1. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-1 MANAGING INFORMATION TECHNOLOGY 7 th EDITION CHAPTER 11 IT PROJECT MANAGEMENT

2. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-2 IT PROJECT MANAGEMENT GOALS To deliver a quality system that meets the needs of the business, on schedule, and on budget To achieve goals, triple project constraints need to be managed: a change in one factor automatically changes at least one of the others ScopeTimeCost

3. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-3 SOME DEFINITIONS. Project: A project is a temporary endeavor undertaken to create a unique product or service. It typically is a one-time initiative that can be divided into multiple tasks, which require coordination and control, with a definite beginning and ending Project Management: The application of knowledge, skills, tools, and techniques to a broad range of activities in order to meet the requirements of a particular project Program Management: A group of projects managed in a coordinated way to obtain benefits not available from managing them individually

4. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-4 IT PORTFOLIO MANAGEMENT Senior business and IT leaders manage the entire IT portfolio to ensure it fits well with the organization’s strategic vision -Decisions are made about the approval and prioritization of IT projects based on financial and strategic assessments - Individual projects and programs are undertaken only after assessing their “fit” with the overall IT portfolio

5. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-5 STRATEGIC MANAGEMENT OF IT IT portfolio management Program management Project management Project AProject BProject C

6. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-6 PROJECT MANAGEMENT INSTITUTE (PMI) An international organization that provides resources for and certifies project managers Project Management Body of Knowledge (PMBOK) Guide details standard project management practices PMI

7. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-7 PROJECT MANAGEMENT INSTITUTE (PMI) Nine areas of PMI competency 1.Project Scope 2.Project Time 3.Project Cost 4.Human Resources 5.Quality Management 6.Risk Management 7.Project Communications 8.Procurement 9.Project Integration

8. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-8 PROJECT MANAGEMENT New project requests are typically submitted using an organizational template

9. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-9 IT PROJECT PRIORITIZATION Example of a categorization scheme to help prioritize projects Absolute Must A mandate due to security, legal, regulatory, or end- of-life-cycle IT issues Highly Desired / Business-Critical Includes short-term projects with good financial returns and portions of very large projects already in progress Wanted Valuable, but with longer time periods for returns on investment (more than a 12-month period) Nice to Have Projects with good returns, but with lower potential business Source: Denis et al. 2004

10. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-10 PROJECT MANAGEMENT ROLES All IT projects should have a project manager and a project sponsor Some projects also require a project champion for successful implementation Each role can be critical to the success of a project, especially for complex projects and/or those involving a significant investment

11. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-11 PROJECT MANAGER (PM) The project manager (PM) is responsible for planning and executing the project IT projects are typically lead by managers from the IS organization, but business managers sometimes are asked to lead projects – or there may be dual PMs for a project A PM needs to have project management skills, as well as technical skills and business knowledge Research has shown that the non-technical skills of the PM are also important

12. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-12 THE EFFECTIVE PROJECT MANAGER Non Technical Skills Effective IT Project Management Project management skills Technical Skills Business Knowledge

13. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-13 THE EFFECTIVE PROJECT MANAGER Important non-technical skills of the PM: Figure 11.3

14. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-14 PROJECT SPONSOR ROLE Typically a business manager who “owns” the project (the sponsor paying for the project) Project Sponsor responsibilities: - Fights for project approval - Ensures project resources - Funding -Project team members It is therefore critical for the PM to maintain a strong relationship with the sponsor throughout the project

15. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-15 PROJECT SPONSOR. Tasks to Keep the Project Sponsor Engaged Schedule regular meetings with the sponsor to ensure the project is on track, according to current business priorities Create a list of expectations with the sponsor to clarify the project manager role and the sponsor’s role Agree on how handoffs between the project manager and sponsor will occur Discuss the sponsor’s preferences for when and how project issues will be brought up with the sponsor Learn how the sponsor will communicate the status of the project to peers and the company’s top management Determine what metrics the sponsor will use to judge the completion of the project Agree on how the sponsor will participate in the post-project review

16. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-16 PROJECT CHAMPION The Champion role needs to be played by a business manager with high credibility, who also is enthusiastic about the project and an excellent communicator Project Sponsor may also play the Champion role, but it is often most effective if the champion is a lower-level business manager who is highly impacted by the project

17. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-17 THE PROJECT LIFE CYCLE 4 generic project phases Project Initiation Project Planning Project Execution and Control Project Closing Note: In this textbook, the Project Execution and Control phase includes two PMBOK phases combined into one

18. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-18 PROJECT INITIATION The main deliverable for this phase is the project charter Project Planning Project Initiation Project Execution and Control Project Closing Project Charter: A document that describes a project’s objectives, scope, assumptions, and estimated benefits

19. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-19 PROJECT INITIATION Many dimensions of Project Feasibility may be assessed in this phase: - Economic Does this project give a positive financial return? - Operational How will the project impact the organization’s operations? - Technical Does the organization have the technology and expertise required? - Schedule Is it possible to finish the project in the required schedule? How is the project’s schedule impacted by other timelines? - Legal or Contractual Does the project have any legal conflicts? - Political Is there support for the project from the relevant stakeholders?

20. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-20 PROJECT PLANNING There are three major components of this phase: 1.Scheduling 2.Budgeting 3.Staffing The primary deliverables for this phase are the Statement of Work and Project Plan Project Planning Project Initiation Project Execution and Control Project Closing

21. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-21 1. SCHEDULING First Scheduling step is generally a Work Breakdown analysis Work Breakdown Structure: A basic management technique that systematically subdivides blocks of work down to the level of detail at which the project will be controlled Once the project work is broken into tasks, time estimates are assigned to each task based on past experience It is important to consider task dependencies when creating the master schedule with project milestones

22. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-22 2. BUDGETING Two traditional approaches to estimating project costs: Bottom-up -Costs are based on project tasks in the work plan, and then aggregated; this is the preferred method Top-down (parametric estimating) -Used when not enough is known about the project to base costs on specific project tasks—especially in Project Initiation phase Inexperienced PMs often make the following mistakes: - Too optimistic in their cost estimates - Leave components out of estimates - Do not use a consistent methodology

23. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-23 2. BUDGETING Purposeful inaccurate estimations of the project budget are of two types, and can have adverse effects: Highballing (or budget padding) - Overestimating project costs on purpose - Projects may not be approved because of higher costs Lowballing - Underestimating project costs on purpose - Sometimes used to gain approval of projects, but can result in a failed project due to being over budget

24. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-24 3. STAFFING Successful projects must have people resources with the right IT skills mix to meet the needs of the project An effective PM must be capable of estimating the skill type, proficiency level, quantity, and time required for personnel needed to complete project tasks - Some staff may require training for a specific project -Some organizations have Centers of Excellence (CoE) where employees learn new skills anticipated for future projects Attention to “teambuilding” may be required at the outset Special Incentives may also be required to retain key project team members for multi-year projects of high impact

25. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-25 3. STAFFING One method of obtaining skilled professionals is to utilize outside contractors - PMs must ensure that relevant knowledge is transferred from contractors to employees to ensure independence from 3 rd -party help after the project is completed The usage of contractors to support a project team can also increase project risks due to the uncertainty about the contract workers’ expertise and working methods

26. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-26 PROJECT PLANNING Two primary deliverables from the Planning phase -Statement of Work: A high level document for the customer that describes what the project will deliver and when - Project Plan: A formal document that includes the projects schedule, budget, and assigned resources that is used by the project manager to guide the execution and control of the project Two types of charts commonly accompany these documents: - PERT (or CPM) chart - Gantt chart

27. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-27 PROJECT PLANNING PERT (Program Evaluation and Review Technique) or Critical Path Method (CPM)

28. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-28 PROJECT PLANNING Gantt Chart

29. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-29 PROJECT EXECUTION AND CONTROL Most projects exhibit the following characteristics: 1.Risk and uncertainty are highest at the start of the project 2.The ability of the project stakeholders to influence the outcome is highest at the start of the project 3.Cost and staffing levels are lower at the start of the project and higher toward the end The deliverable for this phase is the completed project. Project Planning Project Initiation Project Execution and Control Project Closing

30. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-30 PROJECT EXECUTION AND CONTROL Communication with stakeholders is critical - Status reporting should be simple and clear Figure 11.8 (Roman 1986)

31. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-31 PROJECT EXECUTION AND CONTROL Fig 11.9 A Request for Change process needs to be followed for requesting changes to the initial requirements:

32. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-32 PROJECT EXECUTION AND CONTROL Risk Identification and Assessment Elicit, identify, and classify major project and process risks and determine the impact, probability, and time frame of occurrence Risk Planning Use assessment information to make decisions and actions to implement them (present and future) Risk Avoidance Avoid a specific risk when possible, by eliminating its causes (e.g., change the design, change requirements, change technologies) Risk Monitoring Develop processes for monitoring the risk indicators and detecting occurrences. Change the initial assessments (impact, probability, time frame) as relevant Risk Mitigation or Acceptance Take steps to limit the probability of occurrence and limit the impact of a risk OR formally plan for its occurrence (such as shifting the management of a risk to a 3 rd -party) Risk Management, Tracking and ControlContinue to track and control for deviations from the planned risk actions and re-assess the risks and the effectiveness of the monitoring process Fig 11.10 Managing Project Risks

33. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-33 PROJECT EXECUTION AND CONTROL Managing Project Risks - Early warning signs of project failure include People- related and Process-related symptoms:

34. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-34 PROJECT EXECUTION AND CONTROL Managing Project Risks - The profile of the project risks changes over the phases - The risks typically decrease as the organization’s stake in the project increases

35. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-35 PROJECT EXECUTION AND CONTROL Three recommended Strategies to manage Project Risks Exchange Strategy An unknown risk or known critical risk is exchanged for a more acceptable level of risk. For example, the risk can be shifted to a third party by subcontracting with another organization under a fixed-cost contract for a specific project deliverable Reduction Strategy By allocating to the project the best human resources available, a specific project risk can be reduced Avoidance Strategy An alternative technical approach to a problem may be chosen in order to avoid risk exposure

36. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-36 PROJECT EXECUTION AND CONTROL Managing Business Change - Strong Change Management as part of the IT project is required if success of new system requires major changes within the business—work processes, new cross-unit dependencies, new skills that require training prior to implementation, etc. - The objective is to include a strong change management component in the project to minimize resistance to the implementation and usage of a new system Change Management: The ability to successfully introduce change to individuals and organizational units

37. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-37 PROJECT EXECUTION AND CONTROL Lewin/Schein Change Model

38. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-38 PROJECT EXECUTION AND CONTROL Kotter Change Model 1.Establish a sense of urgency 2.Form a powerful guiding coalition 3.Create a vision 4.Communicate the vision 5.Empower others to act on the vision 6.Plan for and create short-term wins 7.Consolidate improvements and produce still more change 8.Institutionalize new approaches

39. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-39 PROJECT EXECUTION AND CONTROL Managing Conflict - PMs typically need to manage conflicts among project team members as well as with other stakeholders - Five modes of conflict resolution (Kerzner 2006) 1.Confronting – a collaborative, problem-solving approach where both parties try for a win-win 2.Compromising – each party gives something up 3.Smoothing – minimizing the differences between the parties 4.Forcing – competing or dominant; one party goes all out to win 5.Avoiding – removal of one party from the conflict

40. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-40 PROJECT CLOSING Post-Project Reviews should be a part of the Project Closing Review process is designed to promote open sharing of “lessons learned” during the project to avoid same problems in the future: Typical questions as part of Project Review: - What went right on this project? - What went wrong on this project? - What would you do differently on the next project, based on your experience with this project? Project Planning Project Initiation Project Execution and Control Project Closing

41. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-41 MANAGING COMPLEX IT PROJECTS Three critical success factors have been identified for effective management of large, complex projects: 1.The business vision was an integral part of the project 2.A testing approach was used at the program level (not just at the individual application level) 3.The projects used a phased-release approach (rather than a single-release rollout strategy) To manage complex projects, many organizations engage consulting firms to take advantage of their expertise performing similar projects in other firms, but this affects project costs

42. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-42 MANAGING COMPLEX IT PROJECTS Characteristic of large, complex project  Increased Risk of Project Failure Project requirements captured from multiple stakeholders Engaging with more stakeholders results in more discrepancies in requirements to be resolved Large project teams devoted to the project Reliance on multiple outside contractors to supplement internal people resources increases time and cost for project coordination Multi-year timetable for project completion The longer the project timeline, the greater the likelihood that key personnel will leave the organization before project completion External environment changes require revisions to a project plan The bigger the project scope, the greater the likelihood that major changes to the project plans will need to be made to accommodate unanticipated changes outside of the control of the project leader Project Size is related to Project Complexity and Risk of Failure Fig 11.13

43. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-43 MANAGING COMPLEX IT PROJECTS Usage of People Resources off-site & offshore also can increase Project Complexity Figure 11.14 (Poria 2004 )

44. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-44 MANAGING VIRTUAL TEAMS Virtual teams bring together individuals with expertise that cannot work together face-to-face Virtual teams for IT projects can introduce additional project risks due to: - Differences in communication norms - Unfamiliarity with a different culture - Lack of trusting relationships across team members Virtual Teams: Project teams that are geographically dispersed and communicating through information technology

45. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-45 MANAGING VIRTUAL TEAMS Strategies for managing Virtual Teams Six Leadership Secrets for Managing Remote Workers Aim to build trust through every interaction Create symbols and structures that unify the dispersed work group Establish ongoing opportunities for the team to learn more about each other, both professionally and personally Develop a daily alignment tool to focus the effort of the team Be scrupulously fair in treating all team members Be crystal clear about project objectives Source: Kostner (1996)

46. Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 11-46 COPYRIGHT All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2012 Pearson Education, Inc. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall