Information Technology Project Methodology (ITPM)

Methodology

Methodology is a strategic-level plan for managing and controlling the project. It is used as a game plan for implementing project and product life cycles. It recommends phases, deliverable, processes, tools, and knowledge areas for support in an IT project. In addition, It must be flexible and include best practices learned from experiences over time and can be traditional (e.g., Waterfall) or Agile (e.g., XPM, SRUM).

Project Management Processes

1. Initiating processes

2. Planning processes

3. Executing processes

4. Controlling processes

5. Closing processes

Phases

Phase1: Conceptualize and Initialize

Phase2: Develop the Project Charter and Detailed Project Plan defined in terms of project's: scope, schedule, budget, and quality objectives.

Phase3: Execute and Control the Project using approach such as the SDLC.

Phase4: Close Project

Phase5: Evaluate Project Success

- Post mortem by project manager and team of entire project.

- Evaluation of team members by project manager.

- Outside evaluation of project, project leader, and team members.

- Evaluate project's organizational value.

IT Value Chain

Measurable Organizational Value (MOV)

The characteristic of MOV:

-- 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

Process for Developing the MOV

Step1: Identify the desired area of impact. The potential areas are strategic, customer, financial, operational, and social.

Step2: Identify the desired value of IT project. Is the IT project help the organizational value better, faster, cheaper, or grow?

Step3: Develop an Appropriate Metric. Should it increase or decrease? The matrics may be money, percentage, or numeric values.

Step4: Set a time frame for achieving the MOV. When will the MOV be achieved?

Step5: Verify and get agreement from the project stakeholders. The project manager and team can only guide the process.

Step6: Summarize the MOV in a clear, concise statement or table.

Examples: Clear --> This project will be successful if _____.

Statement --> The B2C project will provide a 20% return on investment and 500 new customers within the first year of its operaton

Table -->

Business Case

Business Case is an analysis of the organizational value, feasibility, costs, benefits, and risks of the project plan.

Attributes of a Good Business Case:

-- Details all possible impacts, costs, and benefits

-- Clearly compares alternatives

-- Objectively includes all pertinent information

-- Systematic in terms of summarizing findings

Process for Developing the Business Case

Step1: Select the core team

It provides several advantages such as, credibility, alignment with organizational goals, accessing to the real costs, ownership, agreement, and bridge building.

Step2: Define Measurable Organizational Value (MOV) of the project's overall goal.

Step3: Identify alternatives

-- Base case alternative

-- Possible alternatives strategies such as, change existing process without investing in IT, adopt systems from other organizational areas, reengineer existing system, purchase off the shelf applications package, custom build new solution.

Step4: Define feasibility and asses risk such as, economic feasibility, technical feasibility, organizational feasibility, etc. The risk focuses on identification, assessment, and response.

Step5: Define total cost of ownership such as, direct or up-front costs, ongoing costs, and indirect costs.

Step6: Define total benefits of ownership such as increasing high-value, improving accuracy and efficiency, improving decision-making, improving customer service, etc.

Step7: Analyze alternatives using financial models and scoring models such as payback

Example: Payback Period = initial investment/net cash flow = $100,000/$20,000 = 5 years

Breakeven Point = initial investment/net profit margin

If you sell a golf putter for $30 and it costs $25 to make, you have a profit margin of $5.

Therefore, breakeven point = $100,000/$5 = 20,000 units.

Return on Investment = (total expected benefits - total expected costs)/total expected costs = ($115,000 - $100,000)/$100,000 = 15%

Step8: Propose and support the recommendation

Project Selection and Approval

The project selection decision, IT project must map to organization goals and provide verifiable MOV. The selection should be based on diverse measures such as tangible and intangible costs and benefits, various levels throughtout the organization.

Balanced Scorecard Approach

The balanced scorecard approach might fail because nonfinancial variables incorrectly identify as primary drivers, metrics not properly defined, goals for improvements negatiated not based on requirements, no systematic way to map high-level goals, reliance on trial and error as a methodology, no quantitative linkage between nonfinanacial and expected financial results.

MOV and the Organization's Scorecard

IT Governance

IT governance focuses on the processes that coordinate and control an organization's resources, actions, and decisions to help prevent people from making bad inverstments, acting unethically, or doing something illegal.

-- Identify strategic value --> compare the IT project in terms of business value as well as costs and potential risks.

-- Top business managers should set IT priorities

-- Communicate priorities and progress clearly

-- Monitor projects regularly

Project Management Office (PMO)

Its role is to provide support and collect project-related data while providing tools and methodologies. PMO can become center of excellence for project management.

Benefits of PMO

-- Points out minefields in project processes, such as time and cost estimation

-- Enforces priorities and/or controls that keep the project on track

-- Coordinates cross-functional projects that may stumble as a result of organizational politics that often arise when intraorganizational boundaries are crossed

-- Provides a standardized way for all projects to be planned, managed, and reported

-- Can show the real value of projects by comparing projected costs and benefits with actual results

-- Can coordinate more and larger projects than the organization could handle in the past

-- Allows IT to support its requests for additional staff or resources

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For more Information: Information Technology Project Management (Third Edition) by Jack T. Marchewka, Northern Illinois University