PPM 101: Why You Need to Develop A Phase-Gate Process

Phase-Gate Overview

The Phase-Gate process (also known as Stage-Gate™) is a governance structure to evaluate, authorize, and monitor projects as they pass through the project lifecycle and is a critical component of project selection and portfolio oversight. In the previous post we discussed the work intake process which brings new project proposals to the portfolio governance team. In this post we will cover the basics of how a phase-gate process further enhances portfolio management. A winning portfolio must contain winning projects, therefore the portfolio governance team must be able to discriminate between good projects and great projects. This process enables the governance team to review projects in a consistent way based on defined criteria for each gate.

A phase-gate process includes two or more phases such as: Discovery, Planning, Develop, Execute/Control, and Closure. For each phase of work, the project team has a set of tasks to complete before returning to the governance team for a gate review. At each gate review meeting, important information is provided to the portfolio governance team to make a go, no-go, hold, or modify decision related to the project. Without a phase-gate process, unnecessary or misaligned projects can enter the portfolio and significantly reduce the benefits from strategic projects in the portfolio. Project deliverables and metrics further ensure that the projects are done right. Together, a successful phase-gate process ensures that the right projects are done right.The diagram below highlights a sample phase-gate framework where portfolio criteria is used at each gate to ensure the right work is being done.

Phase-Gate Framework
Phase-Gate Framework

Reasons For Developing A Phase-Gate Process

There are eight reasons why you need to develop a phase-gate process.

Without a phase-gate process, unnecessary or misaligned projects can enter the portfolio and significantly reduce the benefits from strategic projects in the portfolio.

Screen Out Misaligned Projects

A successful phase-gate process filters out poorly aligned projects. Every organization will have more projects than it can execute, which requires the portfolio governance team to carefully select the best project. Some projects may look good on paper but are completely misaligned from the organizational objectives and strategies. When organizations have well established evaluation criteria, gate reviews are an excellent way of filtering out these misaligned projects.

Control the Flow of Incoming Work

Gate reviews can also act as a valve to control the number of projects entering into the portfolio. Even if every proposed project is a winner, your organization still has limited resource capacity to get the work done. Projects need to be initiated at the right time so that the organization is not overloaded with work. The phase-gate process works in parallel with portfolio planning.

Steer the Scope of Project Work

Gate reviews afford the portfolio governance team an opportunity to direct the scope of projects. Without gate reviews, project work can continue for months without executive oversight. Successful organizations review the statement of work for each project and identify “must have” versus “nice to have” components of scope. This is important because it gives the portfolio governance team options when reviewing and selecting projects and does not force them into making “all or nothing” decisions.

Improve Project Quality

The phase-gate process provides the portfolio governance team with project deliverables that contain key project information. The deliverables themselves ensure consistency in the process and help ensure that a good project plan is in place. By having the portfolio governance team review key project deliverables, it helps ensure that Project Leaders create higher quality deliverables.

Greater Visibility of Important Projects

The phase-gate process provides much needed visibility to the entire organization of what projects are being reviewed and what is the current status of each project. Without a phase-gate process, it is easy to lose track of projects, and even worse, shadow projects get approved without formal reviews, eroding portfolio value.

Better Monitoring of Project Progress

The phase-gate process not only allows greater visibility of work, but also provide a mechanism for tracking progress and status of projects at different phases of the project lifecycle. Projects that have been stalled in a particular phase or are in difficulty can receive help from senior management faster because the projects are being monitored.

Improves Communication Throughout the Organization

Solid organizational communication is a success factor for good portfolio management. Having a phase-gate process strengthens and improves communication throughout the organization by providing greater visibility of projects in the phase-gate process. By utilizing a common project language and having a consistent process, employees will better understand the work being done across the company.

Provides Structure to the Project Management Process

Finally, the phase-gate process provides structure for the project management process by determining a minimal set of project deliverables needed for gate reviews. Although the phase-gate process by itself does not replace a formal project management methodology, it does standardize the process for bringing projects through each review phase, thus reducing confusion and strengthening the project management process.

Phase-Gate Summary

Phase-gates are an important component of portfolio governance and can apply to waterfall or agile projects. After an organization establishes a work intake process a full phase-gate process can be added to increase the quality of project proposals and help ensure the portfolio contains winning projects. The key is to have just enough process to be effective without being bureaucratic. Only information that the portfolio governance team needs to make a decision should be collected as part of the gate reviews. Like any process, information that is collected but not used is a drain of organizational resources. Phase-gates can be very effective when set up correctly.

Work Intake - The Front Door For the Organization

PPM 101: How To Create A Successful Work Intake Process

Work Intake - The Front Door

Does your organization have a “single entry” for new project requests? Or rather, does your organization have a front door, a side door, a back door, and many other ways to receive requests? Having multiple ways to submit requests is a common problem for many companies and highlights the need for a standard work intake process. Without a common work intake process, it can be nearly impossible to track all of the work being done because there is no “single source of truth”. Even worse, a lot of shadow work may be going on in the organization which consumes valuable resources time from higher priority projects.

When project organizations (PMOs) are being established, one of the first tasks is to clarify how new project requests will be submitted and reviewed. Work intake refers to the process for creating project proposals and getting a go/no-go decision. This process often works in conjunction with an ideation process and phase-gate process, but can be independent as well. Work intake is a critical component for defining the project portfolio and therefore falls within the "Define the Portfolio" lifecycle stage. The diagram below highlights work intake in the context of the portfolio lifecycle.

Work intake in the context of the portfolio lifecycle

The Benefits of Work Intake

There are several benefits for creating a work intake process, summarized below:

  • Organizational clarity—helping employees understand how project proposals are brought forward will result in higher participation from the organization
  • Greater efficiency—having a clear understanding of the work intake process will result in greater efficiency in creating and approving proposals and shorten the time required to create proposals.
  • Higher quality—clarifying what information is needed in the proposal (and why) will result in higher quality proposals. It will also prevent people from collecting information that will not be used.
  • Greater consistency—common tools and templates will provide more consistent proposals making it easier for decision makers to compare and review proposals.
  • Control work in progress (WIP)—having work intake processes helps the PMO and governance team control the amount of work entering the portfolio.


Work intake is a foundational PMO/PPM process that organizations need to complete as soon as possible. Organizations with good work intake processes have visibility of their entire pipeline and higher quality projects with higher submission rates.


Steps for Creating A Work Intake Process

Developing a quality work intake process takes a little effort but is a critical component for portfolio management. Some of the basic steps for creating a work intake process are outlined below.

  1. Document roles and responsibilities: of each participant in the process needs to be documented and communicated. Some questions that need to be answered include: who will write the proposal (project manager, business analyst, executive sponsor)? What information is needed? What templates need to be filled out? What format must the information be presented? Who will review the proposals? How will decisions be made?
  2. Determine project proposal thresholds: in most cases, organizations need to start by focusing on project requests (as opposed to all IT requests which can commonly be handled by a standard IT ticketing system). This requires some definition of a project (e.g. above a dollar threshold? Above a resource effort threshold? Etc.). Creating these definitions will help ensure that all the requests match the definition of a project.
  3. Document workflow: the work intake process does not need to be complicated, but a standard process does need to be defined. The level of detail can increase over time, but helping the participants understand how to create a proposal, how to submit the proposal, and who reviews the proposal (and when) are all important processes to be documented.
  4. Identify tools for creating proposals: participants need to know whether there are templates available (highly recommended) for creating a proposal. Are there any IT systems that need to be utilized? (e.g. SharePoint, portal, portfolio management system)? Dedicated systems such as Acuity PPM help automate the project work intake process.

 Work Intake Success Factors

There are several success factors that organizations need to keep in mind when introducing a work intake process.

  • Having a single “front door to the organization”. Any ambiguity here will undermine the entire work intake process.
  • Have clear roles and responsibilities of all participants in the work intake process. Although the process does not need to be complicated, participants need to understand their role in the process. Some light training is recommended.
  • Clarify what information needs to be submitted. People are passionate about their new ideas and want to do everything they can to see them approved, even if this means spending a lot of time collecting information that is not relevant to the process. Helping participants understand what information they need to collect and how it will be used will streamline the process and make it consistent.
  • Clear process ownership. A PMO or other team needs to own the process, ensure that it works, provide training, and ensure that it is used properly
  • Clear communication. The team that owns the process needs to over-communicate how the process works as well as the decisions made, otherwise, the process is at risk of failure. Work intake processes (just like all portfolio management processes) need care and feeding.
  • Clear timetables for submitting requests and making presentations. Consistency is important here. Is there a day and time of the week that proposals need to be submitted for review? Is there a standing review meeting where decision makers will review proposals? This information needs to be shared in order to make the process more efficient.

Work In-take Metrics

Organizations should consider capturing a few key metrics for the work intake process:

  • How many project requests originate from a given organization (e.g. Finance, Operations, Marketing, etc.). When the organization understands where its requests are coming from, it can take action to better meet the needs of those internal organizations.
  • How many proposals are incomplete?
  • How many proposals come in per week? Per month? Per quarter? This information can inform how often decision makers need to meet and for how long; it can also support annual planning processes.


Work intake is a foundational PMO/PPM process that organizations need to complete as soon as possible. Organizations with good work intake processes have visibility of their entire pipeline and higher quality projects with higher submission rates. All of this translates into a healthy project portfolio, which then requires good prioritization. Once this process is established and working well, a full phase-gate process should be considered.


Priorities Create a True North

PPM 101: Tips For Projects Prioritization

Portfolio Management is About Maximizing Value

Portfolio management is about delivering the maximum value possible through programs and projects. In order to maximize value delivery, governance teams that approve work need to share a common view of “value” in order to select the most valuable work and assign the right resources to that work. Understanding the relative “value” of each program and project in the portfolio is at the heart of portfolio management and determines what work is selected, how it is prioritized, where resources are allocated, etc. In order to select a winning portfolio, every governance team needs to share a common understanding of value; without it, you’ll fail to realize the full potential of your portfolio. Project prioritization helps evaluate project value.

However, the definition of “value” will differ at every company because every company has different strategic goals, places varying emphasis on financial metrics, and has different levels of risk tolerance. Furthermore, even within a company, each department may interpret the strategic goals uniquely for their organization. Hence, “value” is not clear cut or simple to define. Any organization that manages a portfolio of projects needs to define and communicate what kind of project work is of highest value.

"Priorities create a ‘true north’ which establishes a common understanding of what is important. Without a clear and shared picture of what matters most, lower-value projects can move forward at the expense of high-value projects."

Assessing Project Value

Assessing project value is particularly important in the first phase of the portfolio lifecycle (Define Portfolio Value) via a work intake process. The only way to have a winning portfolio is to include winning projects, and this requires that project proposals be evaluated. When evaluating new projects for inclusion in the portfolio, a governance team must understand the relative value of the proposed project in relation to the rest of the projects in the portfolio; this will help inform the governance team’s decision to approve, deny, or postpone the project. Every project has inherent value, but that value is relative when compared to other projects. Some projects are transformational in nature and are highly valuable. Other projects may introduce small incremental change and could be of lower value. However, without a consistent approach to measuring the relative value of all projects it is possible for lower value projects to move forward at the expense of higher value projects. This is why a governance team needs a consistent way to measure project value.

The Right Tool for Assessing Project Value – The Scoring Model

The best tool for consistent project prioritization is a scoring model, which includes: the criteria in the model, the weight (importance) of each criterion, and scoring anchors to assess each criterion (e.g. none = 0, low =1, medium = 2, high = 4). A poor scoring model will not adequately differentiate projects and can give the governance team a false sense of precision in measuring project value. A good scoring model will align the governance team on the highest value work and measure the risk and value of the portfolio. Typical scoring models often include three categories of criteria (see example below):

  • Strategic Criteria: to measure the strategic alignment of each project
  • Financial Criteria: to measure quantitative financial value for each project (e.g. net present value (NPV), return on investment (ROI), payback, earnings before interest and taxes (EBIT), etc.)
  • Risk Criteria: measure of the “riskiness” of the project; this is not about evaluating individual projects risks but evaluating the overall level of risk associated with a project. This is similar to evaluating the risk of an individual stock. Remember, if you could only choose one of two investments that each have the same return, you will always go with the least risky option.
Example of Weighted Scoring Model
Example of Weighted Scoring Model


There are various approaches to building a good scoring model, and we believe it is worthwhile to invest a little time with decision makers to build a robust model from the beginning.

How to Use Project Scores

After using the scoring model each project will have a project score. This score is useful during the project initiation phase to select projects for the portfolio as well as how to assign resources to projects. For many organizations, the process of selecting projects and prioritizing projects is merged together to develop a rank order list of projects where the governance team “draws the line” where budget or resources run out to define the portfolio (see example below). This approach is an acceptable way to begin to use a scoring model (note: portfolio optimization would yield an overall better portfolio and will be discussed in a future post).

Project Prioritization - Drawing the LineGaylord Wahl of Point B Consulting says that priorities create a ‘true north’ which establishes a common understanding of what is important. Without a clear and shared picture of what matters most, lower-value projects can move forward at the expense of high-value projects. Even though experienced leaders understand the need to focus on a select group of projects, in practice it becomes very difficult. Good companies violate the principal of focus all the time and frequently try to squeeze in “just one more project.”

Project Prioritization Is About Focus

Project prioritization is about focus—where to assign resources and when to start the work. It enables the governance team to navigate critical resource constraints and make the best use of company resources. Higher priority projects need the best resources available to complete the work on time and on quality. Resources that work on multiple projects need to understand where to focus their time. When competing demands require individuals to make choices about where to spend their time, the relative priorities need to be obvious so that high-value work is not slowed down due to resources working on lower-value work. You have to be sure that your most important people are working on the most important projects in order to deliver maximum value within existing capacity constraints.

Furthermore, when resources are not available to staff all of the approved projects, lower priority projects should be started later once enough resources are freed up to begin the work. However, not all projects can be initiated immediately. Understanding relative priorities can help direct the timing and sequencing of projects. In some cases, high priority projects may have other dependencies or resource constraints that require a start date in the future. In other cases, lower priority projects get pushed out into the future. In both cases, schedule priority helps answer the question “when can we start project work?”  This is why project prioritization is about focus—where to assign resources and when to start the work.

Summary of Project Prioritization

  • Project prioritization starts with assessing project value
  • Senior leaders first need to share a common view of value
  • The tool for assessing project value is a scoring model
  • Projects scores improve the project selection process
  • Project prioritization is about focus – where to assign resources and when to start the work


If you would like to learn how to build a scoring model and put it into practice, sign up for our newsletter and you will receive a free copy of our ebook “Prioritization With Purpose” which goes into greater detail about creating a successful project prioritization process.


Portfolio Management

PPM 101: Why You Need Project Portfolio Management

Introduction to Project Portfolio Management

Project portfolio management (hereafter referred to as “PPM”) is a critical component for executives and senior managers to execute strategy. According to Mark Morgan, “there is simply no path to executing strategy other than the one that runs through project portfolio management”. In fact, projects are “the true traction point for strategic execution”. Furthermore, David Cleland states in the book Project Portfolio Management: Selecting and Prioritizing Projects for Competitive Advantage by Lowell D. Dye  and James S. Pennypacker that “projects are essential to the survival and growth of organizations. Failure in project management in an enterprise can prevent the organization from accomplishing its mission. The greater the use of projects in accomplishing organizational purposes, the more dependent the organization is on the effective and efficient management of those projects. Projects are a direct means of creating value for the customer in terms of future products and services. The pathway to change will be through development and process projects. …With projects playing such a pivotal role in future strategies, senior managers must approve and maintain surveillance over these projects to determine which ones can make a contribution to the strategic survival of the company”.

Project portfolio management is a senior leadership discipline that drives strategic execution and maximizes business value delivery through the selection, optimization, and oversight of project investments which align to business goals and strategies

Project Portfolio Management Defined

First, portfolio management must be defined. Several definitions of PPM from authoritative resources are given below and provide a balanced view to the subject of portfolio management (note: please see the bibliography at the end of this document for a complete listing of resources used). Without a complete understanding of PPM, the benefits mentioned above will be reduced.

According to the Project Management Institute (PMI®), project portfolio management is the “centralized management of one or more portfolios that enable executive management to meet organizational goals and objectives through efficient decision making on portfolios, projects, programs and operations.”

The Stanford Advanced Project Management series offers a concise definition of PPM: “Portfolio management is the strategy-based, prioritized set of all projects and programs in an organization reconciled to the resources available to accomplish them”.

Gaylord Wahl of Point B provides another angle of portfolio management: “Project portfolio management applies the tools and discipline of financial management to product/project management, taking into account: investment strategy, risk, ROI, growth/profitability, balance, diversification, and alignment to goals.”

Acuity PPM defines project portfolio management as “a senior leadership discipline that drives strategic execution and maximizes business value delivery through the selection, optimization, and oversight of project investments which align to business goals and strategies”.

Portfolio Management Lifecycle

Based on the information above, project portfolio management can be broken down into four basic components: selecting the right projects, optimizing the portfolio, protecting the portfolio’s value, and improving portfolio processes. In order to implement portfolio management, we must understand PPM at this highest level. These four components are represented in the diagram below.

 Portfolio Management Lifecycle

1) Define the PortfolioProcesses to define portfolio parameters and select projects that align with strategic objectives. This results in the portfolio containing a higher percentage of winning projects.

2) Optimize Portfolio Value—all the steps necessary to construct an optimal portfolio given current limitations and constraints (e.g. prioritization, resource capacity planning, portfolio planning, etc.)

3) Protect Portfolio Value—during the execution of an optimized portfolio, the aggregate project benefits (portfolio value) must be protected. This occurs by monitoring projects, assessing portfolio health, and managing portfolio risk.

4) Deliver Portfolio Value—Ensure that portfolio value is delivered by comparing expected benefits with actual benefits. Improving PPM maturity translates into a greater realization of the benefits of project portfolio management.


PPM Provides Answers to Fundamental Questions

Project portfolio management provides answers to eight fundamental questions:

  • What are we working on?
  • Do we have the right projects?
  • Where are we investing money and people?
  • Is our portfolio optimized?
  • Can we realistically deliver the portfolio?
  • Did we get the benefits we intended?
  • How are we performing?
  • Can we absorb all the change?

By implementing project portfolio management, your company can get answers to these questions faster and with greater confidence.

The Benefits of PPM

Companies that do successfully implement project portfolio management (PPM) reap several benefits, listed below:

  • Greater strategic execution resulting in the accomplishment of more business goals and objectives of the organization
  • Maximized portfolio value for the organization
  • Enhanced decision making processes resulting in better decisions
  • Successful management of organizational change
  • Greater visibility of projects in the organization
  • Higher success rate of projects within a complex environment
  • Reduced organizational risk
  • Balanced project portfolio workload


The Current State of PMO Software - It's Not Good

PMO Software Challenges

The vast majority of PMO software utilizes a traditional licensing model and is expensive relative to the value customers get from the software. There has been little innovation in the licensing model for PMO software since 2008 (when software-as-a-service started growing in popularity), and this is holding PMO’s back. Due to the extensive cost and complexity of the offerings, early-stage PMO’s that wanted a digital solution had to consider their future software needs in relation to future processes that they intend to implement (but may never actually adopt). The result often turned out to be cumbersome PMO software that was over-kill for many organization and in some cases, a very expensive paperweight.

In contrast, project management software has expanded greatly in recent years to include a wide variety of offerings at multiple price points, multiple licensing models, with varying degrees of functionality. This makes it far easier for projects teams with different levels of experience and skillsets to find a solution that works best for that team.

PMO software differs from project management software and has a strategic focus. PMO software includes capabilities such as: project tracking, status reporting, strategic roadmapping, portfolio analysis and reporting. More advanced functionality includes: work intake, Stage-Gate™, resource capacity planning, prioritization, and portfolio planning.

Every Project Management Office (PMO) needs to track projects and collect status from the beginning. Unfortunately, most organizations start out using spreadsheets and slide decks, which are static, manual, and time consuming. Today, PMO’s are forced to take a giant leap from using inexpensive basic tools to expensive and heavy PMO software.  Just as Project Managers have many options for managing projects, PMO Directors should have better options as well. Companies should not have to decide between cheap and manual versus expensive and cumbersome. Newer PMO’s deserve a digital solution that not only fits their state of maturity but also enables them to scale at their pace with a true cost proportionate to their true usage.

PMO Software Problem #1 - The Value Gap

The majority of Project Management Offices (PMO) overpay for their PMO software and don’t even realize it! Most PMO Directors do not even consider the “value gap”, which is the gap between the cost to deploy PMO software and the actual value derived from the software. The value gap highlights how broken the current PMO software licensing model is. Today, most PMO software is developed to cover a wide variety of use cases which means that a lot of software functionality is needed. Software vendors have to pass on these development costs to their customers whether or not the customer needs the functionality.

 The PMO Software Value Gap Chokes PMO Value Delivery

Moreover, most PMO’s do not fully utilize all the functionality because of their current capability maturity level. A maturity level represents the level of sophistication in the processes, tools, and people involved in the PMO. According to Gartner, around 80% of PMO’s are level 1 or 2 maturity.  Let that sink in. The overwhelming majority of PMO’s are new or have slowly matured and can only utilize a limited amount of functionality. Companies should pay for what they need, not pay for what they don’t need.  That's the tragic reality of the value gap – newer PMO's can successfully utilize a fraction of the software functionality they are paying for. They pay the software vendor full price for functionality which they may never use.

The overwhelming majority of PMO’s are new or have slowly matured and can only utilize a limited amount of functionality. Companies should pay for what they need, not pay for what they don’t need.

The graphic below shows us the first part of the value gap challenge. The X-axis refers to the five capability maturity levels of a PMO and the conceptual maturity progression from level to level; the Y-axis represents the value of the functionality at each level of maturity. We are drawing a correlation between the level of usage and software value. The more PMO software is successfully utilized, the more valuable it becomes. However, today’s PMO software is very robust, but by definition a level one or level two maturity organization can only utilize a limited set of features. At each maturity level there is a limit to how much functionality can be successfully utilized, this is the “minimum value gap”.  As organizations develop and mature, this minimum value gap gets smaller because they can utilize more features successfully.

The Minimum Value Gap - PMO Software
The Minimum Value Gap - PMO Software

As a simple comparison, grade school children learn how to use a basic calculator for addition and subtraction and have no need for a graphing calculator commonly used for calculus. Introducing a graphing calculator to grade school children is complex, expensive, and unnecessary. The student only needs a basic calculator to do basic math. The same holds true for PMOs and PMO software. PMO Directors should be equally vigilant to give their their early-stage PMO’s the right software to match their maturity level; anything more is a waste of money and a drain of resources.

The Real Value Gap

For each designated maturity level there is a minimum value gap. However, in practice, companies may get even less value than expected due to poor user adoption. This means that the actual utilization (consumption) of the software is less than expected. The real value gap is therefore even greater than the minimum value gap. In other words, when companies fail to utilize PMO software to their full ability, they get even less value than they expected. The graphic below depicts the real value gap. It is critical for PMO Directors to recognize this value gap and manage user adoption accordingly. Without user adoption there is no value.

Their current maturity level dictates or restricts how much of the functionality they can successfully utilize. When companies are unable to successfully utilize even the basic functionality we say that the real value gap is greater. PMO directors need to be aware of this value gap when evaluating PMO software. When a PMO director is considering the purchase of PMO software they strongly need to consider the value gap. It is foolish to buy anything that is far more expensive than what you need. PMO Directors need to evaluate their current state maturity and identify software that matches their current maturity level and allows them to grow into that solution. Buying a complex and advanced solution in order to “plan for the future” is a waste of time and a drain of organizational resources.

The Real Value Gap of PMO Software
The Real Value Gap of PMO Software

PMO software providers do not talk about the value gap in the sales process. This is also problematic and a red flag for PMO Directors. The responsibility for getting value from PMO software should be shared by the customer and the vendor. We’ve seen Fortune 500 companies with good intentions waste hundreds of thousands of dollars on PMO software that was too complex compared to their current state of maturity. This leads us to the second problem with current PMO software – the complexity gap.


PMO Software Problem #2 – The Complexity Gap

The complexity gap takes this problem one step further. When companies do realize the high cost of PMO software, they often do the worst thing possible – they deploy more functionality than they are capable of successfully using in order to get as much “value” as possible. It is very understandable why companies would behave this way. They recognize the high cost of software and want to ‘recoup’ as much of their investment as possible. By stretching the company to implement functionality beyond their maturity level, the hope is that the company will in fact get more value from the software and possibly improve their capability maturity at the same time. Unfortunately, these factors all contribute to the complexity gap. Let’s evaluate the complexity gap in more detail.

The Complexity Gap is Crippling User Adoption

Due to high PMO software costs, customers stretch to get as much “value” as possible and deploy more functionality than they are capable of using. The gap between the complexity of the functionality and the company’s ability to utilize that functionality is what we call the “complexity gap”. We know from experience that deploying functionality that is more complex than what the company can successfully utilize actually frustrates user adoption.  As the complexity gap widens, the risk of failed adoption increases significantly. Moreover, a poor user experience exasperates the complexity gap, further lowering adoption and reducing data quality.

The PMO Software Complexity Gap
The PMO Software Complexity Gap

When companies do realize the high cost of PMO software, they often do the worst thing possible – they deploy more functionality than they are capable of successfully using in order to get as much “value” as possible.


The Complexity Gap in Practice

Early-stage PMO’s (maturity levels 1 or 2) have fundamental needs to track all the projects in the portfolio, communicate project status and portfolio value, manage the intake of new work, and basic portfolio management. In some companies, even these basic processes are a profound shift for the culture and take time to get established. When used well, PMO software can improve the efficiency and effectiveness of these basic processes. However, when additional complex functionality is forced into a PMO software implementation, it adds significant adoption risk. Newer PMO’s cannot afford this additional risk. According to the Association for Project Management, 50% of PMO’s close within three years. PMO Directors must focus on delivering organizational value or risk closing within three years. Implementing complex PMO software functionality adds risk to the deployment, and ultimately to the survivability of the PMO. Let’s look at three examples of how the complexity gap comes up in practice.

  1. Resource management: successfully managing resource capacity brings great potential to higher on-time project completion. However, resource management and capacity planning are among the most difficult portfolio management processes. Good capacity management requires good PMO software. Getting control of resource capacity is one of the lures for buying PMO software, but many foundational processes need to be put in place. On the project management side, good project planning is essential (i.e. scope definition, task definition, effort and duration estimation). On the portfolio management side, the governance team needs to know what decisions it will make based on the data and how to use the data and when. Unfortunately, companies implement resource planning functionality without having these processes in place, and the software fails. We observed a Fortune 500 company spend over a million dollars on PMO software with the intention of managing resource capacity, but because the basic processes were not put in place (along with a poor user experience), the software failed.
  2. Work intake/Stage-Gate: work intake refers to the process of getting new project requests to the PMO or governance team. Stage-Gate is a specific discipline to monitor and approve projects stage by stage. Both processes add a lot of value to PMO’s, but companies implementing more complex PMO software get attracted to using automated workflows to handle intake and Stage-Gate processes. However, without the basic processes defined (and well adopted), unnecessary time gets spent managing the workflows and not managing the work.
  3. Time tracking: in some companies, time tracking is a necessary evil, but it also takes significant time to get adoption. Even when time tracking is part of the work environment, introducing a new time tracking tool can jeopardize a PMO software implementation. Most companies significantly underestimate the amount of work required to successfully implement time tracking. Others have written on the potential value of time tracking, but in many instances, any potential value is quickly lost due to the level of effort required to manage the organizational change. We know of companies that spend hundreds of thousands of dollars just to maintain expensive PMO software that is primarily used for time tracking. That money is better spent elsewhere.

The complexity gap really stems from an outdated licensing model. If companies try to avoid the complexity gap by only deploying functionality that matches their current maturity, they get caught by the value gap (paying more for software than the value received).

If companies try to avoid the value gap and implement more functionality as a way to ‘recoup’ their investment, they will get burned by the complexity gap. The solution is a better licensing model for early-stage PMO’s.

PMO Software Problem #3 - The Contract Race

The third problem with the current PMO licensing model is what we call contract races. When an early-stage PMO (defined as a PMO at level 1 or 2 maturity) signs a contract for new PMO software, there is a fundamental expectation that the customer will end up getting more value than what they paid for the contract. Otherwise, the company is wasting its time and money on software that has a negative return on investment. On day 1 of the new contract, the company has paid the vendor upfront for 1-2 years of licensing and has gotten zero value back. From this point forward, the clock is ticking and the burden is on the customer to deploy the PMO software and get adequate user adoption so that the they realize the value intended. This race against the clock to get more software value by the end of the contract is what we call the “contract race”, and it’s the wrong race to be in.

The Contract Race is the Wrong Race to Be In

This gap only closes as business value is realized through strong user adoption. The value of PMO software comes from successful utilization of the software. Remember, without adoption, there is no value.

The graphic below highlights the software contract race. The orange dotted line represents the annual licensing cost. The orange arrow represents the annual duration of the contract. The blue shaded area represents the actual business value realized over time and the orange shaded area represents lost business value by paying more in licensing costs than value received. From experience, deploying complex PMO software is difficult and can take a lot of effort to gain adequate user adoption.  Some companies realize enough value by the end of their contract, but many do not! One Fortune 500 company spent over a million dollars on licensing and resources to manage the PMO software, but did not use the software for what it was intended for, and the software was later shelved.  That money could have been invested elsewhere. This highlights that any unused functionality and wasted resources results in lost business value.

PMO Software Contract Race
PMO Software Contract Race


The value of PMO software comes from successful utilization of the software. Remember, without adoption, there is no value.


Introducing Freemium PMO Software

Freemium software grants usage rights to a limited version of the software for free and charges money for an expanded or full set of functionality. Freemium software has been available in the marketplace for a few years, most commonly for mobile apps, but until now, there has been no freemium PMO software.

Acuity PPM’s freemium PMO software is a critical development in the PMO software market. Our freemium PMO software allows newer PMO’s to perform the most fundamental PMO tasks with greater efficiency than manually updating spreadsheets and slide decks. Moreover, the reporting and analytic needs of companies has grown significantly in recent years, yet organizations struggle with the most basic reporting when relying on spreadsheets.  Numerous articles have been written about the pitfalls and shortcomings of using spreadsheets for managing a PMO, but unless companies were willing to make a large investment in PMO software, they were left with manual solutions or had to cobble together other tools with a poor user experience. Neither is an acceptable choice.

With our freemium PMO software, organizations can quickly convert their spreadsheets into Acuity PPM and manage their PMO in the cloud with all its benefits. Project Managers and team members can access and update key project information from any device. Keeping project data up-to-date is a big win and a huge step toward delivering greater value. And when a Project Management Office needs to expand the software capabilities they can upgrade to our true feature-based licensing model.

Finally, True Feature-Based Pricing

When a PMO is ready to utilize more functionality, the transition to Acuity PPM’s paid version is very simple. We utilize a true feature-based model with far greater benefits than the traditional licensing model. Companies can turn on new features such resource management and capacity planning, work in-take and Stage-Gate™, or prioritization when they need it and only pay for the modules they use.  You no longer need to pay for modules you may never use. This approach eliminates both the value and complexity gap, which enables customers to adopt the right functionality that matches their current maturity at a far lower risk than traditional PMO software.  This is the safest approach a Project Management Office can take to introduce PMO software. This is why we at Acuity PPM believe strongly in the true feature-based pricing model. With this model, you pay for what you need and don’t pay for what you don’t need. That’s simple and fair.

True feature-based pricing eliminates the value and complexity gap and enables customers to adopt the right functionality that matches their current maturity at a far lower risk than traditional PMO software. Pay for what you need and don’t pay for what you don’t need. That’s simple and fair.

Contact us to learn more about how Acuity PPM’s freemium software can benefit your organization.

PMO Software with Services

An Evolutionary PMO Improvement: Software with Services

The Sad News - PMO Failure Rate

The success rate for most project organizations (PMO’s) is not promising. According to Gartner, the majority of PMO’s fail within three years. There are a number of factors that contribute to this failure rate: poorly set up PMO’s, inadequate PMO leadership, weak governance, poor portfolio management, under-skilled project leaders, etc. Even when organizations have the best of intentions, they still may fail. To compound this problem even further, PMO’s may attempt to adopt expensive and complex software to help manage projects and the project portfolio thinking that the software will improve their success. Often it causes more noise and can become an expensive paperweight. The software rarely lives up to its promise, except in the most mature organizations with a high level of discipline.

To make matters even worse, PMO’s often lack dedicated resources to improve the efficiency of the PMO. Even if there are dedicated resources, they may not have the background needed to successfully implement project portfolio management (PPM). Many Project Management Offices are understandably focused on project and program management and as a result, have limited bandwidth to focus on process improvement. Furthermore, the PMO may not have an optimal mix of Project Managers at different levels of experience.

Unfortunately, even when Senior leaders realize the need for a better project management talent pool and more efficient PMO processes, their teams don’t have enough time to improve. Instead, they falsely hope of “getting there”. But for many PMO’s, they don’t “get there”, the PMO develops at too slow a rate to demonstrate the value that the organization really needs and after a certain period of time, the PMO is disbanded.

It doesn’t have to be this way. PMOs need the right software with services.

Holistic Solutions

Due to the challenges and obstacles that every company faces, PMO’s need holistic solutions, expert solutions that address the needs for better people, processes, and software. Very few companies have the internal expertise to set up a PMO that will grow and thrive, which is why outside help is critical for doing it right. In the past, companies would seek out a consulting firm for process help, a software company for PMO software, and possibly a third agency for project management support. The problem with this approach is that it is not integrated. People, processes, and software need to work in harmony with one another in a way that aligns with the organizational culture. The odds of successfully doing this with three separate companies is low.  New and developing PMO’s really need an integrated holistic solution from PMO experts in order to give them the best chance at long-term success.

A New Approach – Software with Services

Don’t overspend on consulting help, software, or project resources. Get the optimal mix of help to ensure that your PMO thrives. The right help at the right time can accelerate PMO development and greatly increase the chance of success for your organization. Acuity PPM provides holistic solutions across three dimensions: consulting services, project resources, and PMO software.

Consulting Services

Acuity PPM partners with Point B, a nationally recognized consulting firm with a specialty in strategy delivery to provide an array of PMO services.

PMO Enablement: Stand-up or evolve your PMO to increase its effectiveness and ROI. Point B helps you design your PMO with the goal of evolving your PMO’s capabilities and structure that will meet your strategic, mission, revenue-producing or cost-cutting objectives.   We tailor our approach to your environment, determining the key characteristics and success factors needed to achieve your business objectives.  We identify gaps that exist between your current state and desired future state and the relative priority of actions needed to rapidly increase the PMO’s value. From there, we design a point-by-point action plan, timeline, execution steps and required resources to transform your PMO into the required “future-state” model.  Based on our extensive experience in developing PMOs, we offer you guidance on how to define a clear mission, vision and scope so your PMO stays focused on delivering organizational value well into the future.

PMO Analytics: Many companies struggle with project portfolio planning as they confront how to “do more with less”. For most PMO’s there’s no structured, rationalized, or objective approach for evaluating, prioritizing, and sequencing projects. Business impact substantially increases when leaders understand the business contribution of all projects, their relative strategic priorities, and how to make the difficult decisions when project conflicts inevitably arise. When the portfolio planning process utilizes project data coupled with sophisticated analytics to enable objective decision-making based on user defined strategic criteria and constraints, greater value is unlocked. Point B’s proven project portfolio planning methodology uses a unique set of analytic capabilities to rapidly visualize and optimize your PMO portfolio across a wide array of project drivers.

Interim PMO leadership: when an organization is growing and needs to scale operations, but does not have the right skilled resources to manage the more complex components of PMO and PPM operations, this is a signal that the company needs additional help. Even worse, when there is a critical leadership void in the PMO and needs to be filled to manage daily operations, companies turn to Point B for solid delivery of the PMO as well as operational improvements to PMO and PPM processes. Only  associates with the appropriate level of PMO and PPM experience are utilized.

PMO Managed Service: managed services are widely used for processes that are outside a company’s core competency or are more efficiently managed by a provider with expertise.  Point B takes this same approach to help clients run the most effective Project Management Offices possible.  Point B offers a turnkey PMO solution that leads to predictable and reliable delivery of your strategic initiatives. The benefits of a PMO managed service include: a consistent methodology and best practices, handling daily PMO operations, execution, and delivery in order to free up your resources to focus on your core business, rapidly scaling the size of the PMO up and down to provide the right resources when you need them.


Project Resources

Getting the right mix of people and skills is challenging to most companies. Having the right people on the right projects at the right time is a critical success factor for project delivery. Ramping project teams up or down is hard to do, but Acuity PPM has an extensive partner network of high-caliber Project Managers, Business Analysts, and other project experts through Expert Velocity. Don’t get caught without the right people with the right skills. Get the right resources with the level of expertise you need:

Project ResourcesProject Coordinator: manages project schedules, risks, and issues. Develops project communications, status reports, and emails and manages smaller work streams within a large project.

Business Analyst: aligns stakeholders on requirements and business needs, creates and documents current and future states, gathers stakeholder requirements and translates these into functional specifications.

Project Leader: provides direction and collaborates effectively with business leaders, project and technical teams; leads small to medium projects or leads work streams within large programs.

Program Leader: provides direction and collaborates effectively with senior leadership and project teams; leads medium to large complex programs and develops a complex program structure while providing strategic insight.

Executive Leader: leads the most complex initiatives and provides expertise and strategic insight to solve complex business problems and transformation initiatives; advises executives on strategic decisions and best practices.

Subject Matter Expertise: provides expertise and strategic insight in support of a specific project or program; provides oversight and leadership to transformational engagements.


PMO Software

New and developing PMO’s do not need expensive PMO software to be successful. Acuity PPM was designed to meet the needs of 80% of today’s PMO’s (maturity levels 1-2) and our PMO software is specifically designed to help newer PMO’s conduct portfolio analysis and manage the portfolio roadmaps while tracking overall project performance. Acuity PPM is lightweight and easy to use at a low cost to answer fundamental questions:

  • What is our mix of projects (by investment strategy, project type, line of business, etc.)?
  • What does our strategic plan look like?
  • What is the overall health of the portfolio?
  • When are projects scheduled to be delivered?
  • What is the status of our projects?
  • Which projects are not aligned?

The Core Functionality of Acuity PPM's Free Version

Acuity PPM Roadmap

Project Tracking: Acuity PPM offers one place to track key project information and significantly reduces the need for spreadsheets.

Project Status Reports: Acuity PPM web-based status reports can be used for portfolio review meetings or other senior management reviews and are accessible on any device by any user, which significantly reduces the need for creating PowerPoint presentations.

Strategic Roadmaps: Roadmap functionality helps Senior Leadership visualize the timing and sequencing of in-flight projects and will support strategic planning and annual planning exercises.

Reporting: Reporting is a critical capability of a good portfolio management system. Acuity PPM provides a set of basic portfolio-level dashboards as well as integration with common data visualization tools.

Don’t wait. Contact us right away to learn more about how Acuity PPM’s software with services can benefit your organization.