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    Best practices of Performance

    Management in IT industry

    AKHIL MAHAJAN

    ABHAY DUGGAL

    VIJAYENDRA BAWASHALU

    CHANDNI CHADHA

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    Issue :IT organizations are being challenged to assure that their projects / activities

    (1) Are aligned with overall strategic goals and business objectives.

    (2) Deliver promised results on time and within budget.

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    What is the performance management

    issue for IT organizations?

    Many senior managers believe that IT organizations are:

    wasteful and inefficient (as evidenced by chronicproject cost overruns, late deliverables, etc.)

    not aligned with strategic goals and businessobjectives.

    Senior management is often handicapped in its decision-making for IT because it has difficulty determining

    if the most important strategic and business needs

    are being met if they have been presented with the best IT options

    for decision-making

    the appropriate funding levels for IT projects /activities (how much to budget)

    whether the IT organization is likely to deliver the

    promised benefits and results on time and withinbudget

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    Performance information that most ITorganizations lack relates to the non-technicalaspects of the job; the information that can tell

    IT and senior management whether:

    IT projects / activities are progressing as planned

    there are telltale signs of future performanceproblems

    there are troubled projects / activities thatrequire higher managements intervention, or

    actions already taken to correct problems actuallyworked.

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    Three of the concepts underlying

    performance management

    organizations "management system

    performance measures

    performance metrics

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    How does non-technical IT

    performance management work?

    Preparatory steps forperformance managementinitiatives include:

    Definition of the overallanalytic framework

    Formulation ofimplementation plans

    Assignment of analyticresponsibility, staff andmanagement training

    conceptual design of thenecessary supportingsystems applications.

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    Once the foundation is established,

    performance management involves a

    number of recurring steps: Gather performance data on those variables of

    interest to IT and senior management.

    Analyze the data to determine normal (baseline)levels.

    Determine appropriate performance thresholdsfor each important variable; exceeding athreshold indicates a problem worthy ofattention (e.g., achievement of a major projectmilestone is 30 days, or more, behind schedule)and possibly action.

    Periodically (often monthly) monitorperformance variables for deviations fromestablished thresholds (a.k.a., variances). Whena performance threshold is exceeded (e.g.,vacant PC support staff positions increases to10% when the acceptable vacancy threshold is

    3%), analysts identify a variance and determineits significance

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    How does non-technical IT

    performance management work?

    Simulations

    Trend analysis

    In-depth performance reviews

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    To help assure the success of a

    performance management initiative:

    understand managements information needs

    have a clear picture of what you are trying to achieveand how you will do it

    involve people who have actually established andmanaged performance management systems

    study what other organizations are doing - learn whatworks and what doesnt

    manage expectations - make sure all key participantsunderstand and agree on what will be accomplishedand when

    use a limited pilot to gain experience (in other words,

    confine your mistakes to a small area that you can fixquickly), and demonstrate early results

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    IT Performance Management - How

    to get startedMeasuring performance isn't easy; too often,performance measurement initiatives falter because:

    those charged with planning and implementing theinitiative had little or no prior experience withperformance management and measurement (often,

    with the best of intentions, they repeat common,predictable, and sometimes fatal mistakes)

    managements information needs were not identifiedin advance, and a well-thought-out conceptualframework and implementation plan was notdeveloped (in one case, after a years work, the first

    performance report was submitted to seniormanagement two months late; the designers were told"this is not the information we need to see")

    too much performance information materialized toosoon (the organizations capacity to assimilate,interpret, and react to it was overwhelmed)

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    Five Things You Should Know Before

    Undertaking An IT Performance

    Management Initiative

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    1. Performance management

    improvements are often implemented

    in concert with other managementimprovements

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    2. Improvements take time and

    sustained management commitment

    3 Ad b d

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    3. Adequate resources must be made

    available

    design and maintenance of the process

    development of management and staffknowledge and skills

    dedication (eventually) of staff to perform thenecessary analyses

    acquisition, or development, of the technology tocapture and store large amounts of current andhistorical data

    changing budgeting practices and procedures,along with budgeting systems capabilities

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    4. The IT organization will need to

    learn new management techniques

    Performance management can yield

    knowledge and information about the

    organisation.

    The ability to pinpoint potential, and actual,

    performance problems

    It will also require a more businesslikeapproach to IT project and activity planning,

    control, and reporting.

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    5. Some of the approaches

    recommended in current literature

    can be risky. performance management and measurement

    are sophisticated management tools that canyield significant benefits to the organization

    some current publications reveals that quite afew are based more upon academic theory thansolid implementation experience.

    The moral: Evaluate the source before youact upon the advice.

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