Chapter 1: Introduction

It seems that organizations in the United States have become consumed with projects. More and more individuals work as members of task forces, special teams or project teams. Information systems organizations are consumed with this new focus on projects as are many other parts of corporate America. Peter Drucker wrote in his article "The Coming of the New Organization" [1] that by the year 2000 most organizations will be project focused. It has happened. Yet many of us do not know how to run projects effectively.

It is not for a lack of trying. Often we try to find the easy way to get into project management. We believe that learning a new project management software package is all there is to it. An anonymous article in the PM Network magazine in October, 1993 estimates that "Over the next two years, at least a couple of million people...will be introduced to project management software." [2] Millions are introduced each year to this powerful tool. Yet often we do not even understand the difference between routine work and project work.

Most of us are familiar with routine work - we do it all the time. Routine work is the way we get most of our day-to-day business transacted. Routine work is much of what we do; maintenance of current information systems, for example, takes up 80% of the effort of many organizations.

Much of routine work is preplanned and organized according to a specific routine. We do the work again, and again, and again. Routine work usually goes fairly smoothly and unanticipated costs are rare. It is usually managed by a set of functional managers in the organization who administer specific business functions, products or staff responsibilities. Projects, on the other hand, are different enough to demand a unique type of management.

Routine work goes through cycles repeatedly. If you do not do it correctly today, you can try to improve the way you do it tomorrow. With projects, however, there is only one cycle - you only get one try at it, so you need to do it right the first time.

Routine work tends to get comfortable after awhile. Project work does not. Project work requires people who are willing to plan hard, work hard, recognize their mistakes quickly, and correct them. Project managers must have a clear understanding of the project goal, and then move the project team continuously towards that goal.

Project Risk Management

Failure to recognize a project as a unique piece of work that must be managed using project management techniques is one reason that projects fail to meet their objectives. Another reason for failure is not recognizing what creates the most risk for a project. Projects can be at risk for many reasons: high cost, failure to give a good return on investment, the use of new technologies, or poor definition of objectives by the client.

The challenge to the project manager is to identify the variables that can cause the project to fail. By recognizing which variables are creating the risk, the project manager can plan for ways to limit that risk. The most important risk variables for a systems development project are project size, technology, and structure.

These variables can cause a project to cost more than it should, not be completed on time, or not meet objectives. Consultants estimate that as many as 60% of all systems projects fail in one way or another. Government organizations, utilities and major corporations have all had projects which cost millions more than originally planned, time schedules which stretch into years rather than the months promised, and systems which are not used because they do not meet the needs of the clients. Smaller businesses have gone bankrupt because systems cost much more than anticipated.

Of the variables listed, the one which creates the most risk to a project is technology. When projects are undertaken using technology with which the project team is unfamiliar, the risk goes up significantly.

Under certain conditions, a project is almost certain to fail. Failure can be avoided if the people in charge of the project recognize the risks and plan how to manage those risks.

If the risk comes from the use of new technology, project mangers need to recognize that risk and plan for it. Training of project team members in the new technology, reliance on expert consultants, and planning for the delays inherent in the implementation of new technology can all help reduce the risk to the project.

Of course, it also helps to have people managing projects who have learned how to manage risk.

Project Success Factors

It takes special expertise to run a project. Many things impact the probability of success in a project. The project manager must have the necessary training and expertise in order to manage these different major project success factors.

Scope

One key factor is scope management The project manager must be able to define the boundaries of the project as well as the boundaries of assignments, responsibilities, contracts and missions. This definition of scope begins with a carefully considered statement of the goal and objectives of the project. If you do not know exactly what you are doing, it is easy to end up doing something else!

Once a clear definition of scope has been developed the project manger must manage the project within that scope. . Careful planning, daily coordination of tasks, and exacting definitions of the work to be done help keep the project under control are required.

Time

Almost all projects take place with a deadline looming in the distance. Systems projects are no different. Time is often one of the most important measurements of success or failure. It is a tool which can help us motivate people to get things done quickly. The use of project tracking tools and the regular updating of plans can help manage the on-rushing flow of time.

Cost

Project management in many Information Systems organizations is charged with bringing the project in on time and within budget. Managing the flow of cash is often as important as managing the flow of time. Proper use of cash flow can optimize the use of resources at the right time in the project.

Quality

Quality has become a cornerstone of project management in the nineties. Standards of quality and the metrics which will be used to measure that quality need to be clearly spelled out at the beginning of a project. There will always be pressure to compromise quality when things get tough during the latest project crisis, and project managers need to find ways to meet the needs of clients without lowering the quality of the product they are building for their client.

Too often, systems project managers have given into the demands of schedule and limited resources. Think about it - what choices do you have when you do not have enough people to develop a system within the demands of an unrealistic schedule? You can pretend that it is possible to bring the project in on schedule, then bring it in late when reality forces you to do so. You can force your team to work overtime. You can chop out parts of the system and save them for "phase 2." Or you can do a sloppy job and have the maintenance programmers fix everything later. As a project manager the choice is yours. It is not an easy one. If you opt to slight the quality of your work, neither you nor your organization may be around long.

People

The key to effective project management is people. There are several different dimensions to managing people. One of these is the behavioral dimension. The project manager must be able to generate enthusiasm and support for the project among the project team members. Team members must be included in the decision making process throughout the life of the project or else they will not feel that they are a part of the team. They must also feel they are contributing something of value to the project.

A second dimension of people management is the administrative side. Part of this is the managing personnel functions such as recruiting, hiring, firing, and in some cases salary and benefits administration. The manager must also come to know the people that are working with him or her. What are their training needs? When are they going to need time off? What are their skills?

Without proper management of the people on a project, none of the other factors matters. A good project manager will spend a lot of time on communication, motivation, and management of the project team.

Communications

Another key to project management is communications. The project manager has to communicate effectively with the three project constituencies - the project team members, the client, and information systems management. This means being able to communicate in both formal and informal situations.

Formal communication is the management of information about and for the project: statement of the goal and objectives, description of the project plan, communication of standards, norms, and procedures, and articulation of project controls and revisions. Formal communications provide the skeleton on which the other factors depend; they also provide the public relations necessary to let all the interested parties know what is going on. Establishing clear information channels with all those parties will keep the information flowing both ways more easily.

Informal or interpersonal communication is the other side of project communication. This means "playing politics"; or maintaining open and warm communications with team members, clients, and management. It means making sure that you are tapped into "the grapevine" so that you know when problems are beginning to fester. It also means you understand the relationships and dynamics between people.

Contracts

As a project manager you will often have to deal with third parties. They may be hardware and software vendors or third party developers. If you do not understand how to deal with these people or are inexact in drawing up the terms of contracts, your project may flounder. Since many organizations are now using outside vendors for more than 60% of their information systems projects, you will have to devote substantial effort to picking the right vendors and then making sure they carry out the bargain you struck.

Supply

Another important factor is the mastery of the supply of hardware and software for the project. You must understand which tools are available in the organization and which are not. If you want to acquire new software tools or hardware, you must budget and plan for their delivery. You must look at when they are needed and when they can be made available.

Risk Management

The first part of managing risk is recognizing what the risks are for the project. In simple projects, the environment is often stable, and a standard set of rules can be applied. In more complex, riskier projects, those rules may not hold. The project manager must define what the risk is and then decide how the risk is going to cause him or her to manage the project differently. If the system requirements are poorly structured, for instance, higher user involvement throughout the project must be demanded.

If the project is going to be developed using new hardware or software, then outside experts may be needed to help the development team avoid unexpected pitfalls. New technology often has unanticipated costs, is more difficult to use than anticipated, and is late arriving. Large projects may require innovative organizational designs and increased communication channels.

The point is that different types of risk require different project management responses. Projects are not the same, and project managers who treat them all the same will fail.

The Project Lifecycle

All Projects have a lifecycle. Each has a beginning, a development stage, and a closing stage. In each of these stages there is a varying need for resources, planning and control. Project managers must plan how to manage the many different challenges within each stage of the project.

Each software development project goes through a somewhat similar lifecycle, although there may be significant differences based on the resources available to the organization. In almost all projects there is a start-up phase during which the demand for resources is low. The project manager needs to work with the client to establish the goal and objectives, initial cost-benefits and an estimate of the effort needed to complete the project. Following the start-up, more resources are needed as the project is designed and developed. Finally, during the close-out of the project, the need for resources dies down.

Information systems projects follow much the same sort of resource curve. In an application development lifecycle which follows a traditional lifecycle approach, the stages include initiation, requirements, proposal, general systems design, detailed systems design, programming, testing, implementation, and evaluation.

During the initiation phase, a project is chosen according to the organization's priorities. After initial approval is given, work begins on the requirements phase. During the requirements phase the need for the project is established, the goal and objectives are set, and the business functions affected by the project are defined. In the proposal phase the goal and objectives are clarified, alternative methods for implementing the project are defined and costs and benefits are weighed.

In the general systems design phase, the attention of the project team turns to specific analysis and design of the system from the user's perspective. The work done during general systems design is turned into a blueprint for coding during the detailed systems design. Next, during programming, the new system is built and initial testing is carried out. During the testing phase, the complete system is rigorously tested for both programming acceptability and user acceptability.

The implementation phase is when the new system is put into operation, replacing the old system. Finally, the project is evaluated to see whether the system benefits were realized. Further discussion of the systems development lifecycle can be found in a later chapter.

During each of the phases, there is a differing need for resources, management, and monitoring of the project. As the graphic shows, the need for resources starts out fairly low, then continues to grow until the development phase. At that point, the resource need diminishes, until very few resources are needed towards the end of the project.

Why Projects Fail

There are many horror stories about information system projects which have failed. One example is Westpac Banking Corporation. In 1990 it launched an $85 million effort to upgrade it systems. It was going to create a system of decentralized data bases which would allow branch managers to create new financial products at will using tools like C.A.S.E. and expert systems. By the end of 1991 the company had spent $150 million and had "virtually nothing to show for it." [3]

Most organizations can point without pride to a project which cost more than it should, was finished significantly after it was promised, or was not accepted by the users. In some extreme cases, the cost of the failed project was enough to bring down the company. What causes such failures?

Part of the problem is that projects are difficult to plan and estimate. Big systems are orders of magnitude more difficult. Many times, we do not have a clear picture of what we are trying to accomplish. Other times, the project is one which does not have the political support it needs in order to succeed. Often we are too busy "fighting fires" to spend the time needed to put together an effective plan for the project. Project managers need to recognize these problems at the very beginning and address them if they hope to succeed.

The Project Management Climate

The success of the project rests not only with the manager of the project, but also in the organizational climate which surrounds the project. Three key groups need to support the project if it is to succeed. The groups are the project team, the parent information systems group, and the client or users.

The keys to success with the project management team include the following:

Include people on the team who have worked together before.

Select key team members who have proven track records and who have proven themselves reliable.

Begin working from the start to communicate your expectations.

Develop a project management organizational structure which doesn't have too many layers of management, is flexible and allows effective communication.

Develop a sense of mission and commitment to that mission from the start.

Have key team members assist in decision making and problem solution.

Coordinate the communication between team members, the IS organization and the client.

Work with the team, IS management and the client group to develop realistic cost, schedule and performance estimates.

Have back-up strategies to help you solve problems.

Learn to use a user-friendly project management software package.

Follow a proven systems development lifecycle.

Keep changes under control.

The keys to success with the information systems management include:

TS management must be willing to coordinate efforts between the client, the project team and upper management.

IS management needs to have effective oversight of the project, but not meddle in the relationship between the project team and the client.

IS management must be willing to adapt to and manage change.

There must be effective strategic management: IS management needs to compare organizational goals and project goals on an ongoing basis.

IS management should be willing to allow project management teams to organize in an appropriate manner.

IS management must select project managers who have a combination of technical, administrative and people skills.

There should be clear, workable guidelines for project management.

IS management should delegate sufficient authority to the project manager to get the job done.

Project team members should be assigned who have sufficient past experience to be effective.

IS Management needs to support the project by demonstrating enthusiasm for a job well done.

IS management should develop a culture which supports accurate estimating methods

IS management should avoid arbitrary slashing or ballooning of estimates.

The keys to success with the client group include:

Coordinate efforts between the client and the project team.

Establishing rapport between the client group and the project team.

Ensuring that the client group establish clear, reasonable goals and performance criteria.

Minimizing "Red Tape"

Planning for adequate funding

Delegating sufficient authority to the principal client contact to make decisions affecting the project.

These keys to success will help in setting a climate in which the project manager can be effective. Few organizations will have all of these elements in place initially. Each project manager needs to look at his project team, IS management, and the client to see where the climate falls short. Then the project manager should strive to create a climate which is as comfortable as possible.

Selecting A Manager

Selecting a project manager is a critical step in the project. It is not just a matter of choosing the most technically competent analyst. Organizations which continue to choose project managers based solely on technical ability will soon find they have many project problems. As seen in the figure, there are three sets of skills which are needed in successful project management: technical, administrative, and people skills.

Technical skills include skills in problem analysis, system design, and programming. Most information system project managers have those skills. Administrative and people skills, on the other hand, are often missing.

Administrative skills include the ability to set a goal and objectives, plan the project, lay out a work breakdown schedule, estimate the project, and prepare a schedule. People skills include communication, conflict management, organizing the project team, and managing the political climate.

The Project Manager

Once the project manager has been selected, the job is in his or her hands. In order to be effective there are three key skills the manager must have. He or she must:

1. Plan the project carefully.

2. Drive the project to the goal.

2. Keep all aspects of the project under control and in balance.

The pivot to making sound decisions is the project plan. If the plan is sound it will help the project manager make sound decisions. But there are other factors as well. Not everyone can be an effective project manager.

The project manager must keep in balance the first three factors which drive decisions in the project: cost, time and quality. The ability to drive the project, the ability to plan, and the ability to control the plan are critical to this balance. Almost all decisions will involve one of these three factors.

They also need to have several other important project management skills. The ability to communicate is the first of these. Project managers need to not only understand the need for communication - they need to be skilled at communication. That means they must understand how and why people communicate in different ways. They need to understand how to meet different communication needs effectively.

A project manager also needs to be an effective time manager. Skills in time management do not come easily for some. The key to time management is effective priority setting. When a project manager sets priorities correctly for him or herself and the people working for them, they help manage everyone's time effectively.

One way to kill the project quickly is to demonstrate a lack of enthusiasm for the project. If the project manger is not enthusiastic about the project, how can the team members get excited about it?

Similarly, the project manger must be willing to persevere. Many times you will not get things the first time you ask for them. Clients may not be willing to give all the funding necessary or functional managers may not want to assign needed people to the project. If the project manger perseveres, finding new supporting arguments for those needs, and asks again, perhaps the resources will become available. Perhaps they won't, If you do not ask, you will definitely not get what you need.

Many people have a fear of "playing politics." They look at relationship building as a part of the process of playing politics and try to avoid it. The reality is that building good relationships with management, your clients, and your project team is an important key to success. If you have paid attention to the relationships, people are much more likely to help you out when you get in a tight spot. Likewise they will rely on you to help them out.

Managing a project also means making decisions. You will be faced with decisions on a day-in, day-out basis. If you delay your decisions, always trying to make sure that every single fact is uncovered and every issue considered, the project is almost certain to fall behind. It is better to err on the side of making quick decisions than to delay everyone while you analyze the problem.

Finally, a project manager must be an effective team builder. Team building starts with the very first discussion of the project with a new team member. The project manager must have a clear idea of what he or she expects from the team member. What are the work rules, the expectations of the project manager, and the goals of the project.

Team members need to understand what is expected of them from the first day. They also need to feel that they have input into the decisions which are made about the project. If they are involved in making decisions on key dates, design problems, and other important issues they will have a sense of "buy-in." They will be motivated to help meet the dates and solve the problems and issues because they were involved in the initial discussions on them.

Major Project Steps

Besides considering these issues, the project manager must also follow the correct process. On the chart to the left, there are ten steps that should be followed in any project.

Taking these issues into consideration, the project manager has one chance through the project to "get it right". The position of project manager is no place for someone who is weak or indecisive. The project manager must follow through the 10 steps of the project, be willing to work hard, and push the project team to deliver the goods on time and on budget.

Dig in and look at a project which has failed and you are likely to find a project in which there was a poor political climate, poor planning, or poor project control. Often these occur when the project manager lacks necessary skills or is poorly trained.