Assess and Prioritize for Optimal Resource Allocation with SAP xRPM

  • by Rajen Iyer, Cofounder and CTO, Krypt, Inc.
  • Dave Maloney, SAP Labs, LLC
  • January 1, 2006
Consider how portfolios, projects, and operations for IT, product development, and other areas are managed in your organization. Do they share resources? Are they aligned with current business objectives? What are the criteria used to fund projects? Learn how to use SAP xApp Resource and Portfolio Management (SAP xRPM) to answer those and similar questions.
Key Concept
SAP xApp Resource and Portfolio Management (SAP xRPM) provides capabilities for managing portfolios, human and financial resource capacity, and collaboration across an organization. It enables more precise allocation of resources to support organizational priorities and simplify the monitoring of projects and operations. It uses existing application assets from project management, financial, resource planning, time collection, and human resource systems to provide an enterprise-wide view of IT, product development, and other organizational portfolios. Aggregating this information allows you to enforce planning methodologies and best business practices. SAP xRPM was first released in December 2002; the latest version, 4.0, was released October 2005.
If IT and product development organizations have one overriding complaint, it is this: “If I could just get a better handle on all the noise of operations and production problems and the unplanned resources that they consume, we could do a better job executing strategic initiatives!” The number one cause of project failure reported by customers is that often resources are overcommitted elsewhere and they cannot deliver on their commitments to projects.

SAP xApp Resource and Portfolio Management (SAP xRPM) is designed to optimize and monitor the collection of activities — projects and baseline services — that an organization undertakes. CIOs and other organizational leaders use SAP xRPM to manage the activities and resources required to execute on their strategic portfolios as they would any other business investment. By scoring initiatives against success criteria defined by the business — such as reducing costs, accelerating time to market, or improving customer satisfaction — SAP xRPM better enables them to select the right projects and services to deliver maximum business value and monitor and govern the resulting mix with consistent metrics and performance criteria.

SAP xRPM uses a multi-leveled hierarchy of portfolios and strategic buckets that can consist of all activities that compete for resources (i.e., programs, projects, base operations). Figure 1 shows a typical example of an organizational structure and how it might be set up in an SAP xRPM portfolio hierarchy. This example is very organizational, with the hierarchy corresponding with the company’s structure. Many companies use a strategic scenario, and may have goals such as “Run the business” and “Change the business” at the buckets level, with the lower level elements supporting the strategic goals accordingly.

Rajen Iyer

Rajen Iyer is the cofounder and CTO at Krypt, Inc. Rajen has written several in-depth, best practice articles, white papers, patents, and best-selling books on SAP Logistics and SAP Global Trade Services, including Effective SAP SD and Implementing SAP BusinessObjects Global Trade Services. He is also an invited speaker at industry conferences.

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Dave Maloney

Dave Maloney is the solution principal for innovation and portfolio management at SAP Labs. He works with product development customers and R&D to help SAP deliver better NPD solutions.

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