serena.

com

A marriage of convenience or a match made in heaven? June 2007

ALM aND PPm

TaBlE OF CONtENtS

Executive summary............................................................................................................................................................ 3 The case for PPM................................................................................................................................................................... 4 The relationship between PPM and ALM........................................................................................................ 4
WHat IS tHE ROlE OF alm?............................................................................................................................................................ 5 WHat IS tHE ROlE OF PPM?.......................................................................................................................................................... 6 BRINGING tHE twO tOGEtHER...................................................................................................................................................... 6

ALM and PPM support portfolio management activities................................................................ 7

REVIEw tHE cURRENt StatUS OF PROJEctS IN mOtION. ........................................................................................................ 7 REVIEw tHE aPPlIcatION PORtFOlIOS ImPact ON RESOURcES. ....................................................................................... 8 PRESENt NEw caPItal REQUEStS. ............................................................................................................................................. 9 REPRIORItIZE tHE PORtFOlIO....................................................................................................................................................... 9 EXamINE INVEStmENtS FOR EFFEctIVENESS.......................................................................................................................... 10

Serena project and portfolio management for application lifecycle management...................................................................................................................... 10

REVIEw tHE StatUS OF PROJEctS IN mOtION.......................................................................................................................... 11 REVIEw tHE aPPlIcatION PORtFOlIOS ImPact ON RESOURcES. ..................................................................................... 12 PRESENt NEw caPItal REQUEStS. ............................................................................................................................................. 13 REPRIORItIZE tHE PORtFOlIO...................................................................................................................................................... 13 EXamINE INVEStmENtS FOR EFFEctIVENESS........................................................................................................................... 14

Conclusion.................................................................................................................................................................................. 15

serena.com

Executive summary
Executives and other business stakeholders need objective, actionable data to maximize the business value of their organizations application portfolio. Project and Portfolio Management (PPM) combined with Application Lifecycle Management (ALM) deliver whats been missing: application lifecycle data integrated with business metrics for better portfolio decisions. With the combined power of these two frameworks, stakeholders and decision-makers gain a comprehensive and up-to-date view of application costs and benets, enabling them to manage the organizations application portfolio like a businessfor the benet of the business.

serena.com

The case for PPM

A companys projects and programs represent an enormous investment of its nancial and human capital. Just as nancial portfolio management helps balance a mix of investments to achieve an overall nancial goal, Project and Portfolio Management (PPM) enables organizations to balance the costs and value of IT investments so they can achieve their business goals. PPM is growing in importance because companies are focusing more on custom application development. Today, a customers rst experience with an enterprise is often online rather than through a face-to-face or telephone meeting. Organizations are under pressure to invest in developing innovative and engaging applications in order to win more business, keep their customers satised, and improve their efciency. This trend is reected in data from a recent Corporate Executive Board (CEB) survey, which found that 30 percent of all IT spending in 2006 was related to application development. Also, the survey found that organizations are spending twice as much on new application development as on maintenance: 70 percent of application development budgets was spent on custom applications while only 30 percent went to packaged applications.1 In todays environment, innovation is the value IT most needs to deliver to the business. While the need for custom application development is increasing, relatively few development projects are successfully completed, according to SD Times recap of The Standish Groups 2006 Chaos Report.2 In 2006 only 35 percent of software projects concluded with complete success, while 19 percent ended in complete failure. The remaining 46 percent of projects failed to meet some of their time, resource, or business objectives. The shadow of failure is motivating organizations to re-evaluate how they approve and manage projects. According to analyst rm Forrester, Project portfolio management (PPM) provides a fact-based process for evaluating, prioritizing, and monitoring projects. PPM unites the process of strategic planning, resource and budget allocation, project selection and implementation, and post-project metrics.3

The relationship between PPM and ALM

How do business ideas become delivered applications? Consider the left-hand box in Figure 1. This represents a line of business: a sales or manufacturing department, or some other department integral to the business. This is where the impetus for a new application will come from: someone will propose an idea to help drive new business for top-line revenue growth or streamline operations to improve the bottom line. On the right the data center, run by the IT operations group, provides and maintains the environment in which business applications run. ALM and PPM together support business and technical team members in taking ideas from the business and turning them into applications that run in the data center.

1 2 3

Corporate Executive Board, Application Budget, Staff and Portfolio Benchmarks 2006. David Rubenstein, Study: Less Chaos in Development Shops, SD Times, March 1, 2007. How IT Must Shape and Manage Demand, Forrester Research, June 2006.

serena.com

Figure 1. PPM helps organizations manage priority and funding issues to help create applications that support business ideas

WHat IS tHE ROlE OF ALM?

ALM addresses the entire development lifecycle and ties it together. It combines a set of disciplines (such as requirements management and simulation, design, version control, build, and release management) with processes, policies, and procedures to provide reporting and traceability across the lifecycle. This helps teams to coordinate application development across job roles and development processes, which in turn can help projects come in on time, within budget, and to the satisfaction of users.

Figure 2. ALM repositories contain information businesses need to make accurate and timely application portfolio decisions

serena.com

ALM helps teams synchronize and automate the relationships and dependencies among development disciplines including requirements, modeling, development, build, and testing, all the way through to deployment across global sites, teams, platforms, and methodologies.
WHat IS tHE ROlE OF PPM?

Application development organizations cant operate in isolation. A large organization may have hundreds or even thousands of custom applications, each competing for time, resources, and skills. PPM helps the business manage the way it allocates resources to applications in order to gain the maximum value from its investment.

Figure 3. The disciplines of PPM help organizations balance the demand for new applications against the capacity of IT

PPM encompasses project, portfolio, demand, application portfolio, and nancial management. All work together to help organizations optimize allocations of scarce IT and application development resources. (See Figure 3.) Organizations may apply PPM principles differently depending on their internal structure, budget, and strategic dependence on IT. However, according to research rm Gartner, PPM typically includes these ve key activities:4 Review current projects and their status Review the application portfolios impact on resources Present new capital requests Reprioritize the portfolio Examine investments for effectiveness
BRINGING tHE twO tOGEtHER

Although PPM supports these activities directly, the data used to make project and portfolio management decisions needs to come from somewhereand ALM repositories can be an excellent source of this data. But without integration between ALM and PPM, team members will have to collect and copy these data manually. Manual re-entry of data is feasiblebut its slow and prone to error. Integrating ALM and PPM repositories can circumvent these difculties, giving portfolio decision-makers accurate and timely data within a context that helps them make vital portfolio decisions.
4

Project and Portfolio Management Is a Business Process, Gartner Research, May 2005.

serena.com

Figure 4. The combination of PPM and ALM gives decision-makers powerful tools to make timely and accurate portfolio decisions

ALM and PPM support portfolio management activities

ALM and PPM can operate together to streamline the ve standard PPM activities listed by Gartner.
REVIEw tHE cURRENt StatUS OF PROJEctS IN mOtION

Within PPM, the role of project management is twofold. First, stakeholders need to know whether the project is on track with its projected resource usage and delivery time. Second, this activity provides data necessary to plan for future initiatives or reprioritize initiatives already in process. According to Gartner Research, Before allocation of new capital can occur, the prioritization group must understand when resources will be available and which resources (and skill sets) will become available.5 In other words, executives need to understand what resources and skills they have available, what those resources are working on, and when they will become available to work on other projects. Organizations that dont have tightly integrated ALM and PPM typically collect this data through meetings, e-mails, and other manual methods, then copy or paste it into the PPM system. This approach is slow, error-prone, and unnecessary. ALM Task Management systems contain information about the tasks people are working on, how much time has been spent on these tasks, and how many tasks remain for each development resource. ALM Requirements Management Systems, if they are tightly integrated with the rest of the ALM systems, already have information

Project and Portfolio Management Is a Business Process, Gartner Research, May 2005.

serena.com

on the scope of the project, including the requirements that have been completed as well as those that are still in progress. Issue Management systems can provide information about task closure rates as well as quality indicators such as nd/x rates. Instead of trying to gather this data manually, organizations should harvest it directly from the ALM task management system and use it to provide visibility into core project metrics such as: The number of requirements targeted for a project The number of requirements already met in a project Defect nd/x rates Issue closure rates Development resource capacity Development resource backlog This unltered view gives stakeholders reliable information about the status of projects in motion and allows executives to condently allocate resources to future development projects.
REVIEw tHE aPPlIcatION PORtFOlIOS ImPact ON RESOURcES

This activity draws on the PPM disciplines of Demand Management, Resource Management, and Project Management. Decision-makers play a what-if game with resources, determining whether new development projects will jeopardize the quality or maintenance of existing applications in the portfolio. Gartner says, Often, the people allocated to new projects are also committed to enhancing or maintaining recently delivered application projects to varying degrees, depending on where those applications are in their life cycle.6 So just because a project has been completed, it doesnt follow that all the resources will become available for other projects. Some contributors may have ongoing maintenance responsibilities. Decision-makers need to know whether developers will have the availability and capacity to work on new projects. If a new project requires a skill that only Chris Developer has, then managers must decide whether to assign someone else to Chriss maintenance tasks, delay the new project until Chris is available, or get another resource with Chriss skills. To make these determinations, they need to know what Chris is working on. Fortunately, ALM Task Management systems already have much of the necessary data. The ALM system tracks which tasks are assigned to Chris, how much time these tasks will take, and how long Chris is expected to work on these tasks. With integrated ALM and PPM, this data can be pulled into the PPM and used to make resource impact decisions.

Ibid.

serena.com

PRESENt NEw caPItal REQUEStS

Organizations use the discipline of Demand Management to reconcile the seemingly innite demand for IT services with the nite capacity of IT. Demand Management requires that organizations aggregate the requests for application resources and then allocate resources to meet the demands that are most important for the business. As part of this process, business managers hand off capital requests for application development resources to IT for scoping, feasibility studies, analysis, and estimates. PPM systems work with this data, structuring it to provide decision-makers with the information they need to make timely and effective business decisions based on facts and established metrics rather than gut feel or political pressures. After the organization has approved a project, IT should automatically transition the business requirements included in the PPM system to the Requirements Management system to avoid mistakes, prevent scope creep, and track the business alignment throughout the life of the project.
REPRIORItIZE tHE PORtFOlIO

Business priorities changequickly. On Monday a shopping cart application may be one of the highest priorities for an organizations eCommerce business. When the companys ercest competitor unrolls an integration with Amazon on Friday, suddenly the shopping cart application is outdated and the organization must re-evaluate all work in progress in light of this new competitive landscape. Additionally, as new capital demands and maintenance requests come into the Demand Management system, executives need to reprioritize the application development queue so that the requests with highest business value are scheduled before those with lower business value. The PPM disciplines of Project Management and Resource Management provide decision-makers with the information they need to make sound reprioritization decisions. When ALM and PPM are tightly integrated, PPM systems can directly harvest the unltered data they need about the current investment level of projects in motion, projected costs of projects in the queue, and scheduled release dates.

serena.com

EXamINE INVEStmENtS FOR EFFEctIVENESS

When organizations dont have enough budget for innovation, they need to take a hard look at how much they spend on keeping the lights on. In the words of Forrester Research, IT is losing its capacity to innovate because of its maintenance burden. Forresters most recent spending survey of 404 IT decision-makers revealed a disheartening change: The average percent of budget allocated to maintenance and operations is now 80%, up from 76% in 2005. This is not surprising, as last years new project became maintenance and operations (MOOSE) in 2006. The unfortunate result? A smaller innovation capacitythe portion of the budget available to do new work.7 Organizations should revisit each project within six months to a year after completion to see whether it has delivered the expected business benets. This helps in discovering post-project lessons learned and also in prioritizing future work on the project or similar requests made by the business. To determine business value, decision-makers need information about the application in production. What was the total cost of the development effort? How is the application being used? How many open defects are there? Open enhancement requests? Such data provides valuable insights into the usability and usage of the application. Requirements Management systems can provide information about the number and priority of enhancement requests that are associated with the application. Issue and Defect Management systems can tell stakeholders about the quality of the application and how much its maintenance has cost in IT resources. This data, combined with the business view of the applications benets, will support a realistic assessment of the ongoing costs and value of the application so business stakeholders can make the hard application end-of-life decisions based on facts rather than opinions.

Serena project and portfolio management for application lifecycle management

Serena is the only vendor integrating software lifecycle data with business, nancial, and resource intelligence. Serena Mariner Project and Portfolio Management (PPM) software enables organizations to balance the costs and value of IT investments in order to achieve the goals of the business. For the rst time, stakeholders can get objective, actionable data that enables business and IT management to work together to maximize the business value of the application portfolio. Through integration with Serena Dimensions and Serena TeamTrack Application Lifecycle Management (ALM) tools, Mariner delivers complete, accurate, and timely information about application costs and benets, from ideation to retirement. This helps organizations make the right decisions about which new software projects to undertake and which applications to continue to support. When priorities and needs shift, IT management can leverage this comprehensive data to adapt quickly, assigning the right resources to the highest-priority projects to maintain strategic focus.
7

How IT Must Shape and Manage Demand, Forrester Research, June 2006.

10

serena.com

IT organizations continually struggle to optimize allocation of scarce resources between application maintenance work and new application development. But they do so without clear data on how developers are actually spending their time, which resources are the most in demand, and the potential business value of each choice. With detailed information from Mariner, IT management can optimize return on application development spending, prioritizing revenue-generating projects and making the most cost-effective decisions for resource allocation. In addition to keeping projects on time and on budget, Serenas solutions help ensure that they remain on target with the needs of the business. Serena Mariner, Serena Dimensions, and Serena TeamTrack support and enable the ve PPM activities listed by Gartner.
REVIEw tHE StatUS OF PROJEctS IN mOtION

Throughout the application lifecycle, development process metrics (defects, requirements tested and passed, and change requests) from Serena Dimensions and TeamTrack feed into Serena Mariner which combines them with cost, schedule, and resource metrics. IT can stay on top of project status at all times, responding swiftly to any changes.

Figure 5. Tight integrations among Mariner, Dimensions, and TeamTrack provide decision-makers with vital information about the health and status of projects in motion

Key features: Integrated reporting provides visibility and project metrics without the need for roll-up Automated project data collection ensures consistent reporting across projects for apples-toapples comparisons High-delity information from ALM systems (nd/x rate, requirements met, etc.) guarantees unequalled accuracy when reviewing project status and risks Comprehensive project cost data collection (including development and maintenance costs) enables teams to understand the overall costs of applications in the portfolio

11

serena.com

REVIEw tHE aPPlIcatION PORtFOlIOS ImPact ON RESOURcES

Whether its a new application development initiative or a maintenance project, most IT projects end up competing for a nite number of development resources. Mariner replaces the traditional squeaky wheel model of resource allocation with strategic resource management. It captures demands from competing sources and rolls them up to support an objective assessment of total demand versus total capacity. Whenever demand exceeds supply, Mariners portfolio analytics help organizations appropriately prioritize work and allocate resources to the highest-value opportunities.

Figure 6. When integrated with Dimensions Task Management and TeamTrack Issue and Defect Tracking, Mariner Resource Management gives decision-makers timely and accurate insights into current and projected asset usage

Mariner links capacity planning, resource allocation, utilization, task assignments, and skills data to give resource managers a holistic view of their entire resource pool and the full spectrum of demands on those resources. This allows the organization to assess total resource capacity and make strategic sourcing plans for leveraging the expertise of full-time team members or augmenting staff with contract resources. The Serena solution leads to fewer bottlenecks, better forecasting of demand, and faster response to changing priorities. Key features: Demand-versus-capacity views help planners anticipate and pre-empt potential bottlenecks Optimized resource search recommends the best resources for each job based on availability and the priority of all other work assigned to the resources Time reports from Dimensions and TeamTrack task and issue management systems automatically and accurately capture 100% of time worked on all activities

12

serena.com

PRESENt NEw caPItal REQUEStS

Serena Mariner combines portfolio, project, resource, demand, and nancial management to help organizations optimize IT performance, evaluate initiatives based on value, and build a sound portfolio of application investments. Mariners integration with other Serena solutions helps decision-makers gain visibility into business requirements and track achievement throughout the project lifecycle. This information helps businesses assess demand for new applications, the t between project progress and business requirements, and IT skills and resource availability. It enables organizations to make informed choices about whether each application is delivering adequate return on ongoing investment. It also helps organizations assess the value of each application to the portfolio, or even the value of portfolio-wide decisions.

Figure 7. Serena Mariner, combined with Serena TeamTrack and Dimensions, provides complete visibility to stakeholders about the status of projects in motion and the queue of demands for application development

Key features: Top-down portfolio analysis supports strategic rather than tactical decision-making What-if scenario planning enables teams to investigate multiple scenarios with an easy-to-use mouse-driven interface Role-based home pages provide stakeholders with the information they need to make fact-based and timely portfolio decisions
REPRIORItIZE tHE PORtFOlIO

Business changes constantly and the application development portfolio needs to be reviewed to keep up with those changes. Priorities shift due to uid business conditions, resource availability changes, project status evolves and personnel come and go. The expected costs of a project increase or decrease as actuals come in from development, as scope expands or contracts, and as work estimations solidify. Businesses need up-to-the-minute information to be sure they are making the most of their portfolio and to make sure the portfolio continues to have the balance of tactical and strategic focus that is right for the business.

13

serena.com

Serena Mariner shows managers actuals from Dimensions and TeamTrack, and compares them to projections to help clarify the current and expected costs of all projects. Once a business can view the real and projected costs and risks of the projects in its portfolio, it can use what if scenarios to reprioritize the portfolio to make sure it is using application development resources effectively. Decision-makers can view the current priority list and simply check a box to see what happens to the portfolio when project priorities are changed. Key features: Stakeholders can use a customizable scoring system to view the current priority list based on variables such as time, money, or resource availability Managers can rebalance the portfolio to take into account shallow resource availability that will increase project risk Decision-makers can adjust project start-times to make most effective use of available resources. Just because a project has the highest priority doesnt mean it necessarily should be started rst

Figure 8. Mariner enables stakeholders to play a what-if game based on resource availability and priority to make sure the organization invests in the right portfolio balance

EXamINE INVEStmENtS FOR EFFEctIVENESS

Financial management is critical in selecting the right investments. Mariner allows portfolio planners to estimate full lifecycle costs and benets for all projects over their entire lifecyclefrom concept through development and launch, and on through the maintenance and retirement phases.

14

serena.com

serena.com

Key features: Standard business case views enable organizations to compare different types of investments, rolling up total costs and benets across the portfolio Time-phased nancial rollups allow IT to model and track the nancial implications of project starts, stops, and delays

Conclusion
Application development resources are scarce and expensive, while demand for them increases with every year. Only through portfolio management can organizations make effective use of their development resources for the benet of the business. Serena combines valuable data held in ALM repositories with the rollup, analysis, and reporting capabilities of PPM to provide organizations with the industrys rst-ever solution that supplies timely, unltered, and accurate information to decision makers so they can make sure the right people are working on the projects that are right for the business.

ABOUT SERENA

Serena is the leader in Application Lifecycle Management for distributed and mainframe systems. More than 15,000 organizations around the world, including 96 of the Fortune 100, rely on Serena software to automate the application development process and effectively manage their IT portfolios. For more information on Serena software and services, visit: www.serena.com
CONTACT

Learn more about the enterprise-wide power of Serena products by visiting http://www.serena.com or contacting one of our sales representatives in your area.

Serena Worldwide Headquarters Serena Software, Inc. Corporate Ofces 2755 Campus Drive Third Floor San Mateo, California 94403-2538 United States 800.457.3736 T 650.522.6699 F info@serena.com

Serena European Headquarters Serena Software Europe Ltd. Abbey View Everard Close St. Albans Hertfordshire AL1 2PS United Kingdom

Serena Asia Pacic Headquarters 360 Orchard Road #12-10 International Building Singapore 238869

+44 (0)800.328.0243 T +44 (0)1727.869.804 F ukinfo@serena.com

+65 6834.9880 T +65 6836.3119 F apinfo@serena.com

Copyright 2007 Serena Software, Inc. All rights reserved. Serena, Dimensions, Mariner, and TeamTrack are registered trademarks of Serena Software. All other product or company names are used for identication purposes only, and may be trademarks of their respective owners. June07