technologies, these web articles and research reports are a resource developed for your interests:

Sample Report Charts

Table 1. Year-over-year Change in Talent Management Challenges

Challenge 2011 2012 Change
Talent management 4.13 4.28 3.7%
Improve quality and consistency 4.00 4.20 5.1%
Improve sales and marketing 3.99 4.18 4.8%
Achieve revenue and margin targets 4.06 4.18 2.8%
Support rapid growth and expansion 4.15 4.09 -1.5%
Improve/expand portfolio and markets 3.71 3.82 2.7%
Alignment between functions or groups 3.60 3.72 3.2%
Improve knowledge management 3.51 3.63 3.3%
Average 3.89 4.01 3.0%
Source: Service Performace Insight, February 2013

The Remarkable Reason Complacency for Spreadsheets May Reach Critical Mass


How One Cell Discredited the Way the World Measures the Ratio of Debt-to-GDP and What That Should Mean for Corporate Finance

At every FP&A conference I have ever attended, the subject of spreadsheets comes up and those with a great argument for keeping them receive, what I perceive to be, the loudest applause. Usually the argument seems rather reasonable. For example, at the FP&A conference in San Diego earlier this year, a CFO of a Fortune 1000 company confessed that he still uses spreadsheets because it is the "ultimate ad hoc tool". To paraphrase him: Spreadsheets are empowering; you can make them do amazing things, customize them to exactly what you want them to be, and keep massive amounts of valuable data consolidated for limited but somewhat immediate access.

The problem is that whenever the groupthink has concluded that the discussion is closed, everyone returns to the modus operandi of convenience until something terrible happens.

For All Countries That Manage Their Forecasts Based on the Reinhart/Rogoff Model, That Terrible Thing Happened Last Week

According to scholars at the University of Massachusetts, the "most influential article cited in public policy and debates about debt stabilization" is wrong. Specifically, a spreadsheet error has been revealed to have excluded five countries that would have invalidated the theory that countries with a high debt: GDP ratio suffer from slow economic growth. According to Matthew Yglesias of the Slate: (Read more of the Slate article here.)

"At one point they set cell L51 equal to AVERAGE (L30:L44) when the correct procedure was AVERAGE (L30:L49). By typing wrong, they accidently left Denmark, Canada, Belgium, Austria, and Australia out of the average. When you fix the Excel error, a -0.1 percent growth rate turns into 0.2 percent growth."

According to Gawker, "When other revisions were carried out, the scholars found that the true growth rate should have been 2 percent" thus disproving the politically-charged but unwavering position. (Read more of the Gawker article here.)

The Difference Between Politics and Sound Business Practices

The reason you may not have heard about this is because when economists and politicians make aberrant or incorrect public statements very little happens. As Yglesias explains, "…naturally this is going to change everything. Or, rather, it will change nothing." (Read more of the Slate article here.)

Executive Communications Are VitalHowever, if a CFO makes an inaccurate public statement, far from little happens. The implications are massive. Stock prices and forecasts are implicated, lawyers get involved, fines assessed, and sometimes jail time is discussed.

This is not to say that if you don't move away from spreadsheets you should be worried about going to jail. Rather, it is to say that there are very important reasons to stand up to the cognitive dissonance that is especially real within the corporate financial planning community. According to Robert Kugel, CFA, SVP & Research Director of Ventana Research, new research reveals that those in leadership positions or are closest to C-level decisions will inaccurately describe their processes as effectual when they are actually not. During the Webcast of the New Benchmarks for Long-Range Planning, he cites that only 27% of study participants claim executive contributions to the long-range planning process align to corporate strategy and support process. Kugel continues:

"We've done a good deal of research on a wide variety of core business processes so it didn't surprise us to find that only about one-fourth of the participants in our research say that their executives communicate the company's strategic objectives clearly and consistently. Since I'll bet that about 100% of senior executives think that they are good communicators, there's an obvious gap that a large majority of companies need to address."

"Another interesting point that came out of the research was that people who are in charge of running the long-range planning process are much more likely to say that their executives communicate strategy well ‒‒ probably because they are closer to the informal channels of communication among senior executives."

University scholars and industry analysts are in agreement by pointing out that the burden for individuals in leadership positions is fast becoming to illustrate a total confidence in their data.

Gone are the days where an elaborate spreadsheet will be enough to make a business case; especially those responsible for accurately articulating corporate financials and long-term investment decisions. Economists have certainly taken this cue; and they are not worried about the threat of fines and even jail time.

For more information:

Watch the Webcast of the New Benchmarks for Long-Range Planning

Download the Executive Summary of New Benchmarks for Long-Range Planning by Ventana Research

Related posts: Getting Your Executives Involved in Long-Range Planning and How Last Year's Benchmarks Compare to the Latest Research

Warning: Talent Cliff Ahead -- Part 1


Written by Jeanne Urich, Managing Director, Service Performance Insight (SPI)

Jeanne Urich

The Looming Technology Workforce Shortage

A Guest Contribution by Service Performance Insight

This article is the first of a two-part series on the pending "talent cliff," an important topic to professional services leaders. We discuss why this critical situation exists and provide some related insights from the newly published 2013 PS Maturity™ Benchmark for professional services.

By now, most professional services executives realize it is increasingly difficult to find, hire and retain an exceptional consulting workforce in a tight global race for talent. The bad news is that it will only get worse in developed countries as workforce demographics change, the educational system continues in disarray and immigration policies remain rigid.

To understand the growing human capital challenges, one must look at the trifecta of external forces that are creating the talent cliff.

It's the Baby Boomers!

Growth of U.S. workers aged 45 or older
Figure 1. Growth of U.S. workers aged 45 or older

This year, the average baby boomer (people born between 1946 and 1964, as defined by the United States Census Bureau) will be 58 years old. The graph in Figure 1 shows the impact that aging baby boomers are having on the U.S. workforce. In 2000, the number of older workers was 49.2 million. In 2012, this number increased to 63.1 million. While the number of workers older than 45 has exploded, the number of U.S. workers age 25 to 44 has fallen by 6.8 million. Every day, 10,000 U.S. baby boomers retire, meaning 3.65 million experienced workers exit the workforce every year.

Historically, retirement begins to accelerate when people are in their late 50s. Analysts project that by 2018, there may be more than 5 million unfilled jobs in the U.S. And the number of unfilled jobs requiring STEM (Science, Technology, Engineering and Math) skills is projected to be more than 200,000. Unfilled jobs coupled with the loss of baby boomer knowledge, skills and experience could severely impact workforce productivity and the U.S. economy. Furthermore, the shortage of qualified replacement workers makes filling those jobs more difficult.

It's the Schools!

One of the most important and hotly debated topics is the state of the U.S. educational system. Regardless of political perspective, the facts are sobering. On the 2009 Program for International Student Assessment exam, the U.S. ranked 25th in math, 17th in science and 14th in reading among 34 OECD (Organization for Economic Co-operation and Development) member countries. When the 37 partner countries (including China, Singapore and Taiwan) are incorporated into the list, the U.S. dropped to 31st in math, 23rd in science and 17th in reading. Clearly U.S. K-12 schools lag behind those in other developed countries.

Further, an insufficient number of students who go to college are pursuing STEM disciplines to meet market demands for these skills. Microsoft recently published a report underscoring this labor shortage by citing that the company has 3,400 unfilled research, development and engineering positions in the U.S. And this workforce deficit is not just a U.S. issue, as recent headlines declare a worldwide labor shortage of critical IT skills.

Multiple think tanks and nonprofit organizations have published extensively on this topic. While their proposed solutions for education system reform may differ, they all appear to agree on the future STEM-skilled workforce shortage.

It's the Immigration Policies!

Immigration has been a powerful economic engine for the U.S. More than 40 percent of the U.S. Fortune 500 companies were founded by an immigrant or a child of an immigrant. The current immigration policy doesn't provide the requisite number of visas needed to allow companies to recruit internationally to fill open jobs, specifically those requiring technology skills. Moreover, the worldwide shortage for these skills means U.S. companies hiring for domestic positions are competing against firms in other countries. The immigration policy in many other countries is strategically aligned to the urgent need to globally source these highly skilled workers.

Ironically, many of these foreign workers may have been educated in American colleges and universities. Right now, no targeted immigration program exists to keep foreign students in the U.S. after they earn advanced degrees.

A Prolog from Planview: Additional Reading

In the continuation of this article, SPI Research will describe how these factors have contributed to empirical data evidenced in the 2013 PS Maturity™ Benchmark and how the concerns of the looming "talent cliff" have increased dramatically over the past years. Until then, learn more about resource management for professional services organizations in these available reports and articles:

This article was originally published by SPI Research on their blog SPIglass.

Planview has asked permission to publish these materials because of our interest and understanding that the subject matter is important to the project-based service community.

Continue reading more on the topic of the "talent cliff" and PS Maturity on the SPIglass website.

Click here to learn more about the Planview Approach to Services Resource Planning for organizations looking to combat the "talent cliff" with purpose-built technology.

Four Questions on the State of Technology for Professional Services


According to recent research, the professional services industry is growing aggressively and seeing very specific growing pains in talent attrition, project profitability, and resource management. In trying to encapsulate what organizations can do to alleviate these issues, we asked subject-matter expert, Steve Beaumont four questions to help us grasp the state of the industry and the solutions described in his white paper, Your Project-Based Service Organization: Paper Airplane or Rocket Ship?.

Q: Steve, over the course of 25 years, you've worked for some very large IT consultancy organizations, and over that span, the "professional services industry" has grown nearly three times (in net profits) since 2010¹. What do you think has attributed to this growth?

Steve Beaumont: The consulting world's reliance on technology has increased rapidly, and the need to call upon specialists with expertise on how to drive business success has grown with it. As the businesses they serve have become more global or at least multi-national, the consultancies themselves have had to mirror this. This has resulted in larger firms with a range of services that need to be delivered to geographically complex clients. Whilst revenues continue to be strong in comparison with some other industry sectors, this increasing complexity and the pressure on daily rates provides very real challenges.

Q: What do you consider the "consulting world"? Does your research serve many industries considering this wide-ranging perspective?

Steve Beaumont: In the white paper Your Project-Based Service Organization: Paper Airplane or Rocket Ship?, I point to case studies that have embraced newer technologies because they exemplify efficiency and a rapid ROI. Specifically, I cite a technology services firm because the complexities of their organizational requirements and a clinical research organization (CRO) because of the impact integrating a purpose-built solution had an additional benefit of enhancing all of their process technologies.

However, there are several more industries that have allowed me and subject matter experts to expound on the subject data. Along with technology services and clinical research organizations; the "professional services industry" has come to include IT services, software solutions, technology consultancy, business services, advertising, and marketing organizations among others. For all of these organizations, people are the product and therefore, resource management has a direct impact on the bottom line.

While these industries may seem to have completely different business models, what I have learned in my research and my years is that those in charge of project delivery or operational standards have likeminded accountabilities. They all have a project delivery revenue engine and many of the larger organizations are burdened by trying to get an ERP to function for service organization-based requirements ‒‒ a task an ERP tool was not built for by any stretch of the imagination.

Q: Is this why you think Services Resource Planning (SRP) software has established itself as the purpose-built, for these types of organizations²?

Steve Beaumont: To an extent. More so, research has shown that the more mature services organizations have processes and purpose-built systems in place to allow them to operate their business more efficiently, and to provide the information they need to make better business decisions. It is not just about planning and managing projects, it is about maximizing the value from your people and keeping your clients satisfied. The increased complexity of managing successful project driven service organizations with resources or partners in multiple locations requires more sophisticated resource planning and controls. As SRP has gained prominence as a purpose-build solution that has helped project-drive organizations reach these goals, the attribution is a natural conclusion.

Q: In your new white paper you very distinctly classify project-driven organizations into two types. Is it your belief that these types of organizations can be classified so succinctly³?

Steve Beaumont: In very black and white terms: yes. Study after study has indicated there are organizations that automate their resource planning and those that do not ‒‒ or that they automate portions of the process in isolation and then manipulate ad hoc systems, for example, to get the answers they need to improve resource management processes. Correlation is definitive that those organizations that truly automate resource demand, capacity planning and resource allocation are the most successful when it comes to getting the right person on the right project and delivering successful, profitable projects.

Thank you Steve for your valuable insight!

What is remarkable to point out is how consistent Steve's research is with the analysis conducted by SPI Research, Aberdeen Group, and the IDC. Steve is among great company of researchers evaluating systems that are empirically tied to improving processes and profitability. Learn more about this research by downloading the white paper, Your Project-Based Service Organization: Paper Airplane or Rocket Ship?

About Steve Beaumont

For nearly 25 years, Steve Beaumont has been a part of professional services industry with many of those years as a management consultant for Deloitte, Coopers & Lybrand, and Ernst & Young. Steve's expertise lies in team management, pipeline, resource allocation, and project delivery. Currently, Steve is a Planview Solutions Market Manager where he is responsible for understanding and enhancing software solutions designed to help PSOs manage their businesses and deliver successful projects.

Got a question for Steve? Leave a comment for prompt reply.

1 SPI Research: 2013 Professional Services Maturity™ Benchmark, February 2013

2 IDC Executive Brief: Services Resource Planning: Systems for Effectively Managing a Project-based Business, June 2012

3 White Paper: Your Project-Based Service Organization: Paper Airplane or Rocket Ship?, March 2013

How Last Year's Benchmarks Compare to the Latest Research


In part one, of this two-part blog series, I isolated the five characteristics of best-in-class financial planning organizations described in The State of Capital Planning Study, published in 2012. With new data from the 2013 Long-Range Planning Benchmark Study, it's time to revisit and ask, "How does the data compare to my current situation?"

Designed to isolate definitive characteristics, the new research reveals organizations should strive to improve the corporate long-range planning process. The results not only confirm what was described in 2012, but also provide insight and differences between successful organizations and those that struggle with the long-range plan. Here are some key findings from the research:

  1. Nine out of 10 companies with a highly integrated process create long-range plans that are well aligned to the corporate strategy.
    Take a tip from those organizations that are successful with their long-range planning. Integrating strategic and long-range planning with individual capital projects and initiatives is more likely to produce better long-range plans, enabling a company to make better long-term decisions on its capital projects and major initiatives. Furthermore, the data shows that 85% of companies with integrated long-range planning and annual budgets are more likely to have a more effective capital planning process.
  2. Sixty-seven percent of respondents rely on technology that is fundamentally incapable of supporting and ensuring accurate and timely data.
    More than half of the 200-plus organizations that responded to the survey are using spreadsheets. We know that while spreadsheets are indispensable for many finance-related tasks, they do not work well for long-range planning as they have inherent technological inadequacies.
    Perhaps more important, are the study responses that address the impact of access to accurate data during the long-range planning process. Companies plan and set a baseline of expectations can measure objectively against reality. The variances ‒‒ enable executives and managers to spot issues or opportunities that must be addressed. How quickly companies can react when variances appear has an impact on their ability to execute. The data provides a clear correlation between the time it takes to get answers and the quality of these decisions. It's common sense that corporations with shorter decision loops are better able to adjust and succeed.
  3. There is a direct correlation between the software a company uses and its ability to implement long-range plans effectively.
    The effectiveness of the software a company uses has a direct impact on its ability to do many of the important tasks related to the long-range plan. For example, contingency or what-if scenarios are critical to assessing alternatives and understanding the implications of specific choices. The ability to translate a set of assumptions into a detailed set of outcomes quickly goes a long way to give executives a clear understanding of the attractiveness of a various course of action.

Executive Communication

Long-range and strategic planning is, by its nature, an executive function. Communicating vision and tying it to specific actions and initiatives are important. Yet the research in 2012 and current findings show that too few executives are communicating effectively. According to the 2013 data, executives may think they are leading by communicating vision and goals but in reality, 73% are not.

It is also interesting to note that people in charge of running the long-range planning process are much more likely to say that their executives communicate strategy well. The analysts concluded that this is probably because those individuals are closer to the informal channels of communication among senior executives.

To quote Robert Kugel, SVP of Ventana Research and chief researcher of the study:

"The point here is: don't kid yourself and don't judge the effectiveness of commutations by how well the inner circles understand the strategy. It's only working when everyone is on the same page. Good communication of strategy promotes success. Almost all companies with good executive communications have a long-range planning process that is well aligned to their strategy compared to just 30% of those that do not communicate well or at all."

Beyond an ability to communicate, executives ultimately own how an organization will operationalize corporate strategies into specific investments. The effectiveness of technology systems that directly contribute to corporate success should be of paramount concern. With the, State of Capital Planning Study and the new Long-Range Planning Benchmark Study, we have two years of hard data to back up why change and investment is warranted.

To learn more about the new benchmarks download your complimentary copy of the executive summary.

Related posts: Getting Your Executives Involved in Long-Range Planning -- Part 1

Are Your Limited Resources Focused on the Right Opportunities? [Infographic]


Revealing the Global State of Resource Management and Capacity Planning in a New Benchmark Study

Unfortunately, many organizations can't answer the question in the title of my blog post. Can you?

This is an ideal time and opportunity to benchmark your organization's capabilities and maturity level in terms of resource management and capacity planning. I've had the pleasure to be the chief researcher on the most comprehensive study ever on resource management and capacity planning at complex, global organizations. With more than 600 participants from more than 17 countries, we've identified the state of their organization through the lens of a maturity model, designed for specifically for this research (2013).

2013 Resource Management and Capacity Planning Benchmark Study InfographicAnd what did we find?

Many organizations are continuing to operate in a state of chaos or limited visibility into what their resources are working on today and what they are available to do tomorrow. A third of organizations have achieved some level of visibility but have to continue to significantly improve productivity; and a third of organizations have made good, steady progress to truly gaining control and optimizing their resources. It is this top third, or even the top 5% of truly optimized organizations, that have some very interesting characteristics and best practices that all organizations could follow to intentionally move up the maturity spectrum (2013).

Here is a brief look at some of the findings of the study (2013). Get your copy of the Resource Management and Capacity Benchmark Study today.

  • 80% of organizations are using shared resources and often in multi-country, dispersed locations to deliver projects, products, and services.
  • The top business risks are "lost productivity" and "remaining in crisis mode." The risk of remaining in crisis mode reduces by half or more as organizations move up the maturity spectrum. "Delayed time to market" is also a key risk of not addressing these areas.
  • The top pain point is "constant change," followed by "not enough visibility into capacity," and "ineffective demand prioritization." Lower maturity organizations have less insight into demand making project prioritization challenging.
  • Two-thirds of organizations are in low to mid-tier maturity brackets.

Software is used by mature organizations; lower maturity organizations tend to rely upon spreadsheets and basic project.

The study warns if organizations do not get control of their resource management and capacity planning challenges they risk lost productivity, not leveraging resources for high-value projects, losing time to market and basing decisions on bad data (2013).

This is just a glimpse into the findings of the study. The report provides a deeper look into the characteristics and best practices of higher maturity organizations. There are a host of tangible recommendations to intentionally address these areas more proactively. In the words of one of the participants, the best way to improve is to "just do it", start small, and find pockets of success and then continue to address these critical areas of resource management and capacity planning. The research shows that organizations that have graduated from chaos into control are addressing much more strategic, competitive business decisions versus wondering (or hoping) that their precious resources are working on the highest priority opportunities.

I'd like to hear from you. How do you ensure your resources are working on the right work? Post a comment or ask me a question pertaining to the research by leaving a comment below.

Carlson, M. (2013). Resource Management Capacity Planning Benchmark Study. Planview.

Getting Your Executives Involved in Long-Range Planning -- Part 1


Benchmarking Your Company's Long-Range Planning Process as the First Step Towards Improvement

If you were given the opportunity to directly influence your company's success, would you take it? Would you want to help on develop the plans, direction, and spending of your organization? Or would you avoid such an opportunity at virtually all costs?

And yet judged by their actions, when given that very chance most executives choose to avoid such an opportunity. Why? Because the very process that seeks to achieve that corporate success, the long-range planning process, is fundamentally broken.

Long-range planning has a significant impact on company success, defining how your organization will operationalize corporate strategies into the specific investments that lead directly to corporate success for years to come. Given its influence, one would expect that participating in a process that shapes the company's future is precisely the activity executives would want to be involved in. Instead we all consider it the most painful processes businesses perform today. Why? Today's process is manual, labor-intensive, and not actually perceived to achieve any of those objectives. Instead it is considered tedious and frustrating, ultimately delivering a plan bearing little resemblance to current business realities. "Data confirms what many finance professionals know about the prevalent capital planning process ‒‒ it is broken and needs to be fixed."¹

Given the dissonance between the importance of the subject matter and the actual process, there is clearly need for change. How do we move the planning process from loathed and shunned to productive and powerful? To something in which people want to participate? Given that, the question we must ask is what defines a good planning process.

What sets the few organizations that do planning well apart? In search of an answer, I looked at the 2012 Benchmark Report: The State of Capital Planning² for start here for two reasons:

  • First, it distills the feedback of finance professionals dealing directly with these challenges. Its findings lead to five practices every FP&A organization should incorporate when looking to alleviate the burdensome nature and improve the quality of the long-range planning process.
  • Secondly, it will serve as its own benchmark for comparison against the upcoming 2013 New Benchmarks in Long-Range Planning Study and Webcast on February 27, 2013.

The Five Characteristics of Best-in-Class Financial Planning Organizations' Long-Range Planning Processes

  1. The priority of the major programs, projects, and initiatives is clearly defined both absolutely and in relation to each other.
    By understanding how initiatives align to strategic plans and the relative priority of every capital project, the organization can more easily allocate (or later shift) resources as needed. The process can consider the reallocation of resources as priorities change, becoming much more streamlined and efficient while providing the visibility to ensure the company maintains alignment with the strategic plan.
  2. The plan is developed iteratively through a low overhead process that emphasizes decision making and collaboration over simple data consolidation.
    A plan collaboratively built with all impacted groups (finance and business units) and a formal approval process for the final plan ensures buy in and agreement on what the major project, programs and initiatives are; and the business case for each. A streamlined and easy process for participants frees them up to iterate and ultimately produce a stronger plan.
  3. Understand how and where people and money become limiting factors for the business.
    When dealing with constrained resources it is important to be able to create scenarios in the long-range planning process to assess how they can be optimized and which mix of resources on each project or initiative make the most sense to help the business achieve its objectives.
  4. The cost (and projected benefits) of each project can be accurately forecasted both initially and adjusted throughout its lifecycle.
    Having a high level of insight and analysis on projects enables an organization to make informed decisions when they are considering whether to shift investments, kill an initiative or reprioritize it. There needs to be a simple way for both the business unit and finance to have downstream visibility into investment performance and ROI on every project.
  5. When a project is completed, the company knows how well it achieved its objectives.
    This insight is valuable in planning for the future ‒‒ not just at a project level, but at a corporate-wide level ‒‒ as comprehension will influence the outcomes of the long-range planning process on a holistic level; thus prompting even more procedural and conceptual improvements.

I invite you to join me during a live Webcast on February 27 where I will participate in a discussion hosted by Bill Sinnett, Director of Research at Financial Executives Research Foundation (FERF), and with new benchmark analysis detailed by Robert Kugel from Ventana Research, to discuss what are to be considered new benchmarks for long-range planning.

In Part 2 of this two-part series, I will compare what we discuss during the Webcast to these best-in-class characteristics of 2012. While I suspect these best-in-class indicators will not vary significantly; I will be interested to see how important they became over the past year in relationship to new benchmark levels.

Will more organizations using enterprise-wide portfolio resource management solutions top the list as "best in class"? Find out on February 27.

Related posts: Closing the Gap between Strategy and Execution Part 1 and Part 2.

1 Murphy, R. (2012). CFO View of the State of Capital Planning Benchmark Study

2 Carlson, M. (2012). Benchmark Report: The State of Capital Planning

Building an Innovation Portfolio -- 10 Key Takeaways [Infographic]


I recently hosted a discussion with Forrester's, vice president, principal analyst serving CIOs, Chip Gliedman and Planview's NDP solution market manager Carrie Nauyalis about innovation and portfolio management, and how the two relate. I've included an image of the visual notes designed during the live event. They provide a visual reference for the topics and key takeaways.

Infographic: Building and Managing an Innovation Portfolio

We Had a Lively Discussion on Five Topics

  1. What an innovation really is and how it differs from change
  2. The capabilities needed to support sustained innovation across the enterprise
  3. Driving innovation forward and who typically takes the lead
  4. How to leverage an innovation network that culls ideas from inside and outside the organization; and last, but not least…
  5. How portfolio management can tie all this together

My 10 Key Takeaways

  1. Ideation is not innovation ‒‒ Innovation is a process that spans products/services, processes/operations, markets/business models, and organization/governance.
  2. Innovation differs from change; innovation:
    1. Is ongoing, not episodic
    2. Often has distinct governance and funding
    3. Implies a greater degree of creativity and risk
    4. Success metrics are different (often the driving principle is "fail fast, fail cheap")
  3. Balancing Risk vs. Reward is key; strive for innovations that drive value
  4. Exploit the entire ecosystem including employees, customers, suppliers, and more
  5. Innovation may be "everybody's job," but to thrive it is best driven, or at least supported, by a single area.
  6. Regardless of where innovation "sits" in an organization, the CIO role is going to need to shift to support the growing trend toward more innovation initiatives
  7. Product Portfolio Management (PPM) helps operationalize innovation throughout the Ideation, Product Planning, Development, and Launch processes. It also helps align projects and other investments with products, and aligns products with brand strategy.
  8. Be sure to make room in your project portfolios for innovation projects, even smaller efforts that may not have a major impact on current business operations, but help enable business change or growth.
  9. PMOs should not only help accommodate and support innovation projects (relaxing their methodology and metrics as appropriate), but should encourage and drive the trend. This can also serve to improve the image of the PMO as a bureaucratic bottleneck.
  10. To drive innovation, you need:
    • A strategy for driving and managing innovation
    • A culture that fosters innovation
    • Ideas! And lots of them!
    • Processes to filter and vet the ideas
    • A portfolio view of your innovation prototypes
    • Governance and control processes for innovation

For more information, listen to the full Webcast discussion Building and Managing an Innovation Portfolio. Meanwhile, I'd like to hear your thoughts. Who drives innovation in your organization? What processes do you have that ensure innovation is considered? What is the maturity level of your innovation program and what challenges are you facing? And lastly, what do you find stifles innovation in your organization?

The Top 5 Priorities for Your PMO in 2013


On January 28th, ProjectsAtWork featured an article by Jerry Manas titled, Were the Mayans Right About Your PMO? In it he covers the 5 key things you need to worry about concerning the fate of your PMO ‒‒ a list of undeniable trends and predictions for the coming year.

The article follows the End of the World Webcast Jerry hosted where he dropped some ancient Mayan knowledge that dispelled all of the "end of the world" myths that were floating around, but also brought to light a startling statistic that indicates that your PMO could face its demise if you don't make these 5 key points a priority in 2013. Did you know that 75% of PMO's are dissolved within the first 3 years of starting?1

In the article, Jerry leverages the doomsday theme as a background to drive the point home that in order for your PMO to avoid becoming a statistic in this New Year it needs to address the following:

Top 5 Priorities for Your PMO in 2013
  1. Floods (Resource Management)
  2. Blindness (Predictive Analytics)
  3. Risky Adventures (Innovation Projects)
  4. Crevices (Portfolio Management)
  5. Beasts (Understand Agile)

Here's a look at the article:

"In December, I presented a webinar dispelling the numerous myths about the Mayan end-of-the world predictions, not the least of which is the fact that the circular sun stone tablet referred to in 95% of the websites predicting doomsday is in fact Aztec, not Mayan. But I did, however, share the more realistic doom and gloom cautionary messages for PMOs in 2013 ‒‒ specifically five things to worry about, all undeniable trends that have been heading our way like a freight train with faulty brakes…"

Continue reading the full article by logging into the ProjectsAtWork site.

What are some of your PMO's priorities for 2013? Share by leaving a comment below.

1Margo Visitacion, "PMOs: Stop Being the Office of 'No,'" Forrester Research, Inc., Nov. 11, 2011

The Annual Budgeting Process: Insanity is Expecting Different Results from Spreadsheets


Albert Einstein has been credited in saying, "insanity is doing the same thing over and over again and expecting different results."

If you are charged with some element of the fiscal planning process for your organization, such as capital planning, strategic planning, budgeting, and annual allocations, among others; chances are you've been inundated with spreadsheets, tab delimited fields, and pivot tables every January since… forever.

Has Your Expectation of Spreadsheets Changed Over the Years?

According to recent findings, your answer is probably "no." According to the 2012 Benchmark Study: The State of Capital Planning:

49% of companies surveyed indicated that the manual nature of planning and spreadsheet complexity is the top planning pain point.

The predominance of spreadsheet planning and forecasting is at the heart of many challenges long range planning professionals face every year. Coined as a "common pitfall" by Madison Laird in his white paper, 15 Common Pitfalls of Long-Range Planning, the connection between spreadsheets and the lack of productivity and flexibility is supported by many studies and the annual exercise you are likely participating in right now.

Stop the Insanity!

In this short video series, Madison delves deeper into the issues and solutions to the most common pitfalls, including spreadsheet planning.

Some of the solutions he describes tackle spreadsheet planning philosophically and are relatively simple; such as rewarding vision and consensus. Some of the solutions outlined dig deeper into the core of your organization's analytical culture.

As you make progress and conclude your annual planning; now is the best time to consider best-practices of organizations that have eased the intensity and challenges of juggling spreadsheets. Ensuring your next planning cycle is improved upon will not only improve your processes and decision making capabilities: it will also improve your sanity.

For more information watch the videos here or load them into your YouTube playlist.

What is your biggest headache during the annual budgeting process?