Management Issues in Systems Development

Management Issues in Systems Development Lecture 28

Today’s Lecture • Project Management • What is Project Management • The Job of a Project Manager • Change Management • Risk Management • Tips for Good IT Project Management

Introduction • Companies are in three ‘businesses’: • Infrastructure Management • Customer Relationship • Product Innovation • Traditionally companies have bundled the three (businesses) • Leads to compromises because the three have conflicting agendas

Introduction cont. • IS departments can be viewed as being in the same three businesses: • Operations are infrastructure management • The help desk is the customer relationship business • System development is product innovation

Introduction cont. • Infrastructure management: • Goal = reducing costs • Providing infrastructure involves high fixed costs • Battle = build scale • Management focus = • Efficiency • Standards • As we are seeing with operations and network management • Outsourcing?

Introduction cont. • Customer relationship: • Goal = provide service • PC support & help desks often outsourced • Especially in Europe & Asia (multilingual needs) • Outsourcing offshore = increasing dramatically • Product innovation: • Goal = speed • Provides nimbleness

Introduction cont. • Key to success = talent • In IT, developers are “king” so they are given the coolest tools • There are a number of management issues surrounding system development: • “Staffing, staffing, staffing”, • As well as speed & nimbleness

Project Management • Today, much organizational work is performed via projects • In IS as well as other functions, being able to manage a project to completion, and deliver the expected outcome within the allotted time and budget, has become an increasingly valuable skill

Project ManagementWhat is Project Management? • Project Management is simply the management of a project • May sound simple and self-evident BUT = doesn’t make it easy! • Many people get confused/concerned because IT project management contains the dreaded ‘T’ word – Technology • In reality IT project management is not that much different from other forms e.g. construction

Project ManagementWhat is Project Management? cont. • A project is a collection of related tasks and activities undertaken to achieve a specific goal. All Projects (IT or other) should: • Have a clearly stated goal • Be ‘finite’ • Clear beginning & end • IT Project Management: • 10% technical, 90% common sense • Management styles vary as do backgrounds • Key = keeping in mind, and under control the numerous interdependencies • GET THE JOB DONE!

Project ManagementWhat is Project Management? cont. • Project Management Institute • Project Management encompasses five processes • Initiating • Planning • Executing • Controlling, and • Closing

Project ManagementWhat is Project Management? cont. • To become a certified PMP = must pass tests covering nine knowledge areas: • Integration • Scope • Time • Cost • Quality • Human Resources • Communication • Risk • Procurement

Project ManagementThe Job of a Project Manager • Responsible for the following tasks: • Setting Up the Project • Why • A brief background of the project, and • The business objectives to be achieved • What • Key outputs to be produced • Benefits

Project ManagementThe Job of a Project Manager • When • List of milestones and expected timing • High level project plan • Who • Project team • Stakeholders – and their expectations • How • Definition of the work that needs to be undertaken • Scope • Specific exclusions

Project ManagementThe Job of a Project Manager cont. • Responsible for the following tasks cont.: • Managing the Schedule • Schedule / project plan = heart of the project and main communication tool • High level first – then break down as you proceed • Baseline and track • Use automated tools • Recommendations:

Project ManagementThe Job of a Project Manager cont. • Focus on the date that tasks are/ will be completed rather than on the % of overall project completed • Review progress at least monthly, preferably more often • Focus on tasks to be completed Vs. those finished • Reforecast when new evidence comes to light

Project ManagementThe Job of a Project Manager cont. • Responsible for the following tasks cont.: • Managing the Finances • Financial plan, who is accountable, benefits etc. • Baseline costs and track • They will change! • Need to know how much has been spent and how much money is left

Project ManagementThe Job of a Project Manager cont. • Managing the Benefits • Difficult to estimate but must try • Base on same assumptions as costs • Look at timings • Track • Why are we doing this???? • Should we still be doing it?

Project ManagementThe Job of a Project Manager cont. • Responsible for the following tasks cont.: • Managing Risks, Opportunities and Threats • Risk mitigation and risk management • Usually poorly done • Risk logs • Issue management • Soliciting Independent Reviews • Health checks (of the project) • By someone independent (could be external)

Project ManagementChange Management • IS often assume a technically elegant system is a successful system. (IT’S NOT!!!) • Many technically sound systems have turned into implementation failures because the people side of the system was not handled correctly • System is only a success if it meets the users’ requirements and they are happy with it and with using it

Project ManagementChange Management • Information technology is all about managing change • New systems require changing how work is done • Focusing only on the technical aspects is only half the job – the other job is change management

Project ManagementChange Management cont. • Changing management = process assisting people to make change in their working environment • Change – caused by the introduction of a new computer system • People resist change, especially technological change, when they view it as a crisis. ‘Resistance’ includes: • Deny the change • Distort information they hear about the change • Convince themselves and others the new system will not change status quo

Project ManagementChange Management cont. • ODR (among others) offers a methodology to help companies manage technological change • Type of people involved in a change project • Sponsor: the person or group that legitimizes the change • Change agent: the person or group who causes the change to happen • Target: the person or group who is being expected to change and at whom the change is aimed

Project ManagementChange Management cont. Methodology to manage technological change • Conduct surveys with all three groups to determine: • Whether the scope of the project is do-able, or whether the organization is trying to change too much at one time • Whether the sponsors are committed enough to push the change through, or whether they are sitting back expecting the organization to change on its own • Whether the change agents have the skills to implement the change, or whether e.g. they are not adept at rallying support • Which groups are receptive to the change and which are resistant

THE BOC GROUPCase Example – Change Management • Industrial gas manufacturer – operates in 60 countries • Industry= mature & highly competitive • Competition = price & service • $35million to improve position – reengineering BOC’s core processes: • 9 reengineering projects over 2 ½ years • All team members guaranteed a job after project in same or equivalent work • Teams co-led by Business and Information Management (IM) process leader, as IT major component of project

THE BOC GROUPCase Example – Change Management cont. • Each team member studied everything, not just a selected area: • Existing processes • How implementation should be handled • Input into the training plan • Devise the customer communication plan • Garnering True Executive Sponsorship

THE BOC GROUPCase Example – Change Management cont. • President = Executive Sponsor for all teams – not intimately involved with project • Vice presidents & directors = true executive sponsors • ODR teach sponsorship to the nine sponsors over 2 days • Sponsors reluctant to go off site – they see no relevance to program as they could not see any problems

THE BOC GROUPCase Example – Change Management cont. • The workshop allowed sponsors to deal with issues of the company’s ability to assimilate change, obstacles and so on Realization: • Teams can only put the tools in place; the organization had to make the change happen • Sponsors need to drive change through the organization – planning their own strategies and examining possible consequences

THE BOC GROUPCase Example – Change Management cont. One Change Project • Process of paperwork for delivering gas products and invoicing customers • Handwritten – into – Point of Delivery handheld Device (PODD) • PODD: • Schedules downloaded overnight = pack truck in night

THE BOC GROUPCase Example – Change Management cont. • PODD accept signature of customer – print a receipt • Billing data automatically transmitted to headquarters • Team members absorb each others’ knowledge and become one entity rather than two

THE BOC GROUPCase Example – Change Management cont. Involving Middle Management • Advisory council: • Upward job – provide feedback on recommended changes and implementation issues • Downward job – describe recommendations to employees & get their buy-in

THE BOC GROUPCase Example – Change Management cont. Training the Drivers • Created a six-hour training course • “A Day in a Driver’s Life” • Perfect day with PODD (handheld device) • Harder scenarios • Success – PODD team assessed its people aspects at the outset & mitigated the identified risks by: • Holding the sponsorship event • Involving middle management via the advisory council • Thoroughly informing and training the truck drivers

Project ManagementRisk Management • Not all IT-based projects succeed • Many fail, especially the really large ones e.g. ERP, CRM • 30 to 70% fail • Why? = Do not overcome their risks • Technical • Business • Technical risks • Sub-performance, scope creep making it too complex • Can’t always be predicted but they can be contained

Project ManagementRisk Management • Business risks • Business does not change properly to use the new systems • Are not as easily righted • Need to: • Assess the risk • Mitigate the risk • Adjust the project management approach

Project ManagementRisk Management cont. • Step 1: Assess the Risks • Three predominant risk factors: • Leadershipof the business change • Employees’ perspective of the change • Scope and urgency of the change • Decision tree (Figure 10-1) • Project leader = executive(s) responsible for the change • Must be a business executive • It is the business, not IT that is required to change

Project ManagementRisk Management cont. • Contributes to success/failure? – 6 questions: • Are they committed to the business case? • Do they understand the extent of change in work behaviour required for the project to succeed? • Are they formally motivated to pull off the change? • Are they at the appropriate org. level with the formal power…..? • Do they have experience with a project of similar scope, urgency and people impact? • Do they have informal power, such as credibility and respect?

Project ManagementRisk Management cont. • Step 2: Mitigate the Risks • Project management styles • Authoritative Vs. Participative • Project’s budget and timeframe • Rigid Vs. Adjustable • Figure 10-2 • Big Bang • Only appropriate when all 3 factors = positive

Project ManagementRisk Management cont. • Improvisation • Leadership and employee = positive but scope or urgency place the project at risk • Committed workforce can adapt etc. • Guided Evolution • Used when only the employee perception is negative • Can be overcome by involving them • Top-down Coordination • Only works when the leadership factor supports the business change and when the leadership is respected, full-time and highly experienced in leading business change

DOW CORNINGCase Example: Project Management • Successful ERP implementation from 1995 to 1999 • Each project phase had different business risks • Realizing this the project executive took a different project management approach in each phase • Phase 0: Get Ready • Leadership = High Risk • Employee Perception = High Risk • Scope and Urgency = High Risk

DOW CORNINGCase Example: Project Management • Phase 1: Understand the New System • Use the Improvisation approach of participative management and flexible deadlines • Concerned employee reticence in the later phases so focus = on building commitment • Phase 2: Redesign the Work Processes • Use the Guided Evolution approach of participative management with fixed deadlines • Phase 1 = got them committed but did little to get the work processes redesigned • Continued through the pilot – cutover to SAP at newly acquired European sub.

DOW CORNINGCase Example: Project Management cont. • Phase 3: Implement the ERP Worldwide • Use Top-down coordination with an authoritative management style and flexible timelines • Pilot’s success demonstrated management’s determination and shifted employee perception to the positive • Scope shifted to negative because it was ‘company wide’

DOW CORNINGCase Example: Project Management cont. • Phase 4: Complete Implementation • Use the Big Bang approach of authoritative management and firm deadlines • By the end of 1998, most of the sites had implemented so all the risk factors had turned positive • Initially conversion took 18 months. These later sites = 4

Tips for Good IT Project Management • the Ground Rules • Open systems, industry standards, web-enabled etc. • Foster Discipline, Planning, Documentation and Management • If the process is not controlled properly, anything can happen or, more realistically, potentially nothing will happen • Obtain and Document the ‘Final’ User Requirements • Don’t get too technical

Tips for Good IT Project Management • Obtain Tenders from All Appropriate Potential Vendors • Include Suppliers in Decision Making • Convert Existing Data • Task might appear quite simple but often causes the biggest headaches • Follow Through After Implementation • Cross the t’s and dot the i’s in terms of documentation, future maintenance processes etc.

Reasons for Success • Proper Planning • Appropriate User Involvement • Strong Visible Management Support • Project Manager(s) with Power and Time • Good Change Management • Working As A Team • Proper Project Monitoring and Control • Proper Project Closure

Summary We covered Today, • Project Management • What is Project Management • The Job of a Project Manager • Change Management • Risk Management • Tips for Good IT Project Management

Summary.. • DOW CORNINGCase Example: Project Management • THE BOC GROUPCase Example – Change Management

Management Issues in Systems Development