VCU Master Class 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

VCU Master Class 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

VCU Master Class Findings from various organizations OrganizationBusinessConsensus view of success/failure Dunn and Bradstreet Plc Business information Moderate success supplier Esso UK PlcPetrochemicalsSuccess Florida Power and LightPower generation/ High success distribution Kimberly ClarkePaper based products High success supplier Kraft General FoodsFMCG supplier Moderate success National Westminster Bank Plc Retail bankingUnsuccess Norwich Union PlcInsuranceUnsuccess Smith and Nephew PlcHealthcare productsSuccess PowerGen PlcPower generationUnsuccess Vickers Shipbuilding & Shipbuilding & Unsuccess Engineering Plc Engineering Waterford Wedgwood PlcHigh value pottery Unsuccess and china

VCU Master Class High Success Moderate Success 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 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 Role of Senior Executive The McGolpin study

VCU Master Class 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

VCU Master Class 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

VCU Master Class 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.

VCU Master Class 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

VCU Master Class 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)

VCU Master Class Overall conclusions - c  Significant factors related to ‘moderate success’ projects –The life cycle role of senior executive –The benefits management process –The benefit plans

VCU Master Class 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)

VCU Master Class Organizational IT impacts IT Project management – getting it right

VCU Master Class IT enabled improvement Business change Benefits Management Risk Management Positive outcomes Negative outcomes Business improvement needed

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

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

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

VCU Master Class How... Achieve by good management Risk Management Benefits Management Cost Management

VCU Master Class Benefits management – the fried egg analogy

VCU Master Class Dimensions 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 do we want improvements? What improvements do we want / could we get? Where will they occur? Who is responsible for their delivery? What changes are needed to obtain them? How & when can changes be made? Who will be affected by the changes? Measurement and evaluation Planning & effecting business changes How can we measure them? Can we quantify them? What is the financial value?

VCU Master Class Change

VCU Master Class Risk types Outcome risks Operational risks Process risks

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

VCU Master Class Typical concerns StrategicHigh Potential Outcome risks Opportunity & financial risks? 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 Key Operational Support Operational risks Process based 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

VCU Master Class Generic CSFs for different applications Strategic High Potential Key Operational Support Time Quality Cost Time Quality Cost Time Quality Cost R & D projects

VCU Master Class Risk management: core strategies StrategicHigh Potential Key OperationalSupport CONFIGURE COMMUNICATE CONTROL CONSTRAIN

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

VCU Master Class Risk management: directions -2 History Context (external) Context (internal) Business processes Content Risk Outcomes Context oriented risk assessment StrategicHigh Potential Business and corporate risks Key OperationalSupport Operational risks Process based risks Opportunity & financial risks