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.

IT and Modern Day Project Management 1940s 1950s 1960s 1970s 1980s 1990s 2000s 2010s First Electronic Computer EDP Era PC Era Network Era Globalization

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

Table 1.1 Summary of CHAOS Study Factor Rankings for Successful Projects Sources: Adapted from the Standish Group. CHAOS (West Yarmouth, MA: 1995) & http://www.infoq.com/articles/Interview-Johnson-Standish-CHAOS Rank 1994 2001 2006 1 User Involvement Executive Support 2 Executive Management Support 3 Clear Statement of Requirements Experienced Project Manager Clear Business Objectives 4 Proper Planning 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 10 Hard-working, focused team Other Standard Tools and Infrastructure

IT Project Performance Over the Past 3 Years Table 1.2: Project Performance and Internal/External Customer Satisfaction. Source: Marchewka, J.T. (2008). n = 114. IT Project Performance Over the Past 3 Years Much Worse Same Better Ability to meet project schedules 0.0% 12.3% 40.4% 41.2% 6.1% Ability to meet project budgets 1.8% 10.5% 44.7% 37.7% 5.3% Ability to complete project scope or system requirements 2.6% 7.0% 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 13.2% 34.2% 39.5% 11.4% Perceived value of the delivered product to the customer 9.6% 38.6% Potential for future work with the customer 0.9% 3.5% 42.1% 14.9%

Factors for Challenged Projects Factors for Failed (Impaired) Projects Table 1.3: Summary of Factor Rankings for Challenged and Failed (Impaired) Projects Source: Adapted from the Standish Group. CHAOS (West Yarmouth, MA: 1995) Rank Factors for Challenged Projects Factors for Failed (Impaired) Projects 1 Lack of user input Incomplete requirements 2 Lack of user involvement 3 Changing requirements & specifications Lack of resources 4 Lack of executive support Unrealistic expectations 5 Technology incompetence 6 7 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

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 Method 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