Enterprise Navigator

Agile Redux: How Planview and Our Customers Have Benefited from Agile

Last week I generally discussed how agile planning techniques were being driven by the new normal. This week, we thought you might enjoy getting an inside view of the difference it makes. Rob Reesor, our Vice President of Product Development, shares his thoughts about how we made the shift to adopting Agile development here at Planview and what it has meant for us and our customers.

Guest blog entry by Rob Reesor, Vice President of Product Development

In conversations with Planview customers exploring Agile, most have been interested in hearing case studies, experiences and best practices from their peers. In that spirit, I would like to share a very high level view of Planview's journey to Agile, as well the benefits we've seen.

To provide some context, I have a fairly long history with Agile; in fact, my grad school classmate, Kent Beck, has written several books on eXtreme Programming (XP), one of the most widely practiced agile development methodologies. I had the unique experience of working with Kent in introducing XP to one of my former companies. From my roots at the University of Oregon to Silicon Valley and now Austin, I have spent my career implementing Agile development practices in high tech organizations. My story with Planview began in October 2007, when I joined the company as VP of Product Development, where I was tasked with accelerating product development cycles to be as responsive as possible to customer-driven enhancements and new capabilities. The Planview product development team was just beginning to explore Agile, and I knew from experience this would be an important shift to help meet the goals laid out for my team.

Agile does not happen overnight, and it requires a significant shift in culture and processes backed by commitment from leadership, product management, and development teams. Moving in the direction of Agile, the biggest cultural change was the close working relationship between our developers and product managers on a daily basis. Rather than deliver an extensive requirements document, product managers now put together short user stories for the development team to tackle. In turn, developers are able to deliver working code much faster, quickly change course, and increase speed to market.

Over the last two years, Planview has steadily moved in the direction of Agile, implementing organizational, structural, and process changes to realize the vision. We point to the February 2009 release of Planview Enterprise 10 as a key milestone, because the product was built using Agile processes and the release was managed with Planview Enterprise PPM. The team was able to cover significant ground with major product enhancements, making it one of the most successful product deliveries in Planview history. The iterative approach to product management and Agile application development has yielded Planview and its customers several benefits:

• Better meet customer requirements -- The product development team is empowered to represent the voice of the customer by delivering working code earlier, which means they can react to customer feedback at all stages of the process. Planview's deep customer partnerships have always been a differentiator for the company through programs like the customer Inner Circle, but now we can truly say the product is customer-driven.
• Deliver the right product at the right time -- Adopting Agile has increased the productivity, speed, and agility of our product management process. Planview has been able to lead the market with new functionality and offerings, which is why Planview Enterprise 10 was named by Forrester as the No. 1 current offering for business-driven portfolios in its December 2009 Wave report.
• Drive the portfolio management market -- As an independent vendor with a single market focus, Planview is uniquely positioned to drive the portfolio management market by staying focused, nimble, and innovative. The Agile approach improves our ability to stay on the cutting edge through its value propositions of customer involvement, speed, and productivity.
• Deliver a higher quality product -- The ability to test the product from day one and throughout all stages of development improves quality engineering and assurance, because any minor issues can be proactively identified, isolated and resolved.

IT Financial Management Association (ITFMA) Conference

Guest blog entry by Randy Leiser, CFO in Residence

Two weeks ago I attended and presented at the IT Financial Management Association (ITFMA) Conference in San Antonio, Texas. The conference targeted IT CFO's and financial managers and covered a broad range of IT financial management subjects. As Planview's visiting finance expert, I presented "A Strategic Approach to IT Financial Management" — using the discipline of portfolio management to financially plan and manage resources along a hierarchy of the enterprise's strategic plan.

Based on the feedback I got after making my presentation, I think everyone in the room understood the concept and were generally in agreement with the reasons to implement IT Strategic Financial Management. That said, I sensed from a few of the post-presentation conversations I had with a few of the attendees that there were concerns about perceived resistance to the concept they expected to face back at their own companies.

A prerequisite to establishing strategic financial management is articulating the enterprise's strategic plan. As I covered in my blog earlier this month, "It's a Jigsaw Puzzle — Connecting the Pieces of Your Strategic Plan", assembling an enterprise's strategic plan is not accomplished in one big step but in a series of coordinated smaller steps, using an organized and controlled effort. Using a business management application that can frame the strategic plan, as well as assist in the inventorying, sorting and connecting of the strategic plan efforts, provides that organized and controlled framework.

Similarly, strategic financial management is best achieved using organized and controlled steps. An enterprise business management application designed specifically with a strategic hierarchy as its foundation will provide the structural support and control to guide and coordinate the incremental steps to incrementally adopt a strategic financial management approach.

So with all that said, how does a company begin the adoption of strategic financial management? While there are many planning and adoption considerations, I think it is fair to say that it begins with getting CXO's to understand the value to the enterprise of establishing strategic financial management. Getting senior management support can be best achieved by making both an implicit visionary and a more explicit tangible value case.

I make the argument for the more implicit or visionary value case by explaining that enterprise value is maximized through market leadership, and that market leadership is achieved through successful, strategically-aligned innovation. I have added to that the argument that obstructions to successfully achieving strategic alignment can be mitigated through the adoption of strategic financial management. These types of obstructions and the degree in which they impede strategically-aligned innovation are dependent upon the unique characteristics of the enterprise, but they include the ability of the enterprise to:

• Focus on and coordinate the core strategy;
• select the right efforts in which to apply resources; and
• manage the selected efforts to a successful completion

There are compelling general industry survey statistics that further support these as inhibitors to strategic alignment, but I have found that most enterprise's can find their own specific examples where practicing strategic financial management would have resulted in a much more favorable outcome. Some situations, like allowing an out-of-control or strategically-misaligned project continue too long, may be financially significant.

From a more tangible perspective, there are the immediate practical benefits that come with adopting a strategic approach to financial management, including being able to more efficiently plan and manage enterprise resource capacities and demands. In fact, this is where many companies begin their adoption of what will ultimately become a more comprehensive strategic financial management approach. Establishing the management processes along with a supporting business management tool to address this immediate need also provides a foundation for eventually aligning these resource capacities and demands with the enterprise's strategic plans. The near-term tangible benefits achieved through efficient resource management supports the longer-term, visionary argument for adopting strategic financial management.

With senior level support established to make the investment in new management processes and a supporting business management application tool, incremental organized and controlled steps can then be taken to build-out an enterprise's strategic financial management approach. As noted earlier, implementing strategic financial management is not accomplished in one big step but in a series of smaller coordinated steps — it will evolve and take further shape over time just like the construction of a building. Like a building's steel infrastructure, having an enterprise business management application tool designed specifically for strategic financial management will provide the structure to guide and support the build-out as your enterprise adopts strategic financial management.

It's a Jigsaw Puzzle -- Connecting the Pieces of Your Strategic Plan

Guest blog entry by Randy Leiser, CFO in Residence

Anyone who has succeeded in putting together a jigsaw puzzle knows that there are a handful of approaches to assembling a big picture from so many small pieces. However, it seems that the process always starts with the same two basic steps — laying all the pieces out on the table face up, and then looking at the big picture on the box cover.

After completing those two steps, the consistency in approach ends. Some puzzle assemblers make piles of similar colors, while others group similar shapes, and still others pick out the border and corner pieces. Invariably, there are also those who disregard completely any organized approach and immediately start digging in, convinced they can assemble the puzzle by starting wherever they find the first connections.

If you think about it, there are some key strategic planning portfolio management lessons that can be learned from putting together a jigsaw puzzle. Like a puzzle, the strategic plan "pieces" and their alignment with the "big picture" can be a challenge to assemble. Where do you start? Particularly if this is the first time the enterprise is methodically assembling the components of its strategic plan.

I submit, like the jigsaw puzzle, start with the same two basic steps:

1. Look at the big picture, or in strategic planning terms, clearly articulate the strategic goals along a cascading hierarchy of missions tied to supporting objectives and strategies. Missions tend to represent fundamental enterprise values that are, or should be, at the core of an enterprise's success. In turn, each mission is supported by enabling objectives, and each objective by enabling strategies and so on until the strategic plan has been articulated to the appropriate level for the enterprise.
2. Lay the pieces face up, or in strategic planning terms, take inventory of the enabling efforts that support the plan. Enabling efforts are the actionable work that produces tactical programs and services. Programs represent a significant undertaking comprised of a series of inter-related, duration-limited projects that produce a specific product or service. Services are organized systems of actionable work that provide repeatable functions or products. There is no question that the inventory step will require organizational involvement and a significant investment of time but have you ever tried putting together a jigsaw puzzle without turning the pieces face up before getting started?

The sorting of enabling efforts begins after the strategic goals have been clearly stated and, most importantly, understood by everyone involved in the strategic planning process. Just like being able to put all the red jigsaw puzzle pieces in the same pile, it will become obvious where the enabling efforts belong. Once in the right pile, the enabling efforts will likely connect to other related efforts. If there is not a connection, then those remaining enabling efforts need to be further considered for fit. That said, unlike a jigsaw puzzle, there will likely be a few pieces that do not fit with the strategic plan. This is a good outcome because there is no sense in spending capacity on things that do not support the big picture.

In fairness, I believe the complexity of the strategic plan does influence the approach taken to align the enabling efforts. Like assembling the components of a strategic plan, a complex puzzle picture with only a few pieces or a simple picture with lots of pieces is much easier to put together than a complex picture with lots of pieces.

The key to remember when assembling the strategic plan is to approach the process using an organized and controlled methodology. For a simple environment, assembling the strategic plan can probably be accomplished with not much more than standard office tools. For an enterprise that has cascading strategic goals and multiple supporting enabling efforts, having a tool that can provide a framework to establish the strategic hierarchy, as well as assist in the inventory, sorting and connecting all the enabling efforts will not only provide a final result that is more powerful and rewarding but will make the process a lot more efficient. And, since strategic plans and their enabling efforts are not static, using a tool makes adjustments and updates far more efficient. Just like a completed jigsaw puzzle — if clusters of already connected pieces are put back in the box, the puzzle can be put together a lot quicker the next time.

On an unrelated note, I'll be attending and doing a presentation at the IT Financial Management Association (ITFMA) Conference in San Antonio, March 10th through the 14th. If you are going, please take a moment to stop and say "hello" if our paths cross in a session or at the Planview display.

Let the Big Dogs Eat -- Competition for Resources and the Investment Decision Process

Guest blog entry by Randy Leiser, CFO in Residence

Ever hear the expression "Let the Big Dogs Eat"? If you haven't heard it before, visualize a bowl of yummy dog treats and several very hungry, very differently sized, and arguably unguided dogs prowling behind a gate. Now open the gate — who's eating and who's not?

The "Let the Big Dogs Eat" metaphor could easily apply to the competition for resources in some organizations for those "must-have" IT projects, whether those resources are people, money or both. Sometimes it comes down to the biggest enterprise "dog" winning resources even when the enterprise might be better off if the smaller dogs were better recognized. Fortunately, the jockeying for enterprise resources is a bit more civil, although some might argue it is not without growling and flashing of incisors. That said, the allocation of resources often boils down to actions and decisions that are not always based on a level playing field. When this happens, the enterprise is not realizing the greatest overall business value from the use of its resources. The management challenge in these situations is that it is awfully hard for the resource allocation decision makers to compare the overall business value of various investment proposals. It becomes even more difficult when these enterprise resources are tightly constrained.

As one who was responsible for approving resource allocations, I became very popular around budget and capital appropriation time, as department executives and controllers would plead their investment cases. While their proposals reflected financial and other investment rationale for the most part, their presentations often lacked consistency and clear alignment with the overall strategic objectives of the enterprise.

A consequence of this unstructured approach to investment approval was that some of these well-meaning executives, like the big dog, would flex their stature to get the resources they needed despite whether their investment proposals provided the highest overall enterprise business value. Another more personal consequence of this was that I was usually left in the unenviable position of making and communicating investment decisions without having a structured, efficient, and widely-accepted way to do it. While I carried out my responsibilities as a courageous finance leader should, it certainly was easier saying no to the little dogs, whose bark and bite appeared less threatening!

To mitigate these consequences and level the playing field, we adopted a portfolio management approach to investment approval. Simply put, we adopted enterprise-wide structures and processes to execute investment decisions in a consistent, efficient and defensible manner to produce the highest total business value to the enterprise.

As mentioned earlier, the investment proposals I received almost always had some financial metric justification. However, investments that are measured in purely financial terms, whether consistently or not, do not always result in maximized enterprise business value. It's also probably fair to say that with regards to IT investment proposals, I haven't seen one yet in which I couldn't have easily and significantly increased the projected financial benefit by making a few minor enhancements to the underlying assumptions.

So, to optimize the enterprise's portfolio of investments, we reviewed how each investment contributed to the enterprise, in addition to pure financial metrics and measures. We began simply by aligning investments with a handful of well-understood enterprise strategies and categorizing proposals into investment types such as base services, mandatory or discretionary. Through these initial steps we established a foundation for an enterprise-wide common language for investment analysis.

Over time, we incrementally adopted additional investment analysis concepts such as establishing investment goal categories like risk reduction, resource capacity leveling, and financial cost reduction/revenue enhancement. Additionally, we strengthened investment control structures such as tying incremental investment approval to defined milestones.

As our approach to investment analysis and portfolio management matured, we realized many benefits from our efforts beyond producing an investment portfolio that resulted in providing higher total enterprise business value. For instance, my job of making and communicating investment decisions got a lot easier, and my popularity actually grew and not just around budget time. Additionally, there seemed to be considerably more enterprise strategic planning cooperation, and a lot less barking around the resource bowl.

Next up — The Strategic Planning Jigsaw Puzzle — Putting the Pieces Together

Saving Face: Avoid Your Nose When the Budget Axe Swings

Guest blog entry by Randy Leiser, CFO in Residence

I recently read an article in SearchCIO titled, "Recession: A Bond for CIO and CFO," and wanted to offer my perspective. As concern around a recession spreads, it is now more important than ever for organizations to take a strategic approach to IT financial management and resource allocation, in order to ensure business initiatives are not crippled by misdirected budget cuts.

As a former head of corporate financial planning for a fortune 500 company, I can confirm that so-called discretionary IT spend is one of the first areas the enterprise finance department goes after whenever there is a need to trim the budget — recession or not. That said, I have also found that CEOs are often reluctant to cut IT, especially if it can be shown how discretionary IT initiatives are an integral part of the enterprise's strategic plan and have a positive, measurable impact on the bottom line. Often the biggest challenge is giving the CFO and CEO the ability to prioritize the discretionary investments in these situations, so they don't "cut off their nose to spite their face."

As the article suggests, well-run IT shops should be able to respond appropriately in these situations. From my experience, organizations that have used the discipline of portfolio management to plan and manage their IT investment in alignment with the enterprise's strategic plan will find the cutting exercise much less painful. In fact, this strategic approach provides the CFO and CEO with the substantiation to defend making budget cuts outside of IT.

Can Finance Departments Manage Strategic Planning?

Guest blog entry by Randy Leiser, CFO in Residence

Remember the game of telephone? You whisper a message from one person to another until it reaches the end of the chain. The final message is almost always very different, and often funny compared to the original.

In some enterprises, strategic planning can be likened to the game of telephone. Good senior executives are often defined by their ability to articulate their strategic vision in the form of high level missions and objectives — the high level strategy. However, often these strategies get diluted as they are passed down through the layers of their organization to where the tactical planning and execution of work occurs.

In my last blog post, I posed the question of where should an enterprise-wide strategic planning function — Enterprise Program Management Office (EPMO) — be located if finance departments are too busy with non-strategic activity to do it? Given my finance career roots, I am sure it was no surprise that I ultimately concluded that strategic planning belongs with the finance department; however, I want to further explore the question of whether the finance department needs incremental processes and/or supporting application tools to fulfill that role effectively and efficiently.

To answer that question, let's examine strategic planning, a process that often leaves senior executives frustrated. They think they have done a great job communicating the strategies and legitimately believe the organization should then be able to follow through on planning and executing them. Meanwhile, the organization tasked with planning and executing the strategies and their supporting tactical efforts is also frustrated because the dissemination of those strategies was not as clear to them as the senior team perceived. Furthermore, the implementers may feel resources allocated to them are not ample enough or don't align correctly within the enterprise to execute on the strategies.

This senior management and 'rest of the organization' disconnect can occur for several reasons, but I would argue that a contributing factor is using only an organizational-based planning process to manage the strategy through the enterprise. An organizational-based process allocates and manages resources along an enterprise's organizational hierarchy of business units such as subsidiaries, divisions, departments and groups within a department.

Implementing strategies requires resource planning and funding that transcends organizational boundaries. For instance, executing a strategy to improve customer purchasing experience could include resources from marketing, operations, training, as well as information technology. Organizational-based processes that measure resource requirements along organizational hierarchies do not optimally communicate and coordinate cross organizational efforts, which in turn can result in strategy planning and execution inefficiency.

I am not suggesting the abandonment of organizational-based planning processes and supporting applications for strategic planning. That would not make sense since they ultimately and inherently reflect an enterprise's strategic plan. That all said, a strong argument can be made that the overall strategic planning and execution result would be strengthened by the addition of a portfolio management-based planning process and supporting application that aligns strategies, and allocates and manages resources, along a strategic hierarchy of missions, and successively supporting objectives, strategies and ultimately, detailed tactics such as programs and services.

As you may recall from my last blog, I found a definition of what I thought captured the general essence of an EPMO.

An organizational resource that aligns strategically with the entire enterprise and provides a holistic management function over numerous strategic projects which transcend the organization and which may include significant resource allocations besides just technology people and money.

That definition sounds an awful lot like the finance department in most enterprises, given the finance department's existing holistic management, planning perspective, and responsibility. Using a well-defined strategic planning process, such as that offered through the portfolio management discipline, along with a supporting application, the finance department is in a great position to efficiently manage an enhanced strategic planning process and mitigate the game of enterprise telephone.

Next up in CXO Viewpoint — Let the Big Dogs Eat: Competition for Resources and the Investment Decision Process

Are Finance Departments Stuck in a Tactical Rut?

Guest Viewpoint: A Financial Executive's Perspective on Portfolio Management

Similar to many other finance executives, I receive CFO Magazine on a monthly basis. CFO Magazine is to a finance/accounting professional like CIO Magazine is to an information technology professional. Typically I hang on to the most recent couple of issues of the CFO magazine until I can find some time to read it which is usually on an airplane. On my last trip I came across a short article on page 26 of the November issue titled Stuck in the Rut by Kate O'Sullivan.

The article comments on and supports with data that finance departments are still spending too much time on routine tasks as opposed to spending time on strategic activity such as decision analysis and decision support. The article sites that finance departments spend almost half their time processing transactions despite investments in technology and offshore operations to improve efficiency. More importantly, the data sited in the article indicates that there really has not been any reduction over the last 3 years in the amount of time that finance departments spend on this non-strategic activity.

While I did not find the data in the article surprising, I did find it very interesting and relevant to the EPMO panel discussion at the recent Planview Horizons User Conference. Terry talks about this in his recent posting.

For those of you who are scratching your heads as to what exactly is an EPMO, rest assured you are not alone. In its actual form, an EPMO can mean different things to different people based on their own experiences and the organizations in which they have been a part. Some people simply think of it as an enterprise strategic planning office, but it really is more than your father's old strategic planning function. As I searched around for some thoughts as to what best describes an EPMO I found the definition below that I think captures the general essence of an EPMO in today's innovate or fade business world.

An Enterprise Project Management Office or EPMO is an organizational resource that aligns strategically with the entire enterprise and provides a holistic management function over numerous strategic projects which transcend the organization and which may include significant resource allocations besides just technology people and money.

You're probably asking what does the Stuck in a Rut article in CFO magazine have to do with the role of an EPMO? The connection is this — once the panel had covered the need for and role of an EPMO, the discussion naturally transitioned to the subject of where an EPMO resource and function should report. Should the EPMO report through the CIO, CFO or the CEO?

There were arguments made that the EPMO is really just a more holistic extension of the IT PMO that governs multiple PMOs, and therefore can be best managed and optimized for the enterprise under the CIO.

Others saw the EPMO as more of an enterprise, strategic planning function that incorporates resource allocation decisions that extend well beyond those resources that fall under the control of the CIO — more along the lines of the EPMO definition above. In this broader context, there was thought that the function would be best managed and optimized for the enterprise under the CEO or CFO.

Aha! Here's the relevance of the Stuck in the Rut article. With all the recurring transaction processing activity and other regulatory and compliance obligations inherent in today's finance organizations, can the EPMO resource and activity be effectively managed in the finance department? Would the establishment of an EPMO within the finance department provide the finance department with the resource so it can play a more holistic, strategic management role? — or, would establishing the EPMO in the finance department result in not optimizing the EPMO function because the finance department is stuck in the rut and it's not getting out anytime soon despite the finance department's desire to play a more strategic enterprise role?

For a finance executive, it may be considered heresy to suggest that this enterprise-wide strategic management function not be managed within the finance department. Finance is typically the organization that aligns strategically with the entire enterprise and, by virtue of its control function, sees all that is happening within the enterprise — so there is a pretty strong argument that it is the logical place to manage the EPMO.

With that as background, maybe there is a better question to ask: What does the finance department need, whether it be resources, tools or processes, so it can spend more time on strategic activity to maximize enterprise innovation?

Knowledge Is Good

Inscription on the statue of Emil Faber (inventor of the modern pencil, brother to Eberhard, and founder of Faber College)

— Animal House

A college is an excellent place to obtain knowledge…but as Otter, Flounder, Boon, and Pinto learned, credibility, experience, and wisdom are a hard won triumvirate that comes from places and adventures beyond the textbooks and professors (you need something like a kiln explosion).

These characteristics are priceless — the stuff good consulting is made of. They are also more rare and difficult to obtain than one might presume, and should not be confused with mere knowledge and intelligence. Anyone can go to classes, read books, or attend conferences to become knowledgeable enough to spout the lingo, but the elements of credibility, experience, and wisdom are the realm of seasoned practitioners and difficult to acquire through any other means.

A high level of credibility, experience, and wisdom is needed to be a player with a customer base that includes some of the most sophisticated, demanding, and prestigious corporations in the world. We have really smart and experienced staff at Planview, particularly in areas related to work and workforce management. As we extend our footprint of functional capabilities and supported processes, we are developing an ever-widening pool of expertise to fuel this expansion.

One way we do this is by leveraging our strategic partnerships. For example, our current relationship with BMC has done much for both parties to build mind share around how work management and service management should interact.

To supplement our organic brain trust and strategic relationships, we instituted a visiting executive program in late 2006. The objective is to attract the credible, experienced, and wise practitioners in targeted subject areas to spend several months working with us. This program allows us to extend our insights to extreme levels in these specialized areas.

Our first fellow was Sean Worthington, who served as our CIO in Residence. Sean had been a CIO in several organizations, sometimes during daunting times, so he was both highly adept and passionate about controlling IT operational costs. Sean and I worked closely together to develop our best practices for Application Portfolio Management, and I learned much from him about service management during his tenure. He is now in a senior IT leadership position at Cisco.

Our newest collaborator is Randy Leiser, principle at Golden Creek Management and Capital Solutions, who is serving as our current CFO in Residence. Randy has a been-there-done-that factor that comes from many years as a financial planner, treasurer, CFO, and many other experiences in related areas.

Randy held several positions at AMR, the parent company of American Airlines, including VP of Finance and Information Systems for the Cargo Division, Managing Director for Corporate Financial Planning, and Managing Director for Corporate Development. During part of his tenure at AMR, he was directly responsible for managing all major investment spending decisions including IT initiatives, and successfully architected the Sabre spin-off as an independent business entity.

Randy has also held positions in other organizations, including VP and CFO, VP of Investment Banking, and a Big 5 accountant. He is a certified public accountant and has an MBA from University of Michigan with a concentration in corporate finance.

Randy and I will be working closely together over the next several months on a few specific projects, and I look forward to all of us coming out the other side with a great deal more insight into the financial planning process area.

I also want to give him an opportunity to share his insights with you, so I have invited him to be a guest blogger from time to time. To accommodate this, we'll be establishing a new category for the Enterprise Navigator called Guest Viewpoint. Look for Randy's unique perspective in these hallowed pages from time to time as an opportunity to get a first-hand look into the mind of a CFO and how he thinks about the world of integrated business management.