implementing information systems in organizations: change

1Lars GrothImplementing information systems in organizationsINF5210

INF5210

Implementing information systems in organizations:

Change management in practice

Lars Groth


How come?


«Identifying Software Projects Risks: An International Delphi Study»Roy Schmidt, Kalle Lyytinen. Mark Keil og Paul Cule, Journal of Management Information Systems, Spring 2001, 17:4 s. 5-36.


A Reflection on Why Large Public Projects Fail

Kjetil Holgeid

Accenture Managing Director - Nordic Technology Lead Health & Public Service

Dr. Mark Thompson

Cambridge Judge Business School University of Cambridge


Risk factors and problem areasfor big, public IT-projects

1. Project is not anchored in an updated business

plan or IT strategy

2. Unrealistic goals and too high ambitions –

insufficient focus on the ability to actually

complete the work

3. Unclear organization and responsibilities

4. Too big and comprehensive systems – deliveries

not sufficiently modularized

5. Inadequate project management, insufficient

preparedness for exception management

6. Contracts are left in the drawer, and not used for

following up the execution of the project

7. Plans and estimates based on incomplete

information

8. Too much focus on technology, organizational

development and skill improvement

underestimated

9. Choosing bleeding edge technology instead of

tried and tested solutions

10. Insufficient competence, especially at

managerial level

11. Changes in requirements or preconditions during

the project are neglected

12. Wrong choices and low attentiveness to what the

organization should do and what to buy in the

market


Change management

≠

Operational management


Refinement of existing practice

An addition to or extension of

existing practice

Phasing out something

Replacing existing practice

with something entirely new

Levels of change


Change management strategies

Time is critical

Strong disagreement

Comprehensive change

Problem can be solves by changing formal elements

Acceptance for the use offormal authority

Little time pressure

Little disagreement

Limited (incremental) change

Problem-solving requirescultural changes

When employees want and are able to participate

The hierarchicalstrategy

The democraticstrategy


However, change – not least when it comes to introducing new IT systems – is really

about changing the very recurring patterns of action that constitute the organization

The heart of this must be a thorough understanding of this transition and of the planned,

new pattern

There are two basic views on this, corresponding to the two basic change management

strategies:

Change management strategies

The structural view:

Understanding leads to action

The hierarchicalstrategy

Waterfall method?

The democraticstrategy

The interpretational view:

Action leads to understanding

DevOps?

Alexander Budzier

BT Centre for Major Programme Management

University of Oxford

Hovedstadsområdets nettverk for

IT-ledelse og styring (HIT)

28th of May, 2015

Black Swans:

The Real Risk in IT Projects


We Studied a Total of 4,307 Projects, Worth $85.0 Billion

Project archaeology

Count

Desk study FOIA requests

Project type

System type

Projects 1,365

Organisations 28

289

51

1,029

58

Comms

3

Infrastructure6

Software89

Other35

MIS5

HRM

10

SCM

21ERP

29

▪ Average 21m▪ Median 0.8m▪ Total value 85bn

▪ Average 3.3 years▪ Median 3.0 years

Project size (2010 USD millions)

Project length (years)

1,624

120

Budget data

2Other

© Bent Flyvbjerg and Alexander Budzier 2009-2015


Black Swans Matter More Than Medians

N = 4,307 17

© Bent Flyvbjerg and Alexander Budzier 2009-2015

Thin-tailed distribution Infrastructure projects

Cost risk (Percent)1 Normal distributions with thin tails have less than .7% projects

outliers outside these bounds

IT projects

▪ IT and infrastructure projects have

similar median cost over-runs

▪ However, IT projects have a much

fatter “tail” of out-of-control projects

▪ In fact, IT projects are 100 times more

likely to run out-of-control than

expected: more than 10,500% over-

incidence of outliers!!

Frequency (Percent)

0

5

10

15

20

25

30

35

40

-100 -50 0 50 100 150 200 250 300 350 400


La Clairvoyance - René Magritte


Critical matters

1. Very different from what the team and

stakeholders in the organization have been

involved in before

2. Very complex and/or unclear problem

domain

3. Many stakeholders, cultures

4. Numerous interfaces to other systems

5. Involves significant changes in work

processes

6. Large or very large project size

7. Untested technology

Nature of project

8. Is management involved and committed?

9. Are objectives and expectations clear and

well known?

10. Is the project staffed with the right people

with adequate competence?

11. Is the project adequately organized?

12. Project volatility

13. Team spirit and morale, work environment

14. Contract type

Organization and management


Project size

Sauer, C., Gemino, A., and Reich, B.H. (2007): “The Impact of Size and Volatility on IT Project Performance: Studying the factors influencing project risk”, Communication of the ACM, November 2007, Vol. 50, No. 11

«The underperformers consisted of threecategories:

AbandonedBudget ChallengedSchedule Challenged»


Management support

Active commitment and support from line management in the

relevant parts of the organization is absolutely vital for project

success

Projects that are important for the organization as a whole will

also need top management’s full support and commitment

This is necessary to:

– Provide the project with the necessary resources, includingpersonnel

– Make the necessary decisions without delay as the project is progressing

– Solve the problems that always crop up during a project


Clarification of objectives and expectations

The project must have clear and clarified objectives

The objectives must be business objectives

Line management must decide on the objectives and commit

themselves to them

The expectations about what the project is to achieve both in total

and for each phase must be clear and clarified between line

management and the project

The project’s objectives must be known and accepted in the

organization

Project objectives and expectations must be thoroughly

internalized by the project team


Staffing

The quality of the work carried out in the project depends

squarely on the quality of the project team

The project must be allowed to pick the best qualified and most

experienced people in the organization, have them relieved for

their daily duties and made available for project work

Substitutes and temporary workers should be used to cover the

ensuing vacancies in the line organization, and not for project

work

For long periods, the project will require more than a normal

workload – key roles in the project cannot be combined with

daily tasks in the line organization


The Project Academy


The project organization

The project organization must contain the necessary roles

Normally, the role of project manager should be divided and shared by two

persons:

– The project director should have a background from line management positions. He/she should be responsible for maintaining the business perspective in the project, for reporting to the steering committee, and for anchoring the project in the line organization.

– The project manager should have IT-background and have the daily responsibility for the project.

The project organization must have solid support in the line line organization

The project must provide adequate information and reporting

Delivery and implementation should be organized separately, in

particular when a system is going to be installed at more than one site

– if not, the actual implementation work will be starved of resources


Project Volatility

Sauer, C., Gemino, A., and Reich, B.H. (2007): “The Impact of Size and Volatility on IT Project Performance: Studying the factors influencing project risk”, Communication of the ACM, November 2007, Vol. 50, No. 11

«The underperformers consisted of three categories:

AbandonedBudget ChallengedSchedule Challenged»


HIT surveys: Surveys amongmembers of a IT management network in Oslo, conducted onthe network’s seminars.

HIT = Hovedstadområdets nettverk for IT-styring og ledelse

Den gode kunde – Magne Jørgensen (Simula) - presentation at HIT breakfast seminar 27.11.2015http://hitledelse.com/tidligere-avholdte-arrangementer/

Rate of successPercentage of projects)

Per hour Fixed price

Usefulness

Quality

Budget

Time

Effectiveness


SMIOSSuccessful ICT solutions in the public sector

Partners:

• Lånekassen• SPK• Skatteetaten• NAV• NSB• Posten• Difi• Oslo Kommune• Asker kommune• Sykehuspartner• UDI

In-depth study of 35 projects

Magne Jørgensen: Hva kjennetegner IT-prosjekter som lykkes? Hovedstadsområdets nettverk for IT-ledelse og styring (HIT), frokostseminar 28. september 2016http://hitledelse.com/tidligere-avholdte-arrangementer/

Type of contractNumber of projects)

Wentwell

Problems in at least one area

Great problems/ terminated


Typical «Fixed-price» behavior

Contractor:

– More focussed on contract than on usefulness

– More opportunistic

– Reduced quality of deliverables

Customer:

– Becomes less flexible

– Insists that 100% of contracted deliverables should be produced, regardless of usefulness

– More focussed on price and specifications than on usefulness

Magne Jørgensen: Hva kjennetegner IT-prosjekter som lykkes? Hovedstadsområdets nettverk for IT-ledelse og styring (HIT), frokostseminar 28. september 2016http://hitledelse.com/tidligere-avholdte-arrangementer/


Explaining the connection between a focus on low price and project

problems

Context: Risk is particularly high when the customer has low competence in specifying

and evaluating vendor competence

«Hva skal til for å lykkes i IT-prosjekter?» Professor Magne Jørgensen, Simula Research Laboratory, 2015


Dunning-Kruger Effect

The Dunning-Kruger effect, named after David Dunning and Justin Kruger of

Cornell University, occurs where people fail to adequately assess their level of

competence — or specifically, their incompetence — at a task and thus consider

themselves much more competent than everyone else.

This lack of awareness is attributed to their lower level of competence robbing them

of the ability to critically analyze their performance, leading to a significant

overestimate of themselves.

The inverse also applies: Competent people tend to underestimate their ability

compared to others; this is known as impostor syndrome.

If you have no doubts whatsoever about your competence, you could just be that

damn good.

On the other hand...


Ahonen, JarmoJ., et al.: "Reported project management effort, project size, and contract type." Journal of Systems and Software 109 (2015): 205-213.

Fixed price contractsincrease administrative

overhead

Fig.4. Visual representation for hypothesis H5. Circles denote projects with fixed contracts, and triangles denote projects withtime-and-materials contracts. A dashed line is fitted to the time-and-materials contracts, and a continuous line to fixed contracts.


Morale and work environment

High spirits in the project team and a commitment to succeed is

decisive for the fate of the project

The work environment must be supportive of the project work

– Suitable office premises

– Good equipment that works

– Culture-building arrangements and artifacts


If these four conditions are met,

almost all problems can be overwon!

Deep commitment by a management that actively support the

project

Clear, clarified and well-known objectives agreed upon by all

major stakeholders

Adequate staffing with top skills and competence

High work morale


Requirement specification

Specs must be based on business needs

Itemizing must be on the right level – too many details will drown

out the important points, especially if you are buying

packaged software, and you may be lured into making

costly and unnecessary changes to it

Prioritization is adamant – the most important requirements must

stand out clearly

It is also important to include usability: How many clicks and

mouse movements are needed for the most common

operations? How many screens do you have to visit?


Methods and tools

The project should use documented methods

Methods and other tools should be suited for the tasks at hand


Project management methods

Critical chain project management

Event chain methodology

Process-based management

Agile project management

Lean project management

Extreme project management

….

PMBOK®

Most widely used


“The major problems and issues which PRINCE2 participants believe impede the success of projects using PRINCE2 are demonstrably not methodological, but rather organizational.”

Side 42


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"We know why projects fail, we know how to prevent their failure –

so why do they still fail?"

Martin Cobb, CIO, Treasury Board of Canada, 1995


Comprehensive checklistsDocument orientedMeasurements

Points out deviationsProvides advice

Comprehensive checklistsDocument orientedMeasurements

Points out deviations

Short checklistsFocus on interviews and participation in meetings

Points out problemsProvides advice

Proactive

Passive

Formal Problemoriented

Approaches to

Quality Assurance

Short checklistsFocus on interviews and participation in meetings

Points out problems


When should QA start?

Well before the project starts!

The quality assurance of greatest consequence for the

project must be carried out during the planning process!


«Early Warning Signs of IT Project Failure: The Dominant Dozen»Leon A. Kappelman, Robert McKeeman og Lixuan Zhang, Information Systems Management, 2006, 23:4 s. 31-36.


Risikodiagram Usikkerhetsbilde pr 08.08.2011

Høykritisk Kritisk Alvorlig Liten Liten Middels Stor Veldig stor

>50 30-50 10-30 <10 10> 10-30 30-50 50<

ST20

ST03 ST13 ST05, ST06

ST08

Konsekvens

Risiko Mulighet

Veldig stor

>60%

Liten

10-20%

Ubetydelig

<10%

Sann-

synlighet

Usikkerhets-

matrise

Stor

40-60%

Middels

20-40%


RadardiagramMVA3 98.11.25

0

1

2

3

4

5

6

7

8

9

10

Brukermedvirkning

Lederstøtte

Kravspesifikasjon

Prosjektplaner

Status, rapportering og oppfølging

Metoder, verktøy -- rutiner, standarder, maler

Bemanning og kompetanse (IT)

Organisasjon

Arbeidsmiljø og -moral

Mål og forventninger

Status pr. 98.11.25,

uveiet på skala 0-10

Status pr. 98.09.10,

uveiet på skala 0-10


Overordnede planer og fremdrift

ObservasjonerVirksomhetens prosjektleder har i samarbeid med sentrale prosjektdeltagere fullført den overordnede planleggings-prosessen. Planen er estimert og ressurssatt for alle aktiviteter som rapporterer til Virksomhetens prosjektleder.

For utviklingsoppgavene mangler det imidlertid i det fremlagte planmaterialet den nedbrytning i ressurssatte enkeltoppgaver med begrenset varighet (en eller i høyden 2-3 kalenderuker) som bør foreligge hvis fremdriftskontrollen skal være tilfredsstillende. Av samme grunn er det vanskelig å vurdere realismen i gjenværende milepæler og planlagte ferdigtidspunkter.

Sentrale nøkkelpersoner i Virksomhetens del av prosjektet er derfor usikre på hvor mye av de nye systemløsningene som kan være i tilstrekkelig sikker drift innen 31.12.XX med prosjektets nåværende organisasjonsform og fremdriftskontroll. De anser at en betydlig reorganisering (inklusive en endring av Big Consultings rolle) er en nødvendig forutsetning for å lykkes.

Det er derfor tatt initiativ fra Virksomhetens side til diskusjoner med Big Consulting om en reorganisering av prosjektet.

VurderingUten endringer i prosjektet er risikoen for å mislykkes høy. Vurderingene til Virksomhetens nøkkelspersoner i prosjekter virker klart berettiget. Det er derfor tvingende nødvendig at partene i prosjektet kommer frem til en organisasjonsform og en fremdriftskontroll som alle kan godta som realistisk. Det må raskt etableres enighet om en prosjektmodell og et oppfølgingsgrunnlag som alle parter anser vil gi minst samme sikkerhet for å klare kjernekravene som en konvertering av eksisterende systemer.

TiltakProsjektet reorganiseres for å tilpasses den nye situasjonen. En reorganisert løsning bør ha en ansvarlig prosjektleder med dokumentert kompetanse og en styringsgruppe med minst to medlemmer utenom prosjektlederen som har betydelig erfaring fra styringsgrupper eller prosjektledelse for større utviklingsprosjekter. Den ene av disse bør komme fra Virksomheten eller en kompetent 3.part engasjert av Virksomheten, den andre fra Big Consulting.

Reorganiseringen må ta utgangspunkt i utviklingsaktivitetenes behov, deretter må man reetablere den nødvendige prosjektorganisasjon for alle aktiviteter i forbindelse med prosess- og systeminnføring. Hvis Virksomhetens prosjektleder overtar ledelsen av totalprosjektet vil han ha behov for avlastning for arbeidet på prosess/forankringssiden, siden oppfølging av systemutviklingen vil kreve det meste av hans oppmerksomhet.

implementing information systems in organizations: change

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