Project Management

Project Management Overview

Excerpt from:

Lacity, M. (editor), (2008), Major Currents= in Information Systems: The Management of Information Systems, Volume 4 in the= six volume series (series editors: Willcocks, L., and Lee, A.), Sage, London.

By Mary Lacity

The ability to identify, prior= itize, gain approval, develop, and deliver IS-enabled business projects is a key IS capability. For nearly = 40 years, IS leaders have struggled to deliver IS-enabled business projects to= the organization on time, on budget, and with the promised business functionali= ty. Academics have long studied the ca= uses of IS project failures (Ginzberg, 1981; Lyytinen and Hirschheim, 1987; Keme= rer, 1987; Sauer 1993). We have kn= own for a long time that IS project failures primarily result from poor managem= ent and not from poor technology. We have known for a long time that throwing additional resources at a late project will not necessarily speed delivery because of increased overhead (Brooks, 1975).

In Keil et al. (2003) "Why Software Projects Escalate: = The Importance of Project Management Constructs," the authors rigorous= ly test the factors associated with project escalation. The authors tested multiple theories (self justification theory, prospect theory and agency theory). The authors found th= at monitoring/controlling, project planning, and project specification constructs best predicted proje= ct outcomes based on responses from 579 IS auditors. Project size was also found to be = an important construct, but it was confounded with the other project management constructs. =

More recently, Nelson (2007) examined 36 causes of failure among 99 projects. He identified 10 best practices to= avoid failure. His research is cons= istent with the findings from the widely cited Standish Group Chaos Report (2003).&nbs= p; The Standish Group's research comprises 12 years of research on = over 50,000 completed IS projects. In general, the 12 years of data show an increased rate of IS project success.= For example, in 1994, only 16 perc= ent of IS projects were delivered on time, on budget, and with promised functional= ity compared to 29 percent in 2004. As expected, the percentage of project failures (cancelled projects or projects finished but never used) decreased from 31 percent in 1994 to 18 percent in 2004. However, the percentage= of “challenged” projects has remained steady at about 53 percent.<= span style=3D'mso-spacerun:yes'> Challenged projects are IS project= s that are delivered over-budget, over-time or missing functionality. <= /span>

Critical Success Factors. Many researchers have identified t= he critical factors associated with IS project success. Five of these critical succe= ss factors are discussed below.

1. User Involvement. Business users must be actively involved during all phases of the project.   Much research = has been done on the depth of user participation, the nature of user participat= ion, and degree of influence users had on project outcome (Lynch, T., and Gregor, 2004; Hirschheim, 1985; Hirschheim and Klein, 1994; Mumford, 1981). For example, a study of 612 findin= gs on published research from 1980 to 2004 on the determinants of IS success found that user participation positively affects three measures of IS success: Us= er satisfaction, Perceived Usefulness, and System Quality (Sabherwal et al. 20= 06).

2. Executive management support. Executive management support of the= IS project is vital to success. Executive managers play many roles, the most important of which are = to serve as project sponsors and project champions (Beath, 1996; Edwards, 1996= ). Project Sponsors have “the funds and authority to accomplish = their goals” (Beath, 1996, p. 355).&nb= sp; Project Champions are managers who “actively and vigorously promote their personal vision for using IT, pushing the project over or around approval and implementation hurdles. They often risk their reputations in order to ensure the innovation’s success” (Beath, 1996, p. 355). The Sabherwal et al. (2006) study also found that top management support positively affected three measures o= f IS success (1) user satisfaction, (2) perceived usefulness, and (3) system use= .

3. Optimizing scope. One of the biggest threats to delivering IS projects on time and on budget is the phenomenon known as “scope creep.” Scope creep mea= ns that the initial project scope has increased to include new products, servi= ces, or features. Scope creep occu= rs because the initial project scope may have been under-specified, users participating on the project may request more features, or changes to the business or technology during project development might trigger more requir= ements.

Four of the best studies on project escalation have been done by Keil (1995), Keil and Montealegre (2000), and Keil et al. (2000a; 2000b). These authors examined the project, psychological, social, and organizational factors that lead to project esca= lation. Their work provides a deep underst= anding of IS projects beyond the critical success factors. For example, some senior managers provide too much executive mana= gement support by continuing to fund and protect projects with outrageous scope cr= eep.

Another interesting insight comes from the 2002 Standish Group report. The report found that 45 percent of IS features are never used! The delivery of so many unused fea= tures is troubling, particularly in light of the “80/20 rule” which states that 80 percent of requirements cost 20 percent of total costs and t= he last 20 percent of requirements can cost 80 percent of total costs. Thus IS managers should freeze the= scope of projects rather than seek to deliver 100% of requested functions.   Brown and Vessey (2003) call= this a “satisficing mindset.” By optimizing scope, projects should be delivered at cost.

4. Divide a large project into several smaller projects. = For over 25 years, IT researchers h= ave recognized the relationship between project size, risk, and outcome (Gopal = et al. 2003; McFarlan 1981; Wallace et al. 2004). In general, prior research has fou= nd that larger-sized projects are riskier and have lower success rates than smaller-sized projects (Jones 1994). For example, Carroll (2005) found that small projects (less than six months) had a success rate of 50 percent, medium-sized projects (six to nine months) had a 40 percent success rate, and none of the projects in the samp= le (n =3D 22) over nine months were successful. Aladwani (2002) in a study of 42 IT projects found that project size negatively affects project planning, which negatively impacts project success. Practitioners and researchers suggest transforming a large project into smaller projects thro= ugh agile processes, prototyping, or pilot testing to reduce risk and increase success (Naumann and Jenkins, 1982; Janson and Smith, 1985; Jones 1994; Standish Group International 2003; Willcocks et al. 1997).

5. Project management expertise.   Havi= ng experienced project managers is a critical IS capability to ensure project success. A recent study spons= ored by the Society of Information Management Advocacy program found that project management skills were the most vital skills to develop and keep in-house (Zwieg et al. 2006). Increasi= ngly, organizations are building project management expertise through project management certification. The= most popular certification is the PMP (Project Management Professional) from the Project Management Institute (PMI)[1].

Program and Portfolio Management. = In addition to managing individual IS projects, IS and bus= iness leaders must also manage across mul= tiple IS projects. The ability to prioritize, approve, schedule, and source multiple IS projects is called program management. As far ba= ck as McFarlan (1981), academics have been studying the best practices associated with program management. Organizations frequently have a Program Management Office (PMO) to manage t= he set of ongoing projects. In addition, IS leaders must integrate the completed projects into the existing portfolio of IS applications. Portfolio management is the management of the entire portfolio of existing applications, applications currently under development, and applic= ations that need to be developed in the future.&n= bsp; One of the best research articles on this topic is by Weill and Aral (2006). The authors examined = the portfolios of 147 organizations over a five year period. The authors found that certain mix= es of applications (infrastructure, transactional, informational, and strategic) = are associated with different business outcomes in terms of profitability, mark= et value, innovation, and lower cost of goods sold.

Change Management. Whereas project management is concerned about managing the design, development, and delivery of an IS project, change management is about managing the people affected by change caused by the new IS project. Preparing the organization for the cha= nge is accomplished mostly through training and incentives. Hatzakis et al. (2005) offer an excellent framework of change management based on social capital theory. The authors develop a comprehensive framework of change management based on social capital theory.= Based on a survey and interviews within an organization, the authors found that social relationships between business and IS colleagues must be fostered not only during a systems development project, but before, during,= and after. Roberts et al. (2003) provides an excellent example of best practices for change management.

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