Transcript IS Theory and Practice (EMBA 704)

IT Project Management
Critical success and failure factors in IT
project management: getting IT right
GP Dhillon, PhD
Associate Professor of IS
School of Business, VCU
Standish Group findings
 26% of all software projects fail (There are other
findings that suggest a 70% failure rate!)
 46% of the projects experience cost and schedule
overruns or significantly reduced functionality
 Over the years the project completion rate has
improved because companies have trended towards
smaller, more manageable projects - NOT because
of improved management techniques
Findings from various organizations
Organization
Business
Consensus view of
success/failure
Dunn and Bradstreet Plc
Business information
supplier
Petrochemicals
Power generation/
distribution
Paper based products
supplier
FMCG supplier
Retail banking
Insurance
Healthcare products
Power generation
Shipbuilding &
Engineering
High value pottery
and china
Moderate success
Esso UK Plc
Florida Power and Light
Kimberly Clarke
Kraft General Foods
National Westminster Bank Plc
Norwich Union Plc
Smith and Nephew Plc
PowerGen Plc
Vickers Shipbuilding &
Engineering Plc
Waterford Wedgwood Plc
Success
High success
High success
Moderate success
Unsuccess
Unsuccess
Success
Unsuccess
Unsuccess
Unsuccess
The McGolpin study
High
Success
Understanding of
stakeholder intent,
existence of an
organizational
change method &
willingness to
invest in strategic
benefits - different
Evaluation emphasis
- initiation of the SIS
in the context of the
need for business change
Role of Senior Executive
- allocation of
responsibility
for benefit delivery
- involvement in
implementation as
well as planning/
evaluation
Success
Comprehensive
approach to Benefit
Management initiated
in the planned phase
involving an
understanding of
stakeholder intent
and a strong business
involvement & emphasis
Moderate
Success
Unsuccess
Planned approach
appreciating stakeholder
intent, method, output
and Implementation roles
of IS/IT & Business
Significant factors determining success or
failure - a
Generic
 The degree to which a change methodology had
been adopted and used on projects
 The degree of active involvement of the senior
executive across the lifecycle of the project
 The extent to which the strategic and financial
benefits were measured and evaluated
 The existence of a proper benefits management
process
Significant factors determining success or
failure - b
Contextual factors determining success or failure
 Significant high success factors: Senior IS/IT
manager on board; CEO driven change management
program; A change method used on the project;
willingness to invest in strategic benefits
 The difference between a highly successful and a
successful project resides in the contextual factors
identified above
Significant factors determining success or
failure - c
Significant patterns and relationships determining success
 Combination of a planning approach and benefits
management were significant factors in determining
success - but not if done independently
 Combination that appears to be lest significant: evaluation
and implementation; evaluate and benefits management;
planning and context; evaluation and context;
implementation and context.
Overall conclusions - a
 Context is particularly important in explaining the
difference between ‘high success’ projects and ‘success’
projects. Planning and evaluation also appear to be
significant in explaining the difference between ‘high
success’ and ‘success’
 Benefits management is the most important phase which
explains the difference between ‘success’ projects and
‘moderate success’ projects
 Planning and implementation are the most important
phases in explaining the difference between ‘moderate
success’ projects and ‘unsuccess’ projects
Overall conclusions - b
 Significant factors related to ‘unsuccess’ projects
– The lifecycle role of the senior executive (low)
– The implementation role of the business (ill defined)
– The implementation role of IS/IT (ultimate accountability
and responsibility should not be with the IS/IT function)
– The planning approach (lack of a business led approach
– The planning method (predominance of IS/IT function)
Overall conclusions - c
 Significant factors related to ‘moderate success’
projects
– The life cycle role of senior executive
– The benefits management process
– The benefit plans
Overall conclusions - d
 Significant factors related to ‘success’ projects
– The organizational change method
– The strategic benefits (understanding the potential of
IS/IT)
– The evaluation emphasis (understanding of the financial
benefits)
– The evaluation stage (examination of the merits of the
business case)
Organizational IT impacts
IT Project management – getting it right
Business
improvement
needed
Benefits
Management
IT enabled
improvement
Positive
outcomes
Business
change
Risk
Management
Negative
outcomes
IS Project management is … managing episodes
along the change curve
+
Perceptions
or
Performance
High
expectation/Denial
Better than before
Blame others
Minor improvement
Blame self
Despair/Frustration
_
Launch of
an initiative
Time
Positive
Negative
Effect of outcome
Outcomes of IS investment
Identify, exploit &
learn from
Achieve by good
management
Opportunity
realization “bonus”
Investment
justification
Nasty surprises
Price worth paying
Understand &
avoid
Recognize &
minimize
Unexpected
Expected
Predictability of outcome
Positive
Negative
Effect of outcome
Objectives in getting value
Achieve by good
management
Identify,
exploit &
learn from
Recognize &
minimize
Understand &
avoid
Unexpected
Expected
Predictability of outcome
How...
Achieve by good
management
Benefits
Management
Cost
Management
Risk Management
Benefits management – the fried egg
analogy
IT System
Few benefits
on its own
IT responsibility
Training
Business
change
Some benefits
Most benefits
IT & Business
responsibility
Business
responsibility
Dimensions of benefits management
Planning & effecting business changes
Why do
we want
improvements?
What
improvements
do we want /
could we get?
Where will
they occur?
Measurement and evaluation
How can we
measure them?
Can we
quantify them?
What is the
financial
value?
Who is
responsible
for their
delivery?
What changes
are needed to
obtain them?
Who will be
affected by
the changes?
Benefits realization plan
How & when
can changes
be made?
Have we achieved the benefits?
if not - why not - further actions?
What further benefits can we now get?
Change
The relationship between these
change initiatives and process
changes is critical
Affinity
Initiatives
Parallel
Initiatives
Support
Initiatives
Inhibitor
Initiatives
Risk types
Outcome risks
Operational risks
Process risks
Risk management: classification
Strategic
High Potential
Inherent risks
Outcome: high
Operational: low
Process: low
What risk?
Planning needed
Outcome: low
Operational: high
Process: medium
Outcome: low
Operational: low
Process: high
Can be assessed
Key
Operational
and predicted
Support
Typical concerns
Strategic
High Potential
Outcome
risks
Opportunity &
financial
risks?
Operational
risks
Process
based risks
Key
Operational
Support
Lack of strategic framework: poor business
understanding
Conflicts of strategy and problems of coordination
IT supplier problems
Poor management of change
Senior management not involved
Large and complex projects; too many stakeholders
Rigid methodology and strict budgetary controls
Too much faith in the ‘technical fix’
Use of technology for its novelty value
Poor technical skills in the development team
Inexperienced staff
Large and complex projects; too many stakeholders
Poor testing procedures
Poor implementation
Lack of technical standards
Generic CSFs for different applications
Strategic
High Potential
Time
R & D projects
Quality
Cost
Time
Quality
Cost
Key Operational
Time
Quality
Cost
Support
Risk management: core strategies
Strategic
High Potential
CONFIGURE
COMMUNICATE
CONTROL
CONSTRAIN
Key Operational
Support
High Potential
Business and
corporate risks
Opportunity &
financial
risks
Operational
risks
Process
based risks
Key Operational
Support
Uncontrollable
Strategic
Controllable
Risk management: directions - 1
Predictable
Unpredictable
No problem carry out plans
Practice quick
response to
manage as
events unfold
Emphasis
forecasting
and thus
“steer around”
these events
Develop a
contingency
planning system
Risk management: directions -2
History
Strategic
High Potential
Business and
corporate risks
Opportunity &
financial
risks
Context
(external)
Risk
Outcomes
Context
(internal)
Operational
risks
Process
based risks
Key Operational
Support
Content
Business
processes
Context oriented risk assessment