Information Technology Project Management By Jack T Marchewka

Information Technology Project Management By Jack T. Marchewka Northern Illinois University Copyright 2009 John Wiley & Sons, Inc. all rights reserved. Reproduction or translation of this work beyond that permitted in Section 117 of the 1976 United States Copyright Act without the express permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information contained herein.

The Nature of Information Technology Projects Chapter 1

IT and Modern Day Project Management 1940 s First Electronic Computer 1950 s 1960 s EDP Era 1970 s PC Era 1980 s 1990 s Network Era 2000 s 2010 s Globalization 3

IT and Modern Day Project Management EDP era began early 1960 S Purchase of centralized mainframe by large organizations IT projects focused on automating key organizational functions – accounting, inventory, production scheduling Improve efficiency and reduce costs of manual and clerical tasks Structured approach used for managing these projects as the requirements were stable and well understood Created information silos DP manager reported to head of accounting or financial manager 4

IT and Modern Day Project Management Micro era began early 1980 s Proliferation (sometimes uncontrolled) of PCs challenged centralized control that was in place Led to user-developed, decentralized, independent systems that replicated data throughout the organization and vied for IT support Role of CIO is created to ensure that IT is used strategically Reported to CEO to show importance of the CIO position and critical role to be played by IT PCs needed to coexist and integrate with mainframes IT projects now crossed functional lines and requirements were changing at a faster pace Software development methodologies introduced to manage the less stable requirements and shorten the development life cycle 5

IT and Modern Day Project Management Network era began mid 1990 s due to the advances and growth of the ARPANET /Internet. Projects focused on the challenge of creating an IT infrastructure to support many partners, strategic alliances, vendors and customers. Network architecture has to be scalable to support thousands of networked computers in a timely and efficient manner Digital convergence of data, voice, graphics and video allowed for new and innovative ways to deliver new products and services to customers Micro era projects focused on creating an internal network within the organization, network era focused on extending the network externally Support a dynamic business strategy and new organizational structures IT project members need to understand the technology, but more importantly, the organization and its competitive environment Benefits and risks much higher than the previous two eras 6

IT and Modern Day Project Management Globalization era – we’re in the beginning stages now Thomas Friedman “The World is Flat” The combination of technology and lowering of political barriers has flattened the world so that it is now possible for people and organizations to work with almost anyone in any place at any time The global competitive playing field has become level for everyone See his talk at MIT http: //mitworld. mit. edu/video/266 Projects today are more dynamic, geographically dispersed, and ethnically or culturally diverse as ever before IT personnel require a solid set of technical, non-technical and project management skills based on past experience but adapted to this new environment 7

Introduction Information Technology (IT) projects are organizational investments that require Time Money And other resources such as people, technology, facilities, etc. Organizations expect some type of value in return for this investment IT Project Management is a relatively new discipline that attempts to make IT projects more successful and combines traditional Project Management with Software Engineering/Management Information Systems 8

An ITPM Approach Organizational resources are limited, so organizations must choose among competing interests to fund specific projects This decision should be based on the value a competing project will provide to an organization 9

Which Situation is Worse? Successfully building and implementing a system that provides little or no value to the organization? Or… Failing to implement an information system that could have provided value to the organization, but was underdeveloped or poorly managed? 10

Modern Project Management Often credited to the U. S. Navy as an outgrowth of the Polaris Missile Project in the 1950’s. Focuses on reducing costs and product cycle time. Provides an important link between an organization’s strategy and the deployment of that strategy. Can have a direct impact on an organization’s bottom line and competitiveness. 11

Why Do IT Projects Fail? Larger projects have the lowest success rate and appear to be more risky than medium and smaller projects Technology, business models, and markets change too rapidly so projects that take more than a year can be obsolete before they are completed The CHAOS studies also provides some insight as to the factors that influence project success 12

The Software Crisis The CHAOS study published in 1995 by The Standish Group found that although the U. S spent over $250 billion on IT projects, approximately… 31% were cancelled before completion 53% were completed but over budget, over schedule, & did not meet original specifications For mid-size companies, average cost overruns were 182%, while average schedule overruns were 202%! Disagreement with the CHAOS report The Rise and Fall of the Chaos report Figures http: //www. cs. vu. nl/~x/chaos. pdf Projects failure rate – the conventional wisdom is wrong! http: //quantmleap. com/blog/2009/11/projects-failure-rate-%E 2%80%93 -the-conventional-wisdom-is-wrong/ The “Chaos Report” Myth Busters http: //www. guerrillaprojectmanagement. com/the-chaos-reportmyth-busters New IT project failure metrics: is Standish wrong? http: //www. zdnet. com/blog/projectfailures/new-it-project-failure-metrics-is-standish-wrong/513 13

Has the Current State of IT Projects Changed Since 1994? The Standish Group has continued to study IT projects over the years. In general, IT Projects are showing higher success rates due to Better project management tools & processes Smaller projects Improved communication among stakeholders More skillful IT project managers But there is still ample opportunity for improvement! 14

Figure 1. 1 - Summary of the Chaos Studies from 1994 to 2008 15

Table 1. 1 Summary of CHAOS Study Factor Rankings for Successful Projects Sources: Adapted from the Standish Group. CHAOS (West Yarmouth, MA: 1995, 2010) & http: //www. infoq. com/articles/Interview-Johnson-Standish-CHAOS Rank 1994 2001 2006 2008 1 User Involvement Executive Support User Involvement 2 Executive Management Support User Involvement Executive Management Support Executive Support 3 Clear Statement of Requirements Experienced Project Manager Clear Business Objectives 4 Proper Planning Clear Business Objectives Optimizing Scope Emotional Maturity 5 Realistic Expectations Minimized Scope Agile Process Optimizing Scope 6 Smaller Project Milestones Standard Software Infrastructure Project Management Expertise Agile Process 7 Competent Staff Firm Basic Requirements Financial Management Project Management Expertise 8 Ownership Formal Methodology Skilled Resources 9 Clear Vision & Objectives Reliable Estimates Formal Methodology Execution 10 Hard-working, focused team Other Standard Tools and Infrastructure Tools & Infrastructure 16

Table 1. 2: Project Performance and Internal/External Customer Satisfaction. Source: Marchewka, J. T. (2008). n = 114. Much Worse Same Better Much Better 0. 0% 12. 3% 40. 4% 41. 2% 6. 1% 1. 8% 10. 5% 44. 7% 37. 7% 5. 3% 2. 6% 7. 0% 41. 2% 7. 9% Overall satisfaction of the customer 1. 8% 13. 2% 34. 2% 39. 5% 11. 4% Perceived value of the delivered product to the customer 0. 0% 9. 6% 39. 5% 38. 6% 12. 3% Potential for future work with the customer 0. 9% 3. 5% 42. 1% 38. 6% 14. 9% Ability to meet project schedules Ability to meet project IT Project budgets Performance Over the Past 3 Years Ability to complete project scope or system requirements Customer satisfaction over the past 3 years (Customers can be internal – e. g. , HR department or external – e. g. , a particular client) 17

Table 1. 2: IT Project Success Criteria Source: http: //www. drdobbs. com/architecture-and-design/202800777. Criteria Response Schedule 61. 3% said it is more important to deliver a system when it is ready to be shipped than to deliver it on time. Scope 87. 3% said that meeting the actual needs of stakeholders is more important than building the system to specification. Money 79. 6% said that providing the best return on investment (ROI) is more important than delivering a system under budget. Quality 87. 3% said that delivering high quality is more important than delivering on time and on budget. Staff 75. 8% said that having a mentally and physically healthy workplace is more important than delivering on time and on budget. 18

Table 1. 3: Summary of Factor Rankings for Challenged and Failed (Impaired) Projects Source: Adapted from the Standish Group. CHAOS (West Yarmouth, MA: 1995) Rank Factors for Challenged Projects Factors for Failed (Impaired) Projects 1 Lack of user input Incomplete requirements 2 Incomplete requirements Lack of user involvement 3 Changing requirements & specifications Lack of resources 4 Lack of executive support Unrealistic expectations 5 Technology incompetence Lack of executive support 6 Lack of resources Changing requirements & specifications 7 Unrealistic expectations Lack of planning 8 Unclear objectives Didn’t need it any longer 9 Unrealistic time frames Lack of IT management 10 New technology Technology illiteracy 19

Tata Consultancy Services 2007 Report Included 800 senior IT managers from the UK, US, France, Germany, India, Japan, & Singapore: 62% of the IT projects failed to meet their schedules 49% experienced budget overruns 47% experienced higher-than expected maintenance costs 41% failed to deliver the expected business value and ROI 20

Figure 1. 2 - When IT projects have gone wrong, what has been the reaction from the business managers and the Board of Directors? Don't know None Looked for a scapegoat among IT staff Sought compensation from IT vendors Reluctant to fund new IT projects Reduced IT budgets Tend to accept problems as the norm (i. e. , a necessary evil) Continued to provide support to improve IT 1% 2% 9% 13% 19% 21% 43% 69% 21

Improving the likelihood of success A Value-Driven Approach Plain & Simple: IT Projects must provide value to the organization not just completed on time and within budget Socio-technical Approach It’s not just about the technology or building a better mouse trap. Must bring value to the organization. Clients/stakeholders must take an active, participatory role 22

Improving the likelihood of success Project Management Approach Success depends not just on the team but more on the methodology (the set of processes and infrastructure) in place Step-by-step activities, processes, tools, quality standards, controls and deliverables Knowledge Management Approach Systematic process for acquiring, creating, synthesizing, sharing and using information, insights, and experiences to transform ideas into business value lessons learned best practices 23

Improving the likelihood of success Why project management should support IT projects PM enables a company to make the best use of limited resources. Projects can drain or divert resources away from other projects and areas of the organization so investing them wisely is critical. To best meet client’s expectations, PM provides the means to deliver quality products and services in a professional manner (status reports, communications). Facing competition from outside vendors, good PM practices can enable internal IT departments to remain competitive in acquiring new business and talent. Enables an organization to be more efficient (do the right thing) and effective (do the thing right). PM enables shorter development time, lower costs and higher quality PM must be supported and accepted at all levels of the organization. 24

The PMBOK® Guide’s Definitions for Project and Project Management �A project is a temporary endeavor undertaken to create a unique product, service, or result. �Project Management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements. Managing a project includes: � Identifying requirements � Establishing clear and achievable objectives � Balancing the competing demands for quality, scope, time, and cost � Adapting the specifications, plans, and approaches to the different concerns and expectations of the various stakeholders � A project manager is the person assigned by the performing organization to achieve the project objectives. 25

The Context of Project Management Project Attributes – Time Frame (definite start and end) � Purpose (project needs a specific and measurable goal in order to provide value) � Ownership (sponsor) � Resources (the triple constraint) � Roles (different skill sets needed on a project) � Project Manager � Project Sponsor � Subject Matter Expert (domain & technical) � Risk & Assumptions (internal and external risks) � Interdependent Tasks � progressive elaboration – steps & increments � Planned Organizational Change � Operate in Environments Larger than the Project Itself � Company culture, environment, politics, etc. � 26

The Triple Constraint Figure 1. 3 27

The Project Life Cycle and IT Development Project Life Cycle (PLC) A collection of logical stages or phases that maps the life of a project from its beginning to its end in order to define, build, and deliver the product of the project – i. e. , the information system A deliverable is a tangible and verifiable product of work Projects are divided into phases to increase manageability and reduce risk Phase exits, stage gates, or kill points are decision points at the end of each phase to evaluate performance or to correct problems or cancel the project Fast tracking is the overlapping of phases to reduce the project’s schedule Can be risky! 28

The Project Life Cycle Define Project Goal Plan Project Focus on providing business value to the organization Gives the project team a clear focus and drives the other phases of the project What is to be done, why is it being done, how will it be done, who is going to do it, how long will it take, how much will it cost, what can go wrong and what can be done about it, how will we know if the project is successful given the time, money and resources invested? Deliverable is the initial or baseline project plan Execute Project Plan Put the plan in action – build whatever product has been decided based on plan specifications A continuous monitoring of the actual vs baseline is needed 29

The Project Life Cycle Close Project A formal closure of the project ensures that all work is completed as planned and agreed to by the team and sponsor Final report and presentation to the client Evaluate Project Evaluating whether a project met its goals (providing business value) is best done after implementation when it is in production Lessons learned – document experiences and best practices for future projects What went right and what went wrong Evaluate the project manager and team members 30

Generic Project Life Cycle Figure 1. 4 31

The Project Management Body of Knowledge (PMBOK®) The Guide to the Project Management Body of Knowledge (PMBOK® Guide) documents 9 project management knowledge areas The PMBOK® Guide is published and maintained by the Project Management Institute (PMI) http: //www. pmi. org PMI provides a certification in project management called the Project Management Professional (PMP) that many people today believe will be as relevant as a CPA certification PMP certification requires that you pass a PMP certification exam to demonstrate a level of understanding about project management, as well as satisfy education & experience requirements and agree to a professional code of conduct 32

Project Management Body of Knowledge Areas Figure 1. 8 33

Project Management Body of Knowledge Areas 34

Project Management Body of Knowledge Areas Knowledge areas describe the key competencies that project managers must develop 4 core knowledge areas lead to specific project objectives (scope, time, cost, and quality) 4 facilitating knowledge areas are the means through which the project objectives are achieved (human resources, communication, risk, and procurement management 1 knowledge area (project integration management) affects and is affected by all of the other knowledge areas All knowledge areas are important! 35