Chapter 1

1-1
IT and Modern Day Project Management

1940s
First
Electronic
Computer

1950s

1960s

EDP
Era

1970s

1980s

PC
Era

Copyri...
Introduction






Information Technology (IT) projects are organizational investments that require
 Time
 Money
 An...
An ITPM Approach
Organizational resources are limited, so
organizations must choose among competing
interests to fund spec...
Modern Project Management
Often credited to the U.S. Navy as an outgrowth of
the Polaris Missile Project in the 1950’s.
 ...
Which Situation is Worse?
Successfully building and implementing a system that
provides little or no value to the organiza...
Why Do IT Projects Fail?
Larger projects have the lowest success rate and
appear to be more risky than medium and smaller
...
The Software Crisis


The CHAOS study published in 1995 by The Standish
Group found that although the U.S spent over $250...
Has the Current State of IT Projects Changed
Since 1994?
The Standish Group has continued to study IT
projects over the ye...
Figure 1.1 - Summary of the Chaos Studies from 1994 to 2008
Sucessful

Challenged

32%

2008

44%

35%

2006

1998

27%

1...
Table 1.1 Summary of CHAOS Study Factor Rankings for Successful Projects
Sources: Adapted from the Standish Group. CHAOS (...
Table 1.2: IT Project Success Criteria
Source: Source: http://www.drdobbs.com/architecture-and-design/202800777.

Criteria...
Table 1.3: Summary of Factor Rankings for Challenged and Failed (Impaired) Projects
Source: Adapted from the Standish Grou...
Tata Consultancy Services 2007 Report


Included 800 senior IT managers from the UK, US,
France, Germany, India, Japan, &...
Figure 1.2 - When IT projects have gone wrong, what has
been the reaction from the business managers and the
Board of Dire...
Improving the likelihood of success








A Value-Driven Approach
 Plain & Simple: IT Projects must provide value t...
The PMBOK® Guide’s Definitions for Project and
Project Management
A project is a temporary endeavor undertaken to create a...
The Context of Project Management – Project
Attributes













Time Frame
Purpose (to provide value!)
Owners...
The Triple Constraint

Figure 1.3

Copyright 2012 John Wiley & Sons, Inc.

1-19
Extreme Project Management (XPM)






A new approach & philosophy to project management that is becoming
increasingl...
The Project Management Body of Knowledge
(PMBOK®)







The Guide to the Project Management Body of Knowledge (PMBOK®...
Project Management Body of Knowledge Areas

Figure 1.8
Copyright 2012 John Wiley & Sons, Inc.

1-22
Project Life Cycle


Evaluate Project
 Lessons learned to determine those things to do the
same and those things to chan...
Systems Development Life Cycle (SDLC)
Planning
 Identifying and responding to a problem or opportunity
 Incorporates the...
Systems Development Life Cycle (SDLC)
Design
 The project team uses the requirements and “to be” logical
models to design...
Systems Development Life Cycle
Planning

Maintenance &
Support

Implementation

Analysis

Design
An IT Project Methodology

Copyright 2012 John Wiley & Sons, Inc.

2-27
Phases
Phase 1: Conceptualize and Initialize
 Phase 2: Develop the Project Charter and Detailed Project
Plan defined in t...
Phases continued
Phase 3: Execute and Control the Project using
approach such as the SDLC.
 Phase 4: Close Project
 Phas...
IT Project Management Foundation



Project Management
Processes



Project Objectives

 Initiating processes
 Plannin...
IT Project Management Foundation
Tools - e.g. Microsoft Project ®, Computer Aided Software
Engineering (CASE)
 Infrastruc...
Nonnumeric Selection Methods
 The “Sacred Cow”- a pet project advocated by a senior

executive of the firm.
 The operati...
The Q-Sort Method

Copyright 2011 John Wiley & Sons, Inc.
1-33
Numeric Selection Methods
 Financial assessment methods
• payback period
• discounted cash flow
• future opportunity anal...
Payback Period

Initial
Annual

Fixed

Investment

Net Cash Inflows

Copyright 2011 John Wiley & Sons, Inc.
1-35
The Life Cycle of Projects


All organisms have a life cycle (i.e., they are
born, grow, wane, and die) … and so do proje...
The Project Life Cycle

Figure 1-3

1-37
Time Distribution of Project Effort

Figure 1-4

1-38
Another Possible Project Life Cycle

Figure 1-5

1-39
Modern Project Management
Often credited to the U.S. Navy as an outgrowth of
the Polaris Missile Project in the 1950’s.
 ...
Which Situation is Worse?
Successfully building and implementing a system that
provides little or no value to the organiza...
Uncertainties Encountered in Project Management.








Time required to complete a project
Availability and cost o...
Can Uncertainty be Eliminated?


No … uncertainty cannot be eliminated.
However, if managed properly, it can be
minimized...
Risk Analysis


Estimate probabilities or distributions associated with key
parameters
 Construct a mathematical model o...
Risk Analysis with Crystal Ball

 Assumption Cells
 Distribution Gallery
 Forecast Cells

Copyright 2011 John Wiley & S...
Steps in the Project Portfolio
Process



Establish a project council
Identify project categories and criteria
 Collect...
Categories of Projects
Derivative projects … those that are only incrementally
different from existing offerings
 Platfor...
Copyright 2012 John Wiley & Sons, Inc.
All rights reserved. Reproduction or translation of this work beyond
that permitted...
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Software project management

  1. 1. Chapter 1 1-1
  2. 2. IT and Modern Day Project Management 1940s First Electronic Computer 1950s 1960s EDP Era 1970s 1980s PC Era Copyright 2012 John Wiley & Sons, Inc. 1990s 2000s Network Era 2010s Globalization 1-2
  3. 3. Introduction    Information Technology (IT) projects are organizational investments that require  Time  Money  And other resources such as people, technology, facilities, etc. Organizations expect some type of value in return for this investment IT Project Management is a relatively new discipline that attempts to make IT projects more successful andcombines traditional Project Management with Software Engineering/Management Information Systems Copyright 2012 John Wiley & Sons, Inc. 1-3
  4. 4. An ITPM Approach Organizational resources are limited, so organizations must choose among competing interests to fund specific projects  This decision should be based on the value a competing project will provide to an organization  Copyright 2012 John Wiley & Sons, Inc. 1-4
  5. 5. Modern Project Management Often credited to the U.S. Navy as an outgrowth of the Polaris Missile Project in the 1950’s.  Focuses on reducing costs and product cycle time.  Provides an important link between an organization’s strategy and the deployment of that strategy.  Can have a direct impact on an organization’s bottom line and competitiveness.  Copyright 2012 John Wiley & Sons, Inc. 1-5
  6. 6. Which Situation is Worse? Successfully building and implementing a system that provides little or no value to the organization? Or…  Failing to implement an information system that could have provided value to the organization, but was underdeveloped or poorly managed?  Copyright 2012 John Wiley & Sons, Inc. 1-6
  7. 7. Why Do IT Projects Fail? Larger projects have the lowest success rate and appear to be more risky than medium and smaller projects  Technology, business models, and markets change too rapidly so projects that take more than a year can be obsolete before they are completed  The CHAOS studies also provides some insight as to the factors that influence project success  Copyright 2012 John Wiley & Sons, Inc. 1-7
  8. 8. The Software Crisis  The CHAOS study published in 1995 by The Standish Group found that although the U.S spent over $250 billion on IT projects, approximately…  31% were cancelled before completion  53% were completed but over budget, over schedule, & did not meet original specifications ○ For mid-size companies, average cost overruns were 182%, while average schedule overruns were 202%! Copyright 2012 John Wiley & Sons, Inc. 1-8
  9. 9. Has the Current State of IT Projects Changed Since 1994? The Standish Group has continued to study IT projects over the years.  In general, IT Projects are showing higher success rates due to       Better project management tools & processes Smaller projects Improved communication among stakeholders More skillful IT project managers But there is still ample opportunity for improvement! Copyright 2012 John Wiley & Sons, Inc. 1-9
  10. 10. Figure 1.1 - Summary of the Chaos Studies from 1994 to 2008 Sucessful Challenged 32% 2008 44% 35% 2006 1998 27% 1994 16% 15% 49% 26% 1996 18% 51% 28% 2000 19% 53% 34% 2002 24% 46% 29% 2004 Failed 23% 46% 33% 53% Copyright 2012 John Wiley & Sons, Inc. 28% 40% 31% 1-10
  11. 11. Table 1.1 Summary of CHAOS Study Factor Rankings for Successful Projects Sources: Adapted from the Standish Group. CHAOS (West Yarmouth, MA: 1995, 2010) & http://www.infoq.com/articles/Interview-Johnson-Standish-CHAOS 2008 Rank 1994 2001 2006 1 User Involvement Executive Support User Involvement Copyright 2012 John Wiley & Sons, Inc. User Involvement 1-11
  12. 12. Table 1.2: IT Project Success Criteria Source: Source: http://www.drdobbs.com/architecture-and-design/202800777. Criteria Response Schedule 61.3% said it is more important to deliver a system when it is ready to be shipped than to deliver it on time. Scope 87.3% said that meeting the actual needs of stakeholders is more important than building the system to specification. Money 79.6% said that providing the best return on investment (ROI) is more important than delivering a system under budget. Quality 87.3% said that delivering high quality is more important than delivering on time and on budget. Staff 75.8% said that having a mentally and physically healthy workplace is more important than delivering on time and on budget. Copyright 2012 John Wiley & Sons, Inc. 1-12
  13. 13. Table 1.3: Summary of Factor Rankings for Challenged and Failed (Impaired) Projects Source: Adapted from the Standish Group. CHAOS (West Yarmouth, MA: 1995) Rank Factors for Challenged Projects Factors for Failed (Impaired) Projects 1 Lack of user input Incomplete requirements 2 Incomplete requirements Lack of user involvement 3 Changing requirements & specifications Lack of resources 4 Lack of executive support Unrealistic expectations 5 Technology incompetence Lack of executive support 6 Lack of resources Changing requirements & specifications 7 Unrealistic expectations Lack of planning 8 Unclear objectives Didn’t need it any longer 9 Unrealistic time frames Lack of IT management 10 New technology Technology illiteracy Copyright 2012 John Wiley & Sons, Inc. 1-13
  14. 14. Tata Consultancy Services 2007 Report  Included 800 senior IT managers from the UK, US, France, Germany, India, Japan, & Singapore:  62% of the IT projects failed to meet their schedules  49% experienced budget overruns  47% experienced higher-than expected maintenance costs  41% failed to deliver the expected business value and ROI Copyright 2012 John Wiley & Sons, Inc. 1-14
  15. 15. Figure 1.2 - When IT projects have gone wrong, what has been the reaction from the business managers and the Board of Directors? Don't know None Looked for a scapegoat among IT… Sought compensation from IT… 1% 2% 9% 13% Reluctant to fund new IT projects Reduced IT budgets Tend to accept problems as the… Continued to provide support to… Copyright 2012 John Wiley & Sons, Inc. 19% 21% 43% 69% 1-15
  16. 16. Improving the likelihood of success     A Value-Driven Approach  Plain & Simple: IT Projects must provide value to the organization Socio-technical Approach  It’s not just about the technology or building a better mouse trap Project Management Approach  processes and infrastructure (Methodology)  resources  expectations  competition  efficiency and effectiveness Knowledge Management Approach  lessons learned, best practices & shared knowledge Copyright 2012 John Wiley & Sons, Inc. 1-16
  17. 17. The PMBOK® Guide’s Definitions for Project and Project Management A project is a temporary endeavor undertaken to create a unique product, service, or result.  Project management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements.  A project manager is the person assigned by the performing organization to achieve the project objectives.  Copyright 2012 John Wiley & Sons, Inc. 1-17
  18. 18. The Context of Project Management – Project Attributes          Time Frame Purpose (to provide value!) Ownership Resources (the triple constraint) Roles  Project Manager  Project Sponsor  SME (domain & technical) Risk & Assumptions Interdependent Tasks  progressive elaboration – steps & increments Planned Organizational Change Operate in Environments Larger than the Project Itself Copyright 2012 John Wiley & Sons, Inc. 1-18
  19. 19. The Triple Constraint Figure 1.3 Copyright 2012 John Wiley & Sons, Inc. 1-19
  20. 20. Extreme Project Management (XPM)      A new approach & philosophy to project management that is becoming increasingly popular Characterizes many of today’s projects that exemplify speed, uncertainty, changing requirements, and high risks Traditional project management often takes an orderly approach while, XPM embraces the fact that projects are often chaotic and unpredictable XPM focuses on flexibility, adaptability, and innovation Traditional and new approaches together can provide us with a better understanding of how to improve the likelihood of project success Copyright 2012 John Wiley & Sons, Inc. 1-20
  21. 21. The Project Management Body of Knowledge (PMBOK®)     The Guide to the Project Management Body of Knowledge (PMBOK® Guide) documents 9 project management knowledge areas The PMBOK® Guide is published and maintained by the Project Management Institute (PMI)  http://www.pmi.org PMI provides a certification in project management called the Project Management Professional (PMP) that many people today believe will be as relevant as a CPA certification PMP certification requires that you pass a PMP certification exam to demonstrate a level of understanding about project management, as well as satisfy education & experience requirements and agree to a professional code of conduct Copyright 2012 John Wiley & Sons, Inc. 1-21
  22. 22. Project Management Body of Knowledge Areas Figure 1.8 Copyright 2012 John Wiley & Sons, Inc. 1-22
  23. 23. Project Life Cycle  Evaluate Project  Lessons learned to determine those things to do the same and those things to change  Evaluate team member performance  May be audited by an outside third party
  24. 24. Systems Development Life Cycle (SDLC) Planning  Identifying and responding to a problem or opportunity  Incorporates the project management and system development processes and activities  Ensures that the goal, scope, budget, schedule, technology, and system development processes, methods, and tools are in place  Analysis  A closer look at the problem or opportunity  Documents the specific needs and requirements for the new system 
  25. 25. Systems Development Life Cycle (SDLC) Design  The project team uses the requirements and “to be” logical models to design the architecture to support the new information system  This includes designing the network, hardware configuration, databases, user interface, and application programs  Implementation  The development or construction of the system, testing, and installation  Training, support, and documentation must also be in place.  Maintenance and Support  The system is updated to respond to bugs, new features, or to adjust to a changing business environment. 
  26. 26. Systems Development Life Cycle Planning Maintenance & Support Implementation Analysis Design
  27. 27. An IT Project Methodology Copyright 2012 John Wiley & Sons, Inc. 2-27
  28. 28. Phases Phase 1: Conceptualize and Initialize  Phase 2: Develop the Project Charter and Detailed Project Plan defined in terms of project’s:  scope  schedule  budget  quality objectives  2-28 Copyright 2012 John Wiley & Sons, Inc.
  29. 29. Phases continued Phase 3: Execute and Control the Project using approach such as the SDLC.  Phase 4: Close Project  Phase 5: Evaluate Project Success   Post mortem by project manager and team of entire project  Evaluation of team members by project manager  Outside evaluation of project, project leader, and team members  Evaluate project’s organizational value 2-29 Copyright 2012 John Wiley & Sons, Inc.
  30. 30. IT Project Management Foundation  Project Management Processes  Project Objectives  Initiating processes  Planning processes  Executing processes  Controlling processes  Closing processes Copyright 2012 John Wiley & Sons, Inc. 2-30
  31. 31. IT Project Management Foundation Tools - e.g. Microsoft Project ®, Computer Aided Software Engineering (CASE)  Infrastructure   Organizational Infrastructure  Project Infrastructure ○ Project Environment ○ Roles and Responsibilities of team members ○ Processes and Controls  Technical Infrastructure  Project Management Knowledge Areas
  32. 32. Nonnumeric Selection Methods  The “Sacred Cow”- a pet project advocated by a senior executive of the firm.  The operating/competitive necessity  Comparative benefits Copyright 2011 John Wiley & Sons, Inc. 1-32
  33. 33. The Q-Sort Method Copyright 2011 John Wiley & Sons, Inc. 1-33
  34. 34. Numeric Selection Methods  Financial assessment methods • payback period • discounted cash flow • future opportunity analysis  Scoring methods • unweighted 0-1 factor method • weighted factor scoring method Copyright 2011 John Wiley & Sons, Inc. 1-34
  35. 35. Payback Period Initial Annual Fixed Investment Net Cash Inflows Copyright 2011 John Wiley & Sons, Inc. 1-35
  36. 36. The Life Cycle of Projects  All organisms have a life cycle (i.e., they are born, grow, wane, and die) … and so do projects  Some projects follow an S-shaped curve … they start slowly, develop momentum, and then finish slowly  Other project follow a J-shaped curve … they start slowly , proceed slowly, and then finish rapidly Copyright 2011 John Wiley & Sons, Inc. 1-36
  37. 37. The Project Life Cycle Figure 1-3 1-37
  38. 38. Time Distribution of Project Effort Figure 1-4 1-38
  39. 39. Another Possible Project Life Cycle Figure 1-5 1-39
  40. 40. Modern Project Management Often credited to the U.S. Navy as an outgrowth of the Polaris Missile Project in the 1950’s.  Focuses on reducing costs and product cycle time.  Provides an important link between an organization’s strategy and the deployment of that strategy.  Can have a direct impact on an organization’s bottom line and competitiveness.  Copyright 2012 John Wiley & Sons, Inc. 1-40
  41. 41. Which Situation is Worse? Successfully building and implementing a system that provides little or no value to the organization? Or…  Failing to implement an information system that could have provided value to the organization, but was underdeveloped or poorly managed?  Copyright 2012 John Wiley & Sons, Inc. 1-41
  42. 42. Uncertainties Encountered in Project Management.       Time required to complete a project Availability and cost of key resources Timing of solutions to technological problems Macroeconomic variables The whims of clients Actions taken by competitors Copyright 2011 John Wiley & Sons, Inc. 1-42
  43. 43. Can Uncertainty be Eliminated?  No … uncertainty cannot be eliminated. However, if managed properly, it can be minimized Copyright 2011 John Wiley & Sons, Inc. 1-43
  44. 44. Risk Analysis  Estimate probabilities or distributions associated with key parameters  Construct a mathematical model of the situation and run a simulation ... given various scenarios  Analyze distribution of outcomes generated by model Copyright 2011 John Wiley & Sons, Inc. 1-44
  45. 45. Risk Analysis with Crystal Ball  Assumption Cells  Distribution Gallery  Forecast Cells Copyright 2011 John Wiley & Sons, Inc. 1-45
  46. 46. Steps in the Project Portfolio Process   Establish a project council Identify project categories and criteria  Collect project data  Assess resource availability  Reduce the project and criteria set  Prioritize the projects within categories  Select the projects to be funded and those to be held in reserve  Implement the process Copyright 2011 John Wiley & Sons, Inc. 1-46
  47. 47. Categories of Projects Derivative projects … those that are only incrementally different from existing offerings  Platform projects … major departures from existing offerings … the next generation  Breakthrough projects … involving a newer technology … possibly a “disruptive” technology  R&D projects … “blue sky” or visionary endeavors  Copyright 2011 John Wiley & Sons, Inc. 1-47
  48. 48. Copyright 2012 John Wiley & Sons, Inc. All rights reserved. Reproduction or translation of this work beyond that permitted in section 117 of the 1976 United States Copyright Act without express permission of the copyright owner is unlawful. Request for further information should be addressed to the Permissions Department, John Wiley & Sons, Inc. The purchaser may make back-up copies for his/her own use only and not for distribution or resale. The Publisher assumes no responsibility for errors, omissions, or damages caused by the use of these programs or from the use of the information herein. Copyright 2012 John Wiley & Sons, Inc. 1-48
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