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IT Project Management

Critical success and failure factors in IT project management: getting IT right

GP Dhillon, PhDAssociate Professor of ISSchool of Business, VCU

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uStandish 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

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uFindings from various organizations

Organization Business Consensus view of success/failure

Dunn and Bradstreet Plc Business information Moderate successsupplier

Esso UK Plc Petrochemicals SuccessFlorida Power and Light Power generation/ High success

distributionKimberly Clarke Paper based products High success

supplier Kraft General Foods FMCG supplier Moderate successNational Westminster Bank Plc Retail banking UnsuccessNorwich Union Plc Insurance UnsuccessSmith and Nephew Plc Healthcare products SuccessPowerGen Plc Power generation UnsuccessVickers Shipbuilding & Shipbuilding & UnsuccessEngineering Plc EngineeringWaterford Wedgwood Plc High value pottery Unsuccess

and china

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HighSuccess

Success

ModerateSuccess

Unsuccess

- initiation of the SIS in the context of the need for business change - allocation of

responsibility for benefit delivery

- involvement in implementation as well as planning/ evaluation

Understanding ofstakeholder intent,existence of anorganizationalchange method &willingness toinvest in strategicbenefits - differentEvaluation emphasis

Comprehensiveapproach to BenefitManagement initiatedin the planned phaseinvolving an understanding of stakeholder intent and a strong business involvement & emphasis

Planned approachappreciating stakeholderintent, method, outputand Implementation rolesof IS/IT & Business

Role of Senior Executive

The McGolpin study

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uSignificant factors determining success or failure - a

GenericThe 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 projectThe extent to which the strategic and financial

benefits were measured and evaluatedThe existence of a proper benefits management

process

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uSignificant factors determining success or failure - b

Contextual factors determining success or failureSignificant 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

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uSignificant 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.

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uOverall 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

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uOverall 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)

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uOverall conclusions - c

Significant factors related to ‘moderate success’ projects– The life cycle role of senior executive

– The benefits management process

– The benefit plans

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uOverall 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)

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Organizational IT impacts

IT Project management – getting it right

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IT enabledimprovement

Businesschange

BenefitsManagement

RiskManagement

Positive outcomes

Negative outcomes

Businessimprovement

needed

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uIS Project management is … managing episodes along the change curve

Launch ofan initiative

Perceptionsor

Performance

Time

+

_

Despair/Frustration

Better than before

Highexpectation/Denial

Blame others

Blame self

Minor improvement

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uOutcomes of IS investment

Unexpected Expected

Neg

ativ

eP

osit

ive

Eff

ect

of o

utc

ome

Predictability of outcome

Achieve by goodmanagement

Investment justification

Recognize &minimize

Price worth paying

Identify, exploit &learn from

Opportunityrealization “bonus”

Understand &avoid

Nasty surprises

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uObjectives in getting value

Achieve by goodmanagement

Identify, exploit &

learn from

Understand &avoid

Recognize &minimize

Unexpected Expected

Neg

ativ

eP

osit

ive

Eff

ect

of o

utc

ome

Predictability of outcome

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uHow...

Achieve by goodmanagement

Risk Management

BenefitsManagement

CostManagement

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uBenefits management – the fried egg analogy

IT SystemFew benefits

on its own

Businesschange

Most benefitsTraining

Some benefits

IT responsibility

Businessresponsibility

IT & Businessresponsibility

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uDimensions of benefits management

Benefits realization plan

Have we achieved the benefits?if not - why not - further actions?

What further benefits can we now get?

Why dowe want

improvements?

Whatimprovementsdo we want /could we get?

Where willthey occur?

Who isresponsible

for theirdelivery?

What changesare needed toobtain them?

How & whencan changes

be made?

Who will beaffected by

the changes?

Measurement and evaluation

Pla

nnin

g &

effe

ctin

g bu

sine

ss c

hang

es

How can wemeasure them?

Can wequantify them?

What is thefinancialvalue?

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uChange

AffinityInitiatives

Support

Initiatives

ParallelInitiatives

InhibitorInitiatives

The relationship between these change initiatives and process changes is critical

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uRisk types

Outcome risks

Operational risks

Process risks

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uRisk management: classification

Inherent risks

Planning needed

Can be assessed

and predicted

Strategic High Potential

Key Operational Support

Outcome: highOperational: lowProcess: low

What risk?

Outcome: lowOperational: highProcess: medium

Outcome: lowOperational: lowProcess: high

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uTypical concerns

Strategic High Potential

Outcome risks

Opportunity & financial

risks?

Lack of strategic framework: poor business understandingConflicts of strategy and problems of coordinationIT supplier problemsPoor management of changeSenior management not involvedLarge and complex projects; too many stakeholdersRigid methodology and strict budgetary controls

Key Operational Support

Operationalrisks

Process based risks

Too much faith in the ‘technical fix’Use of technology for its novelty valuePoor technical skills in the development teamInexperienced staffLarge and complex projects; too many stakeholdersPoor testing proceduresPoor implementationLack of technical standards

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uGeneric CSFs for different applications

Strategic High Potential

Key Operational Support

TimeQuality

Cost

Time

QualityCost

Time

Quality

Cost

R & D projects

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uRisk management: core strategies

Strategic High Potential

Key Operational Support

CONFIGURE COMMUNICATE

CONTROL CONSTRAIN

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uRisk management: directions - 1

Strategic High Potential

Business andcorporate risks

Opportunity &financial

risks

Key Operational Support

Operationalrisks

Process based risks

Con

trol

lab

leU

nco

ntr

olla

ble

Predictable Unpredictable

No problem -carry out plans

Practice quick response to manage as

events unfold

Emphasis forecastingand thus

“steer around” these events

Develop a contingency

planning system

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uRisk management: directions -2

History

Context(external)

Context(internal)

Businessprocesses

Content

RiskOutcomes

Context oriented risk assessment

Strategic High Potential

Business andcorporate risks

Key Operational Support

Operationalrisks

Process based risks

Opportunity &financial

risks