Chapter 10: A Portfolio Approach to Managing IT Projects

1
Chapter 10 A Portfolio Approach to Managing IT
Projects

• Kimberly Jenkins
• Sarah Hammond
• Hamza Tosun

2
Sources of Implementation Risk

• Three dimensions influence implementation risk
• Project size
• Experience with the technology
• Requirement volatility

3
Project Categories Degree of Risk

• Risk analysis helps to make sure everybody
  involved in a project has the same understanding
  of inherent risks
• More risk factors a project accumulates, the
  higher the risk

4
Project Categories Degree of Risk (cont.)

• Questionnaires
• Highlight sources of implementation risks and can
  suggest alternative routes to conceiving the
  project and managing it to reduce risk
• Help prevent potential misunderstandings by
  encouraging a common understanding among senior
  management, IT Managers and business managers

5
Managing the Dip during Project Implementation

• Difficulties often materialize at cutover

6
Portfolio Risk

• A company should develop a profile of aggregate
  implementation risk for its portfolio of systems
  projects
• Projects are usually conceived and financially
  justified one at a time, not as a group.

7
Project Management A Contingency Approach

• There are four types of tools for managing IT
  projects
• External Integration Tools
• Internal Integration Tools
• Formal Planning Tools
• Formal Result Controls

8
Influence on Tools Selection

• Low Requirements Volatility/Low Technology
  Projects
• Easiest projects to manage, but least common
• Systems concept and design remain constant
• Management does not have to be extraordinarily
  skilled as exposure to risk is low
• Low Requirements Volatility/High Technology
  Projects
• Not easy to manage- successful manager required
• Interaction with users is important to ensure
  agreement on business procedure changes necessary
  for project success and to deal with adjustments
  made necessary by unexpected shortcomings in the
  projects technology
• Technical leadership and internal integration are
  key

9
Influences on Tool Selection

• High Requirements Volatility/Low Technology
  Projects
• Present low risk when well managed
• Effective efforts to involve users in design,
  development and implementation are key
• Formal planning tools are helpful
• Key to success is close, aggressive management of
  external integration, supplemented by formal
  planning and control tools
• Leadership must flow from users rather than from
  technologists

10
Influences on Tools Selection

• High Requirements Volatility/High-Technology
  Projects
• Outputs are not clearly defined at the projects
  start
• Technically complex and extremely difficult
• Requires highly experienced project leaders who
  have wholehearted support from the users
• New tasks crop up regularly

11
Emergence of Adaptive Project Management Methods

• Trend has been toward projects with very volatile
  requirements- these systems are unattractive as
  investments because they achieve uncertain
  benefits
• Adaptive methods- emerging response to those
  projects, assume a need to gather information and
  learn as one goes
• Require staff to experiment during a project
  without incurring high costs

12
Software Development Cycles The Phases of IT
Projects

• Analysis and Design- formal statement of costs
  and benefits, typically developed by IT
  professionals
• Construction- selecting appropriate computer
  equipment, creating, buying, and adapting
  computer programs needed testing the system
• Implementation- involves extensive coordination
  between user and technologist, must be a joint
  effort, extensive testing
• Operation and Maintenance- planned in advance,
  requires highly competent professionals

13
5 Basic Characteristics of Adaptive Projects

• They are iterative. Design, construction, and
  implementation occur in small increments that
  result from each iteration so that outcomes and
  interactions can be tested
• They rely on fast cycles and require frequent
  delivery of value so that incremental
  implementation does not slow down a project.
  Long lead times and variable delivery timing are
  discouraged
• They emphasize early delivery to end users of
  functionality, however limited, so that feedback
  can be incorporated into learning and improvement
  cycles
• They require skilled project staff capable of
  learning and making midcourse adjustments in the
  middle of deployment
• They often resist return on investment and other
  similar tools for investment decision making that
  implicitly assume predictability of outcomes,
  instead emphasizing buying of information about
  outcomes as a legitimate expenditure

14
Adaptive Methods and Change Management

• Do not aspire to finalize a design, but call for
  an acceptable design
• Users are forced to confront trade-offs between
  delay in results and implementation
• Essence is to control the migration of system
  features from development, through testing, into
  production with a clear understanding of the
  benefits and potential problems at each stage
• Adaptive methodologies only make sense when
  experiments do not result in catastrophic
  consequences

15
Process Consistency and Agility in Project
Management

• Basically, PM always involves balancing a tension
  between process consistency and process agility.
• Discipline vs agility
• Simple process management tools have been
  developed to ensure the balance between
  consistency and agility

16
Process Consistency and Agility in Project
Management

• Categories of simple process management tools
• Flow
• Simple illustrations of the process context that
  help people to understand the overall process
  flow
• Completeness
• Simple checklists showing what part of the
  project has been completed and what part of it
  needs to be done
• Visibility
• Tools like wall charts help people review
  processes

17
Summary

• Firms will continue to experience major
  disappointments as they push into new application
  areas and technologies
• A firms IT projects in the aggregate represent a
  portfolio
• Project management in the IT field is complex and
  multidimensional so different sets of management
  tools may be required