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Five Steps to Managing Successful Meetings

Written by Cynthia Low on . Posted in Articles.

5Stepstomanageing1The Challenge

Three years ago, and with a new engineering degree, Xiao immigrated to Canada from China. Xiao took her job seriously. She didn’t spend a lot of time socialising with co-workers and stayed focused on her work. In a short time, Xiao was made project manager. As project manager in a matrix environment, Xiao had to run meetings-and she was failing miserably.

First, the wrong people showed up for her meetings-people who didn’t really need to be present-while the people Xiao needed (decision makers or people with pertinent information) didn’t show up or came unprepared. Xiao also felt that attendees did not respect or pay attention to her. They would use their PDAs or have side conversations with each other. Xiao felt that this was because she was shy and spoke with a quiet voice. She was also younger than many of the people on the project and felt this was another reason for the lack of respect she was given in the meetings she chaired.

In addition, there were two regular attendees who constantly interrupted her and steered the conversation in different directions. One attendee was an “ideas” person who could not seem to stay focused. The other person, a woman a couple of years older than Xiao, was resentful that Xiao was the project manager. That woman seemed to be deliberately sabotaging Xiao’s meetings. In the end, nothing seemed to get accomplished in the meetings, though they seemed to drag on forever.

Mimicking Success

Xiao noticed that one of the other project managers, Lak, had a reputation for running successful meetings. Lak’s meetings stayed on track and were regarded as very productive. Too shy to ask Lak what his secrets were, Xiao would drop in on his meetings to determine how she could mimic Lak’s success. It didn’t take long for Xiao to build a list of five rules that summarized Lak’s successful meeting strategies.

Xiao began applying these rules to facilitate her meetings. By sending out a strategic agenda in advance, Xiao got the right people to attend her meetings, while those who didn’t have to be there were appropriately grateful. Xiao established new ground rules for her meetings, such as no PDAs and no side conversations, and got compliance by offering to cut meeting times in half (from 60 minutes to 30) if people agreed to follow her rules for a one-month trial period.

Xiao also started managing her emotions. For instance, when the ideas person or the saboteur tried to take over, Xiao calmed herself, maintained her confidence, and used the agenda to keep the meeting moving forward as planned. Almost overnight, Xiao’s meetings become more effective. The change was so miraculous that, when she passed her rules on to Paul, another project manager struggling to hold effective meetings, she called them the “five magic steps.”

The Five Steps for Successful Meetings

1. E-mail a Strategic Agenda Well in Advance
A strategic agenda has four key ingredients:

  • It has a specific subject line. If the e-mail subject line says “Project X”, everybody who is involved in Project X will come. Specifying what aspect of Project X the meeting addresses limits attendees to those actually needed.
  • It is sent only to those people who need to be there, not to everyone involved in the project.
  • It contains a list of the action items for the meeting.
  • It contains the name of the person responsible for each item so that they can come prepared.

If a senior decision maker is required at the meeting, sending them a personal e-mail and following it up with telephone call is a good idea.

2. Establish Ground Rules
No matter what the norms are for your organisation, if your meetings are effective you can establish additional ground rules. You can, for instance, forbid PDAs in the room (but allow urgent calls or e-mails to be taken outside of the room); ban side conversations while others are speaking; expect attendees to come prepared; and start and finish at the scheduled time. Once you establish these rules, and your meetings become more effective, the value of the new rules is reinforced.

3. Practice Self- Awareness
Before the meeting begins (and during, if necessary), take command of your emotional state:

  • Take a few deep breaths to calm yourself.
  • Engage in positive self-talk and visualisation, as professional athletes do-see yourself, confident and in control of the meeting.
  • Stand when making important points to give yourself the feeling of more height and power.
  • If people have trouble understanding you, speak slower, summarise often, and check frequently if attendees understand the agenda.

4. Be Authoritative
Too many meeting facilitators are afraid to drive the bus and, instead, let the passengers drive. Treat your meetings like a bus route with a schedule and agreed-upon stops. Set the time allotted for each topic in advance and keep the meeting moving forward on that schedule. If people are reluctant to move off a topic, then agree to cover the topic outside of the meeting or at a separate meeting.

5. Use a Meeting Agenda Template
Do not use the strategic agenda you mailed out to manage the meeting. Instead, use a one-page, landscape sheet:

  • At the top, have the meeting objective(s), date and time.
  • Down the left-hand side, list the agenda items.
  • Across the top have these five headings, which should all be filled in before the meeting starts:
    • Objective
    • Person Responsible (Filled in, unless the purpose of the meeting is to assign a person.)
    • Time
    • Result
    • Due Date/Follow-Up (Filled in, unless the purpose of the meeting is to assign a due date or follow-up date.)

As the meeting progresses, fill in any empty cells and update cells that require change. The agenda allows you to track both your time and accomplishments. This serves as evidence to yourself and others that your meetings are productive and worthwhile. Remember that the agenda is separate from the minutes, which are taken by someone else so that you can concentrate on managing the meeting.

Don’t forget to leave your comments below

Serena Williamson, PhD, is a speaker, author, seminar leader and coach specialising in people skills. She teaches several Learning Tree Courses, including Course 292 “Communication Skills: Results Through Collaboration”, Course 244, “Assertiveness Skills: Communicating with Authority and Impact”, and Course 344, “Effective Time Management”.Since 1974, over 13,000 public and private organizations have trusted Learning Tree to enhance the professional skills of more than 1.9 million employees. For more information, call 1-800-843-8733 or visit www.learningtree.ca.

Five Steps to a Winning Business Case

Written by Cynthia Low on . Posted in Articles.

5StepsToAWinningMaking a successful business case for your new project is the winning way to ensure a good beginning for your team. How often have you been asked to “work the numbers” and provide a basis for a compelling project? Often, if you are a project manager with responsibility to help your sponsor and your company make decisions about which projects are the right ones to do. The PMBOK provides the body of knowledge for “doing it the right way.” In this article, you will learn about the five steps of a methodology that you can take away and use everyday for identifying, selecting, and justifying a new project or a significant change in scope to an ongoing project.

Projects with a solid business case return value to the business, to their sponsors, and to the stakeholders and customers. Meeting scope, staying within budget, and getting done on time are the tactical elements that deliver the value. This being so, it is self-evident that successful project managers are those that effectively make the connection between project accomplishment and business value. (Goodpasture 2001)

Business Case Basics

A winning business case is really no mystery. First, it provides the background and context for the project. Historical performance is often necessary to illustrate opportunity. As is operating results from functional and process metrics are part of context. Perhaps there are lessons learned and relevant history of other projects that got you to where you are.

Second, the business case identifies the functional, technical, or market opportunity that the project is to address. From opportunity, specific solutions can be developed.

Third, the project proposal is given, laying out a description of scope, required investment, expected results and project benefits, and key performance indicators (KPIs).

Next, understanding is conveyed about how the results of the project fit into the business operationally. For this, a “concept of operations” is needed.

Last, and perhaps most important, you ask for a decision on the project proposal. In this section, it is customary to ask for approval of the assignment of managers for performance responsibility.

Step 1. Establishing Context: Put History Together

Assembling history and setting the context for a new project may not be where project managers expect to first come into the picture. However, often times it is necessary to bring forward completed, cancelled, or deferred projects for analysis, or to analyse the operating metrics of ongoing functions and processes. Activities in this step are identifying the similarities, highlighting the differences, and making certain irrelevant aspects of past endeavors do not color the current situation.

Here’s a helpful hint: start with the WBS of all prior engagements. The WBS contains all the scope and should link directly to the financial records and chart of accounts. Make adjustments for change orders or other scope differences. Examine the project charter; make adjustments for tools, facilities, constraints, assumptions, and policies that influence the project, but may no longer be operative. Look also at the OBS (organizational breakdown structure) and the RAM (resource assignment matrix) that maps organization to scope.

Step 2. Responding to Opportunity

We begin with this idea: Opportunity is “unmet need.” Investing in projects to satisfy identified need leads to reward. Reward enriches all who participate.

Goal Setting and Strategy Development

To effectively and wisely choose among opportunities requires goal setting and strategy development. We make these definitions: Goals are ends to be achieved, a state of the business in a future time. Objectives do not differ materially from goals, though some prefer to think of objectives in more of a tactical time-frame and goals in more of a strategic framework.

Opportunity is most often found within the goal sets of the “balanced scorecard” [Kaplan and Norton, Chapter 1]. Typically, there are four such sets: Customer and Market, Operational Efficiencies and Improvement, Organizational Development and Learning, and Employees.

The value of opportunity is transferred into goal achievement. Not all of the opportunity may be available to the business. Thus, more practically, we speak of the “addressable” opportunity as being that part that can find its way into the business. To make good on the addressable opportunity, strategy is required.

Strategy is actionable, often requiring projects for execution. Projects are identified by flow-down from opportunity analysis; projects are an instrument of strategy.

Business Case Preparation

Action plans, the essence of strategy, are a natural for project managers. The strategy is a high level WBS for the overall business case, identifying those actions that are in scope, and perhaps identifying strategy elements considered but deferred or not accepted.

Step 3. Proposing the Project and Laying out the Investment and Benefits

Opportunity is in the future. There are no facts in the future, only estimates. As such, your project proposal must identify four elements:

  1. Scope of accomplishment in terms with which sponsors and approving authorities will identify;
  2. Major milestones that are meaningful to the business;
  3. An assessment of risk factors that affect both investment and benefits estimates; and finally,
  4. A specific proposal of risk-adjusted investment dollars, benefit dollars (benefits recover investment), and KPs.

Many projects have only intangible KPIs and indefinite benefits. Sometimes it is possible to “dollarise” these benefits using the “before and after” methodology: what does it cost to run the business before hand, and what will it cost to run it after? Even though any specific cost element may not be directly linked to the project, the business as a whole will be different.

Identifying and Assessing Risk

The traditional investment equation is: “total return is provided by principal at risk plus gain.” Project methodology transforms this equation into the project equation: “project value is delivered from resources committed and risks taken.” The project equation is the project’s manager’s math and the balance sheet for the project. [Goodpasture, 2001, Chapter 3]

One means of risk assessment is through statistical analysis of the major schedule elements. For purposes of the business case, only major project outcomes need be scheduled. The best estimator of the schedule outcome is the expected value of the overall duration, defined simply as the sum of possible outcomes, each weighted by their probability.

Financial estimates should also be adjusted for risk. After all, financial performance is one key performance indicator (KPI) for all new projects. Two financial measures that account for risk are Net Present Value (NPV) and Economic Value Add (EVA).

Financial Measures with Risk Assessments

NPV measures cash on a risk-adjusted basis. Cash is consumed by projects, but subsequently is generated by project deliverables. EVA measures profitability. Although it has been said “profit is an opinion, but cash is a fact” [Pike, 1999], reflecting the influence of accounting practices on calculating profit, project managers should know that NPV and EVA are equivalent when profit is restated in its cash components.

Net Present Value

How can projects managers affect the NPV or its equivalent, the EVA? Simply put, the main effects under project management control are timelines for cash flows, that is, the schedule for the development of project deliverables and subsequent operations, and assessments of the risks associated with cash flows. After project completion, the responsibility for cash flows is transferred to a benefits manager through the KPI’s. Project management participation in risk-adjusted financials has many parallels with risk-adjusted scheduling of critical path using such techniques as Monte Carlo, PERT, or critical chain scheduling.

Economic Value Add

EVA is a financial measure of how project performance, especially after the deliverables become operational, affects earnings. [Higgins, 1998 Chapter 8]. Projects with positive EVA earn back more than their cost of capital funding; that is, they return to the business sufficient earnings from reduced costs or increased revenues and margins to more than cover the cost of the capital required to fund the projects.

The bottom line on financial analysis: NPV (Cash flow) = present value EVA (After-tax cash-equivalent earnings).

Estimating Cash Flow

Estimating the cash flow for the business case is a project manager’s task. Estimating cash flows is tantamount to estimating the resource requirements for the project, and then estimating the benefits that will accrue from a successful project. The PMBOK identifies several estimating techniques that can be applied. The key is not only to estimate the resources for the project, but also the benefit stream from operations.

Step 4. Outlining the Concept of Operations

A concept of operations need not be rocket science. The idea is this: Once the project ends, and by definition, as given in the PMBOK, all projects end, we must address the question, “how will the project deliverables be made operational in the business?”

Deliverables in the Concept of Operations

If project deliverables are to be inserted into, or change, or bring into being new processes, then there are process actors, inputs, methods, and outputs to consider. If there are new products, the fit to marketing and sales must be considered, as well as support after sale. And if there are new plant, systems, and equipment deliverables then the concept of operations will address the on-going operations that would be touched by these new assets, new or changed workforce, their training and relocation, and retirement of legacy assets.

To convey the concept of operations (ConOPs) in the business case, identify effected organizations, jobs, roles within jobs, tasks within roles, skills, tools and facilities necessary to do the tasks, operating budgets, and other relevant components. By narrative or diagram, explain the operating concept.

For purposes of the business case, it is most useful to reduce even complex processes to a handful of boxes, and back-up this abstraction with whatever detail is needed to satisfy participating managers that their needs are covered.

Step 5. Asking for a Decision and Assigning Responsibility

Hopefully, business cases in your organization are subject to a rational decision policy. Rational means: “outcome is a predictable consequence of information applied to methodology.” With a rational decision policy, the business case should make a direct appeal for a decision to approve the project.

On the presumption of a favorable decision, the managers responsible for executing the decision should be identified. It’s easy for the project sponsor to identify and assign responsibility for the investment: it’s the project manager. The project manager controls the consumption of resources invested, scope accomplished, and the timeliness of it all.

Assigning responsibility for benefits and KPIs is more problematic. We use these definitions: Benefits are the mechanisms for recovering project investment. KPI’s are different yet: they are the “balanced scorecard” of the project. KPIs measure business success as a consequence of project success, and are many times intangible.

The manager(s) for benefits and KPIs becomes loosely defined as the “benefit managers.” They must make commitments in the business case to make good on the ConOPs and the changes envisioned. Benefit managers must accept this responsibility in a transfer from the project manager at the conclusion of the project. A slip-up here will materially affect the investment recovery.

Summary

A good business case lays out the response to opportunity. Such a response is made contextually relevant with history setting the background. From opportunity, all else flows. Risk adjusted financial measures, the project ConOPs, and the strategy response to goals rounds out the completed business case. In short, good business cases define good projects. Good projects return value, provide benefits, and have measurable KPIs.

Don’t forget to leave your comments below

John C. Goodpasture, PMP and Managing Principal at Square Peg Consulting, is a program manager, coach, author, and project consultant specializing in technology projects, strategic planning, project office operations. He is the author of several books, articles, and web blogs in the field of project management. He blogs at johngoodpasture.com, and his work products are found in the library at www. sqpegconsulting.com, and at www.slideshare.net/jgoodpas. His full profile is at www.linkedin.com/in/johngoodpasture. Mr. Goodpasture’s most recent book is “Project Management the Agile Way: making it work in the enterprise”, published in January, 2010.

References
Goodpasture, John C., “Managing Projects for Value,” Management Concepts, Vienna, Virginia, 2001, cover piece Ibid, pg 40.
Pike, Tom, “Rethink, Retool, Results,” Simon and Schuster Custom Publishing, Needham Heights, MA, 1999, pg 177.
Higgins, Robert C., “Analysis for Financial Management,” Irwin/McGraw Hill, Boston, MA, 1998.
Kaplan, Robert S. and Norton, David P., “The Balanced Scorecard,” HBS Press, Boston, MA, 1996.

John Goodpasture shares his views on contemporary topics in project management, methodologies, and the value propositions of programmes and projects on his blog A Project Management Opinion.

© John Goodpasture. All rights reserved. Used with permission

Building a Business Case as the Foundation for Project Success

Written by John Moore on . Posted in Articles.

BusCaseAsFoundation1When projects fail to deliver results, ensuing conversations can often become accusatory. The division manager says, “Even with all the resources and money put into this new product, the quarterly numbers show that it’s another loss. Plus, one of our competitors brought out an equivalent product before we were ready to launch ours”.

The head of the department responsible for the project responds, “We did the job, delivered on time and stayed within budget. It’s not our fault if the product didn’t generate the money you expected”.

The problem is…they’re both right! But even with everyone doing their best, the results were disappointing and the second-guessing begins. Were the business’ expectations too high? Was the original scope of the project assessed correctly? And that competitor who introduced an equivalent product – was the possibility of that risk ever identified at either the outset of the project or during its life? If so, were those involved-stakeholders included-aware of the potential risk so measures could be taken to mitigate it? Or was it decided the team was just there to deliver a product and not manage external events?

Applying the Business Case

Questions like these are often argued once the project is over.

Unfortunately, it’s usually too late to repair the damage. That’s why successful project teams take the time to consider such issues by building a solid Business Case at the inception of every project. This enables a team to address potential risks and plot alternative strategies while providing a tool for future variables throughout the project.

Once the Business Case has been developed, it is then applied at four critical phases in the project’s life cycle in order to ensure that the project-once completed-will deliver the return on investment that was originally forecast.

Expert Advice from Today’s Top Professionals

An effective Business Case can contribute greatly to the success of a project during these four critical phases of its life cycle:

Phase One: Defining the Project

First, before development begins, the Business Case asks and answers the “why” of the project to document the justification for the initiative and how success will be defined. As cost estimates are gathered and incorporated, the stakeholders must identify the expected benefits of the project in measurable terms that will enable the organization to determine if the project was (or wasn’t) a success. These same estimated costs and anticipated business benefits also create a foundation against which any anticipated risks or uncertainties-such as the possible release of a competitor’s product-can be measured.

When gathering input, outside contributors should also be included, such as personnel from the finance department who can provide key input for forecasting the project’s returns.

Even at this early stage, it’s not unusual for stakeholders to challenge the validity of the case’s inputs, especially if they don’t like what they hear. During this information gathering process, everyone involved must be willing to challenge the expectations of the business as related to cost and time. This is also the right moment for alternatives to be developed, each with their own cost, time and risk expectations. These alternatives provide a yardstick to measure the project against and potentially suggest better solutions for dealing with whether the project is viable.

Phase Two: The “Go/No Go Decision”

After the input has been gathered, the business must make the decision whether to proceed with the project or not (go/no go).

If the project is a “go”, then the Business Case will be used as the basis for decision making during the life of the project. These are the key questions to ask about the Business Case at this critical point:

  • Is the business need clearly stated and in line with the

organization’s strategy?

  • Have the benefits been clearly identified?
  • Is it clear what will define a successful outcome?
  • Is the preferred option clearly stated?
  • Are there alternatives presented?
  • Is it clear how the necessary funding will be put in place?
  • Are the risks–and the plans for addressing the risks–explicitly stated?

However, even after the project is initiated, the Business Case can still revisit the “go/no go” decision if changing conditions invalidate the “why” of the project.

Phase Three: If Changes Occur

After the business case is written and approved, it should be reviewed frequently. As the project progresses, the project’s external environment may change, potential risks may become reality, new risks may come to light and new business decisions may directly impact the project. In some cases, the initial justification for the project-the “why”-may disappear. Consequently, the Business Case has to be re-examined continually as the content (especially the projected benefits) may be affected. It’s also critical that all the stakeholders involved in gathering the initial inputs be kept involved to keep the case updated throughout its life cycle, especially during changes.

Phase Four: Project Closure

When the project is complete, it can then be viewed against the current Business Case. Only by comparing the project’s results against the specified project “why” can the degree of success be determined. However, it’s important to remember that, while the project can be assessed immediately upon closing, many benefits may only be realized after the solution has been “live” for a period of time.

Ultimately, building a Business Case before beginning any project is a matter of common sense: It’s not enough to just do something right, first you need to know why you’re doing it.

Don’t forget to leave your comments below

John Moore is a technical project manager working for Newton Software Ltd and specializes in projects involving data intelligence. As a Learning Tree instructor, he teaches Course 212, “Building an Effective Business Case”, and Course 315, “Developing User Requirements“. He is the author of Course 921, “Recovering Troubled Projects“, and technical editor for Course 938, “Contract Management Introduction“, and Course 916, “PRINCE2® in Practice.” He can be reached [email protected]

Article courtesy of Learning Tree International, a leading training provider for Managers and IT Professionals.

Why on Earth Would You Promote a Business Analyst?

Written by John Simpson on . Posted in Articles.

We have a recommendation.  Whether their official titles are Business Analyst, Product Intelligence Analyst, Requirements Analyst or something else, if they define and manage requirements as a core function of their jobs, then they are strong candidates for a promotion.  Think this is a crazy request during this bad, but they tell us, improving, economy?  Maybe it’s not such a bad idea at all!

Read on to understand the five reasons why senior executives at innovation-driven organizations are realizing how strategically important business analysts are to the overall success of their companies.  And, they are rewarding those who excel in this role.  We’ll leave it to the bosses to decide exactly how they want to spread the love – bonuses, parking spots or other perks are always nice.

In many places the Business Analyst role doesn’t get much appreciation, because its value is misunderstood or viewed just as a tactical role.  Let’s debunk those myths here by examining the important role the BA has throughout the organization.

They are Shepherds of Innovation

As you know, innovation isn’t just a hyper-buzzword.  Innovation is what customers demand, it’s what shareholders expect.  And it’s what helps fatten the coffers of most successful corporations. How many nights do you lie awake thinking about how to more effectively deliver innovative products to market faster than the competition?

As unsexy and tactical as “requirements management” sounds and maybe is perceived, it is the foundation of an organization’s ability to innovate.  As business analysts, these employees are your shepherds of innovation.  Try that sound bite out at your next company meeting and see how the morale and company culture changes to embrace this important function.

 Project Success Lives or Dies by Requirements Management.

This isn’t meant as a statement to create dramatic effect – study after study shows that the management of requirements is a top success factor.  If you work in an industry such as Aerospace, Medical Devices or Healthcare where safety isn’t optional, then requirements management is itself a mandated requirement.  Based on that, it seems reasonable to suggest that anyone who manages a function that’s this critical to the success of your company deserves some kudos.  For example, the newly published Business Analysis Benchmark Study by IAG Consulting highlights several major findings, including:

  • Companies with poor requirements, on average, spend $2.24 million more per project on strategic projects than those that employ requirements best practices.
  • Companies with poor requirements and business analysis capability have three project failures for every one project success.
  • Only 32% of companies employ practices that make the likelihood of project success “Probable.” The remaining 68% enter every project with an “Improbable” likelihood of success, even before they begin the project
  • Over 40% of the IT development budget for software, staff and external professional services will be consumed by poor requirements at the average company using average analysts. This requirements premium is avoided by organizations that consistently use best practices in business requirements when completing projects.

An Idea is Worth $0 Until it Becomes a Well-executed Requirement.

We see requirements as the glue that holds the entire innovation process together – from ideas to requirements to products.  So, without well-defined, well-managed and well-executed requirements, innovation simply doesn’t happen.  Good ideas don’t materialize, R&D investments go to waste and smart people get frustrated – all things that paralyze an organization.  Thus, an investment in requirements management and in this key role will yield a higher Return on Ideas – think of it as a new kind of ROI to go with the financial one.

They Save Your Company “a lot” of Time and Money.

Call it productivity. Call it efficiency.  Call it failure avoidance.  Whatever you want to call it, your business analysts save your company a lot of time and money.   How much is a lot? It can be a difficult thing to quantify precisely, but a lot is somewhere between “oodles” and “a truck load”. And we all have an idea how much that is!  How ever you measure it, when requirements get done properly, projects get delivered on time and products go to market faster.  And, last time we checked, those were two things that great companies and senior executives valued. A lot!

Chief Business Analyst Sounds Pretty Nice.

Meet the new Chief Business Analyst, time to make room at the executive table!  Should we get new business cards printed up?  We’re not kidding.  By championing the development of thousands of well-written requirements and collaboratively managing them throughout your innovation process, your staff of business analysts significantly impact the performance of your company every day.  And, that makes them a strategic asset.  Hmm, that sounds like a function worthy of a C-level executive.  We think CBA sounds pretty nice too.

References: http://www.iag.biz/resources/library/business-analysis-benchmark.html A summary of the Business Analysis Benchmark appeared in a recent Business Analyst Times. To reach it click http://www.batimes.com/component/content/article/106-articles/517-business-analysis-benchmark-the-path-to-success.html

Don’t forget to leave your comments below

John Simpson is director of customer outreach and marketing at Jama Software. John represents the voice of the customer in Jama’s product strategy and communications. He has over 12 years experience working at software technology companies including Microsoft, WebTrends and Omniture. In his spare time, he chases his three kids around and raises awareness for cancer research in his local community, Portland, OR. You can reach John at http://www.jamasoftware.com or follow him on Twitter at http://www.twitter.com/jamasoftware

The Virtues of Virtualization

Written by Cynthia Low on . Posted in Articles.

Virtualization technologies have graduated to the big time, but it didn’t happen overnight. While early virtualization application experiments can be traced back to the 1960s, it is only in the past decade that there has been growing acceptance of this cost-saving technology.

Foreshadowing new virtualization breakthroughs, a 2006 IDC analysis projected that companies would spend more money to power and cool servers by 2009 than they would spend on the servers in the first place. And a recent Goldman Sachs survey of corporate technology users found that 45% of respondents expect to virtualize more than 30% of their servers (up from only 7% today).

The heart and lifeblood of virtualization consists in using a hypervisor (software that provides a virtual machine environment), situated between the hardware and the virtual machine. The virtual machine is, in essence, data, while its applications files are stored on a physical server or on a remote storage device. The result is that the virtual machine has portability, which translates into a strategic advantage in adverse situations.

Virtualization technologies have come a long way, says James Geis, director of integrated solutions development at Boston IT consulting firm Forsythe Solutions, because evaluating capacity was once difficult. Thanks to improved capacity management tools, that task has been simplified and has become a mainstream means for resource planning.

Geis also notes that, while massive adoption of virtualization solutions has become commonplace, not all servers and applications are meant to be virtualized. The choice, he says, of when, where, and how an application can be virtualized should be based on performance metrics. “There are cases where processing, memory, storage, and network requirements dictate a solely dedicated server.”

However, the value of virtualization as an enduring strategy for continued growth is enormous. Geis outlines the following benefits:

Capacity optimization. Virtualization places capacity planning and optimization at the forefront of data center management. Properly implemented, it produces the maximum return on investment per server dollar.

Rapid server provisioning. Speed and accuracy are essential in a frenetic virtual business environment. Using a server template, virtual servers can be created effortlessly. Geis says new server provisioning takes minutes or seconds, rather than the days or weeks required to procure a new box and install an operating system and software.

Server portability. Virtual servers and the applications they support can be easily moved or copied to other hardware, independent of physical location or processor type. This feature alone provides unlimited flexibility for hosting servers and applications on any combination of physical hardware.

Reduced hardware, facilities, and HR expenses. Fewer server boxes cost less, take up less floor space, require less electricity and air conditioning, and require less maintenance, thus reducing costs related to hardware procurement, real estate, utilities, and human resources.

Larry Honarvar, vice president, consulting services, at CGI, a Montreal-based IT and systems integration consulting company, employs virtualization technologies in the following areas: managed services, software development and maintenance, and hosting solutions.

For software development, virtualization better leverages hardware and software investments, Honarvar says. This works well, given the fact that customers are often scattered around the globe, working in different time zones. “Virtualization makes better use of our infrastructure investments because it allows us to test different development and testing environments. It lets us control costs and redirect funding into product maintenance and enhancement,” he explains.

In hosting solutions, CGI employs virtualization solutions to maximize services and, at the same time, contain costs. Honarvar stresses that a compelling selling point for clients is that virtualization offers transparency. “They see the benefit of being able to have more environments pre-configured and quickly available to map their needs.”

The virtualization solutions marketplace gets bigger every year. Many companies are turning out half a dozen virtualization solutions a year. Here are two examples:

Toronto-based company Asigra has developed a line of backup and recovery services. Its Multi-Tiered Storage Billing System is designed to save the time and expense of developing or modifying an existing billing system, which the company says could run up to thousands of dollars. Its features include “agentless simplicity” (software is installed on only one node, whether the customer has one PC or hundreds); advanced security features (authentication, encryption and non-escrowed keys); and autonomic healing (provides managed backup/restore services for customers).

Ottawa-headquartered Mitel has introduced a number of communication tools for small and medium-size businesses, offering reporting and a signaling protocol called SIP (Session Initiation Protocol) capabilities. Mitel is aggressively promoting its Business Dashboard, which allows companies to track call activity on an internal IP network with both historical and real-time reporting. It collects trend data on call volumes and times, and trunk usage. Its neatest feature is tracking the path of a single call through internal systems and departments, which makes for accurate management of calls.

And that’s just a brief sampling of the virtualization technologies on the market. Look for aggressive new startup companies from all over the globe to jump into this application-rich, expanding niche.

Bob Weinstein is a science and technology writer with Troy Media Corporation.