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® IBM Software Group © 2009 IBM Corporation ® IBM Software Group Plan, Execute and Measure for Operational Excellence Product, Project and Portfolio Management Innovation for a smarter planet © 2009 IBM Corporation IBM Software Group | Rational software Agenda  Challenges to the Effective Delivery of Software  IBM Rational – Our Unique Value  The IBM Rational Product, Project and Portfolio Solutions  Return on IT Assets: Achieving great value from your investments  Summary 3 IBM Software Group | Rational software Businesses are facing an unparalleled rate of change Manage business transformations Enable business flexibility Differentiate products Exploit globalization React to market shifts Manage regulatory mandates Deliver real customer innovation Successful businesses will use software to drive innovation and competitive differentiation 4 IBM Software Group | Rational software Challenges to the effective delivery of software A history of cost overruns, schedule slips and quality issues “34% of software projects are deemed successful costing $300B annually” “49% of budgets suffer overruns and 62% fail to meet their scheduled” “Only 22% of executives felt that their IT and business strategy were tightly integrated” “50% of outsourced projects are expected to under perform” 30% of project costs are due to rework and poor execution of requirements” Growing focus on business outcomes “Business leaders and CIOs are under pressure to enable their teams to become catalysts for change. However, change is outpacing their ability to deliver. They are reorienting their teams to focus on ROI and quantified business outcomes and to mitigate risk and reduce costs.” – IBM CIO Survey, 2008 5 IBM Software Group | Rational software IBM Rational software Delivering greater value from your investments in software Analyzing and managing change by aligning investments with business priorities Making better decisions based on real-time, accurate information and consensus across stakeholders Delivering quality solutions through improved governance and risk management Successful businesses will use software to drive innovation and competitive differentiation 6 IBM Software Group | Rational software Successful businesses will manage software and systems delivery as a robust business process Collaborate Automate Report Achieve common goals by optimizing how people work Increase control and efficiency by integrating workflows Continuously improve by measuring progress in real time 7 IBM Software Group | Rational software Enabled by the Rational Software Delivery Platform & ecosystem Modernize Enterprise Assets Transform Information Technology Business Planning & Alignment Product & Project Management Deliver Smarter Products Compliance & Security Collaborative Lifecycle Management Design & Development IBM and Business Partner Ecosystem 8 IBM Software Group | Rational software Delivered through a rich set of software delivery capabilities Modernize Enterprise Assets Enterprise Architecture Transform Information Technology Product & Project Management Portfolio Management Business Planning & Alignment Requirements Definition & Management Performance Management Product & Project Management Configuration & Change Management Build & Deploy Management Asset Management Deliver Smarter Products Compliance Management Security Management Compliance & Security Quality Management Collaborative Lifecycle Management Architecture Tools Modeling Tools Development Tools Testing Tools Design & Development IBM and Business Partner Ecosystem 9 IBM Software Group | Rational software IBM – A Thought Leader in Project and Portfolio Management  Over 300,000 professionals managing projects and portfolios that impact clients around the globe  Over 35,000 employees using IBM technologies for Project Management  Over 12,000 PMI Certified Project Managers (largest concentration in on organization). IBM is also one of the 21 members of PMI’s Corporate Council  Recognized process and methodology leader, contributor to the Project Management Institute (PMI), ITIL and COBIT and Software Development processes  Winner of PMI’s “Top-20 Outstanding Organizations in Project Management”  Winner of PMI Distinguished Project Award  Winner of PMI Professional Development Provider of the Year Award 10 IBM Software Group | Rational software IBM Rational Product, Project and Portfolio Management “Making the Right Investments” “Right Market, Right Time, Right Scope” “Doing Things Right” “Measure Performance Against Business Objectives” Improve predictability of product success Manage and optimize Execute project execution Measure team performance and project results Plan Align investments with business objectives Measure Improve 11 IBM Software Group | Rational software IBM’s modular, flexible, open and integrated solutions Performance Management Portfolio Management Product Management Project Management “Making the Right Investments” “Right Market, Right Time, Right Scope” “Doing Things Right” “Measure Performance Against Business Objectives” Align investments with business objectives Improve predictability of product success Manage and optimize project execution Measure team performance and project results Best Practice Processes and Guidance 12 IBM Software Group | Rational software Align investments with business objectives Portfolio Management Increase investment value by avoiding offstrategy projects that waste an average of 10% of IT budgets*  Measure, analyze and objectively evaluate investment scenarios  Focus on business direction and strategy, rather than resource utilization  Pre-configured product portfolio workspace, backed by best practices provides day-1 productivity Ensure strategic alignment of planned investments to business priorities  Central oversight of budget, risks, demands and investment management  Information captured at all levels of the organization (in one solution) for consistent decision making  Analyze and prioritize enterprise architecture work identified by Rational System Architect “Reduce cost per project by 37%, eliminate 78% of redundant projects, and increase IT staff productivity by 14%.*” * Source: IDC whitepaper, “How Project and Portfolio Management Solutions are Delivering Value to Organizations”, September 2008 13 IBM Software Group | Rational software Product Management Improve predictability of product success Improve investment strategy to drive 20% higher margin in the market*  Organize work around value; identify and sequence activities and deliverables  Perform cost/benefit and trade-off analysis to make informed investment decisions COST / BENEFIT  Quickly align and adjust roadmaps to changing market needs and business value  Decision-making based on objective information for strategic and agile roadmaps  Analyze stakeholder needs to drive scope and objectives  Understand the market needs that will return value to the business  Information captured at all levels of the organization via a collaborative web environment Focus on customer value to drive success and product profitability “By enhancing our decision making, [IBM Rational] has helped us choose the products and features that deliver the greatest customer and business value. This has improved our productivity and reduced costs because we are developing the right products for our markets.” Tobias Chyssler, Product Management ABB Process Automation * Source: Aberdeen Group Study, “The Product Portfolio Management Benchmark Report”, August 2006 14 IBM Software Group | Rational software Project Management Manage and optimize project execution Enable collaborative and process-driven execution to overcome the issues that cause 59% of projects to fail*  Reduce delays and mistakes with real-time, “in-context” collaboration Scope, Tasks and Time Financials Built on the Jazz open architecture to transparently and seamlessly integrate across disciplines or the entire application lifecycle Software as a Service (SaaS) for lower cost of ownership, ease of deployment and faster time to market Integrated project management  Guide teams on best practice processes for increased consistency and predictability Supports traditional, agile and hybrid methodologies Leverages best practices and the integrated IBM Rational Software Delivery Platform  Validate investments continually Analyze and estimate costs, benefits and risks; redeploy resources with changing priorities Resources Skills “Today we have higher quality in our projects. There is no doubt that the control of the projects has been improved – it has saved us time and a lot of resources” -- Kasper Schmidt, Manager City of Copenhagen * Source: IBM Study, “Making Change Work” (http://www-935.ibm.com/services/us/gbs/bus/pdf/gbe03100-usen-03-making-change-work.pdf), 2008 15 IBM Software Group | Rational software Measure team performance and project results Performance Management Automate project and process measurement to improve team productivity by 10-15%*  Measure, monitor, analyze and trend project and process performance Access data across the entire application lifecycle through the open Jazz architecture Real-time information in a single view across projects, products and geographies Automatic collection of data using built-in collectors Built-in library of industry best practice metrics and dashboards  Continual process improvement to improve organizational outcomes Process improvement and best practice guidance through the Measured Capability Improvement Framework (MCIF) Built on best-in-class business intelligence platform from IBM Cognos Control Settings Better Results “Organizations exercising world-class performance management practices enjoy a 2.4 times market returns of typical companies” BusinessWeek Study: The Payoff of Pervasive Performance Management * Source: Based on hundreds of client interactions of the IBM Rational Services Organization, as observed by VP Services, IBM Rational 16 IBM Software Group | Rational software Achieving great value from your investments Balancing the top-line and bottom-line drives real returns Enable improved Enable collaborative decision-making and and process-driven increased execution to predictability through overcome the issues best practices and that cause 59% of collaboration across projects to fail disciplines Improve Organize work investment around strategy tovalue drive customer 20% higher to drive success margin in the and profitability market ( Risk ) ( Increase investment Objectively evaluate value by avoiding offinvestments to align to strategy projects business prioritiesthat and waste an average reduce costs of 10% of IT budgets Benefits Total Asset Cost ) Automate project Measure project and and process process measurement to performance for improve team continual productively by improvements 10-15% 17 IBM Software Group | Rational software The Right investment strategy leads to Real returns Improve value and efficiency, manage risk Improve Benefits  20% margin increase from better investment strategies  10-15% ROI increase from faster time to market Reduce Cost Control Risk  Reduce portfolio spending by 10% by removing offstrategy and duplicate projects  Optimize execution to overcome issues that cause 59% of projects to fail  Automate reporting to improve productivity by 10%  Real-time status & alerts reduce failure costs up to 100x Sample ROI on a $10M Annual Portfolio with 50 resources over 5 years Goal Issue Intended Benefit Improve Benefits Customer and market requirement churn impacts speed to market and adoption impacting ROI stream up to 33% Hit the right market at the right time with the right offer and improve project returns 20% $2,000,000 Reduce Cost Off-strategy investments and redundant projects consume 20% of a typical portfolio Re-deploy capital to more valuable investments, saving 10% annually $1,000,000 Control Risk Time consuming and error-prone reporting fails to identify risks that cost 100X to fix and drive project costs up an average of 30% Improve team productivity 10% through reporting automation and risk mitigation Savings Cost Cost / Benefit Benefit / (cost) $ 1,000,000 $4,000,000 PPM solution $500,000 $3,500,000 18 IBM Software Group | Rational software Manage costs by improving productivity ECONOMIC IMPACTS Business Value Improve Automation Improve Collaboration Improve Process Increase Flexibility & Investment Value Cost to Implement: Cost to Implement: Cost to Implement: Cost to Implement: <5% 5%-10% 10%-35% 25%-50% Very predictable Predictable Some culture change Much culture change Productivity: Productivity: Productivity: Productivity: 5-25% 15-35% 25-100% 2x – 10x Timeframe = Days Timeframe = Weeks Timeframe = Months Timeframe = Years Efficiency Control Implementation costs are per person per year Individual Team Organization Business 19 IBM Software Group | Rational software Summary: Why choose the IBM Rational solutions? Addressing your needs through differentiation We offer… Modular, flexible, open and integrated solutions Scalable/Extensible ALM and Jazz  Scalable and extensible including integrations with industry-leading software estimation tools and support for heterogeneous environments  Proven and integrated solutions that span the complete application lifecycle  Leverage the power of Jazz, enabling improved decisionmaking through collaboration across the disciplines Process Improvement  Measured benchmarks to ensure progress towards business objectives using the Measured Capability Improvement Framework Methodologies  Simultaneous support for traditional, agile and hybrid methodologies for added flexibility Software & Systems Delivery  Integrated solutions that are optimized for both Software and Systems Delivery 20 IBM Software Group | Rational software Product, Project and Portfolio Management Additional information For additional information on the IBM Rational Product, Project and Portfolio Management solutions please refer to the following websites: IBM Rational Product, Project and Portfolio Management: http://www-01.ibm.com/software/rational/offerings/ppm/ IBM Rational Portfolio Management: http://www-01.ibm.com/software/rational/offerings/ppm/portfolio.html IBM Rational Product Management: http://www-01.ibm.com/software/rational/offerings/ppm/product.html IBM Rational Project Management: http://www-01.ibm.com/software/rational/offerings/ppm/project.html IBM Rational Performance Measurement and Management http://www-01.ibm.com/software/rational/offerings/ppm/performance.html IBM Rational Process Management: http://www-01.ibm.com/software/rational/offerings/ppm/process.html 21 IBM Software Group | Rational software © Copyright IBM Corporation 2009. All rights reserved. The information contained in these materials is provided for informational purposes only, and is provided AS IS without warranty of any kind, express or implied. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, these materials. Nothing contained in these materials is intended to, nor shall have the effect of, creating any warranties or representations from IBM or its suppliers or licensors, or altering the terms and conditions of the applicable license agreement governing the use of IBM software. References in these materials to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates. Product release dates and/or capabilities referenced in these materials may change at any time at IBM’s sole discretion based on market opportunities or other factors, and are not intended to be a commitment to future product or feature availability in any way. IBM, the IBM logo, Rational, the Rational logo, Rational, the Rational logo, and other IBM products and services are trademarks of the International Business Machines Corporation, in the United States, other countries or both. Other company, product, or service names may be trademarks or service marks of others. 22 ® IBM Software Group Backup Slides © 2009 IBM Corporation IBM Software Group | Rational software IBM’s modular, flexible and integrated solutions Portfolio Management Product Management Project Management “Doing the Right Things” “Right Market, Right Time, Right Scope” “Doing Things Right”  Rational Focal Point  Rational Focal Point  Rational Insight  Rational Insight  Rational Focal Point for Project Management **  Rational System Architect  Rational Insight **available in beta Powered by Performance Management “Measure Performance Against Business Objectives”  Rational Insight  Rational Measured Capability Improvement Framework Best Practice Processes and Guidance Integrated Software & Product Lifecycle Management Platform 24 IBM Software Group | Rational software Customer Success Stories “Today we have higher quality in our projects …There is no doubt that the control of the projects has been improved – it has saved us time and a lot of resources …” -- Kasper Schmidt, Manager City of Copenhagen “Management now has much better project status information to support crucial portfolio decisions.” -- Henrik Jeberg, CIO, Okonomistyrelsen, the Danish Agency for Governmental Management “By enhancing our decision-making....This has improved our productivity and reduced costs because we are developing the right products for our markets.” -- Tobias Chyssler, Product Management ABB Process Automation - System 25 IBM Software Group | Rational software Service Offerings for IBM Rational Solutions  Assessments  Objective insight and recommendations for improvement Accelerates deployment enabling rapid realization of benefits Provides a roadmap aligned to business needs and current situation Aligns to best practices utilizing IBM’s thoughtleader expertise Mitigates risks commonly associated with introducing new technologies and processes Provides a path to quick self-sufficiency through mentoring  Deployment Services  Deployment planning  Installation and administration  Usage model definition and configuration  End-user rollout  Follow-up deployment review  Measured Capability Improvement Framework (MCIF) Service Offering  4 phases for well-governed process improvement 26 ® IBM Software Group IBM Rational Focal Point Slides © 2009 IBM Corporation IBM Software Group | Rational software Managing Across the Portfolio Missing Category Target Investment Level P1 P2 P3 Serious overinvestment P4 P5 P6 P7 P8  Achieve balanced investment across the portfolio  Assure that the portfolio covers the marketscape  note missing category  Target investment level for each portfolio element is a function of:  Strategic alignment  Customer and market demand, competitive positioning  Investment, returns, ROI, etc. 28 IBM Software Group | Rational software Drill Down into Product Line Sub-Portfolio Portfolio Drill-Down Target Investment Level P1 P2 P3 Drill down into product line P5, and consider investment into the individual products/offerings that comprise the product line and again balance investment against similar drivers. P4 P5 P6 P7 P8 Target Investment Level P5-a P5-b P5-c P5-d P5-e 29 IBM Software Group | Rational software Drill Down into Specific Product Features/Requirements Drill down into Product P5-e and prioritize features and requirements within products, again applying business drivers. Target Investment Level P5-a P5-b P5-c P5-d P5-e RESULT: Consistent process that scales from portfolio, to product line, to product, to product features 30 IBM Software Group | Rational software Repository for Project Portfolio information  Escape chaos of spreadsheets, documents and emails  Standardize submission of new project requests  Easily answer questions like:  what projects are running?  what new projects are being requested?  who is asking for them and why? 31 IBM Software Group | Rational software Evaluate & Prioritize Projects  Evaluate new project requests against strategic objectives  Prioritize projects by expected value, contribution to objectives  Visualize trade-offs – value vs. cost vs. risk 32 IBM Software Group | Rational software Monitor & Review Portfolio  Produce real-time portfolio status overviews  Reduces need for reporting  Reprioritize or cancel failing projects sooner to reduce waste  Maximize the business value of the portfolio in relation to IT costs 33 IBM Software Group | Rational software Crystallize business priorities for IT action Make planning actionable  Prioritize competing projects and supporting investments  New integration enables cost-benefit and trade-off analysis of the business and IT architecture  Enable collaboration on priorities across broad constituencies  Show impact of portfolio decisions  New workflow to extend application planning into enterprise architecture  Assure projects remain aligned with business goals  New IT roadmaps guide planning to successful outcomes “[We] saved time and money by prioritizing applications for reuse, and by identifying areas where spend is not aligned to the IT roadmap.” Rational System Architect Rational Focal Point for Product and Portfolio Management Chief Information Officer Large Financial Organization 34 IBM Software Group | Rational software Adapt the project to changing business and customer needs Involve stakeholders continuously to achieve positive results  Identify changing needs early Engage continuously with your stakeholder via the collaborative web environment  Evaluate trade-offs and select optimal solutions Generate an optimized roadmap and assess impact against that roadmap  Monitor investments to ensure delivery of promised scope and highest value items Adjust project investment levels based on new customer needs, changing economic conditions, and shifting business objectives Rational Focal Point for Product and Portfolio Management Rational Requirements Composer “The biggest return on investment… is improved customer satisfaction because they know we’re listening to them. Additionally, we feel more confident that we are improving our product to better meet our customers’ needs.” Rich Paulson, VP of Marketing Product Management, MarketLinx 35 ® IBM Software Group IBM Rational Insight/MCIF Slides © 2009 IBM Corporation IBM Software Group | Rational software Confidently deliver incremental improvement Drive necessary change at lower cost with a proven, repeatable approach  Reach goals and maximize value with improvement roadmap Identify customer business challenge and align to operational objectives Apply proven best practice to achieve objectives Progress checkpoints Continuous and measurable improvement Data analysis  Drive continuous and measurable improvement End-to-end lifecycle framework drives 15-25% productivity improvement of selected priorities  Check results and iterate as needed Progress checkpoints and data analysis determines results and improvements still needed Measured Capability Improvement Framework Learning opportunities “IBM’s advice was not ‘product centric’ but rather focused on the business outcomes for Qantas and how we could go about achieving those.” Brad Tate, Manager Enterprise Solutions Qantas 37 IBM Software Group | Rational software Drive business innovation and reduce costs through measured and continuous process improvement Empower teams to measure, manage, and incrementally improve their software delivery capability  MCIF is a phased approach that helps teams  Adopt an incremental, measured approach to transformation  Focus on the core practices that matter most  Accelerate adoption through out-of-the-box assets  Articulate capability improvements in terms of business value  Support any method optimized for Agile practices Phase 1 Establish business and operational objectives Phase 2 Prioritize practices and define roadmap Phase 3 Accelerate adoption with tools and services Phase 4 Report, analyze and act on results Start next incremental improvement 38 IBM Software Group | Rational software Measure and manage software delivery performance Deliver performance and predictability with integrated lifecycle intelligence  Measure process and project outcomes Real-time intelligence based on IT industry best-practice metrics, dashboards and models  Inform decisions and drill into issues Alerts and automated analysis focuses owner to take action on root causes, before mitigation costs balloon 1000% Integrated lifecycle intelligence Control Settings Better Results  Take real-time action on relevant data Proven BI-backbone automates collection and analysis to improve lifecycle productivity 10-15% Rational Insight “Organizations exercising world-class performance management practices enjoy a 2.4 times market returns of typical companies” BusinessWeek Study: The Payoff of Pervasive Performance Management 39 IBM Software Group | Rational software Why IBM Rational Insight?  Monitor and analyze project and process performance Collaborate by leveraging an open Jazz architecture Automate collection of actual data with built-in collectors Report on relevant data with a built-in library of industry best practice metrics and dashboards  Drive business innovation and reduce costs through measured and continuous process improvement  Built on best-in-class business intelligence platform from IBM Cognos Real-time information in a single view across projects, products and geographies “Until now we were gathering metrics by manual methods. Rational Insight simplifies the presentation... Overall great tool to have for optimizing project efforts and giving management a birds eye view of the project performance at all stages.” -- Unisys 40 ® IBM Software Group IBM Rational Focal Point for Project Management** Slides ** available in beta © 2009 IBM Corporation IBM Software Group | Rational software IBM Rational Focal Point for Project Management** Jazz-based collaborative Project and Portfolio Management  Optimize software delivery - minimize costs Plan and steer projects with dynamically changing circumstances  Capture objective measures of value and cost Insight into scope, opportunities, resources and risks  Better decision making using informed views Views into past performance, current status, and predicted estimates-at-complete including values, trends and variances  Extensible planning engine Connect to and integrate with many sources to support heterogeneous software Open and extensible on ** available in beta  Collaborate in context  Right-size governance  Day one productivity 42 IBM Software Group | Rational software IBM Rational Focal Point for Project Management** Resource Query Editor ** available in beta 43 ® IBM Software Group Related Solutions © 2009 IBM Corporation IBM Software Group | Rational software Manage the impact of change, consolidation and M&A Increase operational efficiency, reduce recurring costs and mitigate risks Redundant, Inefficient, High Cost  Gain clarity in enterprise decision making  Enhanced web collaboration creates a common perspective of the organization, from one location  New enterprise search quickly reveals critical data required for accurate decisions  Identify redundancy and reuse of business and technology assets Increase Operational Efficiency  Enhanced heat maps report IT information in business-friendly formats Consolidated, Reused and Optimized!  Identify and minimize execution risk  New “work space” feature groups information for more accurate integration planning Rational System Architect “We used enterprise architecture to guide the consolidation of our US operations in an efficient and cost-effective manner.” Director of IT Leading Express Shipping Organization 45 IBM Software Group | Rational software Enterprise Architecture Management IBM Rational System Architect Gartner Group EA Magic Quadrant, 2008 Better Decisions Prioritize Investments Manage Risk Strategy to Results  Define Vision: Assure products support business need  Govern and Manage Architecture Development: Plan, Govern, & Execute Solution Implementation  Identify IT/Engineering assets and applications that support design environment  As-Is versus To-Be Analysis  Impact Analysis across Organization: Control expenses, indentify reuse  Frameworks: Defense Architecture (DoDAF, NAF, MoDAF), TOGAF 46 IBM Software Group | Rational software Execute efficiently through global collaboration and agility Reduce costs, improve governance, and assess risk as a unified team  Unify globally diverse teams of all sizes Support thousands of developers, stakeholders and partners on multiple projects with enhanced scalability, security, high availability and performance  Enable teams to adapt rapidly Identify high risk plan items early with enhanced agile planning and schedule risk assessment  Integrate existing tool and infrastructure investments Consolidate and reduce costs by supporting J2EE, .NET, IBM i, System z, Microsoft Sharepoint®, Lotus Quickr® and business partner offerings Rational Team Concert “We've seen a 30% productivity gain on our global projects. The ability to easily suspend and resume work, along with advanced SCM features, helps team members juggle multiple tasks and priorities without missing a beat.” Alain Bergeron VP Consulting Services, CGI 47 IBM Software Group | Rational software Deliver quality solutions to meet stakeholder objectives Align project deliverables to stakeholder business needs  Smart team collaboration leads to faster stakeholder consensus Web-based review enhances communication to help decrease project overruns 20% by reducing requirement errors  Requirement definition techniques improve effectiveness Visual and textual prototyping speeds consensus and improves productivity, reducing costs up to 10%  Align business and IT through application lifecycle Traceability keeps analysts, architects, developers, and testers aligned to business needs and requirements Rational Requirements Composer “… We can work collaboratively with the business stakeholders to visualize requirements. User interface sketches and story boards can be drawn…to elaborate the user experience in order to further elicit and validate requirements...” Kenny Lew, CEO Noblestar 48