Silicon Valley Speaker Series: Microsoft Office Project 2003: Improving Collaboration and Productivity

DAN'L LEWIN: Hi, everyone. Can everyone hear me alright? I would like to make a brief introduction here before we get going. Thanks, everyone, for coming. We really appreciate your attendance and your involvement in our speaker series.

By way of introduction, my name is Dan'l Lewin. I'm a vice president of Microsoft, overseeing a lot of the things that we do in Silicon Valley.

I always like to, when I'm in town, which is pretty frequently these days, especially in the summer, like to participate in these events and the first thing I always like to ask is how many people who are here work at Microsoft. And those that don't, just again a show of hands. So this is great.

Part of our goal, and you're helping us meet that, is to bring in people who have interest in what we're doing as a company and various topical areas, and I'm really pleased today to introduce Chris Capossela, who's been at Microsoft for over a dozen years. He's the general manager of the Microsoft Office Project business unit within the Office team. He's got a really great presentation today involving customers, who are always very helpful in terms of articulating how things are being used, and I understand there's a user group meeting that's occurring and that many of you may be involved, so again this would be a great chance for you all to ask questions.

We've had the speaker series running now for quite some time and again we're very pleased to see this kind of involvement.

Chris has been, as I said, at Microsoft for 12 years and has a distinguished background prior to that in working in Boston at his family restaurant, so you can ask questions about that too. Thanks, Chris.

CHRIS CAPOSSELA: Thank you. (Applause.)

Well, good afternoon, everybody. Oh, we can do better than that. Good afternoon, everybody.

AUDIENCE: Good afternoon.

CHRIS CAPOSSELA: Thank you. As Dan'l mentioned, my name is Chris Capossela, and I'm the general manager for the Microsoft Project business. I have been at Microsoft for 12 years and I've worked in a bunch of different roles, lots of different jobs obviously at a company that's Microsoft size.

I did grow up in Boston, in sort of the Italian section of Boston, and my dad opened a small Italian restaurant right in the North end of Boston, a place called "Dom's." He didn't know what he was doing when opening a restaurant but 30 years later it's still going strong and that's kind of how we grew up and he made the three sons all do all the different jobs. You had to do your stint washing the dishes and do your stint cooking the books when you got a little older. (Laughter.) It is a small business after all. And he hated when I got into PCs and started writing database programs and tracking the numbers and he was like, "No, wait a second, I don't want those spreadsheets that show where all the money goes." So that was kind of an interesting education.

It has been a great ride for me. I've been on the Project business for the last 18 months or so and we're basically here to talk about a product called Microsoft Office Project 2003. And I just really wanted to give you a sense for what's going on with the Project business.

Microsoft has been in the Project business for 10, 12, 13 years, and yet in the last year there's really been kind of a rebirth to the business itself thanks to a couple of things that I'd like to talk about.

And I'm going to show you the product as well, so I'll spend about 15 or 20 minutes talking to some slides and then about 15 or 20 minutes actually demoing the product.

And I invited Kevin Myette from REI to actually talk about how they plan on using Project 2003. Kevin and REI are one of our Early Adopter Programs through the beta program and Kevin's team basically builds gear and apparel that you can buy through REI stores, so for them they have very, very cool projects that are namely things like this tent that Kevin is going to talk about at length. So we wanted to carve some time out for that as well and then we'll have about 30 minutes for questions at the end.

So with that, let's sort of jump in.

Project is kind of a best-kept secret at Microsoft. It's something that I was amazed to learn more about when I looked at joining the team and so I often start off presentations where we have people who might be a little bit new to the business or maybe sort of have drawn some charts in their time but haven't really gone deep, so basically share the top five things you probably don't know about Microsoft Project.

The first one is just to give you a sense that this is a very, very large business. Project last year surpassed $500 million. In fact, we were closer to $600 million. That's just a stunningly large business for something that you really don't hear too much about. So it's something that millions and millions of people use and it's been a great business and there's great partner opportunity behind that business and customers are pretty excited about it.

When you put that in the context of the rest of Microsoft, it doesn't seem like that big, 500 million. Well, you've got Office, you've got Windows; we just have these monolithically large businesses, but it's actually the sixth largest software business at the company and that's kind of an amazing thing to think of when you think about all the products that we build. We're right behind Windows, Office, Windows Server 2003, SQL Server and Exchange. Those are the top five; Project is number six. It's a pretty amazing business.

Number three, Project recently for the past two years has been in the Gartner magic quadrant as a leader in this space, which is great. We've enjoyed that sort of leadership in the category for a long time and it's great to see us being a leader in the enterprise project management space, which is something that is new for us over the last couple of years.

A year ago we shipped a product called Microsoft Project Server 2002 and this is a product that has really started to transform the business. We grew about 35 percent last year and the reason was, we think, or two reasons, but one of the main reasons is because a server product really changes the value proposition of the project management technology. Rather than being something that's focused on the individual project manager, the server product basically connects lots and lots of users inside an organization to project data, regardless of whether or not they're actually a project manager creating schedules and updating schedules, and we'll talk about that.

So we did introduce that server product for the first time as a standalone product about a year ago and today I'm sort of here and excited to point out that Project 2003 is going to release to manufacturing on August 18th. Today is August 14th, I think. That gives us four or five days. Hopefully we won't find any show stopping bugs that we think are necessary to change that date.

I was a little nervous about coming and announcing our release date before we actually hit the release date because you never know what can happen, but things are looking quite good and our target right now is just in four days we'll release the Project 2003 series to our manufacturing facility and obviously build all of the CDs and boxes and it will be available to customers in the fall timeframe.

So that's pretty exciting for the team to turn around and do that in a relatively short time.

We have seen that there's been a sort of evolution in the project management space, focusing moving from the individual project manager to moving up into an organization and bringing together teams of people who aren't necessarily interested in living (inaudible) , but those teams of people who are interested in getting everyone to participate in their project, using tools they already know, and that are interested in collaborating on what we would call sort of the work products associated with the project. The work products associated with a project are documents, they're Visio diagrams, they're spreadsheets, they're vision statements, they're the issues that people are worried about for the project, they're the risks to the project; they're all the things that go around the actual schedule and the project plan, and we hear from teams that if you can tie those things together that is something that becomes very, very interesting.

And most recently, perhaps in the last two years, and it's getting hotter and hotter over the last six months with sort of the government cloud coming on very strong, organizations at a higher level, the executive level or the business leader level are getting extremely interested in these concepts of project portfolio management, how do I manage all of the work that's going on inside of my organization and make sure it's aligned to my strategic initiatives. That's that sort of concept of portfolio management. What are my people doing? How are they wasting their time because of our bureaucracy? How can we get rid of that so they can focus on what they do quite well? So give me a sense of my utilization of my people and resources.

So we see this evolution from the individual all the way up to teams, and all the way up to the executives, as something that is happening at the same time that technology obviously is getting very mature when it comes to server technologies, when it comes to connectivity, so there's an obvious opportunity there.

So the base thing that I would like to leave you with is probably this one slide right here: We're transforming the Project business from a business that focuses on just the project manager to a set of technologies -- server, desktop, browser, et cetera -- that really appeal to a much broader set of users than we've ever appealed to before.

So again the executive stakeholders, they basically want to see and prioritize the initiatives across their entire organization: What's the status of the top three initiatives? And they want to see reports that matter to them using the key indicators that they think are important, not what the project manager might decide is important. They want to make sure that everybody is sort of marching to the same drum. So for executives it's all about the portfolio management and great reporting.

For the team member it isn't about necessarily the broader schedule or what happens if I'm late on this task; they want to leave that to the project manager. The team member really wants to collaborate with other people on their team. They want to understand what are the things I'm supposed to be delivering right now, this week, next week, et cetera. So they basically want to live with the tools they already know -- Office, Outlook, Visio, the browser -- and interact with project oriented data as it relates to them, and that's a big, big change for us.

Next we've got resource managers that we think play a pretty unique role in these organizations. These guys are the folks that are responsible in staffing the new project, figuring out how you can shift things around to utilize their people in the best possible way, who's working on what and if they have the right skills to get the job done. So for resource managers we've really focused on providing what we call skills based resource management technology that I'll try to give you a quick demo of.

Any time we're talking about a server product we're also obviously talking to the IT group that has to maintain that server and install that server, so typically these folks are really interested in linking project data with their front-end system and their back-end system, so how I get my project data into my accounting systems so people are only entering data once. How do I turn an opportunity from Siebel into a project that we're going to staff tentatively and then for real when we actually win the contract, so linking that is important? And, of course, the standard things around having a server technology like how do I configure it, how do I deploy it, how many servers do I need, how do I monitor it for health, so IT managers really want an open and secure system.

And finally, we don't want to forget about the project manager, obviously. They've been an incredibly important constituent for us and the key questions obviously they're interested in answering are the same that they've been interested in for a long time. Are we really going to finish this thing on time and what's it really going to cost us and how do we reuse best practices again and again and again over a project? How do we get smarter the fourth and fifth and sixth time we do an installation or we bring a product to market? The project manager is all about intuitive project management.

So we used to really focus on these folks. We've now taken a very different approach over the last four years in building Project Server and the other Project technologies to go much, much broader than in the past.

So the strategy for us is to really connect your broad worker, your information worker to project oriented data, letting them use tools they already know. So Project Server is sort of at the heart of that and it's built on top of Microsoft SQL Server. This is, of course, the central database where you put all of your projects and all of your people.

We also integrated a technology called Windows SharePoint Services, which allows us to link documents and issues and risks, those work problems, if you will, to the project data and Windows SharePoint Services is sort of a document management platform that we're building on top of and it comes as part of Windows Server 2003.

For the project manager we have a product called Microsoft Project Professional. That's obviously an evolution of the desktop product that millions of people have been using for years.

And then for the executives and resource managers and team members we basically want to let them live in the browser and let them live in Office to interact with project data, so we have something called Project Web Access that's very much focused on letting those folks get to the data that's in this back-end system just through the browser or Office, and I'll give you a demo there.

About a year ago, Bill spoke on our behalf at a Project Leadership Conference in Orlando and one of the first questions he was asked was I think from one of our partners, which was, "Hey, Bill, what's your metrics for success for the Project Management team? How much market share" -- this was the exact question -- "how much market share do you want to take away from the high-end enterprise vendors in this space, the Primaveras, the Artemises, et cetera," and Bill's answer was beautiful. He basically said, you know, "Taking away market share from those high-end vendors is not very important to us. We won't think that the Project team has succeeded unless 80 percent of the people involved in IT projects are sitting in front of tools like this one." And IT projects was one example.

His point here again was just reiterating the fact that we're not interested in like capturing some market share in the enterprise project management space; we're interested in bringing these tools to an incredibly broad set of users. We're talking 20, 30 percent of people who use Office we think we want to be using Project Web Access, the browser, and Office to interact with project data. That's something we would never expect Project on the desktop to reach. We're about 5, 6, 7 percent of Office users use Project on the desktop. Our goal is not to move that number to 20; the goal is to let millions of people interact with project data using the browser and Office itself, and Bill captured that really well for us.

So what is it that I'm actually here to sort of announce? Well, again the release to manufacturing data is the 18th, next Monday, and when we release to manufacturing we're releasing a new version of our product, Microsoft Project Standard 2003 for the desktop standalone project user and then what we call the Microsoft Office Enterprise Project Management Solution and that is Project Professional plus Project Server plus Project Web Access. When you use those three things together we call that our Enterprise Project Management Solution.

You can see on this slide we've got lists, the full package product price list here. Most people don't buy Project by going to CompUSA or Circuit City; they obviously buy it through a volume discount, but this is the full package price that you would expect to pay around if you walked into a Circuit City.

And we've had really three key goals with Project 2003 over the 2002 release. The first was, my God, we came out with this server product a year ago and people went bananas. We expected this product to sell well. We had no idea that the interest would be as high as it was and we just got lambasted with what let me call it constructive feedback on what would then become the product. (Laughter.) It was amazing. I mean, I felt the full impact of the closed feedback loop that we have from our partners and our customers. It was extremely, extremely impactful.

So we have really done a lot of work to say, "Hey, there's a lot of low hanging fruit that we can do to do a much better job with timesheets, to do a much better job with synching with Active Directory, integrating with Office, et cetera, et cetera," and we basically took 15 months to do what we think is a really, really high value release, very much focused on the feedback from our early adopters in 2002.

We also really deepened our Office integration, so for the first time ever we now let you live inside of Outlook and see all of the project tasks that you're supposed to be getting done on the days in your Outlook calendar when you're supposed to get them done. So rather than having to go to a timesheet or look inside of Project for your assignments, as team member you literally live in Outlook and new assignments can just show up in the calendar as project managers are giving them to you and then you can double-click on them and say, "I'm done with this thing" or "I'm 50 percent done with this thing" or "I've done seven hours and I've got ten hours left" and just stay inside of Outlook, never go to some other thing, and I'll give you a demo there. That's one example of the Office integration and there are a couple of other big ones.

And then finally we think of Project Server as really a scheduling and resource management platform that a lot of our partners can build solutions on top of, and I'll talk about some examples of how that's possible.

But every single Project Server customer that we've engaged with over the last year has told us that it's mission critical that they can integrated Project Server data with some other system. It might be accounting, it might be issue tracking, it might be lead tracking; so we've done a lot of work inside of Project Server to really make that much, much easier in 2003 than it was in 2002.

We have seen incredible partner momentum. We have something like 410 Project partners. We've got sort of a tiered system of Enterprise Project Partners and Premier Project Partner and Project Partners. This slide shows some of the folks that are in the top two tiers. I know some of the folks I think are here today. I can see them. Solutions is here and (inaudible) is here. We wouldn't succeed without these partners.

One of the things that we've learned is that a successful implementation of enterprise project management, technology is one of probably three pieces and believe me it's the easy one. Even though it's not simple, it's pretty much the easy one. There's a lot of process that goes into figuring out how to be successful, what are the processes that you want to optimize or you want to re-engineer, and then there's a huge people and cultural element to successful enterprise project management deployment or adoption.

And that's what a lot of these partners basically do. A lot of them really focus on helping companies improve their project management maturity. So I might be at level one and I want to get to level two over the next 18 months; a lot of our partners can help you figure out how to take those steps to do it.

Some of our partners build vertical solutions in the financial or pharmaceutical or manufacturing space. A lot of people focus on pure integration, integrating Project data with SAP or Siebel or PeopleSoft.

Of course, the bread and butter of a lot of our partners is doing the actual implementation and then many of them actually do software extensions too.

This is definitely a space where we are 100 percent dependent on a really healthy partner ecosystem and it's also something that really differentiates Microsoft from the other vendors in the enterprise project management space that typically provide all of these services themselves and therefore don't necessarily have the scale that we can reach through our partners.

I said that there are four things I really want to touch on that we have really focused on in terms of continually improving, improving, improving Project.

How many people here have ever sort of crashed one of our products and seen the little thing that says, "Hey, would you send us an error report?" (Laughter.) A lot of people. How many people click on that "Send Error Report to Microsoft" ? Thank God. Thank you, thank you, thank you. That is the number one thing that you guys can do to improve the quality of every single one of our products.

I'll give you a sense for what happens there. When you hit that Send Report button, basically a heap dump is sent back to Microsoft and we've got people that are doing nothing but looking through all of the crashes that we get.

And if you were to look at a chart that shows you the buckets of crashes where each bucket represented one crash that lots of people were hitting, you would see a graph that basically looks like this where there's just an incredible, you know, 80 percent of all the crashes we see are happening in about 15 percent of the buckets, meaning you fix 15 bugs, because each bucket represents a bug, you fix 15 bugs and you are literally removing 80 percent of the crashes from the face of the earth.

In Project 2003 we literally fixed something like 54 bugs that came from those Watson crashes and we got rid of something like 24,000 crashes that we saw over the lifecycle of just a year just in Project 2002.

So that's an incredible feedback loop that we've never had before that you're seeing across all of Microsoft. MSN uses it, Xbox uses it, Windows uses it, Office uses it, Project uses it, so that's something that we just feel like today it's almost a competitive advantage to the quality of our products.

You should know that anyone who builds software on top of Windows actually has the ability to get that crash reporting from Microsoft. It's an industry wide thing we do; it's not something that's only available to Microsoft products. Right now I think we're the ones who are living and breathing it the most. So that's been just awesome and we're pretty excited about that.

Obviously the scalability and the performance focus that we've done I think is going to reap big rewards from all the feedback that we've gotten so far.

And in terms of usage we're doing a new really important thing to dramatically expand the usage. The first thing is actually the bottom point, which is we are dramatically increasing the quality and the amount of content that we make available to developers and to administrators so that we make it very, very easy for you to say, "Okay, this is how I use this system. It's mostly a timesheet system for me. I've got a thousand people entering times." And we'll basically tell you we think you need three servers configured like this with this kind of network connectivity to get the performance we think you need to get.

So having really good content is important. We're introducing a certification exam for Project Server administrators so you'll have a level of understanding that these administrators, whether they be partners or your own internal people, have really gone through some rigorous testing to really know the system.

And then finally we're building some cool what we call Solution Accelerators. Some of you may have seen some of the press around this already. We've built a sic sigma accelerator, which is really nothing more than taking Project and Project Server and putting sort of a sic sigma skin on top of it. There isn't a lot of new code; it's much more a template and UI and configuration that's very dear towards the sic sigma methodology, and we see a lot of our partners building a lot of these Solution Accelerators too.

So you don't have to start with almost a blank sheet of paper where you then have to go in and define everything to get it to work the way you want it to work but instead we're seeing sort of these vertical solutions, a lot of interest there.

In terms of sort of advancing the discipline of project management, again for us it's critical that we build on an open platform and that we have a very strong partner focus.

We had just an awesome year in terms of customer adoption and the thing that's really fun for me to see is that the types of customers that adopt the products really run a very broad range of customers. We've got the traditional IT organizations like let's say (in audible) , where you've got a bunch of IT people that are focused on picking the most important things to do and then cross-charging the divisions so those divisions can see what they're actually spending their money on and maybe prioritize based on the spend that they have.

But we've also got some very cool examples in like the energy verticals where Bonneville Power in Portland, you know, they run an incredibly large organization that handles about $300 million of federal money that they have to go prove the worth of that spend every year and they're managing 2,500 projects, integrating with PeopleSoft and something called (Indis Passport ?), all the way back to sort of the manufacturing organizations like Cooper Tire and Peugeot, who are obviously interested in getting more efficient and bringing their products to market faster or with higher quality. And (inaudible) was another early adopter for us and they're interested in sort of a timesheet system that ties together accounting and project management so you only have one timesheet to fill out rather than two separate ones, so that's been a lot of fun for us as well.

So that's the sort of incredibly fast, 15 minute, fire hose approach to what we've been doing with the Project business, basically going incredibly broad and trying to let you use the tools that you already know to connect many more users to the system itself, and we've seen great partner growth and great customer adoption.

What I want to do now is basically just kind of minimize PowerPoint and spend the next 15 or 20 minutes giving you an equally high level and equally fire hosed approach demo of Project Server.

One of the things that you're going to notice is that I'm going to spend very, very little time in Microsoft Project on the desktop. And for folks who are used to Microsoft Project on the desktop, I'm sorry if that's a disappointment. I'll whet your appetite a little bit. But I really am trying to indicate to all of you guys that this is not the Project that you may think of; I really want to show you what Project Server through the browser allows different types of users to do.

So what we're looking at right now is something called Project Web Access. This is nothing more than Internet Explorer pointed to Project Server and you see that we're hiding my inactive notifications and that's fine. You see the home page right here. This is actually built on something called Windows SharePoint Services. So if any of you have used that technology, this will feel very, very comfortable for you.

And you can see that I'm logged in as a guy named Scott Bishop. It looks like I don't have any updates that I need to approve. It looks like I've got a couple of timesheets waiting for me to approve, and you can see that we've got support for different periods of time that I can define. So I can say that I want people reporting time in these periods and I can lock down a period to basically say, "You had your chance to report time. It's now locked down because we're going to bill, and I don't want you touching it because we're about to bill a client for that time." That was a very highly requested feature of Microsoft Project 2003.

You also see this will tell me what new tasks the project manager has given me. It looks like I have an active risk that's assigned to me for one of our projects, and I've got some issues as well.

Across the top obviously we've got different tabs that let me get access to different data in the server.

I'm sort of a fictitious person at a fictitious manufacturing company and we make DVD drives and hard drives and all kinds of things along that nature.

If I click on the project link right there we should go to what's called the Project Center, and all of a sudden I'm looking at a portfolio of my projects and I've organized them by geography. So I can see all the projects that are happening in Kuala Lumpur, in Germany. I can scroll down and see more, et cetera, et cetera. And, of course, on the Gant Chart on the right I'm looking, every one of these lines here is actually a project -- not a task; it's the project itself. If I were to click on one of them, I'd drill down into the details of that particular project.

Here I can get a bird's eye view of what's going on in my portfolio. I can see traffic lights for how we're doing, in this case, on budget. I think if I scroll over we've got traffic lights on the schedule, we've got traffic lights to get an indication of what we think the ROI is going to be and our exposure and all kinds of goodies.

Now, I can change this view. If I don't want to look at a geographic view I might want to take a different view where I actually look at things organized by strategic importance or strategic alignment. So now I'm seeing all of the projects that fall into the expand-our-markets bucket or all of the projects that are focused on increasing our efficiency bucket.

Again, you have to think of our projects as just basically living in a database and you can tag them with whatever information you want to tag them with and that lets you pivot and filter and group and create views that let you see the things you want to see. It might be by strategic alignment, by geography, by manager; really, however you want.

I'd say if there's one thing that these demos are hard to communicate, it's that exact point, that you get to decide what are your metrics, what are your key indicators; what's green for you or yellow for you or red for you is going to be different than a different organization. You basically build those metrics and then you build the views that let you see that data just in the browser. So this is a view that a project manager would love or a business manager might like as well.

Now, if I make this column a little bit bigger you'll see that next to the DVD drive right here we've got a couple of icons, and if I hover over there it basically tells me that associated with this one project I've got issues and documents that are attached to this particular project. I'm going to drill in and click on the risks and it's going to take me to all the risks.

This is a demo. You can see I've got one risk. In the real world you'd probably have more than one of you who are a very good project management organization, and I want to learn from you.

So you can see that this lets me quickly see all the risks that are assigned to me or owned by me or all the risks I've opened. It looks like we've got a risk here with a project schedule because we've got an over-allocation of a resource. I'm going to click on the risk and I can read a lot more detail about who created it, whether it's active or not. We track the versioning of the risk so you can see change history of the risk. And basically this person is saying that Bradley Beck is over-allocated and we need to assign someone else to work on what Bradley is working on.

So I'm going to pop back over to the Project Center and I'm going to click on this DVD drive and I'm going to select the DVD drive project and I'm going to click on the Build Team button. What this button is going to allow me to do is to basically build a team for that particular project.

So what I'm going to see in this UI in this right hand side I see all the resources that are already working on the project and in the left hand side I see all of the resources that I have access to as the resource manager.

We actually don't pre-populate this for performance reasons, so I can build a filter if I want, or if I hit View All it's going to show me all the people in the resource pool that I have access to work on.

So from here I want to take Bradley Beck -- I'm going to click on him right there -- and Bradley has certain skills. He might be a VB developer who has level-three competency or he might be an Exchange deployment expert or he might speak French or he might be someone who can travel to certain countries. Again, you decide what skills you want to track about Bradley, but from here I can click on Bradley and I can say Match and Project is going to take the skill set of Bradley and match all the resources in the resource pool that have Bradley's same skills and now it's only going to show me someone who can do the same things Bradley can do.

From here I might want to filter further. I might want to come in here and say, you know what, I'm going to insert a row to my filter and I only want people who are in a certain location, so I'm going to use the resource breakdown structure and I'm going to specify people in Kuala Lumpur and I'm going to apply this filter again and now I just see people who have Bradley's skills and who work in Kuala Lumpur. There are three of them. I'm going go select all three and I'm going to click the Availability button.

Project Server is now going to go off and query these different resources and show me their availability over time, and I can see the actual projects that they're working on right down below here.

So if I check, let's say take Brad Sutton off and let's just focus on Mindar, I can see when Mindar is free and when Mindar isn't. It looks like Mindar is in trouble too; he's over-allocated. Oh, there's some free time. I can click on Brad Sutton and see when Brad is free and when Brad is over-allocated to figure out where do I need to add a resource that gives Brad some breathing room.

I can change the calendar or the view, et cetera, et cetera. Bradley Beck is the guy who's in trouble. I can see when he's busy. You get the idea.

If I come down below here, I can actually drill in and see what projects each one of these folks are working on. There's the desktop extra bytes, desktop hard drives, on and on and on.

Once I've picked the person that I want, I can come back in here and let's say I want Brad Sutton. And I'm going to add Brad to the team, click on the Add button and there's that Brad. And you'll notice that Brad is marked as committed. Well, Project Server now supports the concept of a committed versus a proposed resource. Services organizations talk about this as soft versus hard booking. You might want to soft book Brad because you kind of want to hold the time tentatively on his calendar, you want to decrement it from his resource availability but you don't want to say he's absolutely going to start working on this yet. You want to think through between those two contexts and we certainly support that distinction.

And from here I can go ahead and hit the Save Changes button. The changes have been successfully done and now Brad has been added to the project team. The project manager can get a notification that he's got to open up the project and put Brad on the task that he wants Brad to work on.

But just through the browser a resource manager can do far more than they've been able to do before. They can search for resources that have certain skills, add them to a project, send them off to the project manager.

That's sort of a quick overview of kind of the portfolio views of our project and how our resource manager can add people to the team based on skills.

We also have support for things called generic resources, so rather than talking about Brad you can have a VB level-two developer assigned to do lots and lots of work so you can get a sense for how many VB level-two developers you need over the next six months, and we'll even do this resource substitution for you. If you say, "Hey, just fine me someone who's a VB level-two and has the availability," we'll go ahead and do that for you.

In terms of reporting, this is something that we've been able to really crank the volume up on in the last couple of releases. We are basically using SQL Server for our underlying database, so that means we can take advantage of something called Analysis Services to build a couple of OLAP cues so you can basically get some really good analytical data from your project plans.

This is one of the favorites of project managers and I think of people who have to deal with money around projects. This basically is the infamous bubble chart that shows three pieces of data. The size of the bubble in this case is the cost of the project, so that yellow guy is a pretty expensive one compared to the tiny little blue one. This tells me the name of all the projects that I've got here.

So the size is the cost, and then let me see if I get this right. Where it lives vertically is our work variance from our plans. So if I'm living down here, if I'm a yellow guy living below the line, it looks like we're 400 hours under what we thought we were going to do, so we're working less than we thought. If I'm up here, if I'm that little blue guy, we're about 410 hours or something over what we thought we were going to do. That was a pretty bad guess on that one.

This axis actually shows me how we're doing on our cost variance. So if I'm to the right here I'm more expensive than we thought. If I'm to the left I'm less expensive than we thought. So this blue one is a pretty inexpensive one in terms of what we thought it was going to be. It's costing us way more than we thought and we're pouring way more into it. If I hover over, you can see the actual dollars. This yellow one is actually going pretty well; we're working less than we thought and it's costing us less.

And then the big joke, of course, is that all the ones in the middle -- what -- haven't started yet. (Laughter.) All the ones in the middle haven't started yet or nobody's reporting time on them or nobody's reporting progress because they're scared.

Again, this feels a lot like Excel. This is basically just something called the Office Web Controls, so I can filter this down. In this case project location, I might want to see just a certain set of locations. I might want to see just a certain set of project managers, a certain set of versions. You get the idea. It's basically just a pivot table on top of the SQL cube that we automatically generate for you as you put these projects into your Project Server, so that's a quick look there at some of the analysis and reporting capabilities that we've done.

I'm going to quickly switch over the resource tab. So I showed you the project tab or I show you all the projects in the database. Now I'm showing you all the resources in the database. And from here you can get a sense for where people are working and what kind of skills they have. I can approve my timesheets.

But one of the key things I might want to do is sort of view my resource assignments. If I click on this, this is really going to give me an understanding of who's doing what. So you'll notice that we're looking at Brad Sutton and Bradley Beck. I've already added them over here. And now this is showing me all the things that Brad Sutton and Bradley Beck are working on over time.

I might want to actually print this -- imagine that, wanting to print. I'm going to go ahead and click on the Print Grid button and from here I can maybe remove, I don't know, the start date and the "submitted on" and hit the Reformat Grid and basically we take that data that was living in ActiveX control and we just build an HTML table that will print pretty well in the browser. That was a high request. And we also have the ability to just quickly export this to Excel so we can take all of that data, just dump it into Excel very quickly, and you can, of course, use the grouping and filtering that you've come to expect in Excel to show just the level of detail you want; very, very easy to use, the tools that you already know, namely Office, to interact with data in Project Server.

I'm going to close that down, going to minimize this, going to minimize this. I'm running a little bit long so I'm going to pop over to Outlook and I'm going to finish up my demo real quick and bring Kevin up.

This is actually Outlook 2003 but the things I'm going to show work in Outlook 2000 or higher. I mentioned that obviously we've added a lot of capability to integrate with Office. One of the key ones was letting people report progress and report time right from with inside of Outlook.

So what I've done here, as a team member I don't want to go to Project timesheet and fill in my time. I just want to live right here. So I've gone ahead and used the Project Server and Outlook integration and now what I'm looking at is a really nice calendar. I wish my calendar looked this nice. (Laughter.) I've only got lunch with Bob. I've got one meeting that day, one meeting that day; that is just beautiful.

However, at the top I see that I've actually got some all-day assignments going across the top of my calendar. I've got to conduct an internal product review over a few days. I've got to assign resources over a few days.

If I double-click on this guy, it's going to open up what looks like an Outlook calendar request, an Outlook calendar item, because it is, but we've done some custom work to build a custom form in order for Project to have access right here.

When I click on that tab it tells me what the task name is and it tells me what project this task has come from, the 100x DVD drive, and it tells me, hey, tell me what your percent work complete is. I'm going to say that I'm 50 percent done and it's going to automatically update the actual and remaining and I can hit the Update Now button and it will send that off to Project Server, update the task with me being 50 percent done, just like I had done in my timesheet, and the project manager gets a notification that they've got time to review, just like if I had done it in my timesheet.

If I've on the plane I can hit the Save and Close button so when I'm disconnected from the server. This is just Outlook working offline. These are just calendar items in my Outlook calendar. I don't need to be connected to the server to see them. I hit the Save and Close button. I do that for all my different tasks. I do a bunch of e-mail, change my calendar around. When I get back to the office I plug it in, my e-mail goes out, my calendar synchs up, Project Server is automatically updated and as a team member I literally just live inside of Outlook and things just show up here when my project manager gives me these things; very, very easy for people to sort of participate in a project whereas they simply wouldn't do that in the past.

I'm not even going to have time to do the Project desktop stuff. That's a very quick view of a lot of the different things that we've done for resource managers and executives and team members. Obviously there's sort of a ton of functionality geared towards bringing more people into the project space.

I wanted to talk about the technology and our partners, but I what I want to do now is introduce Kevin -- I'll bring the slides back up -- from REI. Kevin works inside the Gear and Apparel division inside of REI that actually makes products that you go to REI and actually buy such as this tent, and Kevin is going to sort of share what his team does and what they're hoping to use Project for.

With that, please welcome Kevin. (Applause.)

KEVIN MYETTE: Hi. My name is Kevin Myette and, as Chris mentioned, I'm from REI. A real quick show of hands: How many people are familiar with REI? Oh, good. An even better question: How many of you are members of REI? Even better, okay.

Great. As Chris mentioned, I work in the Gear and Apparel group within REI and I want to talk a little bit about, for those who aren't -- it doesn't look like many aren't familiar with REI -- to talk a little bit about the organization so you can learn a little more about it. Even if you know REI I'll talk a little bit more about that. And then I'll talk about our Gear and Apparel organization and then step into why we are really seeing tremendous promise in this technology.

And taking an organization, it's interesting, I shared a point with Chris at lunch, those who have known REI over the years we started in Seattle and such and for some we've developed a reputation of being founded on a glacier and moving like one. (Laughter.) And sometimes that's earned but quite honestly we're doing some pretty exciting things and I think that this project here is indicative of that.

And the other thing too is that we're going to talk about some stuff that -- not that we don't love technology, but we're going to talk about some stuff that helps us recreate, so we look at Project in a little different way. As Chris mentioned, this here is a project that hasn't yet hit the market yet but will be coming out next year.

Okay, so again my name is Kevin Myette. I've worked for REI for about 17 years and I'm the Director of Business Operations at our Gear and Apparel group.

A little bit about REI, a little history: We were founded in 1938 as a consumer cooperative. Currently we have over 2 million members. We're actually the largest consumer cooperative in the nation.

A national retailer of muscle-powered gear and apparel products, primarily in the categories of camping and backpacking -- that's where we've become known over the years -- but also very much so in cycling, in climbing and mountaineering, paddling, which includes canoeing, kayaking, sea kayaking, river kayaking, and then snow sports, which is downhill skiing, cross-country skiing and snowboarding.

Multi-panel shopping: We actually were one of the first in our category to actually go to the Web. We started as a retail store in Seattle and have expanded to 66 stores, then went into our catalogue for a number of years and now we have Web as well, so we actually have a three-way to shop approach and it's worked extremely well for us.

It's interesting, in the Web environment people learn to trust us in the catalogue and the retail business and so therefore in the Web it was a natural extension.

Annually we're about a $750 million business, so that's the whole corporate REI.

Now, Gear and Apparel, think of us as a manufacturer within the larger retail organization. The Gear and Apparel organization, we're the organization that designs, develops -- design is come up with the concept, develop, which is commercializing it -- sources, where are we going to make this product and what materials are we going to be using for this product, and then conducts the research and testing to ensure the product is up to snuff for brands which bear the REI name, and again I have a couple of examples right here.

We have about a thousand active styles in our portfolio, in our assortment that are REI Gear and Apparel products. This is distributed between tents, backpacks, sleeping bags, travel, bicycles. We have apparel for all the different -- we make a lot of apparel that support the categories like cycling or cross-country skiing, things that require performance fabrics. Rainwear and outerwear: We sometimes think of our rainwear as gear, because when you're climbing and you really need to have a product that performs, it is gear, it really needs to perform to that level. And then sportswear: Everything I'm wearing here today is actually REI sportswear. It's getting to the point of we're actually working on a little more style here, which we haven't been known from in the beginning.

About 21 percent of the products or 21 percent of our total corporate sales are attributed to REI products, so that means that 79 percent of our sales are other wholesale brands and there's a lot of great wholesale brands out there. And one of the reasons why people come to REI is assortment, choice. We can make great products but you also want to look at what North Face has to offer or Sierra Designs or in the bicycle arena it could be Cannondale or you name it in all the different categories.

So it's an important distinction and it's an important thing for us to recognize. That said, our brand is very profitable and we want to make sure we do it really well.

So let's talk a little bit about the business environment for the Gear and Apparel organization. We have two major project introductions every year, that being fall. We're in that right now. If you go into one of our stores you will see a number of products geared towards the fall and actually leading into the winter products for skiing and such. Back to school is a big thing as well. And then spring introduction happens in January, so in January to March timeframe you'll have new bicycles, you'll have new sleeping bags for camping and a whole variety of products that show up, so we really work on those schedules.

We have 600 new or revised styles per year, so we think of every single one of those as a project, because even though they happen in different categories and they may share a lot of similarities, the fact remains that you may be off schedule on something because of materials or because of a holdup in the way a product is testing that you don't want to slow down the whole category. And currently actually, prior to using this tool, we were living really at the category level. It was hard for us to work in project management and really get down to the individual product level.

And these cycles are really dependent upon how complex the product is. Some of the products are really simple. Sportswear may be a great product for us, but it's really not that technical. Cotton is cotton, although there are varieties of grade there, but compared to the technical fabrics that we're using on this tent right here, there's a great difference. So there's a very big difference depending upon on how much testing we have to do and how much work we have to do in each of those projects.

So the cycles range from 12 months -- and this includes manufacturing -- 12 months from concept all the way to delivery in the stores to up to two years on a product like this tent here.

And incidentally, you don't have to be a mathematician to recognize that you have overlapping seasons, so it's interesting, sometimes you go up to a designer and say, "Well, what are you working on," and they could be working on three seasons at one given time, so ability to manage their tasks and see their tasks and know exactly what they need to do that week can be real challenging.

And we have 100 plus team members. This includes people throughout our organization. Our team within the Gear and Apparel group is about 50 people but we bring in a number of people throughout the rest of the organization to help bring the product to market. Now, if we expand it also out to our partners in our manufacturing unit that could explode it upwards of 200 or 250 or so.

And I'd again mention teams are geographically dispersed. This is similar to most other big outdoor brands right now. For example, I mentioned North Face across the Bay here. Designing, developing and sourcing can happen locally. In our case it's in Seattle. Yet manufacturing often is happening in a variety of different places around the planet. So we're primarily in North America and South America and in Asia.

It's a very labor intensive process, highly collaborative. Information, document, samples are managed at that project level. They're shared, revised by many different team members.

So what are our challenges? Well, first and foremost is portfolio management. We have a very, very difficult time and seeing we have multiple lines, multiple seasons, hundreds of products, hundreds of people. Really being able to manage that entire portfolio in the way that is meaningful for us to really know where we're putting our most valued resources on our most valued projects.

Document management: We have documents that exist and we, like many, live in an Office world: Excel, Word, a number of Visio diagrams, but they may sit on a hard drive, a server or in our corporate internal portal.

Resource scheduling allocation: We want to make sure that with a limited amount of staff -- again, we're a retail organization and we're a cooperative, so we don't have bottomless resources to dedicate to staff. We have a great team, don't get me wrong there, but we want to make sure we really direct this team in the way that is best. We really want to make sure they're focused on what is important.

We also want to make sure that they have the time, because this is a creative bunch. We want to make sure that they have the time to do the things that are important to create innovation that is going to help us move our products.

Although we may be creating some wonderful products now we have a real challenge with cross-departmental and visual communication. Where are you on this product or this project and are we going to be ready for launch? How do we partner with our retail group, our marketing group and make sure we're all on the same page?

So we have some goals that we want our systems to do for us, those being improving our efficiency. We want to streamline our methods of getting our products to market. In some cases we're going to shorten lifecycles but we really want to make sure the things that we do during those lifecycles are of really high value.

We want to add greater consistency. The threat assessor to this tent here was a product called the Half Dome 2 or Half Dome Plus. Anyone here own one of those tents? Yeah. "Backpacker" editor's choice award last year, a fabulous tent. We said, well, you know, we can do -- that tent had a great niche. This one is all about fast and light. That tent weighs about five pounds. This tent weighs under four, three pounds eleven ounces for a two-person, two-door, two-vestibule tent and in the backpacking world this hasn't been done yet. We think there's another award in this product here.

We want to do more of that and we know we can but we need to be able to improve our consistency. We want to deliver great products every time.

We're being asked to increase our capacity. How do we do more projects? How do we get into categories that are of greater value? How do we do that? Well, with the existing team it's going to mean adding people but we don't just want to add people; we want to make sure we improve our efficiency to increase our capacity. We want to do it in a cost effective way that improves our scalability.

And we want to be interconnected. We want to make sure that our systems -- as Chris mentioned, that the back-end and front-end are interconnected so that we really do share and collaborate, and now we want to do that within REI but eventually into our partners, because that's a two-way street; the more we can tell them about where projects are, the more they can participate and actually help us be on time.

So the solution -- I'm just going to bullet point this pretty quickly -- we actually use a variety of different tools. We're mapping our process in Visio 2003 but we're using more of Visio than I think most people use it for, because we're using the intelligence behind Visio. We're actually using the data management behind Visio through a product called Apprentice Systems Process Author where that extends Visio's capability to actually build expert systems. They call it an apprentice, so we build these apprentices or expert systems so we have an apprentice to build a pack, an apprentice to build a tent. These are the things that go into creating that product.

The projects then can be initiated right on top of that apprentice literally with push-button ease using the .NET XML functionality. The resources then can be assigned, managed, changed appropriately on the server side and managing it in Project Server.

And then the project is managed by the team members. This is really an important point. The project now and the management really exist within the team members, those who are really doing the work. This changes the project management role a little bit. I kind of say instead of being a gatekeeper, they're kind of a shepherd to help keep things moving forward, and that happens through Project Professional for the project manager, Project Web Access for everybody and then, as Chris pointed out, Outlook, which I think is really the Holy Grail.

So I want to give a quick visual of that. Some people think words, some people think visually. This kind of illustrates the flow of what we're talking about. We're going to start and we're going to actually create an apprentice here for Pack and Travel, which is a category we're piloting right now.

We develop the apprentice, the project apprentice, pulling together the process experts to be able to define what that apprentice is, and that's a little bit of a labor intensive process to begin with, but keep in mind once we use that and create that we then now can generate projects using this apprentice and answering some basic questions we now have the ability to very rapidly initiate projects. That was one of the challenges and sometimes initiating a project is really building that first. And you can use project plans, you can use templates, but here we've really used an expert system.

We then now go into assigned resources. In most cases it's pretty simple, we have it automatically done because we have a finite team who's working on bicycles and that's the team that gets to do it, but it also gives us flexibility because in some cases we want to be able to say, you know, we're working with a partner who can do the development here; let's assign this project that role, so it gives us tremendous flexibility and again back to the scalability.

Which now allows us to actually go into project management mode, and actually from step three to step five is actually fairly rapid. I mean, some of it's just almost answering questions and pushing a button and then assign the resources. Most of our work exists in step six where we're really interacting with the project and that's where that timeframe of actually conducting the project exists.

Now, in many cases the next step is you complete the project, but the beauty of what we're doing here, which is really powerful, is step seven. And that is not to belittle step 6D, because that's what we want to do is you want to complete a successful project and come out with a successful product. The feedback loop as to what went well and what didn't is an integral part of this cycle to allow us to feedback to apprentice, improve the apprentice so every time we now initiate a project we're doing a better job and it's based on actual history.

So our anticipated outcomes and benefits, firstly total portfolio management. We now can view, have perspectives, have interactions is really kind of the key with the project plan, tailored to the way we work, tailored to the way a designer designs or the way they interact.

And it was actually interesting that a designer came up to me and said, "I don't want to look at this information; I just want to know what I need to do and when I need to do it. Can't I just have it in Outlook?" And, I mean, that was a comment before we even were moving towards this Project plan. Really it defined it.

Our ability to manage our portfolio at an appropriate detail to provide consistent execution.

Resource management: We tend to say yes all the time and when you're presented with a really cool project it's like hard to say no, or a really cool category. It's like, you know what, I really want to work on hydration, that's a really cool thing, but the reality is that causes great difficulty for our organization because we over commit and we will not do it at the sacrifice of quality, so as a result some people are working really hard and can be a burnout.

So we anticipate we're going to direct work towards teams rather than saying, "Here, you teams take on hydration, you can do it, you've got the time." It's really being way more strategic about that. We anticipate more success and less burnout.

And here's a real key one is our organization scalability. We already create high quality, award winning products. We need to become more efficient at doing that. There are two big reasons. One is that we can take on additional projects or categories, which is good for REI as an organization. And the second important one is this is a sales point for the design team and they're very much on board, because we thrive on innovation and coming up with products that work really well in the outdoors. And the only way you get all that is you have to be out there. So the better we can manage our time and our resources allows us to say, you know what, you need to spend some time maybe working at the top of Mt. Rainier and you need to be working on these particular projects, and we can actually start scheduling that now, whereas now it's like, well, yeah, I know I need to get out there and we do that all the time anyway, but how do you actually make that as a real part of the whole plan, and that's important and a great point that really has come to light.

So that's my presentation and I'm going to turn it back over to Chris. (Applause.)

CHRIS CAPOSSELA: It's always interesting for me to sort of learn about what the value proposition of the solution is for a particular customer and it was interesting for me when I learned from Kevin, A) just to sort of see a physical manifestation that there is a project for them, it's a tent, it's going to come out in a year and a half or whatever, and it's really important to win a certain quality award, and to hear that the value prop isn't to do more for him but it's actually to get there, to free up time for their own product development people to be able to do a better job on quality, better job on innovation.

Most of the people that we talk to, the value prop focuses on something around those items, whether it's better insight into the portfolio of work that we're doing and making sure that's aligned with what we're supposed to be doing, whether it's getting a good understanding of resource utilization and how you want to change that over time or whether it's increasing team member participation in projects, whatever those might be for your organization. That's typically what it comes down to for different groups.

So as we look forward we're really energized in the project management space. The announcement today of our release to manufacturing is obviously a big one for us. That essentially means the product development team is done and now we just have to let the clock tick while the CDs can get into people's hands and we can sort of continue the momentum of hooking together information workers with project data, which I think has been really missing over the past years.

It's super exciting for us to work with customers like REI and (inaudible) , two of our early adopters for 2003, and we'll be talking about many more of them at the formal launch of the product in the fall.

There is just an awesome partner opportunity around services with project and consulting and we do think that 2003 will be an important product to bring sort of project discipline to the masses.

With that, I wanted to thank everybody for your time. I know it's super valuable. I think Kevin has brought a couple of REI goodies to sort of give away towards the end, so we have 30 minutes for Q & A and at the end of that Q & A I think Kevin is going to be picking names and giving those out.

Top of page