IT departments are scrapping projects in response to tightening budgets and the ever-deteriorating economy. But this is no time to cut back on project management or portfolio management, experts say.

"High project failure means you're wasting money, and there's even less tolerance for that in a down economy," says Margo Visitacion, a vice president with Forrester Research who covers project portfolio management and quality assurance.

Portfolio management can help you zero in on the projects that are most worth their effort and scant budget dollars, while project management can help you execute those projects most efficiently, IT managers and project management experts say.

David Muntz, CIO of Dallas-based Baylor Health Care System (which warned patients last week of a potential breach of their personal data), agrees that an economic downturn increases the need for project management software. "Good project management tools enhance the three Cs: communication, coordination and collaboration," he says. "With fewer people [on staff], you can't afford missteps."

Baylor Health's IT group uses project portfolio management software from Planview to prioritize projects, track the progress of projects and manage demand from the business for IT resources, Muntz says. Making informed decisions about which projects to work on is critical at a time when Baylor Health is being especially fiscally prudent, he says.

One example: Recently, says Muntz, the IT department was asked to move a printer from one side of a hallway to the other. Muntz says the IT department used Planview to estimate that moving the printer, which he says cost $300 or $400 when the company purchased it, would cost $1700 based on the labor involved and the cost of adding circuitry. IT quickly determined that moving the printer wasn't worth the effort and was able to explain why to the business.

Muntz says more accurately predicting costs makes managing demand from the business easier. "If you didn't have any idea what it cost to do something, you'd do anything," he says.

As well as helping the IT department identify projects to avoid, Planview highlights which projects should be sped up—based on their anticipated business benefits. For example, Baylor Health decided that its electronic health record system should remain a high priority during the downturn because of the efficiency improvements it will bring, Muntz says.

At the Washington State Employees Credit Union, hosted project portfolio management software from AtTask is helping the organization determine which of the company's IT projects are absolutely critical to serving the banking needs of the credit union's roughly 150,000 members.