Mit6e Ch12 by Firli

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1

Managing Information Technology6th Edition

CHAPTER 12

IT PROJECT MANAGEMENT


IT Projects are Difficult

• Although reports vary considerably, IT projects fail frequently– According to the Standish Group, the failure rate

may approach 2/3 of IT projects– Sauer, Gemino, and Reich (2007) report much lower

IT project failure rate with over 2/3 of projects delivered close to on-time and on-budget

• Organizational IT project management greatly affects the success of IT projects


Goal of IT Project Management• Overall goal of project management is to

deliver a quality system on schedule and on budget that meets the needs of the business

IT Project Management Goal• Scope• Time• Cost


Scope

Time Cost

Triple Constraint

• Time, cost, and scope are called the triple constraint– A change in one automatically changes at least

one of the others


Project Management BasicsProject

• A project is a temporary endeavor undertaken to create a unique product or service. It typically is a one-time initiative that can be divided into multiple tasks, which require coordination and control, with a definite beginning and ending

Project Management

• The application of knowledge, skills, tools, and techniques to a broad range of activities in order to meet the requirements of a particular project (PMBOK Guide, 3rd ed.)

Program

• A group of projects managed in a coordinated way to obtain benefits not available from managing them individually (PMI, 1996)


Project Management Institute

• The Project Management Institute (PMI) is an international organization that provides resources and certifications to help project managers reach their project goals– Among their resources are the Project

Management Body of Knowledge (PMBOK) Guide which details and attempts to standardize project management practices


Project Management Institute

• The PMBOK Guide contains nine areas of competency1. Project Scope2. Project Time3. Project Cost4. Human Resources5. Quality Management6. Risk Management7. Project Communications8. Procurement9. Project Integration


Strategic Management of IT

• IT Portfolio Management– Senior business and IT leaders manage how the

entire IT portfolio fits with the organization’s strategic vision

• Decisions are made about the approval and prioritization of IT projects based on financial and strategic assessments

• Individual projects and programs are undertaken only after the assessing their fit with the overall IT portfolio



IT portfolio management

Program management

Project management

Project A


Strategic Management of IT• New projects are typically submitted using a

template to assist with prioritization

Figure 12.2(Vavre and Lane 2004)



• IT project prioritization scheme– During the evaluation of IT projects, a

categorization scheme is usually used to assist managers in their decision making

– The Denis et al. (2004) scheme:

Absolute Must

•A mandate due to security, legal, regulatory, or end-of-life-cycle IT issues

Highly Desired / Business-Critical •Includes short-term projects with good financial returns and portions of very large projects already in progress

Wanted •Valuable, but with longer time periods for returns on investment (more than a 12-month period)

Nice to Have

•Projects with good returns, but with lower potential business


Project Management Roles

• All IT projects should have a project manager and a project sponsor

• Additionally, some projects will require a project champion for success

• Each of these roles is important to project success, especially in complex projects


Project Management Roles• Project Manager (PM)

– Typically systems projects are lead by IT project managers who possess technical knowledge and project management skills

– A project manager’s main responsibility is to plan and execute the project

– The following non-technical skills are important for successful project management:

Figure 12.3


Project Management Roles

Effective IT project management

Project Manageme

nt Skills

Knowledge Skills


Project Management Roles• Project Sponsor

– Typically a business manager who “owns” the project (the sponsor is paying for the project)

– The sponsor has several responsibilities to the project:

• Fights for project approval• Ensures project resources

– Funding– Project team members

– It is critical for the project manager to have a strong relationship with the sponsor


Project Management Roles• Project Sponsor

Tasks to Engage Sponsor

•Schedule regular meetings with the sponsor to ensure the project is on track, according to current business priorities•Create a list of expectations with the sponsor to clarify the project manager role and the sponsor’s role•Agree on how handoffs between the project manager and sponsor will occur•Discuss the sponsor’s preferences for when and how project issues will be brought up with the sponsor•Learn how the sponsor will communicate the status of the project to peers and the company’s top management•Determine what metrics the sponsor will use to judge the completion of the project•Agree on how the sponsor will participate in the post-project review


Project Management Roles• Project Champion

– A role played by a business manager with high credibility

– Requires enthusiasm and excellent communication– Can be the same as the project sponsor, but often

more effective if the champion is a lower-level business manager who is highly impacted by the project


The Project Life Cycle

• All successful projects pass through four generic phases along the path to completion

• We will discuss all four of the project phases because all are crucial to project success

Project Initiati

on

Project Planni

ng

Project Executio

n and Control

Project Closing


Project Initiation

• The first step in the project life cycle is project initiation

• The main deliverable for this phase is the project charter

Project Charter

• A document that describes a project’s objectives, scope, assumptions, and estimated benefits

Project Planning

Project Initiation

Project Execution and Control

Project Closing


Project Initiation• Many dimensions of project feasibility are likely to be assessed in this

phase– Economic

• Does this project give a positive financial return?

– Operational• How will the project impact the organization’s operations?

– Technical• Does the organization have the technology and expertise required?

– Schedule• Is it possible to finish the project in the required schedule? How is the project’s

schedule impacted by other timelines?

– Legal or contractual• Does the project have any legal conflicts?

– Political• Is there support for the project from the relevant stakeholders?


Project Planning

• The second phase of the project life cycle is project planning

• The primary deliverables for this phase of the project are the statement of work and project plan

• There are three major components of this phase1. Scheduling2. Budgeting3. Staffing Project

PlanningProject

InitiationProject Execution

and ControlProject Closing


Project Planning

1. Scheduling– The first step of scheduling is generally a work breakdown

analysis

– Once the work is broken into tasks, time estimates are assigned to each task based on past experience

– It is important to consider task dependencies when creating the master schedule with project milestones

Work Breakdown Analysis

• A basic management technique that systematically subdivides blocks of work down to the level of detail at which the project will be controlled


Project Planning

2. Budgeting– Approaches to estimating

• Bottom-up– Based on work-breakdown

• Top-down (parametric estimating)– Used with not enough is known about the project to create a work-

breakdown

– Inexperienced cost estimators often make the following mistakes:

• Too optimistic in their assessments• Leave components out that should be estimated• Do not use a consistent methodology


Project Planning

2. Budgeting– Purposeful inaccurate estimations of the budget

can have adverse effects– Highballing (or budget padding)

• Overestimation of project costs• Projects may not be approved because of higher costs

– Lowballing• Underestimating project costs• Used to gain approval of questionable projects• Often lead to project failures when overbudget


Project Planning

3. Staffing– To succeed, a project must contain the right IT skills mix of the

professionals assigned to the project– An effective project manager must have the ability to estimate the

skill type, proficiency level, quantity, and time required for personal to complete project tasks

– Some staff may require training for the project• Some organizations have created Centers of Excellence where employees can

learn additional skills that may be required for future projects

– Outside contractors• Important to transfer knowledge from contractors to employees to remove

dependency

– Teambuilding– Incentives


Project Planning

3. Staffing– One method of obtaining skilled professionals is

to utilize outside contractors• It is important for organizations to transfer knowledge

from contractors to employees to remove future dependency on the contractors

• This can increase project risk because of uncertainty in the contractor’s expertise and behavior


Project Planning

• Primary deliverables from the planning phase– Statement of Work– Project Plan

Statement of Work

• A high-level document for the customer that describes what the project will deliver and when

Project plan

• A formal document that includes the project’s schedule, budget, and assigned resources that is used by the project manager to guide the execution and control of the project


Project Planning

• Primary deliverables from the planning phase– Statement of Work– Project Plan

• Additionally, two types of charts commonly accompany these documents

– PERT (or CPM)– Gantt


Project Planning

• Program Evaluation and Review Technique (PERT) or Critical Path Method (CPM)

Figure 12.5


Project Planning• Gantt Chart

Figure 12.5

Figure 12.6(Valacich, George, and Hoffer 2001)



• The third phase of the project life cycle• The deliverable for this phase is the completed

project• Most projects exhibit the following characteristics

1. Risk and uncertainty are highest at the start of the project

2. The ability of the project stakeholders to influence the outcome is highest at the start of the project

3. Cost and staffing levels are lower at the start of the project and higher toward the endProject

PlanningProject





• Communication with stakeholders is critical• Status reporting should be simple and clear

Figure 12.7(Roman 1986)


Project Execution and Control• Managing Project Risk

– All projects carry risk and some IT projects (e.g., enterprise projects) involve considerable risk of failure

– Early warning signs of project failure

Figure 12.8(Kappelman et al. 2006)



– The risk exposure profile changes over time• Risk decreases over time as the organization’s stake

increases

Figure 12.11(Frame 1994)



– Project managers go through several phases when managing risk

Figure 12.9(Mohtashami et al. 2006)



• Managing Project Risk– Three overall strategies are utilized for managing

risk

Exchange Strategy

•An unknown risk or known critical risk is exchanged for a more acceptable level of risk. For example, the risk can be shifted to a third party by subcontracting with another organization under a fixed-cost contract for a specific project deliverable

Reduction Strategy

•By allocating to the project the best human resources available, a specific project risk can be reduced

Avoidance Strategy

•An alternative technical approach to a problem may be chosen in order to avoid risk exposure



• Managing Business Change– New systems can lead to major changes in

business processes– Due to these changes, IT projects often require

change management to overcome resistance to the new system

Change Management

• The ability to successfully introduce change to individuals and organizational units



• Multistage change models– As change management has become a more

important component of IT projects, several change models have been proposed to help managers think about change

– Two important change models we will consider:• Lewin/Schein Change Model• Kotter Change Model



• Multistage change models• Lewin/Schein Change Model

Figure 12.12



• Multistage change models• Kotter Change Model

1. Establish a sense of urgency2. Form a powerful guiding coalition3. Create a vision4. Communicate the vision5. Empower others to act on the vision6. Plan for and create short-term wins7. Consolidate improvements and produce still more change8. Institutionalize new approaches



• Managing conflict– Project managers may have conflict on their teams or

with other stakeholders– Strategies may vary depending on situation, but overall

there are five modes of conflict resolution (Kerzner 2006)1. Confronting – a collaborative, problem-solving approach where

both parties try for a win-win2. Compromising – each party gives something up3. Smoothing – minimizing the differences between the parties4. Forcing – competing or dominant; one party goes all out to win5. Avoiding – removal of one party from the conflict


Project Closing

• Even when the project deliverables are complete, successful organizations include a final closing stage to review project success

• A post-project review is used to share lessons-learned during the project– Typical questions during this phase may include:

• What went right on this project?• What went wrong on this project?• What would you do differently on the next project, based

on your experience with this project?Project

PlanningProject




`Special Issue •Managing Complex IT Projects

• To overcome this complexity, many organizations use consulting firms to take advantage of their expertise performing similar projects in other firms

• Three critical success factors have been identified in large, complex projects:1. The business vision was an integral part of the project2. A testing approach was used at the program level (not just at the individual

application level)3. The projects used a phased-release approach (rather than a single-release rollout

strategy)


Special Issue •Managing Complex IT Projects

• Complexity increases with resources are off-site and offshore

Figure 12.15(Poria 2004)


Special Issue •Managing Virtual Teams

• These teams can bring together individuals with expertise that cannot meet face-to-face

• These teams introduces additional project risks– Differences in communication norms– Unfamiliarity with a different culture– Lack of trusting relationships across team members

Virtual Team

• Project teams that are geographically dispersed and communication through information technology


Special Issue •Managing Virtual Teams

• Kostner (1996) identified six strategies for managing virtual teams

Six Leadership Secrets for Managing Remote

Workers•Aim to build trust through every interaction•Create symbols and structures that unify the dispersed work group•Establish ongoing opportunities for the team to learn more about each other, both professionally and personally•Develop a daily alignment tool to focus the effort of the team•Be scrupulously fair in treating all team members•Be crystal clear about project objectives


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mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall

Mit6e Ch12 by Firli

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