The old adage of the shoemaker’s son’s going barefoot has long been associated with IT organizations because they have often been the last to adopt the kind of automated solutions to run their shops that they have implemented for the rest of the enterprise.
Of course, packaging up what IT does is kind of difficult because, compared to line organizations, technology group processes and activities are so diverse. On one hand, they are regarded as a digital utility that is responsible for keeping digital lights on; not surprisingly, that is a dominant impression given that, according to a wide range of surveys, IT infrastructure and software maintenance easily consumes 70% or more (depending on whose survey you read). As to what’s left over, that’s where IT is supposed to play project delivery mode, where it delivers the technologies that are supposed to support business innovation. In that role, IT juggles several roles including systems integration, application development, and project management. And, if IT is to function properly, it is supposed to govern itself.
With ITIL emerging as a -– fill in the blank -– process enabler or yet another layer of red tape, the goal has been to make the utility side of IT a more consistent business with repeatable processes that should improve service levels and reduce cost. While adherence to the ITIL framework, or the broader discipline of IT Service Management, is supposed to make the business feel that it is getting more value for its IT dollars (better service can translate to competitive edge, especially if you heavily leverage the web as a channel for dealing with business partners or customers), the brass ring is supposed to come from the way that IT overtly supports business innovation in project delivery. But like any business, there is the need to manage your investments, a concern that has driven emergence of Project Portfolio Management as a means for IT organizations to evaluate how well projects are meeting their budgets, schedules, and defined goals; in some ways, it’s tempting to label PPM as ERP for IT, as it’s intended as an application for planning where IT should direct its resources.
Five years ago, Mercury’s (now part of HP) acquisition of Kintana, which was intended to grow the company out of its development/testing niche, began putting PPM on the map. That was followed in the next few years with each of the major development tools players acquiring their ways into this space.
Of course, the devil’s in the details. PPM is not a simple answer to a complex problem, as it requires decent data from IT projects that could encompass, not only accomplished milestones from a project management system, but feedback or reports from quality management or requirements analysis tools to ensure that the software – no matter how mission-critical – isn’t getting bogged down with insurmountable defects or veering away from intended scope. Significantly, at least one major player – IBM – is rethinking its whole PPM approach, with the result being that it will likely split its future solutions into separate project, portfolio, and program management streams.
Against this backdrop, Innotas has carved a different path. Founded by veterans of Kintana, the goal of the founders is to make the new generation a kinder, gentler PPM for the rest of us. Delivered as a SaaS offering, the company not surprisingly differentiates itself using the Siebel/Salesforce.com metaphor (and in fact is a marketing partner on Salesforce’s App Exchange). While we haven’t yet caught a demo to attest that Innotas PPM really is simpler, the company did grow 4x to a hundred customers last year, expects to double this year (recession notwithstanding), and just received a modest $6 million shot of C funding to do the usual late round expand sales & marketing.
The dilemma of governance is that lacking bounds, you can often wind up spinning wheels just to get the last detail, whether you actually need it or not. Not surprisingly for a top-down solution, and one that’s aimed at IT, the PPM market has been fairly limited. Significantly, in the press release, Innotas referred to the size of the SaaS rather than the PPM market to promote its upside potential. While that begs the question, there’s always the classic China market argument of a relatively empty market just waiting to be educated. In this case, Innotas points to the fact that barely 300 of the Fortune 1000 have bought PPM tools so far, and that doesn’t even count the 50,000 midmarket companies that have yet to be penetrated.
Our comeback is that like any midmarket solution, the burden is on the vendor to make the case that midmarket companies, with their more modest IT software portfolios, have resource management problems that are complex enough to warrant such a solution. Nonetheless, the PPM market is in need of solutions that can at least give you an 80% answer, because most organizations don’t have the time or resource to maintain fully staffed program management offices whose mission is to perform exactly that.