In-Depth

PSA emerges from Y2K ashes

• By Rich Seeley
• September 1, 2001

The scope of Y2K and its fixed deadline led to the establishment of many IT project management offices that quickly added responsibility for Web application development during the dot.com boom. The "Y2K crisis" also led to demands for multifaceted enhancements that are now subsuming project management into the constellation of tools that fall under the new label of Professional Services Automation (PSA). The result is that while project management, the discipline, has never been more important in IS/IT shops, and project management professionals are finally getting some respect in IS/IT circles, project management software, especially the stand-alone variety, is becoming just another tool in a big PSA toolbox.

"From a project management perspective, the market is as mature as mature gets," said David Hofferberth, research director, Professional Services Automation for Aberdeen Group, Boston. "There aren't the radical enhancements to project management software anymore."

In his view, project management has become just one of several components of PSA, whose package also includes modules for resource management, especially human resources, and time and expense management.

"PSA started out a couple years ago as more of an add-on to project management," Hofferberth explained. "Then it brought in time management, expense management, resource management and now it's turned into this full-fledged collaboration software that enables everybody to share information more readily and hopefully accomplish the work better and at a lower cost."

The Aberdeen analyst does not get an argument on this from his colleagues.

"I see project management and PSA beginning to converge," said Margo Visitacion, a project management analyst with Giga Information Group, Cambridge, Mass. "The functionality within the two sets of applications is becoming very similar. A number of the PSA vendors are either beefing up their scheduling and planning features or improving their integration into Microsoft Project. The enterprise project management vendors are improving their resource management, engagement management and overall workflow management. They've already started going after the same customer base, and I think that's going to continue."

Adapting to changing economic climate
First the tight labor market for programmers with specific skills, which began for IT during the Y2K project rush of the late 1990s, and now a weakened economy have helped transform PSA from its role as a bit player into a star on the project management stage. When unemployment was low, it was important to find the right programmer either in-house or in pools of contractors. Now that the economy is down, it is critical to make the best use of the time and skills of employees and contractors alike. For both problems, PSA turned out to be the solution.

"PSA focuses on managing resources, where project management focuses specifically on managing projects," said Ted Tzirimis, research analyst for Spex, which is part of the Meta Group Inc., Stamford, Conn. "The need emerges to capture where all your employees are, on what they are staffed, who is available and who is going to be available, in order to help budget and forecast all of your requirements for projects in the future."

Technological convergence and a weak economy are creating a familiar trend in the software industry, according to analysts who cover project management and PSA.

Acquisition happens
"The big trend that we're seeing," said Tzirimis, "is PSA vendors buying project management vendors. I'd point to the Niku acquisition of ABT, which was one of the leading project management tools on the market."

Meanwhile, Microsoft Corp. appears to be extending Microsoft Project, its popular desktop tool, into the enterprise market with its acquisition last year of eLabor.com technology. With eLabor's tools, Microsoft Project can be beefed up with skills-based scheduling, which analysts say is a hot technology right now.

Project managers are seeking ways to save their companies money on human resources by keeping programmers as busy as possible. Skills-based scheduling allows managers to identify, for example, a C++ programmer who may have the knowledge and expertise to complete critical parts of several projects. Ideally, these in-demand programmers can be scheduled so that as soon as they complete their work on one project, they can move on to the next without losing a keystroke. Experts say companies are increasingly counting on this type of productivity enhancer to boost bottom lines.

Gartner analysts believe the eLabor technology will boost Microsoft's bottom line. "MS Project is the leading desktop scheduling tool, and by securing eLabor.com's technology, Microsoft should be able to propel MS Project into the market for project portfolio management tools currently led by Artemis, Niku/ABT, PlanView and Primavera," according to a Gartner report.

Asked about this, Brett Bentsen, group program manager for Microsoft Project said: "That's certainly the implication in the technology acquisition [from eLabor.com]. If we didn't think that was an area more of our customers wanted to move into, we certainly wouldn't have acquired that technology. So I think it's pretty safe to say that we're trying to expand to meet the needs of our customers across the traditional desktop project management and scaling up into the enterprise project management in the future."

More than one analyst predicts that project management leaders like Artemis, PlanView and Primavera need to hold onto their hats when the 900-pound gorilla in Redmond, Wash., rolls out the next version of Microsoft Project.

Another company to watch is PeopleSoft, Pleasanton, Calif., which, with its human resources roots, acquired Sunnyvale, Calif.-based SkillsVillage to beef up its Enterprise Service Automation (ESA) toolset. Hofferberth points out that the SkillsVillage (now known as PeopleSoft Services Procurement) labor exchange and technology provides the resource management link to contract workers that every company offering a PSA solution covets.

Finding a few good programmers
Using the next generation of PSA tools, project managers for IS/IT shops and consulting firms can line up contract programmers through Web labor exchanges as they are scheduling projects. While the current economic slowdown may cause a slight up-tick in the unemployment rate in Silicon Valley, there are no reports of long lines of C++ programmers at San Jose homeless shelters. Having a link to skilled labor exchanges is going to be a plus for any project manager.

Analysts agree that gone are the days when an IT manager could gather programmers from neighboring cubicles and say, "Let's build an application!" Most development projects are done with a mix of in-house talent and outside contractors, and in a global economy both groups may be working in offices stretching from Boston to Bangalore, India, to Austin, Texas. That is the reason IS/IT project managers are demanding tools that help them juggle human resources and coordinate collaboration.

"It originally started with the very tight labor markets," said Tzirimis. "You still see that for IT professionals. Obviously the unemployment rate has gone up, but the market is still very competitive for IT professionals. Finding the right talent is important. In terms of ROI, it has been proven that PSA packages reduce costs in terms of human resources. It enables you to shift resources from project to project as soon as they are available. So it really helps maximize project management as a whole."

Greg Lege, manager, professional services, global operations for BMC Software, Houston, is using PlanView tools to manage the human resources needed to implement products for its customers.

"BMC has more than 200 products, so our skillsets are pretty vast," he explained. "We use PlanView for resource management, not only to do the traditional things where our resources are, but also to determine the individual levels of proficiency across the large number of products that we have."

Scheduling time for e-learning
Another new wrinkle in the human resources side of project management is that managers can use software to provide training to IT professionals to ensure that they have the skills required for upcoming projects. PSA tools not only track qualifications for programmers and other knowledge workers, the software also can help arrange e-learning to update the qualifications on their resumes.

"If there is a course this person needs to take so they can acquire the skills they need, you can book them [for] that course, track when they've completed it and update their information," Tzirimis explained.

In a scenario that might be called "Monster.com meets Microsoft Project," the human resource management tools store programmer preferences, right down to idiosyncrasies like "only works on East Coast" or "goes backpacking in the Sierras during August."

Once the project managers have the right programmer with the right skills for the job, the next thing they need is a tool for tracking how the work is going. This is a level of micromanagement that is new since the days of Y2K projects.

New cost accounting requires new tools
"Two or three years ago, we didn't see a lot of IS/IT shops bothering to try to track activity and status and progress at the team member level," recounted John Baldwin, vice president, product development for Artemis International Corp., Boulder, Colo. "Three years ago, their idea of project management was somebody developing a project plan at the beginning of a project that they'd wave around at a product review or use to support a business case for an app. Today, we've got sites that are applying our resource tracking and timesheet tools, making every IS [employee] fill out [their] time cards electronically to collect costs. Four years ago, we never sold our time tracking and progress modules to IS shops, now we sell thousands of seats to them."

Baldwin said he's not sure how much this has to do with new mandated accounting procedures, but Patrick Durbin, president and CEO of PlanView Inc., Austin, Texas, has noted a similar trend to more detailed job costing among his company's customers. Durbin believes it is being inspired by the 1998 release of the American Institute of Certified Public Accountants' Statement of Procedure 98-1, which requires publicly traded companies to follow detailed procedures when accounting for the costs of software development. Analysts' consensus is that if companies want to stay in the good graces of the Securities and Exchange Commission, they ought to implement a project cost tracking system.

Whatever the motivation, project management is getting very detail-oriented.

How the future works
As an example of where this technology is headed, Baldwin points to one of Artemis' European customers, Unicible, Prilly, Vaud, Switzerland, a computer engineering company focused on the banking industry.

"They represent the profile of where IS/IT is today and where we see it going in the next year or two," he said. "They've moved from early use of Microsoft Project-style Gant scheduling to comprehensive project management. Unicible is characteristic in that they created a project management office, which we didn't see in IS/IT operations four or five years ago."

Baldwin said that the IS/IT shops he talks to have realized they need a project management "core center of expertise." At Unicible, the project management office defines, prescribes and enforces the corporate standards for project management.

"They live and breathe the methodologies," Baldwin said. "Their purpose in life is to make sure everybody on the project, all department managers, all team members and all players, follows the same methodologies and processes and know what they are."

At a process level, they have adopted project management across the board for controlling project-based work as well as non-project-based activity that is not necessarily able to be assigned to an end project.

"They manage all work through the paradigm of project management and apply it to everything," Baldwin explained. "So everything gets an activity code, everything gets assigned to a home somewhere in a project schema, whether it's an individual project that is ongoing, like operational support, or specific discrete work projects, like application development."

With 370 employees and 40 contractors, Jacques Hussy, vice president of the executive board for Unicible, said this ABC (Activity-Based Costing) approach applies to all employees from developers to the president of the company, so that everyone tracks their activities in a central repository. That way, he said, "I have an overview of all the activities of the company."

But this level of project management, which would have astounded the IT managers who were on the cutting edge with Microsoft Project for Windows in the mid-1990s, takes time and effort to implement, according to Hussy.

An Artemis user since 1999, he said, "This process needs time. I think we need almost four years to introduce all the processes step-by-step. The first step, you must have a repository. You must organize data and activity, you must track the time. The second step, you must drive the activity and the project. After that, I must manage all the support.

"It's a big challenge, you must introduce this in different steps and you need three to four years. And for that I need to work with a partner [in his case, Artemis]. It's not a one-shot relationship, but very long one. Each week we work one or two days with employees of Artemis International, who help us introduce the process, not the tools—it's not a problem with the tools; they're easy. It's learning to manage the process."

Dilbert meets George Orwell?
If all this sounds a little like Dilbert meets George Orwell, the reader may be forgiven some skepticism about how all this will work in practice as opposed to in theory and in sales pitches. But both the demands of the marketplace for greater productivity and new government regulations for accounting appear to be driving us to a brave new world of project management.