a portfolio approach to managing it projects
TRANSCRIPT
04/10/2023 STRATEGIC MANAGEMENT OF INFORMATION TECHNOLOGY
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A Portfolio Approach to Managing IT Projects
Presented By:Arvind Kumar
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IT Project Management – Cascading effect of failure
• A major chemical company halts its SAP installation and takes a major write-off(millions of dollars loosed)
• A major credit card company underestimates processing requirements and moved its online credit processing to a new service provider and found when system ‘goes live’ it crashes-> 1.5 million accounts lost -> CIO and whole team FIRED
• 2 similar companies with similar problems and requirements implemented same IT solution, one gained millions of dollar other looses
Major IT projects FAILED because1. Failure to assess(or acknowledge) the implementation risk of a project at the
time it is funded2. Failure to consider the aggregate implementation risk of a portfolio of projects3. Failure to recognize that different projects require different managerial
approaches
STRATEGIC MANAGEMENT OF INFORMATION TECHNOLOGY
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Portfolio
• Selecting and prioritizing projects– Which projects have the greatest impact?
• Organization’s strategy• Internal processes
– Which projects have the greatest risk?– Which projects have the greatest payoff?
• In terms of dollars, tangible and intangible benefits
– Which projects are required?– What is the value of information?
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Corporate Initiatives
• Corporate infrastructure• IT infrastructure
Portfolio
Organization Strategic Plan
IT Strategic Plan
Portfolio Project Implementation
• Long-term projects• “Low-hanging fruit”
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Project Risk
• Serious deficiencies in IT management Failure to assess the implementation risk of a project at
the time it is funded Failure to consider the aggregate implementation risk of
the portfolio of projects Failure to recognize that different projects require different
managerial approaches
Risk
Payoff
The greater the risk, the greater the payoff (benefit)
Potential
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Project Implementation Dip
Most projects don’t go smoothly all the way
New system going live common point
Expectations not always realistic
Short term downward shift may be necessary
All happens in middle of business cycle and worker turnover
Need to focus on end goal to get through value of change when people are complaining
Ideally see it before it comes and get people ready
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Expectations vs. reality
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Project Dimension and Risk
Project size • The larger the
project (budget, staffing levels, duration, number of departments affected), the larger the risk
Experience with technology • Unfamiliarity with
the technology (hardware, software, etc.) increases risk
Requirements volatility • Stable requirements
reduce the risk; “evolving” projects pose greater risks
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Effect of Increasing Risk Components
Project Risk
Number of Risk Factors
Moderate Risk
High Risk
Very High Risk
1 2 3
Project sizeExperience with technologyRequirements volatility
Risk
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Implementation Risk Categories
Low Technology
High Technology
High Requirements Volatility
Low Requirements Volatility
Spreadsheet support for budgeting (low tech application, requirements unknown)
Online graphic support for advertising copy (high tech application, requirements unknown)
Year 2000 compliance (low tech application, requirements known)
AI-driven bond trading (high tech application, requirements known)
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Implementation Risk Categories
Low
High
High Low
Tech
nolo
gy
Requirements Volatility
Size
Small
Large
Year 2000 compliance (low tech application, requirements known)
AI-driven bond trading (high tech application, requirements known)
Spreadsheet support for budgeting (low tech application, requirements unknown)
Online graphic support for advertising copy (high tech application, requirements unknown)
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Dimensions Influencing Risk
• Project size • Experience with technology • Requirements volatility (structured vs. unstructured)
Project size
Requirements VolatilityStructured Unstructured
LargeSmall
Experience
High
Low
Large, unstructured project with new
technology
Small structured project with new technology
Large, structured project with known technology
“Low hanging fruit”
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Dimensions Influencing Risk
• Project size • Experience with technology • Requirement volatility (structured vs. unstructured)
Project size
Requirements VolatilityStructured Unstructured
LargeSmall
Experience
High
Low
Low risk (unstructured, high experience, small project)
Medium risk (structured, low experience, large project)
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Dimensions Influencing Risk
• Project size • Experience with technology • Requirement volatility (structured vs. unstructured)
Project size
Requirements VolatilityStructured Unstructured
LargeSmall
Experience
High
Low
High risk (unstructured, low experience, small project)
Very High risk (unstructured, low experience, large project)
e-busin
ess p
rojec
ts
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Risk Assessment Based on the Strategic Grid
High
Low
HighLow
Impact of Existing IT
applications
Impact of Future IT applications
FactoryOperational IT
SupportBasic elements
TurnaroundGradual adoption
StrategicStrategic IT plan,
initiatives
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Risk PortfolioPr
ojec
t Ris
k
Very high
High
Medium
Low
New core value
New benefits
Improved benefits Variation
Breakthrough systems
New platforms
Derivative systems
Portfolio composed of different projects
Portfolio to mitigate risk
Low-hanging fruit
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Project Management: A Contingency Approach
“There is no single correct approach to all projects”
• Management tools External integration – Link project team
to system users(steering committee, prototyping, reporting etc.) Internal integration – Ensure project team
operates as an integrated unit(team selection, review meetings etc.)
Formal planning – Structure sequence of tasks, estimate time, money and resources(PM s/w, system specifications and estimation processes, post project auditing etc.)
Formal result controls – Evaluate progress and flag potential problems(Status vs. Plan report, milestone review meetings, analysis of deviation from plan)
Use depend
s on the
project
Integration tools assists with COMMUNICATIONS necessary to develop common understanding of project objectives, characteristics and potential outcomes…to make sure
everyone is on ‘SAME PAGE’
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Implementation Risk Categories
Low Technology
High Technology
High Requirements Volatility
Low Requirements Volatility
Projects easy to manage• External integration necessary • Internal integration less
necessary• Formal planning tools,
traditional• Results controls necessary
Low-risk profiles• External integration critical• Internal integration necessary• Formal planning tools,
traditional• Results controls necessary
Extremely difficult and should not be taken lightly
• External integration critical• Internal integration necessary• Formal planning tools, less
predictive value (due to uncertainties)
• Results controls necessary
Projects not easy to manage• External integration not crucial • Internal integration crucial• Formal planning tools, less
predictive value• Results controls limited,
personnel monitoring important
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Project Management
Relative Contribution of Management Tools• Depends on specific
project• Results-oriented
tools work in structured/formal environment
• Depends on corporate culture
Emergence of Adaptive Project Management Methods• Approaches to
design, deployment, implementation & investment that assume a need to gather info & learn as one goes.
• Not effective universal methods yet
Software Development Life Cycles
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SDLC(Software Development Life Cycle)
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Project Management (cont’d)
Adaptive Methodologies• Quickly build rough preliminary
version• Iterate through stages rather than
finish every stage• Fast cycle through stages• Aim to deliver limited functionality
fast• Require skilled staff
Adaptive Methods and change management• Intensely involve users in evaluating
outcomes• Strictly control migration of system
features from development, testing to production
• Separating stages avoids major problems
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Process Consistency and Agility in Project Management
Balancing tension between process consistency and process agility• Understand interrelationships between projects
Tools useful one place shouldn’t necessarily be applied to everything• Keeping track of all tasks in project
Success in balance often includes minimal formalization• Getting info on status of rest of project
Flow
Completeness
Visibility
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Other Aspects of IT Project Management
Develop and compare feasibility, complexity, scalability and cost of possible solutions• Contingency plans
Project portfolio – investing in the right projects
Aligning projects and initiatives to strategic objectives
Risk management – risk considerations, factors and plans
Managing multiple vendors and workflow
Regulatory and compliance issues
Leveling resources over projects – human, financial, technical
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Other Aspects of IT Project Management
Project planning, execution and scheduling
• Prioritizing, defining performance measures, tracking processes to ensure performance, schedule resources, project monitoring, change and service controls, quality assurance and testing, identify key drivers
Project leadership – Assessing change and change management, communication and organizational skills
Adoption issues
Identify and understanding stakeholders
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Good IT Project Management
Deliver on time
Come in or under budget
Meet the original objectives
Establish ground rules
Foster discipline, planning, documentation and management
Obtain and document the “final” user requirements
Obtain tenders from all appropriate potential vendors
Include suppliers in decision making
Convert existing data
Follow through after implementation
Successful project characteristics
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THANK YOU