TMHG 526Project Management

Nawanan Theera‐Ampornpunt, M.D., Ph.D.Faculty of Medicine Ramathibodi Hospital

Mahidol UniversityOctober 10, 2014

IT Project Management

Marchewka (2006) Marchewka (2009)

• Information Technology (IT) projects are organizational investments that require– Time– Money– Other resources such as people, technology, facilities, etc.

• Organizations expect some type of value in return of this investment

• IT Project Management is a relatively new discipline that combines traditional Project Management with Software Engineering/Management Information Systems to make IT projects more successful.

Introduction

• Organizational resources are limited, so

organizations must choose among competing

interests to fund specific projects.

• This decision should be based on the value a

competing project will provide to an organization.

An ITPM Approach

• Successfully building and implementing a system

that provides little or no value to the

organization.

Or…

• Failing to implement an information system that

could have provided value to the organization,

but was poorly developed or poorly managed.

Which Situation Is Worse?

• The CHAOS study published in 1995 by The Standish Group found that although the U.S. spent over $250 billion on IT projects, approximately…

–31% were cancelled before completion

–53% were completed but over budget, over schedule, and did not meet original specifications.

• For mid-size companies, average cost overruns were 182%, while average schedule overruns were 202%!

The Software Crisis

• Larger projects have the lowest success rate and appear to be more risky than medium and smaller projects

–Technology, business models and markets change so rapidly that a project that takes more than a year can be obsolete before they are completed.

• The Chaos study also provides some insight as to the factors that influence project success.

Why Do IT Projects Fail?

• The Standish Group has continued to study IT projects over the years.

• In general, IT Projects are showing higher success rates due to–Better project management tools & processes–Smaller projects– Improved communication among stakeholders–More skillful IT project managers

• But there is still ample opportunity for improvement!

Has the Current State of IT Projects

Changed Since 1995?

Rank Success Factor

1 User Involvement

2 Executive Support

3 Clear Business Objectives

4 Emotional Maturity

5 Optimizing Scope

6 Agile Process

7 Project Management Expertise

8 Skilled Resources

9 Execution

10 Tools and Infrastructure

Source: The Standish Group. CHAOS (West Yarmouth, MA: 1995, 2010) and http://www.infoq.com/articles/Interview‐Johnson‐Standish‐CHAOS. (cited in Marchewka JT. Information technology project management. 4th ed. Singapore: John Wiley & Sons;2013.

New Top Ten Factors for IT Project Success

Figure 1.1 Sources: www.standishgroup.com

Summary of CHAOS Studies from 1994 to 2008

• Socio-technical Approach

• Project Management Approach

– processes and infrastructure (Methodology)

– resources

– expectations

– competition

– efficiency and effectiveness

• Knowledge Management Approach

– lessons learned, best practices and shared knowledge

Improving the Likelihood of Success

IT Project Management

• A project: “a temporary endeavor undertaken to

accomplish a unique purpose”

• Project management: “the application of

knowledge, skills, tools, and techniques to

project activities in order to meet or exceed

project requirements”

Marchewka (2006)

• Time Frame• Purpose (to provide value!)• Ownership• Resources (the triple constraint)• Roles

– Project Manager– Project Sponsor– Subject Matter Experts– Technical Experts

• Risk & Assumptions• Interdependent Tasks• Planned Organizational Change• Operate in Environments Larger than the Project Itself

The Context of Project Management - Project Attributes

Class ExerciseThe Importance of Project Management

Group discussion: Without proper Project

Management, what can go wrong with the IT

projects?

The Project Management Dilemma

Project

Deliverables

Good Fast

Cheap

The Triple Constraint

Marchewka (2006)

• Project Life Cycle (PLC)– A collection of logical stages or phases that maps the life

of a project from its beginning to its end in order to define, build and deliver the product of the project – i.e., the information system

• Projects are divided into phases to increase manageability and reduce risk– Phase exits, stage gates, or kill points are decision points

at the end of each phase to evaluate performance, correct problems or cancel the project

– Fast tracking is the overlapping of phases to reduce the project’s schedule• Can be risky!

The Project Life Cycle & IT Development

Project Life Cycle

Marchewka JT (2006)

• Represents the sequential phases or stages an information system follows throughout its useful life

• Useful for understanding the development of the project’s largest work product – the application system

• Phases/Stages– Planning – Analysis – Design – Implementation – Maintenance and Support

Software Development Life Cycle (SDLC)

Software Development Life Cycle

Marchewka JT (2006)

• The systems development life cycle (SDLC) becomes part of the project life cycle (PLC).

–The PLC focuses on the project management phases, processes, tools and techniques for effectively managing the project.

–The SDLC focuses on the software engineering phases, processes, tools and techniques for building and/or implementing the IT solution.

Relationship Between PLC & SDLC

PLC & SDLC

Marchewka JT (2006)

IT Project Management Methodology

Marchewka JT (2006)

• Structured Approach to Systems

Development–Waterfall Method

• Rapid Applications Development (RAD)–Prototyping

–Spiral Development

–Extreme Programming

Putting the SDLC into Practice

Structured Approaches:

Waterfall Method

• A new approach and philosophy to project management that is becoming increasingly popular.

• Characterizes many of today’s projects that exemplify speed, uncertainty, changing requirements and high risks.

• Traditional project management often takes an orderly approach while XPM embraces the fact that projects are often chaotic and unpredictable.

• XPM focuses on flexibility, adaptability and innovation

• Traditional and new approaches together can provide us with a better understanding of how to improve the likelihood of project success.

Extreme Project Management (XPM)

• The Guide to the Project Management Body of Knowledge (PMBOK® Guide) documents 9 project management knowledge areas.

• The PMBOK® Guide is published and maintained by the Project Management Institute (PMI).– http://www.pmi.org

• PMI provides a certification in project management called the Project Management Professional (PMP) that many people today believe will be as relevant as a CPA certification.

• PMP certification requires that you pass a PMP certification exam to demonstrate a level of understanding about project management, as well as satisfy education and experience requirements, and agree to a professional code of conduct.

The Project Management

Body of Knowledge (PMBOK®)

The Project Management

Body of Knowledge (PMBOK®)

Marchewka (2006)

1. Project Integration Management

2. Project Scope Management

3. Project Time Management

4. Project Cost Management

5. Project Quality Management

6. Project Human Resources Management

7. Project Communications Management

8. Project Risk Management

9. Project Procurement Management

Project Management Body of Knowledge Areas

Marchewka (2006)

Developing The Business Case

Marchewka (2006)

Measurable Organizational Value (MOV)

Marchewka (2006)

• The project’s goal

• Measure of success

• Must be measurable

• Provides value to the organization

• Must be agreed upon

• Must be verifiable at the end of the project

• Guides the project throughout its life cycle

• Should align with the organization’s strategy and goals

The IT Value Chain

Marchewka (2006)

A Good Project Goal

Marchewka (2006)

“Our goal is to land a man on the moon and return him safely 

to the earth by the end of the decade.”

John F. Kennedy (1961)

Metrics: Financial

Marchewka (2006)

• Payback Period = Initial Investment

Net Cash Flow

• Breakeven Point = Initial Investment

Net Profit Margin

• Project ROI = (Total Expected Benefits - Total Expected Costs)

Total Expected Costs

Metrics: Scoring Method

Marchewka

(2006)

Criterion Weight Alternative A Alternative B Alternative C

Financial

ROI 15% 2 4 10

Payback 10% 3 5 10

Net Present Value (NPV) 15% 2 4 10

Organizational

Alignment with strategic objectives 10% 3 5 8

Likelihood of achieving project’s MOV 10% 2 6 9

Project

Availability of skilled team members 5% 5 5 4

Maintainability 5% 4 6 7

Time to develop 5% 5 7 6

Risk  5% 3 5 5

ExternalCustomer satisfaction 10% 2 4 9

Increased market share 10% 2 5 8

Total Score 100% 2.65 4.85 8.50

Notes: Risk scores have a reverse scale – i.e., higher scores for risk imply lower levels of risk

Balanced Scorecard

Marchewka (2006)

MOV & Scorecard

Marchewka (2006)

IT Project Management Methodology

Marchewka (2006)

Project Charter Template

Marchewka (2006)

Formulating Project Plan

Marchewka (2006)

Project Scope

In‐Scope Out‐of‐Scope

Project Planning Framework

Marchewka (2006)

Gantt Chart

Marchewka (2006)

PERT Chart

http://en.wikipedia.org/wiki/Program_Evaluation_and_Review_Technique

Activity On The Node (AON)

Network Diagram

Marchewka (2006)

Project Scheduling

Marchewka (2006)

• Critical Path Method (CPM)

• Precedence Diagramming Method (PDM)

• Lead Time & Lag Time

Work Breakdown Structure

Marchewka (2006)

Project Schedule Estimation Techniques

Marchewka (2006)

• Guesstimating

• Delphi Technique

• Time Boxing

• Top-Down

• Bottom Up

• Analogous Estimates (Past experiences)

• Parametric Modeling (Statistical)

Project Budget

• Direct/up-front costs– Materials– Services– Labor

• Ongoing costs• Indirect costs

– Facilities, utilities– Administration– Taxes– Benefits

• (Opportunity & productivity costs)• (Sunk costs)• Learning curve• Reserves• Total Cost of Ownership (TCO)

Project Human Resource Management

Marchewka (2006)

• Project team members, roles & responsibilities

• Organizational structure– Functional

– Project-based

– Matrix

• Stakeholder analysis

Project Risk Management

Risk Strategies• Accept/ignore• Avoid completely• Reduce risk

likelihood or impact• Transfer risk to

someone else (e.g. insurance)

Marchewka (2006)

Risk = f(likelihood x impact)