IT Project Management

1. IT Project Management Critical success and failure factors in IT project management: getting IT right GP Dhillon, PhD Associate Professor of IS School of Business, VCU

2. Standish Group findings • 26% of all software projects fail (There are other findings that suggest a 70% failure rate!) • 46% of the projects experience cost and schedule overruns or significantly reduced functionality • Over the years the project completion rate has improved because companies have trended towards smaller, more manageable projects - NOT because of improved management techniques

3. Findings from various organizations Organization Business Consensus view of success/failure Dunn and Bradstreet Plc Business information Moderate success supplier Esso UK Plc Petrochemicals Success Florida Power and Light Power generation/ High success distribution Kimberly Clarke Paper based products High success supplier Kraft General Foods FMCG supplier Moderate success National Westminster Bank Plc Retail banking Unsuccess Norwich Union Plc Insurance Unsuccess Smith and Nephew Plc Healthcare products Success PowerGen Plc Power generation Unsuccess Vickers Shipbuilding & Shipbuilding & Unsuccess Engineering Plc Engineering Waterford Wedgwood Plc High value pottery Unsuccess and china

4. High Success Success Moderate Success Unsuccess The McGolpin study - initiation of the SIS in the context of the need for business change Role of Senior Executive - allocation of responsibility for benefit delivery - involvement in implementation as well as planning/ evaluation Understanding of stakeholder intent, existence of an organizational change method & willingness to invest in strategic benefits - different Evaluation emphasis Comprehensive approach to Benefit Management initiated in the planned phase involving an understanding of stakeholder intent and a strong business involvement & emphasis Planned approach appreciating stakeholder intent, method, output and Implementation roles of IS/IT & Business

5. Significant factors determining success or failure - a Generic • The degree to which a change methodology had been adopted and used on projects • The degree of active involvement of the senior executive across the lifecycle of the project • The extent to which the strategic and financial benefits were measured and evaluated • The existence of a proper benefits management process

6. Significant factors determining success or failure - b Contextual factors determining success or failure • Significant high success factors: Senior IS/IT manager on board; CEO driven change management program; A change method used on the project; willingness to invest in strategic benefits • The difference between a highly successful and a successful project resides in the contextual factors identified above

7. Significant factors determining success or failure - c Significant patterns and relationships determining success • Combination of a planning approach and benefits management were significant factors in determining success - but not if done independently • Combination that appears to be lest significant: evaluation and implementation; evaluate and benefits management; planning and context; evaluation and context; implementation and context.

8. Overall conclusions - a • Context is particularly important in explaining the difference between ‘high success’ projects and ‘success’ projects. Planning and evaluation also appear to be significant in explaining the difference between ‘high success’ and ‘success’ • Benefits management is the most important phase which explains the difference between ‘success’ projects and ‘moderate success’ projects • Planning and implementation are the most important phases in explaining the difference between ‘moderate success’ projects and ‘unsuccess’ projects

9. Overall conclusions - b • Significant factors related to ‘unsuccess’ projects • The lifecycle role of the senior executive (low) • The implementation role of the business (ill defined) • The implementation role of IS/IT (ultimate accountability and responsibility should not be with the IS/IT function) • The planning approach (lack of a business led approach • The planning method (predominance of IS/IT function)

10. Overall conclusions - c • Significant factors related to ‘moderate success’ projects • The life cycle role of senior executive • The benefits management process • The benefit plans

11. Overall conclusions - d • Significant factors related to ‘success’ projects • The organizational change method • The strategic benefits (understanding the potential of IS/IT) • The evaluation emphasis (understanding of the financial benefits) • The evaluation stage (examination of the merits of the business case)

12. Organizational IT impacts IT Project management – getting it right

13. Business improvement needed IT enabled improvement Positive outcomes Benefits Management Business change Risk Management Negative outcomes

14. + Perceptions or Performance _ Launch of an initiative Time IS Project management is … managing episodes along the change curve High expectation/Denial Better than before Blame others Minor improvement Blame self Despair/Frustration

15. Achieve by good management Identify, exploit & learn from Positive Opportunity realization “bonus” Investment justification Effect of outcome Price worth paying Nasty surprises Negative Understand & avoid Recognize & minimize Expected Unexpected Predictability of outcome Outcomes of IS investment

16. Achieve by good management Identify, exploit & learn from Positive Effect of outcome Negative Recognize & minimize Understand & avoid Expected Unexpected Predictability of outcome Objectives in getting value

17. Benefits Management Achieve by good management Cost Management Risk Management How...

18. Benefits management – the fried egg analogy

19. Why do we want improvements? What improvements Measurement and evaluation do we want / could we get? What is the Where will How can we Can we financial they occur? measure them? quantify them? value? Who is responsible for their delivery? Planning & effecting business changes What changes are needed to obtain them? Who will be affected by the changes? How & when Benefits realization plan can changes be made? Have we achieved the benefits? if not - why not - further actions? What further benefits can we now get? Dimensions of benefits management

20. Change

21. Risk types Outcome risks Operational risks Process risks

22. High Potential Strategic Inherent risks Planning needed Outcome: high Operational: low Process: low What risk? Outcome: low Operational: high Process: medium Outcome: low Operational: low Process: high Can be assessed and predicted Key Operational Support Risk management: classification

23. Lack of strategic framework: poor business understanding Conflicts of strategy and problems of coordination IT supplier problems Poor management of change Senior management not involved Large and complex projects; too many stakeholders Rigid methodology and strict budgetary controls Strategic High Potential Opportunity & financial risks? Outcome risks Too much faith in the ‘technical fix’ Use of technology for its novelty value Poor technical skills in the development team Inexperienced staff Large and complex projects; too many stakeholders Poor testing procedures Poor implementation Lack of technical standards Operational risks Process based risks Key Operational Support Typical concerns

24. High Potential Strategic Time Quality Cost R & D projects Time Quality Cost Time Quality Cost Key Operational Support Generic CSFs for different applications

25. Strategic High Potential Key Operational Support Risk management: core strategies COMMUNICATE CONFIGURE CONTROL CONSTRAIN

26. Unpredictable Predictable Strategic High Potential Practice quick response to manage as events unfold Opportunity & financial risks No problem - carry out plans Business and corporate risks Controllable Operational risks Process based risks Emphasis forecasting and thus “steer around” these events Key Operational Support Develop a contingency planning system Uncontrollable Risk management: directions - 1

27. History Context (external) Content Strategic High Potential Opportunity & financial risks Risk Outcomes Business and corporate risks Context (internal) Business processes Operational risks Process based risks Context oriented risk assessment Key Operational Support Risk management: directions -2