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Successful Implementation of Complex Projects

Successful Implementation of Complex Projects. Terminology. Successful Project: Completed on time and on budget, with all requirements implemented and the user community is generally happy with the results Failed Project: Cancelled before completion or never implemented

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Successful Implementation of Complex Projects

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  1. Successful Implementation of Complex Projects

  2. Terminology • Successful Project: Completed on time and on budget, with all requirements implemented and the user community is generally happy with the results • Failed Project: Cancelled before completion or never implemented • Unsuccessful Project: One that’s completed but over-budget, over the time estimate, or with fewer features than planned and an unhappy user community

  3. Unsuccessful Projects 1,471 projects were examined in the largest global study ever of IT change initiatives The average cost overrun was 27% A large number of gigantic overages - one in six had a cost overrun of 200% Failure or Not Successful rate of large projects is between 50-80%

  4. Unsuccessful Projects (Con’t) • Survey of 800 Managers • 62 percent of IT Projects fail to meet their schedules • 49 percent suffered budget overruns • 47 percent suffered higher than expected maintenance cost • 41 percent failed to deliver the expected business value and ROI • What is the realistic expectation?

  5. ERP Gamble Haunts Hershey • NOVEMBER 01, 1999 - A$112 million ERP project has blown up in the face of Hershey Foods Corp., which last week said it's still struggling to fix order-processing problems that are hampering its ability to ship candy and other products to retailers • Hershey squeezed what was originally envisioned as a four-year project into just 30 months before going live with the full ERP system in July • That's when retailers begin ordering large amounts of candy for back-to-school and Halloween sales • "They've missed Halloween, they're probably going to miss Christmas, and they might even start missing Easter," said William Leach, a financial analyst at Donaldson, Lufkin & Jenrette Inc. in New York.

  6. Levi Strauss • In 2003 Levi Strauss decides to migrate from mix of incompatible country-specific computer systems to a single SAP system and hired a team of consultants to lead the effort. • The proposed budget was less than $5 million • During the switchover it was unable to fill orders and had to close its three distribution centers for a week • In the second quarter of 2008, the company took a $192.5 million charge against earnings to compensate for the botched project and the CIO was forced to resign • A $5 million projects leads to an almost $200 million loss

  7. Kmart • Kmart was already losing its competitive position to Walmart and Target when it began a $1.4 billion IT modernization project in 2000 • By 2001 it realized that the new system was so highly customized that maintenance would be prohibitively expensive • It launched a $600 million project to update its supply chain management software • That effort went off the rails in 2002 and the two projects contributed to Kmart’s decision to file for bankruptcy that year • The company later merged with Sears Holdings, shedding more than 600 stores and 67,700 employees

  8. Primary Causes for Failure • Poor Planning • Unclear goals and objectives • Scope creep or feature creep • Unrealistic time or resource estimates • Lack of executive support or user involvement • Failure to communicate and act as a team • Inappropriate skills

  9. Three Keys to Project Success • Executive Support (Top Management) • A Sound Methodology • Solid Project Manager

  10. Red Light Green Light • Executive Support • Strong Project Manager Or Sponsor • For Large Projects Deliver Key Objectives First • Break-up Complex Projects Into Sub-Projects with Good Leaders • Dead Time • Accountability • Reporting/Communication

  11. Dead Time

  12. Red Light Green Light • Executive Support • Strong Project Manager • For Large Projects Deliver Key Objectives First • Break-up Complex Projects Into Sub-Projects with Good Leaders • Hold people accountable • Dead Time • Reporting/Communication

  13. Example of Report

  14. Red Light Green Light • Executive Support • Strong Project Manager • For Large Projects Deliver Key Objectives First • Break-up Complex Projects Into Sub-Projects with Good Leaders • Hold people accountable • Eliminate Dead Time • Reporting/Communication

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