Chapter 2: The Project Management and Information Technology Context

Information Technology Project Management, Fifth Edition

Projects Cannot Be Run in Isolation

Projects must operate in a broad organizational

environment Project managers need to use systems thinking

Taking a holistic view of carrying out projects within the

context of the organization

Senior managers must make sure projects

continue to support current business needs

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A Systems View of Project Management

A systems approach emerged in the 1950s to

describe a more analytical approach to management and problem solving

Management must see how projects relate to the whole

orgnaization
Three parts include: Systems philosophy: an overall model for thinking about things as systems Systems analysis: problem-solving approach Systems management: address business, technological, and organizational issues before making changes to systems

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Media Snapshot
The Press Association Ltd, the largest news agency in the

United Kingdom, hired a consulting firm to help turn things around after management noticed its profit margins were sliding
The organizations rapid growth rate and acquisition of several news

organizations help extend its reach throughout the country but these disparate groups were not sharing work processes and technologies causing high operating costs
The consultants suggested using a holistic view and a top-down

strategy to make sure projects supported key business goals

Everything must be seen as being connected in order for

organization change to be accomplished

They also suggested releasing short-term results to accrue

benefits on an incremental basis and reviewing projects on a regular basis to ensure strategic alignment
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Opening Case Analysis

Tom Walters did not use a systems approach the

IT department did all of the planning He did not address many of the organizational issues involved in such a complex project He did not clearly define the business, technological and organizational issues associated with the project He did not involve the stakeholders which led to his being blindsided by the problems raised at the meeting

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Three Sphere Model for Systems Management of Laptop Project

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Understanding Organizations
Structural frame: Focuses on roles and responsibilities, coordination and control. Organization charts help define this frame. Political frame: Assumes organizations are coalitions composed of varied individuals and interest groups. Conflict and power are key issues.

Human resources frame: Focuses on providing harmony between needs of the organization and needs of people.

Symbolic frame: Focuses on symbols and meanings related to events. Was it good the CEO came to the kickoff meeting? Culture is important, particularly in international projects.

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What Went Wrong?

Many enterprise resource planning (ERP) projects fail due to

organizational issues, not technical issues. For example, Sobeys Canadian grocery store chain abandoned its two-year, $90 million ERP system due to organizational problems.
As Dalhousie University Associate Professor Sunny Marche states, The

problem of building an integrated system that can accommodate different people is a very serious challenge. You cant divorce technology from the sociocultural issues. They have an equal role.

People in different parts of the company had different terms for various items. People had their daily work to do and did not want to take the required time to get the new system to work

Sobeys ERP system shut down for five days and employees were

scrambling to stock potentially empty shelves in several stores for weeks. The system failure cost Sobeys more than $90 million and caused shareholders to take an 82-cent after-tax hit per share.* *Hoare, Eva. Software hardships, The Herald, Halifax, Nova Scotia (2001).

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Organizational Structures
Related to political and structural frames

Three basic organization structures Functional: functional managers report to the CEO Project: program managers report to the CEO Matrix: middle ground between functional and project structures; personnel often report to two or more bosses; structure can be weak, balanced, or strong matrix

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Functional, Project, and Matrix Organizational Structures

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Information Technology Project Management, Fifth Edition, Copyright 2007

Project Characteristics

Organizational Structure Influences on Projects

Organizational Structure Type Matrix Balanced Matrix Low to Moderate 15-60% Functional Weak Matrix Limited 0-25% Project Strong Matrix Moderate to high 50-95% Little or none Virtually none High to almost total 85-100%

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Project managers authority Percent of performing organizations personnel assigned full-time to project work Who controls the project budget Project managers role Common title for project managers role

Functional manager Part-time Project Coordinator/ Project Leader Part-time

Functional manager Part-time Project Coordinator/ Project Leader Part-time

Mixed

Project manager Full-time Project Manager/ Program Manager Full-time

Project manager Full-time Project Manager/ Program Manager Full-time

Full-time Project Manager/ Project Officer Part-time

Project management administrative staff PMBOK Guide, 2000, 19, and PMBOK Guide 2004, 28.

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Organizational Structure
Project managers have the most authority in a pure project

organizational structure and the least in a pure functional structure A project leader in a functional organization who requires strong support from several different functional areas, should ask for top management sponsorship
The sponsor should solicit support from all relevant functional managers to

ensure that they cooperate and that qualified people are available to work as needed
Even though PMs have the most authority in the project organizational

structure, this is often inefficient for the company as a whole

Assigning full-time staff to the project an lead to underutilization and/or

misallocation of resources
A full-time technical writer that has no work on a particular day is a wasted

resource Using a systems approach might lead the PM to suggest hiring an independent contractor to do the writing instead of using a full-time employee, thus saving money
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Organizational Culture
Just as an organizations structure affects its ability to

manage, so does an organizations culture. Organizational culture is a set of shared assumptions, values, and behaviors that characterize the functioning of an organization Many experts believe the underlying causes of many companies problems are not the structure or staff, but the culture
Even within one organization, one departments culture

may be different from another departments culture (technology vs. finance)

Some cultures make it easier to manage projects

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Ten Characteristics of Organizational Culture1

Member identity* Risk tolerance*

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Group emphasis*
People focus Unit integration*

Reward criteria*
Conflict tolerance* Means-ends

Control
1

orientation Open-systems focus*

as per Stephen P. Robbins *Project work is most successful in an organizational culture where these items are strong/high and other items are balanced
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Ten Characteristics of Organizational Culture

A PM or team member might feel more dedicated to his or her company or project team than to their job or profession, or they might not have any loyalty to a particular company or team. An organizational culture where employees identify more with the whole organization are more conducive to a good project culture.

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1. Member identity: The degree to which employees identify with the organization as a whole rather than with their type of job or profession.

2. Group emphasis: The degree to which work activities are organized around groups or teams, rather than individuals.

An organizational culture that emphasizes group work is best for managing projects.

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Ten Characteristics of Organizational Culture

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3. People focus: The degree to which managements decisions take into account the effect of outcomes on people within the organization.
A PM might assign tasks to certain people without considering their individual needs, or the PM might know each person very well and focus on individual needs when assigning work or making other decisions. Good PMs often balance the needs of individuals and the organization.

4. Unit integration: The degree to which units or departments within an organization are encouraged to coordinate with each other.

Most PMs strive for strong unit integration to deliver a successful product, service, or result. An organizational culture with strong unit integration makes the project managers job easier.

5. Control: The degree to which rules, policies, and direct supervision are used to oversee and control employee behavior.

Experienced PMs know it is often best to balance the degree of control to get good project results.
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Ten Characteristics of Organizational Culture

6. Risk tolerance: The degree to which employees are encouraged to be aggressive, innovative, and risk seeking.

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An organizational culture with a higher risk tolerance is often best for project management since projects often involve new technologies, ideas, and processes.

7. Reward criteria: The degree to which rewards, such as promotions and salary increases, are allocated according to employee performance rather than seniority, favoritism, or other nonperformance factors.

Project managers and their teams often perform best when rewards are based mostly on performance.

8. Conflict Tolerance: The degree to which employees are encouraged to air conflicts and criticism openly.

It is very important for all project stakeholders to have good communications, so it is best to work in an organization where people feel comfortable discussing conflict openly.
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Ten Characteristics of Organizational Culture

9. Means-ends orientation: The degree to which management focuses on outcomes rather than on techniques and processes used to achieve results.

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An organization with a balanced approach in this area is often best for project work.

10. Open-systems focus: The degree to which the organization monitors and responds to changes in the external environment.

Projects are part of a larger organizational environment, so it is best to have a strong open-systems focus.

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Stakeholder Management
Project managers must take time to identify,

understand, and manage relationships with all project stakeholders Using the four frames of organizations can help meet stakeholder needs and expectations
Since organizations have limited resources,

projects affect top management, other functional managers and other project managers by using some of those resources
Senior executives/top management are very

important stakeholders
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Opening Case Analysis

Tom Walters focused on just a few internal project stakeholders
He did not involve the main customers of his project - the

students nor did he hold meetings with senior administration or faculty At the faculty meeting, it became evident that there were many stakeholders Tom had excluded from his original plan
Structural frame by looking at an organizational chart of the entire

college he would have been able to see that his project would affect academic dept heads and members of different administrative areas Human resource frame tap his knowledge of the college and identify individuals who would most support or oppose his project Political frame consider the main interest group most affected by his projects outcome Symbolic frame address what moving to a laptop environment would really mean to the college. He could have anticipated some of the opposition and solicited a strong endorsement from the college president or dean before talking to the faculty

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The Importance of Top Management Commitment

Several studies have found that

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one of the key factors associated with virtually all project success is the

commitment and support PMs receive A senior manager, called a champion, acts as a key proponent for the project Makes sure adequate resources are provided money, human resources, visibility Help PMs meet specific needs in a timely manner realize that unexpected problems can and will arise and support is needed to overcome them As most IT projects cut across functional areas, assists in obtaining cooperation from people in other parts of the organization; fight political battles Mentors and coaches PMs on leadership issues since most IT PMs are not experienced in management
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Best Practice
IT governance addresses the authority and control for key IT

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activities in organizations, including IT infrastructure, IT use, and project management A lack of IT governance can be dangerous, as evidenced by three well-publicized IT project failures in Australia (Sydney Waters customer relationship management system, the Royal Melbourne Institute of Technologys academic management system, and One.Tels billing system)*
Senior management had not ensured that prudent checks and

balances were in place to enable them to monitor either progress of the projects or the alignment and impact of the new systems on their business Project level planning and control were absent or inadequate project status reports to management were unrealistic, inaccurate and misleading
*Avison, David, Gregor, Shirley and Wilson, David, Managerial IT Unconsciousness, CACM, vol 49, No. 7, P.92
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Need for Organizational Commitment to Information Technology (IT)

If the organization has a negative attitude toward

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IT, it will be difficult for an IT project to succeed Having a Chief Information Officer (CIO) at a high level in the organization helps IT projects Assigning non-IT people to IT projects also encourages more commitment Some CEOs take a strong leadership role in promoting the use of information technology in their organizations

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Need for Organizational Standards

Standards and guidelines help project managers

be more effective Senior management can encourage:

The use of standard forms and software for project

management The development and use of guidelines for writing project plans or providing status information The creation of a project management office or center of excellence to help PMs achieve project goals Development of career paths for PMs and/or requiring PMP certification
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Project Phases and the Project Life Cycle

A project life cycle is a collection of project

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phases that defines:

What work will be performed in each phase What deliverables will be produced and when Who is involved in each phase How management will control and approve work produced in each phase

A deliverable is a product or service produced or

provided as part of a project

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More on Project Phases

In early phases of a project life cycle: Resource needs are usually lowest The level of uncertainty (risk) is highest Project stakeholders have the greatest opportunity to influence the project In middle phases of a project life cycle: The certainty of completing a project improves More resources are needed The final phase of a project life cycle focuses on: Ensuring that project requirements were met The sponsor approves completion of the project

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Phases of the Traditional Project Life Cycle

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Phases of the Traditional Project Life Cycle

Concept phase managers briefly describe the project Develop a very high-level or summary plan for the project describing the need for the project and basic underlying concepts Rough cost estimate is developed and an overview of the work involved is created A work breakdown structure (WBS) outlines project work by decomposing the work activities into different levels of tasks
The WBS is a deliverable-oriented document that defines the total scope of the

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project

Tom Walters should have created a committee of faculty and staff

to study the concept of increasing the use of technology on campus

They might have developed a management plan that included an initial,

smaller project to investigate alternative ways of increasing the use of technology Prepare a report that studies what are similar campuses doing, surveys students, staff and faculty and estimates the impact of using more technology on costs and enrollments.
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Phases of the Traditional Project Life Cycle

Development phase project team creates more

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detailed project management plans, a more accurate cost estimate and a more thorough WBS
If the concept phase suggested that laptops were one means

of increasing the use of technology on campus, then further study would be required in this phase to determine buy/lease, type of hardware and software, how much to charge students, how to handle training and maintenance, etc. If the concept phase suggested that laptops were not the way to go, the project would have been cancelled at that point thereby saving time and money

Information Technology Project Management, Fifth Edition, Copyright 2007

Phases of the Traditional Project Life Cycle

Implementation project team creates a very accurate

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cost estimate, delivers the required work and provides performance reports to stakeholders
Acquire the hardware and software, install necessary

network equipment, deliver laptops to the students, create a process for collecting fees, provide training, etc.
Faculty need to consider how to take advantage of the laptops,

security prepare for potential problems, admissions include this in recruiting brochures, etc.

Close-out all the work is completed, customer

acceptance of the entire project

Project team should document their experiences on the project Survey students, faculty, administration on impact of technology
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Product Life Cycles

Products also have life cycles The Systems Development Life Cycle (SDLC) is a

framework for describing the phases involved in developing and maintaining information systems Systems development projects can follow:
Predictive life cycle: the scope of the project can be

clearly articulated and the schedule and cost can be predicted

Project team spends a large portion of the project attempting to

clarify the requirements of the entire system and then producting a design Users are often unable to see tangible reults in terms of working software for an extended period
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Predictive Life Cycle Models

clarify the requirements of the entire system and then producing a design Users are often unable to see tangible results in terms of working software for an extended period
Waterfall model: has well-defined, linear stages of systems

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Project team spends a large portion of the project attempting to

development and support Spiral model: shows that software is developed using an iterative or spiral approach rather than a linear approach Incremental build model: provides for progressive development of operational software Prototyping model: used for developing prototypes to clarify user requirements Rapid Application Development (RAD) model: used to produce systems quickly without sacrificing quality
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Product Life Cycles

Adaptive Software Development (ASD) life cycle:

requirements cannot be clearly expressed, projects are mission driven and component based, using time-based cycles to meet target dates
Development proceeds by creating components that

provide the functionality specified by the business group as these needs are discovered in a more free-form approach Requirements are developed using an iterative approach and development is risk driven and change tolerant to address and incorporate rather than mitigate risks

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Product Life Cycles

Large IT projects are usually composed of several

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smaller, more manageable projects, especially when there is a lot of uncertainty involved
Some aspect of project management need to occur

during each phase of the product life cycle

Systems planning phase for a new information system can include

a project to hire an outside consulting firm to help identify and evaluate potential strategies for developing a particular business application Implementation phase might include a project to hire outside programmers code part of the system Close-out phase might include a project to develop and run several training sessions for users of the new application

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The Importance of Project Phases and Management Reviews

A project should successfully pass through each of the

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project phases in order to continue on to the next Management reviews, also called phase exits or kill points, should occur after each phase to evaluate the projects progress, likely success, and continued compatibility with organizational goals
At the end of the concept phase, the project team could have

presented information to the faculty, president and other staff members that described different options for increasing the use of technology, an analysis of what competing colleges were doing and results of a survey of local stakeholders opinions on the subject. Unfavorable results could have resulted in stopping the project at that point and not investing more time, effort and money.
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What Went Right?

"The real improvement that I saw was in our ability toin the words of Thomas Edisonknow when to stop beating a dead horse.Edison's key to success was that he failed fairly often; but as he said, he could recognize a dead horse before it started to smell...In information technology we ride dead horsesfailing projectsa long time before we give up. But what we are seeing now is that we are able to get off them; able to reduce cost overrun and time overrun. That's where the major impact came on the success rate.* Many organizations, like Huntington Bancshares, Inc., use an executive steering committee to help keep projects on track.
*Cabanis, Jeannette, "'A Major Impact': The Standish Group's Jim Johnson On Project Management and IT Project Success," PM Network, PMI, Sep.1998, p. 7
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The Context of IT Projects

IT projects can be very diverse in terms of size,

complexity, products produced, application area, and resource requirements IT project team members often have diverse backgrounds and skill sets IT projects use diverse technologies that change rapidly; even within one technology area, people must be highly specialized

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Case Wrap-Up
Due to the concerns raised from many people at

the meeting, the president directed that a broadbased committee be formed to investigate the technology issue and report back in a month. Not surprisingly, the committee recommended to terminate the concept Tom Walters learned the hard way about the need to pay more attention to the needs of the entire college before proceeding with future technology plans.
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