Last week, I had the pleasure of presenting at the Gartner PPM and IT Governance Summit in London, an event which attracted over 400 attendees keen to hear the latest ideas, thoughts and trends in Project and Portfolio Management (PPM) from leading Gartner Analysts, distinguished speakers in the industry and organizations involved in PPM best practices. I presented on the topic of “Financial Visibility Drives Project and Portfolio Success” – a theme high on the list of priorities for CIO’s as IT budgets continue to get squeezed during this period of economic uncertainty.
My presentation followed straight after Matt Light (Gartner Research VP) who discussed in his session the importance of PPM to Professional Services organisations and it struck me that as more and more IT organisations make the transition from operating as a cost centre to running their operation more as a business, where greater accountability for spending and cost recovery is required, we can learn a great deal from Professional Services organisations where effective cost management, cost recovery, revenue, profitability and cross-charging (billing) play a critical role in the efficient day to day running of their business.
Capturing all the costs (people, expenses, software, hardware etc.) associated with the delivery of IT services, categorising costs by type (Capital and Operational – KTLO), tracking which projects and which business units are consuming the IT budget can help improve portfolio investment planning and drive more accurate cost recovery (through cross-charging) whether you’re using a simple high level cost allocation model or more sophisticated service-based pricing. If you were unable to attend my session at the Gartner PPM and IT Governance Summit, a SlideShare copy of my presentation can be found below .