1. Chapter 2: The Project Management and Information Technology Context Information Technology Project Management, Fifth Edition

2. Information Technology Project Management, Fifth Edition, Copyright 2007 2 Projects Cannot Be Run in Isolation Projects must operate in a broad organizational environment Project managers need to use systems thinking Taking a holistic view of carrying out projects within the context of the organization Senior managers must make sure projects continue to support current business needs

3. Information Technology Project Management, Fifth Edition, Copyright 2007 3 A Systems View of Project Management A systems approach emerged in the 1950s to describe a more analytical approach to management and problem solving Management must see how projects relate to the whole orgnaization Three parts include: Systems philosophy: an overall model for thinking about things as systems Systems analysis: problem-solving approach Systems management: address business, technological, and organizational issues before making changes to systems

4. What Went Wrong? Many enterprise resource planning (ERP) projects fail due to organizational issues, not technical issues. For example, Sobey’s Canadian grocery store chain abandoned its two-year, $90 million ERP system due to organizational problems. As Dalhousie University Associate Professor Sunny Marche states, “The problem of building an integrated system that can accommodate different people is a very serious challenge. You can’t divorce technology from the sociocultural issues. They have an equal role.” People in different parts of the company had different terms for various items. People had their daily work to do and did not want to take the required time to get the new system to work Sobey’s ERP system shut down for five days and employees were scrambling to stock potentially empty shelves in several stores for weeks. The system failure cost Sobey’s more than $90 million and caused shareholders to take an 82-cent after-tax hit per share.* *Hoare, Eva. “Software hardships,” The Herald, Halifax, Nova Scotia (2001). Information Technology Project Management, Fifth Edition, Copyright 2007 4

5. 5 Organizational Structures Related to political and structural frames Three basic organization structures Functional: functional managers report to the CEO Project: program managers report to the CEO Matrix: middle ground between functional and project structures; personnel often report to two or more bosses; structure can be weak, balanced, or strong matrix

6. Information Technology Project Management, Fifth Edition, Copyright 2007 6 Organizational Structure Project managers have the most authority in a pure project organizational structure and the least in a pure functional structure A project leader in a functional organization who requires strong support from several different functional areas, should ask for top management sponsorship The sponsor should solicit support from all relevant functional managers to ensure that they cooperate and that qualified people are available to work as needed Even though PMs have the most authority in the project organizational structure, this is often inefficient for the company as a whole Assigning full-time staff to the project an lead to underutilization and/or misallocation of resources A full-time technical writer that has no work on a particular day is a wasted resource Using a systems approach might lead the PM to suggest hiring an independent contractor to do the writing instead of using a full-time employee, thus saving money

7. Information Technology Project Management, Fifth Edition, Copyright 2007 7 Organizational Culture Just as an organization’s structure affects its ability to manage, so does an organization’s culture. Organizational culture is a set of shared assumptions, values, and behaviors that characterize the functioning of an organization Many experts believe the underlying causes of many companies’ problems are not the structure or staff, but the culture Even within one organization, one department’s culture may be different from another department’s culture (technology vs. finance) Some cultures make it easier to manage projects

8. Ten Characteristics of Organizational Culture 1 Member identity* Group emphasis* People focus Unit integration* Control Risk tolerance* Reward criteria* Conflict tolerance* Means-ends orientation Open-systems focus* 1 as per Stephen P. Robbins *Project work is most successful in an organizational culture where these items are strong/high and other items are balanced 8 Information Technology Project Management, Fifth Edition, Copyright 2007

9. Ten Characteristics of Organizational Culture 1. Member identity: The degree to which employees identify with the organization as a whole rather than with their type of job or profession. A PM or team member might feel more dedicated to his or her company or project team than to their job or profession, or they might not have any loyalty to a particular company or team. An organizational culture where employees identify more with the whole organization are more conducive to a good project culture. 2. Group emphasis: The degree to which work activities are organized around groups or teams, rather than individuals. An organizational culture that emphasizes group work is best for managing projects. 9 Information Technology Project Management, Fifth Edition, Copyright 2007

10. Ten Characteristics of Organizational Culture 3. People focus: The degree to which management’s decisions take into account the effect of outcomes on people within the organization. A PM might assign tasks to certain people without considering their individual needs, or the PM might know each person very well and focus on individual needs when assigning work or making other decisions. Good PMs often balance the needs of individuals and the organization. 4. Unit integration: The degree to which units or departments within an organization are encouraged to coordinate with each other. Most PMs strive for strong unit integration to deliver a successful product, service, or result. An organizational culture with strong unit integration makes the project manager’s job easier. 5. Control: The degree to which rules, policies, and direct supervision are used to oversee and control employee behavior. Experienced PMs know it is often best to balance the degree of control to get good project results. 10 Information Technology Project Management, Fifth Edition, Copyright 2007

11. Ten Characteristics of Organizational Culture 6. Risk tolerance: The degree to which employees are encouraged to be aggressive, innovative, and risk seeking. An organizational culture with a higher risk tolerance is often best for project management since projects often involve new technologies, ideas, and processes. 7. Reward criteria: The degree to which rewards, such as promotions and salary increases, are allocated according to employee performance rather than seniority, favoritism, or other non- performance factors. Project managers and their teams often perform best when rewards are based mostly on performance. 8. Conflict Tolerance: The degree to which employees are encouraged to air conflicts and criticism openly. It is very important for all project stakeholders to have good communications, so it is best to work in an organization where people feel comfortable discussing conflict openly. 11 Information Technology Project Management, Fifth Edition, Copyright 2007

12. Ten Characteristics of Organizational Culture 9. Means-ends orientation: The degree to which management focuses on outcomes rather than on techniques and processes used to achieve results. An organization with a balanced approach in this area is often best for project work. 10. Open-systems focus: The degree to which the organization monitors and responds to changes in the external environment. Projects are part of a larger organizational environment, so it is best to have a strong open-systems focus. 12 Information Technology Project Management, Fifth Edition, Copyright 2007

13. 13 Stakeholder Management Project managers must take time to identify, understand, and manage relationships with all project stakeholders Using the four frames of organizations can help meet stakeholder needs and expectations Since organizations have limited resources, projects affect top management, other functional managers and other project managers by using some of those resources Senior executives/top management are very important stakeholders

14. Information Technology Project Management, Fifth Edition, Copyright 2007 14 Opening Case Analysis Tom Walters focused on just a few internal project stakeholders He did not involve the main customers of his project - the students – nor did he hold meetings with senior administration or faculty At the faculty meeting, it became evident that there were many stakeholders Tom had excluded from his original plan Structural frame – by looking at an organizational chart of the entire college he would have been able to see that his project would affect academic dept heads and members of different administrative areas Human resource frame – tap his knowledge of the college and identify individuals who would most support or oppose his project Political frame – consider the main interest group most affected by his project’s outcome Symbolic frame – address what moving to a laptop environment would really mean to the college. He could have anticipated some of the opposition and solicited a strong endorsement from the college president or dean before talking to the faculty

15. Information Technology Project Management, Fifth Edition, Copyright 2007 15 The Importance of Top Management Commitment Several studies have found that one of the key factors associated with virtually all project success is t he commitment and support PMs receive A senior manager, called a champion, acts as a key proponent for the project Makes sure adequate resources are provided – money, human resources, visibility Help PMs meet specific needs in a timely manner – realize that unexpected problems can and will arise and support is needed to overcome them As most IT projects cut across functional areas, assists in obtaining cooperation from people in other parts of the organization; fight political battles Mentors and coaches PMs on leadership issues since most IT PMs are not experienced in management

16. Best Practice IT governance addresses the authority and control for key IT activities in organizations, including IT infrastructure, IT use, and project management A lack of IT governance can be dangerous, as evidenced by three well-publicized IT project failures in Australia (Sydney Water’s customer relationship management system, the Royal Melbourne Institute of Technology’s academic management system, and One.Tel’s billing system)* Senior management had not ensured that prudent checks and balances were in place to enable them to monitor either progress of the projects or the alignment and impact of the new systems on their business Project level planning and control were absent or inadequate – project status reports to management were unrealistic, inaccurate and misleading *Avison, David, Gregor, Shirley and Wilson, David, “Managerial IT Unconsciousness”, CACM, vol 49, No. 7, P.92 Information Technology Project Management, Fifth Edition, Copyright 2007 16

17. Information Technology Project Management, Fifth Edition, Copyright 2007 17 Need for Organizational Commitment to Information Technology (IT) If the organization has a negative attitude toward IT, it will be difficult for an IT project to succeed Having a Chief Information Officer (CIO) at a high level in the organization helps IT projects Assigning non-IT people to IT projects also encourages more commitment Some CEOs take a strong leadership role in promoting the use of information technology in their organizations

18. Need for Organizational Standards Standards and guidelines help project managers be more effective Senior management can encourage: The use of standard forms and software for project management The development and use of guidelines for writing project plans or providing status information The creation of a project management office or center of excellence to help PMs achieve project goals Development of career paths for PMs and/or requiring PMP certification Information Technology Project Management, Fifth Edition, Copyright 2007 18

19. Information Technology Project Management, Fifth Edition, Copyright 2007 19 Project Phases and the Project Life Cycle A project life cycle is a collection of project phases that defines: What work will be performed in each phase What deliverables will be produced and when Who is involved in each phase How management will control and approve work produced in each phase A deliverable is a product or service produced or provided as part of a project

20. Information Technology Project Management, Fifth Edition, Copyright 2007 20 More on Project Phases In early phases of a project life cycle: Resource needs are usually lowest The level of uncertainty (risk) is highest Project stakeholders have the greatest opportunity to influence the project In middle phases of a project life cycle: The certainty of completing a project improves More resources are needed The final phase of a project life cycle focuses on: Ensuring that project requirements were met The sponsor approves completion of the project

21. Phases of the Traditional Project Life Cycle 21 Information Technology Project Management, Fifth Edition, Copyright 2007

22. 22 Phases of the Traditional Project Life Cycle Concept phase – managers briefly describe the project Develop a very high-level or summary plan for the project describing the need for the project and basic underlying concepts Rough cost estimate is developed and an overview of the work involved is created A work breakdown structure (WBS) outlines project work by decomposing the work activities into different levels of tasks The WBS is a deliverable-oriented document that defines the total scope of the project Tom Walters should have created a committee of faculty and staff to study the concept of increasing the use of technology on campus They might have developed a management plan that included an initial, smaller project to investigate alternative ways of increasing the use of technology Prepare a report that studies what are similar campuses doing, surveys students, staff and faculty and estimates the impact of using more technology on costs and enrollments.

23. Information Technology Project Management, Fifth Edition, Copyright 2007 23 Phases of the Traditional Project Life Cycle Development phase – project team creates more detailed project management plans, a more accurate cost estimate and a more thorough WBS If the concept phase suggested that laptops were one means of increasing the use of technology on campus, then further study would be required in this phase to determine buy/lease, type of hardware and software, how much to charge students, how to handle training and maintenance, etc. If the concept phase suggested that laptops were not the way to go, the project would have been cancelled at that point thereby saving time and money

24. Information Technology Project Management, Fifth Edition, Copyright 2007 24 Phases of the Traditional Project Life Cycle Implementation– project team creates a very accurate cost estimate, delivers the required work and provides performance reports to stakeholders Acquire the hardware and software, install necessary network equipment, deliver laptops to the students, create a process for collecting fees, provide training, etc. Faculty need to consider how to take advantage of the laptops, security prepare for potential problems, admissions include this in recruiting brochures, etc. Close-out – all the work is completed, customer acceptance of the entire project Project team should document their experiences on the project Survey students, faculty, administration on impact of technology

25. Information Technology Project Management, Fifth Edition, Copyright 2007 25 Product Life Cycles Products also have life cycles The Systems Development Life Cycle (SDLC) is a framework for describing the phases involved in developing and maintaining information systems Systems development projects can follow: Predictive life cycle: the scope of the project can be clearly articulated and the schedule and cost can be predicted Project team spends a large portion of the project attempting to clarify the requirements of the entire system and then producting a design Users are often unable to see tangible reults in terms of working software for an extended period

26. Information Technology Project Management, Fifth Edition, Copyright 2007 26 Predictive Life Cycle Models Project team spends a large portion of the project attempting to clarify the requirements of the entire system and then producing a design Users are often unable to see tangible results in terms of working software for an extended period Waterfall model: has well-defined, linear stages of systems development and support Spiral model: shows that software is developed using an iterative or spiral approach rather than a linear approach Incremental build model: provides for progressive development of operational software Prototyping model: used for developing prototypes to clarify user requirements Rapid Application Development (RAD) model: used to produce systems quickly without sacrificing quality

27. Information Technology Project Management, Fifth Edition, Copyright 2007 27 Product Life Cycles Adaptive Software Development (ASD) life cycle: requirements cannot be clearly expressed, projects are mission driven and component based, using time-based cycles to meet target dates Development proceeds by creating components that provide the functionality specified by the business group as these needs are discovered in a more free-form approach Requirements are developed using an iterative approach and development is risk driven and change tolerant to address and incorporate rather than mitigate risks

28. Information Technology Project Management, Fifth Edition, Copyright 2007 28 Product Life Cycles Large IT projects are usually composed of several smaller, more manageable projects, especially when there is a lot of uncertainty involved Some aspect of project management need to occur during each phase of the product life cycle Systems planning phase for a new information system can include a project to hire an outside consulting firm to help identify and evaluate potential strategies for developing a particular business application Implementation phase might include a project to hire outside programmers code part of the system Close-out phase might include a project to develop and run several training sessions for users of the new application

29. Information Technology Project Management, Fifth Edition, Copyright 2007 29 The Importance of Project Phases and Management Reviews A project should successfully pass through each of the project phases in order to continue on to the next Management reviews, also called phase exits or kill points, should occur after each phase to evaluate the project’s progress, likely success, and continued compatibility with organizational goals At the end of the concept phase, the project team could have presented information to the faculty, president and other staff members that described different options for increasing the use of technology, an analysis of what competing colleges were doing and results of a survey of local stakeholders’ opinions on the subject. Unfavorable results could have resulted in stopping the project at that point and not investing more time, effort and money.

30. What Went Right? "The real improvement that I saw was in our ability to  in the words of Thomas Edison  know when to stop beating a dead horse.…Edison's key to success was that he failed fairly often; but as he said, he could recognize a dead horse before it started to smell...In information technology we ride dead horses  failing projects  a long time before we give up. But what we are seeing now is that we are able to get off them; able to reduce cost overrun and time overrun. That's where the major impact came on the success rate.”* Many organizations, like Huntington Bancshares, Inc., use an executive steering committee to help keep projects on track. *Cabanis, Jeannette, "'A Major Impact': The Standish Group's Jim Johnson On Project Management and IT Project Success," PM Network, PMI, Sep.1998, p. 7 30 Information Technology Project Management, Fifth Edition, Copyright 2007

31. 31 The Context of IT Projects IT projects can be very diverse in terms of size, complexity, products produced, application area, and resource requirements IT project team members often have diverse backgrounds and skill sets IT projects use diverse technologies that change rapidly; even within one technology area, people must be highly specialized

32. Information Technology Project Management, Fifth Edition, Copyright 2007 32 Case Wrap-Up Due to the concerns raised from many people at the meeting, the president directed that a broad- based committee be formed to investigate the technology issue and report back in a month. Not surprisingly, the committee recommended to terminate the concept Tom Walters learned the hard way about the need to pay more attention to the needs of the entire college before proceeding with future technology plans.