managing information technology 6 editionsilabus.fe.unila.ac.id/sim/pdf6-mit-martin/mit6e_ch12 - it...

Managing Information Technology6th Edition

CHAPTER 12IT PROJECT MANAGEMENT

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall 1

IT Projects are DifficultIT Projects are Difficult

• Although reports vary considerably, IT projectsAlthough reports vary considerably, IT projects fail frequently– According to the Standish Group, the failure rate g p,may approach 2/3 of IT projects

– Sauer, Gemino, and Reich (2007) report much l IT j f il i h 2/3 flower IT project failure rate with over 2/3 of projects delivered close to on‐time and on‐budget

• Organizational IT project management greatly• Organizational IT project management greatly affects the success of IT projects


Goal of IT Project ManagementGoal of IT Project Management• Overall goal of project management is to deliver a quality system on schedule and on budget that meets the needs of the business

IT Project Management Goal•Scope•Time•Cost


Triple ConstraintTriple Constraint

• Time cost and scope are called the tripleTime, cost, and scope are called the triple constraint– A change in one automatically changes at least– A change in one automatically changes at least one of the others

Scope


Time Cost

Project Management BasicsProject Management BasicsProject

• 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 endingg g g

Th li i f k l d kill l d h i b d

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 (PMBOK Guide, 3rd ed.)

• A group of projects managed in a coordinated way to obtain benefits not available from managing them individually (PMI 1996)

Program


not available from managing them individually (PMI, 1996)

Project Management InstituteProject Management Institute

• The Project Management Institute (PMI) is anThe Project Management Institute (PMI) is an international organization that provides resources and certifications to help projectresources and certifications to help project managers reach their project goals– Among their resources are the Project– Among their resources are the Project Management Body of Knowledge (PMBOK) Guide which details and attempts to standardize project p p jmanagement practices


Project Management InstituteProject Management Institute

• The PMBOK Guide contains nine areas of competency1. Project Scope2 Project Time2. Project Time3. Project Cost4. Human Resources5. Quality Management6. Risk Management7 P j t C i ti7. Project Communications8. Procurement9. Project Integration


j g

Strategic Management of ITStrategic Management of IT

• IT Portfolio ManagementIT Portfolio Management– Senior business and IT leaders manage how the entire IT portfolio fits with the organization’sentire IT portfolio fits 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• Individual projects and programs are undertaken only after the assessing their fit with the overall IT portfolio



IT f liIT portfolio management

Program management

Project managementProject A Project B Project C


Strategic Management of ITStrategic Management of IT• New projects are typically submitted using a

l i i h i i i itemplate to assist with prioritization

Figure 12.2(Vavre and Lane 2004)



• IT project prioritization schemeIT project prioritization scheme– During the evaluation of IT projects, a categorization scheme is usually used to assistcategorization scheme is usually used to assist managers in their decision making

– The Denis et al. (2004) scheme:The Denis et al. (2004) scheme:

Absolute Must

A d t d t

Highly Desired / Business‐Critical

I l d h t t

Wanted

V l bl b t ith

Nice to Have

P j t ith d•A mandate due to security, legal, regulatory, or end‐of‐life‐cycle IT issues

•Includes short‐term projects with good financial returns and portions of very large projects

•Valuable, but with longer time periods for returns on investment (more than a 12‐month

•Projects with good returns, but with lower potential business


already in progress period)

Project Management RolesProject Management Roles

• All IT projects should have a project managerAll IT projects should have a project manager and a project sponsor

• Additionally some projects will require a• Additionally, some projects will require a project champion for successE h f h l i i j• Each of these roles is important to project success, especially in complex projects


Project Management RolesProject Management Roles• Project Manager (PM)

Typically systems projects are lead by IT project– Typically systems projects are lead by IT project managers who possess technical knowledge and project management skills

– A project manager’s main responsibility is to plan and execute the projectThe following non technical skills are important for– The following non‐technical skills are important for successful project management:

Figure 12.3


Project Management RolesProject Management Roles

Knowledge Skills

Project Management

Skill

Skills

Skills

Effective IT project management


management

Project Management RolesProject Management Roles• Project Sponsor

– Typically a business manager who “owns” the project (the sponsor is paying for the project)

– The sponsor has several responsibilities to the project:

Fi ht f j t l• Fights for project approval• Ensures project resources

– Fundingg– Project team members

– It is critical for the project manager to have a


strong relationship with the sponsor

Project Management RolesProject Management Roles• Project Sponsor

Tasks to Engage Sponsor

•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

ith thwith 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•Agree on how the sponsor will participate in the post‐project review


Project Management RolesProject Management Roles• Project Champion

– A role played by a business manager with high credibility

– Requires enthusiasm and excellent communicationC b h h j b f– Can be the same as the project sponsor, but often more effective if the champion is a lower‐level business manager who is highly impacted by thebusiness manager who is highly impacted by the project


The Project Life CycleThe Project Life Cycle

• All successful projects pass through fourAll successful projects pass through four generic phases along the path to completion

• We will discuss all four of the project phases• We will discuss all four of the project phases because all are crucial to project success

Project Project Project ProjectProject Initiation

Project Planning Execution

and Control

Project Closing


Project InitiationProject Initiation

• The first step in the project life cycle is projectThe first step in the project life cycle is project initiation

• The main deliverable for this phase is the• The main deliverable for this phase is the project charter

• A document that describes a project’s objectives, scope,

Project Charter

A document that describes a project s objectives, scope, assumptions, and estimated benefits

ProjectProject Project Execution Project


Project Planning

Project Initiation

Project Execution and Control

Project Closing

Project InitiationProject Initiation• Many dimensions of project feasibility are likely to be assessed in

thi hthis phase– Economic

• Does this project give a positive financial return?– OperationalOperational

• 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 contractualg• Does the project have any legal conflicts?

– Political• Is there support for the project from the relevant stakeholders?


Project PlanningProject Planning

• The second phase of the project life cycle isThe second phase of the project life cycle is project planning

• The primary deliverables for this phase of theThe primary deliverables for this phase of the project are the statement of work and project planplan

• There are three major components of this phase1 Scheduling1. Scheduling2. Budgeting3 Staffing P jP j P j


3. Staffing Project Planning

Project Initiation


Project Closing

Project PlanningProject Planning1. Scheduling

– The first step of scheduling is generally a work breakdown analysis

• A basic management technique that systematically subdivides blocks of work down to the level of detail at which the project will be controlled

Work Breakdown Analysis

– Once the work is broken into tasks, time estimates are i d t h t k b d t i

work down to the level of detail at which the project will be controlled

assigned to each task based on past experience– It is important to consider task dependencies when

creating the master schedule with project milestones



2. Budgeting. udget g– Approaches to estimating

• Bottom‐up– Based on work‐breakdown

• Top‐down (parametric estimating)– Used with not enough is known about the project to create a

k b kdwork‐breakdown

– Inexperienced cost estimators often make the following mistakes:

• Too optimistic in their assessments• Leave components out that should be estimated• Do not use a consistent methodology


• Do not use a consistent methodology


2. Budgeting2. Budgeting– Purposeful inaccurate estimations of the budget

can have adverse effects– Highballing (or budget padding)

• Overestimation of project costs• Projects may not be approved because of higher costs

– Lowballing• Underestimating project costs• Underestimating project costs• Used to gain approval of questionable projects• Often lead to project failures when overbudget


Project PlanningProject Planning3. Staffing

– To succeed, a project must contain the right IT skills mix of the professionals assigned to the project

– An effective project manager must have the ability to estimate th kill t fi i l l tit d ti i d fthe skill type, proficiency level, quantity, and time required for personal to complete project tasks

– Some staff may require training for the project• Some organizations have created Centers of Excellence where• Some organizations have created Centers of Excellence where

employees can learn additional skills that may be required for future projects

– Outside contractors• Important to transfer knowledge from contractors to employees to

remove dependency– Teambuilding

Incentives


– Incentives


3 Staffing3. Staffing– One method of obtaining skilled professionals is

to utilize outside contractorsto utilize outside contractors• It is important for organizations to transfer knowledge

from contractors to employees to remove future dependency on the contractors

• This can increase project risk because of uncertainty in the contractor’s expertise and behaviorin the contractor s expertise and behavior



• Primary deliverables from the planning phasePrimary deliverables from the planning phase– Statement of Work

Project Plan– Project Plan

• A high‐level document for the customer that describes what the project will deliver and when

Statement of Work

project will deliver and when

Project plan

• A formal document that includes the project’s schedule, budget, and assigned resources that is used by the project manager to guide the execution and control of the project



• Primary deliverables from the planning phasePrimary deliverables from the planning phase– Statement of Work

Project Plan– Project Plan

• Additionally, two types of charts commonly th d taccompany these documents

– PERT (or CPM)– Gantt



• Program Evaluation and Review TechniqueProgram Evaluation and Review Technique (PERT) or Critical Path Method (CPM)

Fi 12 5Figure 12.5


Project PlanningProject Planning• Gantt Chart Figure 12.6

(Valacich, George, and Hoffer 2001)

Fi 12 5

(Valacich, George, and Hoffer 2001)

Figure 12.5


Project Execution and ControlProject Execution and Control

• The third phase of the project life cyclep p j y• The deliverable for this phase is the completed

project• Most projects exhibit the following

characteristics1 Risk and uncertainty are highest at the start of the1. Risk and uncertainty are highest at the start of the

project2. The ability of the project stakeholders to influence

the outcome is highest at the start of the projectthe outcome is highest at the start of the project3. Cost and staffing levels are lower at the start of the

project and higher toward the endProject Project Project Execution Project


jPlanning

jInitiation


jClosing


• Communication with stakeholders is criticalCommunication with stakeholders is critical• Status reporting should be simple and clear

Figure 12 7Figure 12.7(Roman 1986)


Project Execution and ControlProject Execution and Control• Managing Project Risk

All j t i k d IT j t (– All projects carry risk and some IT projects (e.g., enterprise projects) involve considerable risk of failure

– Early warning signs of project failure

Figure 12.8(Kappelman et al. 2006)



– The risk exposure profile changes over time• Risk decreases over time as the organization’s stake

increasesincreases

Figure 12.11Figure 12.11(Frame 1994)



– Project managers go through several phases when managing risk

Fi 12 9Figure 12.9(Mohtashami et al. 2006)



• Managing Project RiskManaging Project Risk– Three overall strategies are utilized for managing

riskrisk

Exchange Strategy

•An unknown risk or

Reduction Strategy

•By allocating to the

Avoidance Strategy

•An alternative technical•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

•By allocating to the project the best human resources available, a specific project risk can be reduced

•An alternative technical approach to a problem may be chosen in order to avoid risk exposure

be shifted to a third party by subcontracting with another organization under a fixed‐cost contract for a specific project


specific project deliverable


• Managing Business ChangeManaging Business Change– New systems can lead to major changes in

business processesbusiness processes– Due to these changes, IT projects often require

change management to overcome resistance tochange management to overcome resistance to the new system

Change Management

• The ability to successfully introduce change to individuals and organizational units

Change Management


and organizational units


• Multistage change modelsMultistage change models– As change management has become a more

important component of IT projects severalimportant component of IT projects, several change models have been proposed to help managers think about change

– Two important change models we will consider:• Lewin/Schein Change Model• Kotter Change Model



• Multistage change modelsMultistage change models• Lewin/Schein Change Model

Figure 12.12g



• Multistage change modelsMultistage change models• Kotter Change Model

1. Establish a sense of urgency2. Form a powerful guiding coalition3. Create a vision4 Communicate the vision4. Communicate the vision5. Empower others to act on the vision6. Plan for and create short‐term wins

l d d d ll h7. Consolidate improvements and produce still more change8. Institutionalize new approaches



• Managing conflictg g– Project managers may have conflict on their teams

or with other stakeholdersStrategies may vary depending on situation but– Strategies may vary depending on situation, but overall there are five modes of conflict resolution (Kerzner 2006)1 Confronting a collaborative problem solving approach1. Confronting – a collaborative, problem‐solving approach

where both parties try for a win‐win2. Compromising – each party gives something up3 Smoothing – minimizing the differences between the3. Smoothing minimizing the differences between the

parties4. Forcing – competing or dominant; one party goes all out to

win


5. Avoiding – removal of one party from the conflict

Project ClosingProject Closing

• Even when the project deliverables areEven when the project deliverables are complete, successful organizations include a final closing stage to review project success

• A post‐project review is used to share lessons‐learned during the project– Typical questions during this phase may include:

• 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?ProjectProject Project Execution Project


y p p jProject Planning

Project Initiation


Project Closing

`•Managing Complex IT ProjectsSpecial Issue g g p jSpecial Issue

"Complexity must be accepted as a part of the systems development world for the future“

‐ Hugh Ryan

• To overcome this complexity, many organizations use consulting firms to p y, y g gtake advantage of their expertise performing similar projects in other firms

• Three critical success factors have been identified in large, complex projects:projects:1. The business vision was an integral part of the project2. 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


3. The projects used a phased‐release approach (rather than a single‐release rollout strategy)

•Managing Complex IT ProjectsSpecial Issue g g p jSpecial Issue• Complexity increases with resources are off‐site and offshore

Figure 12.15Figure 12.15(Poria 2004)


•Managing Virtual TeamsSpecial Issue g gSpecial Issue

• Project teams that are geographically dispersed and i ti th h i f ti t h l

Virtual Team

• These teams can bring together individuals with ti th t t t f t f

communication through information technology

expertise that cannot meet face‐to‐face• These teams introduces additional project risks

– Differences in communication norms– Differences in communication norms– Unfamiliarity with a different culture– Lack of trusting relationships across team members


•Managing Virtual TeamsSpecial Issue g gSpecial Issue

• Kostner (1996) identified six strategies forKostner (1996) identified six strategies for managing virtual teams

Six Leadership Secrets for Managing Remote Workers

• Aim to build trust through every interactiong y• 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


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mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.p p

Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall


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