The Nature of Information Technology Projects

Chapter 1

Learning Objectives Describe the dominant eras of information systems called the

electronic data processing (EDP) era, the micro era, the network era, and the globalization era, and understand how managing IT projects has evolved during these eras.

Understand the current state of IT project management and how successfully managing IT projects remains a challenge for most organizations.

Explain the value-driven, socio-technical, project management, and knowledge management approaches that support ITPM.

Define what a project is and describe its attributes. Define the discipline called project management. Describe the role and impact IT projects have on an organization. Identify the different roles and interests of project stakeholders. Describe some common approaches to structured systems

development and iterative systems development. Describe the project life cycle (PLC), the systems development life

cycle (SDLC), and their relationship. Describe extreme project management. Identify the Project Management Body of Knowledge (PMBOK®)

core knowledge areas.

1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s

First ElectronicComputer

EDPEra

PCEra

NetworkEra

Globalization

IT and Modern Day Project Management

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 andcombines traditional Project Management with Software Engineering/Management Information Systems

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

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?

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

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%!

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!

Figure 1.1 - Summary of the Chaos Studies from 1994 to 2006

Rank 1994 2001 2006

1 User Involvement Executive Support User Involvement

2 Executive Management Support User Involvement Executive Management

Support

3 Clear Statement of Requirements Experienced Project Manager Clear Business Objectives

4 Proper Planning Clear Business Objectives Optimizing Scope

5 Realistic Expectations Minimized Scope Agile Process

6 Smaller Project Milestones Standard Software Infrastructure Project Management Expertise

7 Competent Staff Firm Basic Requirements Financial Management

8 Ownership Formal Methodology Skilled Resources

9 Clear Vision & Objectives Reliable Estimates Formal Methodology

10 Hard-working, focused team Other Standard Tools and Infrastructure

Table 1.1 Summary of CHAOS Study Factor Rankings for Successful ProjectsSources: Adapted from the Standish Group. CHAOS (West Yarmouth, MA: 1995) & http://www.infoq.com/articles/Interview-Johnson-Standish-CHAOS

IT Project Performance

Over the Past 3 Years

MuchWorse Worse Same Better

MuchBetter

Ability to meet project

schedules0.0% 12.3% 40.4% 41.2% 6.1%

Ability to meet project

budgets1.8% 10.5% 44.7% 37.7% 5.3%

Ability to complete

project scope or system

requirements

2.6% 7.0% 41.2% 41.2% 7.9%

Customer satisfaction

over the past 3 years

(Customers can be

internal – e.g., HR

department or external –

e.g., a particular

client)

Overall satisfaction

of the customer

1.8% 13.2% 34.2% 39.5% 11.4%

Perceived value of the

delivered product to

the customer0.0% 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%

Table 1.2: Project Performance and Internal/External Customer Satisfaction. Source: Marchewka, J.T. (2008). n = 114.

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

Table 1.3: Summary of Factor Rankings for Challenged and Failed (Impaired) ProjectsSource: Adapted from the Standish Group. CHAOS (West Yarmouth, MA: 1995)

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

Improving the likelihood of success A Value-Driven Approach

Plain & Simple: IT Projects must provide value to the organization

Socio-technical Approach It’s not just about the technology or building a better

mouse trap Project Management Approach

processes and infrastructure (Methodology) resources expectations competition efficiency and effectiveness

Knowledge Management Approach lessons learned, best practices & shared knowledge

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

The Context of Project Management – Project Attributes

Time Frame Purpose (to provide value!) Ownership Resources (the triple constraint) Roles

Project Manager Project Sponsor SME (domain & technical)

Risk & Assumptions Interdependent Tasks

progressive elaboration – steps & increments Planned Organizational Change Operate in Environments Larger than the Project Itself

The Triple Constraint

Figure 1.3

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

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!

Generic Project Life Cycle

Figure 1.4

Systems Development Life Cycle (SDLC)

Figure 1.5

Waterfall MethodDefine

Requirements

Design

Build

Test

Maintenance

Implement

Figure 1.6

The Relationship Between the PLC & SDLC

Figure 1.7

Putting the SDLC into Practice Structured Approach to Systems Development

Waterfall Method Iterative Development

Rapid Applications Development (RAD) Prototyping Spiral Development Extreme Programming

Extreme Project Management (XPM) A new approach & philosophy to project management

that is becoming increasingly popular Characterizes many of today’s projects that exemplify

speed, uncertainty, changing requirements, and high risks

Traditional project management often takes an orderly approach while, XPM embraces the fact that projects are often chaotic and unpredictable

XPM focuses on flexibility, adaptability, and innovation Traditional and new approaches together can provide us

with a better understanding of how to improve the likelihood of project success

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

Project Management Body of Knowledge Areas

Figure 1.8