Recent Developments in Information Technology IT Project Management

1. 1 Recent Developments in Information Technology (IT) Project Management Kathy Schwalbe, Ph.D., PMP Associate Professor, Dept. of Business Administration, Augsburg College May 14, 2003 schwalbe@augsburg.edu www.kathyschwalbe.com

2. 2 Personal Background B.S. in math, 1981 (before Notre Dame and most colleges offered computer science or MIS degrees), MBA in 1986, Ph.D. in education in 1996, PMP in 1998 First job was as a project manager in the Air Force working on advanced communications systems Worked on many projects to develop and install several types of systems Now enjoy teaching, writing, and mentoring others Personality profile: ENTJ, driver, high need for achievement

3. 3 Presentation Overview Update on project management (PM) and progress in managing IT projects Key findings from recent PM research Sample templates New developments in software to help manage projects Personal views on what’s changing and what needs to change Suggested references

4. 4 Recent FactsAbout Project Management* The Project Management Institute (PMI) estimates that 4.5 million people in the U.S. (3.3% of the workforce) and over 12 million people in the rest of the world regard project management as their profession of choice The U.S. spends over $2.3 trillion on projects every year, or one quarter of the nation’s gross domestic product

5. 5 Certification Updates Number of PMPs continues to grow PMI’s CAQ for IS Development came out summer 2002 CompTIA purchased the Gartner Institute IT PM exams and launched the IT Project+ exam in April 2001

6. 6 IT Project Demand Continues to Grow In 1998, corporate America issued 200,000 new-start application development projects In 2000, there were 300,000 In 2001, there were over 500,000

7. 7 A 1995 Standish Group study (CHAOS) found that only 16.2% of IT projects were “successful” and over 31% were canceled before completion, costing over $81 B in the U.S. alone. Time overruns were 222%, cost overruns were 189%, and only 61% of features were provided The latest CHAOS Study (2001 data) showed improvements in all areas, but still… Only 28% of IT projects succeeded Motivation for Improving IT Project Management

8. 8 Recent Research Findings on Managing IT Projects Standish Group What the Winners Do (Milosevich) Templates (Schwalbe) Project Management and ROI, Maturity Levels (Ibbs and Kwak) Project Management and Competitive Advantage (Jugdev and Thomas)

9. 9 The 2001 Standish Group Report Findings (Compared to 1995 Report) Time overruns significantly decreased to 163% compared to 222% Cost overruns were down to 145% compared to 189% Required features and functions were up to 67% compared to 61% 78,000 U.S. projects were successful compared to 28,000 28% of IT projects succeeded compared to 16%

10. 10 Why the Improvements? "The reasons for the increase in successful projects vary. First, the average cost of a project has been more than cut in half. Better tools have been created to monitor and control progress and better skilled project managers with better management processes are being used. The fact that there are processes is significant in itself.” The Standish Group, "CHAOS 2001: A Recipe for Success" (2001)

11. 11 “What the Winners Do” Companies that excel in project delivery capability: Build an integrated project management toolbox (use standard/advanced PM tools, lots of templates) Grow competent project leaders, emphasizing business and soft skills Develop streamlined, consistent project delivery processes Install a sound but comprehensive set of project performance metrics

12. 12 Templates Many software developers and other IT professionals don’t like to write or ask others how to do “simple” things Templates make it easier to prepare common project documents and use standard tools and techniques It’s important to tailor templates to unique project and organizational needs

13. 13 Sample Templates 3rd edition of Information Technology Project Management, includes 34 templates used in the book information for accessing 333 free templates from other sources You can access these template files from www.kathyschwalbe.com Note: Publisher will have more professional companion Web site for text ready by August 2003

14. 14 Sample Templates for Initiating Projects

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20. 20 Sample Templates for Planning Projects

21. 21 More Templates A group of students in my spring 2003 project management course at the University of Minnesota did a project to find and evaluate free project management templates They found 333 free templates and categorized them by knowledge area and process group

22. 22 Summary of Templates Found

23. 23 Number of Templates Found by Knowledge Area

24. 24 Percentage of Templates Found by Process Group

25. 25 Students’ Top Ten Free Template Sites

26. 26 Observations on Templates This year I added templates to my Web site for project proposals, team contracts, and scope statements, and the quality of student assignments/projects improved tremendously People like to have more guidance on expectations and formats for various project documents, and they want the actual files to make their jobs easier Be sure the templates are useful and not just bureaucratic paperwork For example, scope statements should describe project success criteria. Track that info in the status and final project reports

27. 27 Using a Standardized Project Management Approach (SPM)* Research found that a consistent (one-size-fits-all) managerial approach may be essential to the successful standardization of certain aspects of project management, and a contingency approach is needed for certain aspects, too Low standardization with a sufficient amount of variation is the more appropriate approach SPM factors include process, technology, organization, methods, metrics, culture, and leadership

28. 28 Significant Predictors of Project Management Capability For new product development (NPD) projects: methods, metrics, and culture For software development (SWD) projects: metrics, culture, and leadership

29. 29 Metrics, Culture, and Leadership* Metrics: Projects using comprehensive metrics to measure and monitor performance will have fewer problems Culture: In a strong project culture, team members are more satisfied, engaged, and mutually supportive Leadership: Projects managed by project managers with strong leadership skills are more successful and effective

30. 30 Project Management ROI* Over 94% of senior project management professionals say that implementing PM added value to their organizations Higher PM maturity (PMM) leads to Better project schedule and cost performance Lower PM costs (ave. about 11% of PM revenues) Formula to predict increased company ROI based on increased PMM level For example, current PMM of 2.3, future of 3.1, upgrade cost $400K, 5% profit margin, $10 million in revenues, PM/ROI = 40%

31. 31 Project Management Maturity

32. 32 Project Management Maturity Models Similar to maturity models for improving software like the Capability Maturity Model (CMM) Several PM firms have their own maturity models, most using levels 1-5 The International Institute for Learning, Inc. calls the five levels common language, common processes, singular methodology, benchmarking, and continuous improvement ESI’s five levels are called ad hoc, consistent, integrated, comprehensive, and optimizing PMI’s Organizational Project Management Maturity Model (OPM3) will release their model later this year

33. 33 But Today’s PM Maturity Models Only Measure Explicit Knowledge* Explicit knowledge: “know what,” can be put into IT, a digital or discrete process that can be codified and transmitted in formal, systematic language (Nonaka 1994) Tacit knowledge: “know how”, in one’s experience; hard to replicate and can be transferred indirectly though time consuming socialization processes (Kaplan et al 2001)

34. 34 Need to Make PM a Strategic Asset (Just Like IT) Many executives view project management as having worth at the operational and tactical rather than strategic level Resource Based View (RBV) frameworks emphasize how firms create value and profits from their internal resources and focus on strategic assets RBV is relevant to project management because it emphasizes intellectual capital

35. 35 RBV Model*

36. 36 What’s New In Project Management Software Today there were hundreds of different products to assist in performing project management Three main categories of tools: Low-end tools: Handle single or smaller projects well, cost under $200 per user Midrange tools: Handle multiple projects and users, cost $200-500 per user, Microsoft Project most popular High-end tools: Also called enterprise project management software, often licensed on a per-user basis, most are Web-based today

37. 37 Move Toward Enterprise PM SW? Microsoft’s Project 2002 now includes an enterprise version, several other products available, too, by other vendors Microsoft suggests organizations plan to take at least 3-6 months to install their enterprise software, mostly because organizations need to standardize a lot of things and change the way they work to get the most out of the software Milosevich’s research did not find PM software as a distinguishing factor for what the winners do, perhaps because it’s still fairly new at the enterprise level

38. 38 PlanView’s ProjectHealth

39. 39 Personal Views on What’s Changing and What Needs to Change in IT PM What’s Changing More people are “learning the language according to PMI” More people are getting certified People are under even more pressure at home and work, often have too many projects and unrealistic deadlines What Needs to Change Top management needs to emphasize a common language that fits in their organizations Certification is not enough: Need to use best practices Organizations need to focus on sound business planning and execution: pick the high value projects and focus on them, get rid on unnecessary work

40. 40 Suggested References Lots available (see citations and next slide) Take advantage of PMI’s web sites and conferences www.pmi.org www.pmi-mn.org www.pmi-issig.org My Web site and book have lots of references www.kathyschwalbe.com Information Technology Project Management, Second Edition (on www.amazon.com), third edition available in August 2003

41. 41 Sources for Project Management Research PMI’s research pages (www.pmi.org/research) Historical PM Research database (Kloppenborg, Opfer, and Gallagher) Project management research on the web (www.fek.umu.se/irnop/projweb.html) Research methods knowledge base (http://trochim.human.cornell.edu/kb) The Standish Group (www.standishgroup.com)

42. 42 PMI’s ISSIG Web Sitewww.pmi-issig.org

43. 43 Several Free WebCasts and Great Conferences

44. 44 Questions or Comments?