Transcript ISG Presentation to P.A.R.T.T

Managing IT Delivery Risk
Presentation to PMI GT ISLIG
January 10, 2001
Hitesh Seth
Senior Manager, Cap Gemini Ernst & Young
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Objectives / TOC
To Identify common risk areas and leading practices to overcome
risks in IT implementation projects.
 Background
 IT Disasters
 Common IT Delivery Risks
 Risk Management Leading Practices
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Who is Cap Gemini Ernst & Young?
 A global Management Consulting and I.T. services firm
combining the strengths of Cap Gemini with E&Y Consulting.
 A company with demonstrated success in outsourcing and
joint venture business ventures with companies like Sprint,
Farmland Industries, EDF, British Steel and PruessenElektra.
 With a head office in Paris, it employs more than 57,000
people worldwide, operating in 31 countries and reports
global revenues of 7.7 billion euros.
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Who is New Horizons?
 A joint venture between Ontario Power Generation (itself a
successor company to Ontario Hydro) and CGEY to provide
full-range IT services to the North American energy
marketplace.
 Immediately focused on continuing to provide IT services to
OPG and related entities: Bruce Power, Retail Energy Hub.
 The North American energy sector (especially energy
generation) represents a multi-billion dollar emerging market
as a result of Energy deregulation.
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Knowledge
Skills
Challenges of Project Management
Time &
Effort
Training
Experience
Evolving
Scenarios
Quality
Management
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Dealing
with
People
Software Project Statistics :
Standish Group 1994 U.S.
Application Development
250 Billion / Year
175,000 Projects
Project Statistics
31% - Cancelled
16% - On time / on Budget
53% - Over Budget / Schedule or under Scope
Issues
222% - Average Schedule Overrun
189% - Average Cost Overrun
39% - Average Scope Underrun
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Common IT Delivery Risks
1. Ineffective Sponsorship & Commitment
2. Loose Definition of Requirements.
3. Misunderstanding success.
4. Doing too much.
5. Technology Complexity
6. Not having the right skills.
7. Demanding business timing. Unrealistic deadlines.
8. Aggressive business change.
9. Pitiful project management.
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1. Ineffective Sponsorship & Committment
Also Disguised As…
 Changing sponsorship.
 Multiple business leaders / companies that do not
agree. Key users are different from funder.
 Wrong Technology
Leading Practices
 Steering Committee for Issue Resolution
 Demonstrating success to management
 Apply appropriate priorities
 Motivating staff
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Sponsorship & Commitment - Risk Management
Keep the sponsor and users
actively involved in the entire
project life cycle to increase the
likelihood that:
 The correct problems are addressed
 The appropriate priorities are followed
 The solution is affordable
 The solution deals with the problems
Engage clients:
 Task forces
 Prototype systems
 Incremental implementation
 Walkthroughs
 Pilot sites
 Status reviews
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2. Loose Definition of Requirements
Also Disguised As…
 “Let me describe it verbally…”
 “Show me a prototype, then I can provide details…”
Leading Practices
 Define the scope & deliverables in a project charter.
 Model the process and define a process owner.
 Iterative definition and deployment.
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3. Mis-understanding Success.
Also Disguised As…
 Relying on users to know the complete business
process.
 Business case is outdated, or not done.
 “Out of left field” requirements.
Leading Practices
 Understand / update the business case.
 Model the process and define a process owner.
 Find the appropriate business approver.
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4. Doing too much.
Also Disguised As…
 It will take over a year to complete…
 We can correct small problems, after we implement.
Leading Practices
 Deploy solutions iteratively to limit technology and
business complexity.
 Assess size limitations on the project.
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Doing Too Much: Size Assessment
Schedules
 Effort
 Elapsed time
Technology
 Interfaces to other systems
 Interfaces to other technologies
 Bomb-proofing requirements
 Extent of functionality
 Volume of transactions
 Number of vendors
Organization
 Team size
 Number of sites
 Number of organization units
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5. Technology Complexity
Also Disguised As…
 Multiple mixed e-business tools
 Unstable development environment
 High Performance, Reliability or Scalability
Requirements
Leading Practices
 Pilot solutions.
 Use technical experts. Leverage the knowledge of
others.
 Limit the “newness” of the solution
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Technology Complexity: Define Development
Approach
Ensure that all pieces of the solution will fit together by the end
of the project and improve communication of both the problem
and the proposed solution with:
Modular design:
Top down
architectures:
• Hierarchical Structure
• Defined interfaces
• Logical data structure
• Reusable objects
• Application
• Data
• Technology
Walkthroughs:
Technical
review
group
Documentation:
• Analysis
• Design
• Programming
• Testing
• Use Cases
• Prototypes
• Models
• Specifications
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6. Not having the right skills.
Also Disguised As…
 The team is working overtime and stressed.
 The project estimate was wrong.
Leading Practices
 Find experts in each solution domain: infrastructure,
new media, development, business area, etc.
 Procure experts externally, if not available internally.
 Triangulate estimates.
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Acquiring the Right Skills: Staffing Considerations
Project team productivity will be impacted by:
Experience of:
Dedicated
assignment of:
 Project manager on
similar projects
 Project manager
 Team members working
together
 User and technical
staff
 Team with the application
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Team
Location
7. Demanding business timing. Unrealistic deadlines.
Also Disguised As…
 We will miss the market opportunity if we do not
implement by…
Leading Practices
 Manage expectations. Procure experts who have done
it before.
 Consider the implementation approach. Deploy
solutions iteratively to minimize technology and
business change.
 Assess implementation readiness to articulate the
downside risk.
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Demanding business timing: Implementation
Approach
The selected implementation strategy needs to be understood by
all management and staff in terms of rationale, benefits, and
consequences.
Strategies can include:
Big Bang
Incremental or phased Quick and dirty
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8. Aggressive business change.
Also Disguised As…
 We want to eliminate our paper billing system with a
“wireless internet CRM system”
Leading Practices
 Deploy solutions iteratively to minimize technology and
business change.
 Implement Communications & Training programs.
 Pilot solutions and business processes.
 Prepare contingency plans.
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Managing business change.
Recognize that technology will impact the integration of people /
organization, business process and business strategy.
People
Process Technology
Business Strategy
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10. Pitiful project management
Also Disguised As…
 Cost overrun, Schedule overrun, scope reduction, ...
Leading Practices
 Use PM best practices.
 Manage “up”.
 Focus on risk management.
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Project Management Risk Factors
Ability to plan, estimate, schedule, perform to overall
plan, and the quality of the final system, will be directly
related to use of:
 System implementation / development methodology
 Scope control approach
 Issue resolution approach
 Quality management strategy
 Knowledge coordination approach
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Risk Management
1. Recognize the risks
2. Utilize risk management techniques
 Optimize project structure
 Plan and control project
 Engage users
 Perform technical reviews
 Conduct risk abatement
 Conduct external risk reviews
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Project Functional Organization
Internal Audit
Security
Sponsor
Enterprise
IT Planning
Steering
Committee
Enterprise
Data Management
Project
Manager
Project
Administration
Quality
Assurance
Technical
Coordination
Business
Coordination
Operating
Users
User
Administration
System
Data
Development Management
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Technical
Services
Operations Production
Services
Services
Risk Management
Utilize Risk Abatement Strategies
Limit project
size /duration
Limit innovations
 Avoid “the bleeding edge”
 Match technology literacy
 Control rate of change
 Phase delivery
 Implement 80% solutions
Reward
Constrain
design options
Success
 Avoid the “perfect” solution
 Recognize unknowns and
futures
Establish
training programs
 Develop standards/guidelines
 Deliver training
 Provide support
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