Purchasing a Project Portfolio Management Tool: What's the ROI?


LOS GATOS, CA April 6th, 2016 - You could ask just about any project management leader out there and most or all would probably say that purchasing a good PPM (project portfolio management) tool is a great idea. The problem is, when it comes time to actually write the check, most are hesitant because they have tight budgets, staff and current projects to worry about, and they aren't sure what the return on investment (ROI) will be or if there even is one...or if it can be measured.
The problem with basing everything on ROI is you never take that jump. I was worried about being able to afford our first child. Imagine if I had stayed in that mind set – how boring our life would be. Instead, we now have 11 children...4 born to us and 7 adopted. I am blessed to the fullest and couldn't imagine life any differently – though I realize that's not for everyone. But as with many things in life, we sometimes we have to take that bold step and say, "Yes, I'm ready...let's see how this goes".

The tangible pros

Maybe for this situation, we actually can look at this a little deeper. While it's difficult to determine an exact ROI – in fact you'll probably never really get there – you can consider some cold hard facts about what purchasing a project portfolio management tool will bring to your organization in a positive way. Quickly, these five pros come to mind...

Reporting is always a critical piece of the decision-making process

Let's consider the reporting aspect a little farther. When you are managing all of your projects in, say, a spreadsheet as one organization I worked for was doing, there is no easy way to provide meaningful reporting across all projects that can be used well and productively by senior management. In general project managers are spending an average of at least 4 hours per week putting reports together and another 2 hours collecting actuals from project team members. If you consider that they may have a billable rate of $150/hour if they are doing client-related work as opposed to spending valuable time on reporting...then that's up to $900 per week of potential client-billable time an organization me be losing on an activity better suited by and probably eliminated by the acquisition and implementation a good project portfolio management tool. Over the course of a year that could add up to $45,000 per project manager needlessly spent or lost of potential billable time.

Let's look at this another way that may help further convince the reader of the ROI of a solid PPM tool. These tools – if you choose the right one – can be a collaborative wonderland with very good and customizable reporting mechanisms. What serves our project managers and the PMO director and all of their weekly analysis and reporting needs to get a nice detailed view of the project landscape and backlog in the company's PM infrastructure, can also serve the upper management tier very well with a 10,000 foot level dashboard view into the projects that need to be planned for, proposed upon, prioritized and addressed.

Those in charge need to be able to identify critical projects, make accurate prioritization of projects, and analyze resource usage and availability across all of those projects and potential projects. With a spreadsheet you may be able to capture some key aspects of each project, but meaningful reporting and customizable reporting that can be done quickly is just not possible. With the purchase of a good project portfolio tool you will have customized reporting and can use the tool to accurately report on, prioritize against, and assess resource availability for all of those ongoing and potential projects in your organization.

It's unfortunate, but some projects actually get canceled once an organization realizes all too late that they do not have the time or the resources to do it. If they had a good PPM tool that could assist with capacity planning or portfolio simulation, they wouldn't start a project they couldn't finish. As I mentioned earlier...managers are spending an average of about 6 hours every week collecting actual project hours and putting reports together that mean something to leaders and decision-makers in the organization and can be used to plan for and prioritize projects. This expense effort can be eliminated by acquiring and implementing a good project portfolio management tool.


Without a good PPM Solution, your management is likely making project management resource, financial and prioritization decisions based on gut feelings, inaccurate or estimated information and may even be taking on projects that aren't the best use of time and resources in the organization and contradictory to organizational goals. I've seen so many organizations approach the management of their overall project portfolio without any real insight and oversight...prioritizing based on what director or VP may be shouting the loudest. It is disastrous situation to be in and perpetuate and has led to the deconstruction of more than one project management office (PMO).

About The Author

Brad Egeland

Brad Egeland is a Business Solution Designer and IT/PM consultant and author with over 25 years of software development, management, and project management experience leading initiatives in Manufacturing, Government Contracting, Creative Design, Gaming and Hospitality, Retail Operations, Aviation and Airline, Pharmaceutical, Start-ups, Healthcare, Higher Education, Non-profit, High-Tech, Engineering and general IT. Visit Brad's site at www.bradegeland.com .