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Value-Driven Project Leadership (VDPL) Panel Presentation C-SPIN Meeting, February 3, 2005 Moderated by: Gezinus Hidding Associate Professor Loyola University Chicago [email protected] 312-915-7059 Objectives of This Presentation Offer: A New Way of Thinking About Project Management Focused on Medium-sized IT Projects Background Overview Real-life Experiences Enable You To: Reduce Project Failures Our Request Brief Presentations - Then Discussion Presented Concepts Are Interrelated Let Us Paint Whole Picture First Request: Please Hold Questions for Q/A Please Fill Out Survey (Green Forms) Return to Panel Moderator Background: Why VDPL? High I.T. Project Failure Rates (for Decades) Standish Group - Chaos 2002 23% of Projects Fail Altogether 49% of Projects Over Budget, and/or Late 28% of Projects Succeed Department of Defense Software Projects 29% - Paid for, but not delivered 46% - Delivered, but not successfully used 20% - Used, but extensively reworked or abandoned 3% - Used after changes 2% - Used as delivered KPMG study 62% of IT projects overran budget by more than 30% Background: Single-loop v. Double-loop Learning* Single-loop Learning Improve Towards Same Objective(s) Focus of Traditional Budget Project Management: Schedule Double-loop Learning Improve by Modifying Objective(s) Business Value Added Focus of VDPL: People-to-People Relations Architecture VDPL = New Way Of Thinking! * Chris Argyris “On Organizational Learning”, Blackwell Publishing, Cambridge, MA 1994. Overview: What Are VDPL’s Key Aspects? Traditional Project Management Necessary, but Not Sufficient VDPL Emphasizes: Value Focus on Adding Business Value, Not Activities Leadership Manage More People Relationships, Less Activities Architecture Structure Project Plan from Structure of the System Real-life Experiences: Who Is Involved? Today’s Panel Presenters: Gezinus Hidding - Founder, Moderator Mark Bills - Value Bob McMurray - Leadership Paul Tedesco - Architecture Previous C-SPIN presenter An Additional 14 Seasoned Professionals Including Scott Stribrny: C-SPIN leader Total of “Centuries of Experience” ;-) Panel Members’ Contact Info Mark Bills CEO Darwin Corporation [email protected] Bob McMurray Chief Technology Officer, 3 Olive Solutions, LLC [email protected] Paul A. Tedesco President, Tedesco & Associates Author of “Intrapreneurial Project Management” [email protected] (312) 560-7806 Value-Driven Project Leadership (VDPL) Value is the Best Project Metric Presented by: Mark Bills CEO Darwin Corporation [email protected] 312.371.0308 Companies Undertake Projects to Create Value Focus on Value Creation From Beginning to End Project Selection Project Management Project Review Value is the Best Metric for Selecting Among Investment Alternatives Value is the Best Metric for Making Management Decisions Along the Way Value is the Best Metric for Determining & Demonstrating Project Success Copyright © 2005, Darwin Corporation. All rights reserved. Financial Model Can Be Used to Make Trade-Offs Along the Way • Lose $300K in value for each month that the rollout is delayed. Financial Model of Project Rules of Thumb Q: Add 15 contract programmers at a total cost of $450K and maintain schedule or slip schedule by 3 months? • Lose $100K in value for each percent of cost overrun. • Gain $250K in value for each percent of additional revenue. A: Add programmers. Cost: $450K Benefit: Additional $900K in revenue Back Financial Model Can Be Used to Make Trade-Offs Along the Way • Lose $300K in value for each month that the rollout is delayed. Financial Model of Project Rules of Thumb Q: Add feature that will increase revenue 1% but increase cost by 1% and delay rollout by 1 month? • Lose $100K in value for each percent of cost overrun. • Gain $250K in value for each percent of additional revenue. A: Do not add feature. Cost: $100K (overrun) + $300K (delay) = $400K Benefit: $250K in additional revenue Back Value-Driven Project Leadership (VDPL) Leadership Presented by: Bob McMurray Chief Technology Offier 3 Olive Solutions, LLC [email protected] Leadership – Apply it every day Parachute Metaphor Imagine…you’re in a new setting Seeing things from a different perspective is the equivalent to “parachuting in” Continually assess your situation Project leadership - your set of tools you have as you “parachute in” Finding common ground Integrity Warm, human approach to relationships Courage Inspiration to others Copyright © 2005, 3 Olive Solutions, All rights reserved. Leadership – Vignettes from my experience Key Business Partner is not following your process Internal customer over-promised and is now requesting impossible functionality in an impossible time frame Lead Development effort for start up Software Product (Software as a Service model) Balance Marketing driven needs with Development capability and desire for elegance within intense time and cost constraints Customer needs service Need never goes away – this is a good thing be happy Copyright © 2005, 3 Olive Solutions, All rights reserved. Leadership – Finding Common Ground Experience: Key Business Partner is not following your process Automating Sales Programs – Requests came from Sales and Marketing Hard Due Dates promised to (external) customer without input from IT Convoluted designs of Sales Programs Requests come to IT way too late Copyright © 2005, 3 Olive Solutions, All rights reserved. Leadership – Finding Common Ground Common Ground There’s always something in common Made commitment to not saying ‘No’ to scope but, instead, ‘No’ to bad process I say “When” you say “What” – use business language Be able to estimate with integrity and meet the new commitment Be patient – be appreciative of their efforts Post script Later on, after a few successes, the business asked for design guidelines! Copyright © 2005, 3 Olive Solutions, All rights reserved. Leadership – VDPL Principles Focus on Person-to-Person Relationships Build Agreement along the way Utilize your Imagination Find common ground to resolve conflict See others’ perspective Anticipate issues/problems Plan contingencies from the beginning Prepare organization for change Copyright © 2005, 3 Olive Solutions, All rights reserved. Value-Driven Project Leadership (VDPL) Why Architecture? Presented by: Paul Tedesco President Tedesco & Associates [email protected] (312) 560-7806 The 20/80 Rule With a Proper Architecture: 20% of the Code Produces Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. 80% of the Requirements This is What all Program Do Setup Take Input Data Transform the Data Produce Output Clean up Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. Creating New Opportunities / Unearned Value Business Goals Creation and Negotiation Identified Opportunities Implemented Technology Architecture New Business Value / Unearned Benefit Figure 1-2 Creating New Business Value Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. Business Goals Business Benefits Business Requirements Technical Goals Technical Requirements Tying Business Goals and Technical Requirements to make it work Business Inspiration Driven by Technical Functions Technical Inspiration Driven by Business Functions New Goals Figure 1-3 Combined Business and Technical Functions Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. Business Design Technical Design Business/Technical Negotiation Technical Proof of Concept Technical Problems Debugged Business Functionality Tested Business Technical Alternatives Tested Implementation Plan Training Plan Training and Implementation Continuous and Iterative Designing, Analysis, Testing, and Debugging Start End Month 1 End Month 2 End Month End Month 3 4 End Month 5 End Month 6 Figure 1-4 Combined Business and Technology Tasks Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. Managing Innovation Through Projects Determine Project Requirements Determine Identify Business / Technology Alternatives Determine Project Participants Determine Business Department Personnel Determine Senior Management Involved Determine Customer Benefits Select Immediate Implementation Determine Reuse Determine Critical to Business / Technology Select Best Alternatives Requirements Analysis Design and Implement Determine Benefits to the Business Determine Specification Needs from Phase 2 Alternatives Write the Specifications Determine Benefits of Technology (Architecture) Determine Benefits of each alternative Describe Requirements for Combined Business and Technology (Architecture) Integration of Business and Technology Issues Begin Description of System Parts Determine and Describe Benefits of the Combines Business and Technology Write Use Cases for the Selected Items Determine possible reuse Determine the Potential Problems Determine How to Test Write User Documentation Test the System (all levels) Implement the System Operate the System Figure 1-1 Managing Innovation Through Projects Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. Potential Architectures Matrix Control Project Management and Derivatives Decision Table Processors Chart of Accounts Processors Contract Based Processors Scenario Description Transaction Processors AI Based Proactive Monitoring Processes Full AI Control Processor Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. VDPL - Next Steps Analyze Your Feedback Hand In Survey Before You Leave Approach Other Audiences Executives, Middle Management Develop More Details Appendix Architecture Matrix Control Uses Matrix Input Control n by m n is the set of conditions to be tested m is the actions that need to happen Has an ability to handle most important actions only Input Data Fill specified conditions Output Based upon specified processes Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. Architecture Project Management and Derivatives Use: Control the Manufacture of Large Manufacturing Plants Handles Accounting Transactions Purchasing Transactions Step Completion Information Foretasted Completion Time and Cost Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. Architecture Decision Table Processor Questions (A) Questions the current state of required processing Answers (B) Sets identifiers to select actions based on current state Actions (C) Defines processes that need to occur Required Actions (D) Runs actions based on current state Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. Architecture Chart of Accounts Processor All Accounting is Based Upon the Chart Defines required and valid information for each item Defines required action to take Engine Uses these Rules to Control Processing Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. Architecture Contract Based Processors Uses Legal Contract Clauses to Control Processing Contract clauses direct the required actions Matches type of data to contract clauses Input is Data Needing Processing Output is Results from Processing Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. Architecture Contract Based Processors Uses Legal Contract Clauses to Control Processing Contract clauses direct the required actions Matches type of data to contract clauses Input is Data Needing Processing Output is Results from Processing Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. Architecture Scenario Based Uses Strings of Control Forming a Process Scenario Input Matches a Basic Scenario Actions Controlled validation data manipulation database update Output Side standardized sequenced reports selection of data Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. Architecture Transaction Control There are Sets of Processing Rules Inputs Match a Set of Process Rules The Processor Follows the processing rules validates handles required data manipulation handles specific output Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved. Architecture AI Controlled Processing Uses Heuristic Based AI Control Rules Receives Input Input Triggers Controlled Processing 1)Determines which actions most need to be performed 2)Performs the actions as required 3)Alters its state to repeat process at 1) Alters Rules Based on Feedback (genetic) Alters the importance of each of its rules Alters the rules Copyright © 2005, Tedesco and Associates, Inc.. All rights reserved.