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Recent Developments in Information Technology (IT) Project Management

Recent Developments in Information Technology (IT) Project Management. Kathy Schwalbe, Ph.D., PMP Associate Professor, Dept. of Business Administration, Augsburg College December 4, 2002 schwalbe@augsburg.edu www.kathyschwalbe.com. Personal Background.

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Recent Developments in Information Technology (IT) Project Management

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  1. Recent Developments in Information Technology (IT) Project Management Kathy Schwalbe, Ph.D., PMP Associate Professor, Dept. of Business Administration, Augsburg College December 4, 2002 schwalbe@augsburg.edu www.kathyschwalbe.com

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

  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 *The PMI Project Management Fact Book, Second Edition, PMI, 2001

  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 See www.pmi.org and www.comptia.org for more details on certification exams

  6. IT Project Demand • In 1998, corporate America issued 200,000 new-start application development projects • In 2000, there were 300,000 • In 2001, the estimate was over 500,000 *The Standish Group, "CHAOS 2001: A Recipe for Success," 2001

  7. Motivation for Improving IT Project Management • 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

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

  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. 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. “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 Dragan Milosevic, Portland State University, “Delivering Projects: What the Winners Do,” PMI Conference Proceedings, November 2001

  12. 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 Milesovich and Pantanakul, “The Impact of Standardized Project Management: New Product Development Projects versus Software Development Projects,” Proceedings of PMI Research Conference 2002

  13. Significant Predictors of Project Management Capability • For NPD projects: methods, metrics, and culture • For SWD projects: metrics, culture, and leadership

  14. 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

  15. 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 PM maturity (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% William Ibbs, “The $$$ Value of Project Management: Continuing the Search for PM’s ROI,” PDS ’02 Conference Proceedings, PMI-ISSIG, also see http://www.ce.berkeley.edu/pmroi/PMROI%20PMI%20Presentation%20Feb2001.pdf

  16. Project Management Maturity* *Figure in my book, Information Technology Project Management Second Edition, 2001

  17. 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) *Jugdev and Thomas, “Blueprint for Value Creation: Developing and Sustaining a Project Management Competitive Advantage Through the Resource Based View,” Proceedings of PMI Research Conference,2002

  18. 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 focuses on strategic assets • RBV is relevant to project management because it emphasizes intellectual capital

  19. RBV Model* *Jugdev, Kam, presented at PMI Research Conference, July 2002

  20. What’s New In Project Management Software • By 2001, 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, Project 2000 most popular • High-end tools: Also called enterprise project management software, often licensed on a per-user basis

  21. Move Toward Enterprise PM SW? • Microsoft’s Project 2002 now includes an enterprise version • 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 • Milesovich’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

  22. 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: pick the high value projects and focus on them, get rid on unnecessary work Personal Views on What’s Changing and What Needs to Change

  23. 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 book and web site have lots of references • www.kathyschwalbe.com (goes to www.augsburg.edu/ppages/~schwalbe with no ads/distractions • Information Technology Project Management, Second Edition (on www.amazon.com)

  24. 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)

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

  26. Several Free WebCasts and Great Conferences

  27. Questions or Comments?

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