Killing Projects is a Good Thing
|More Budget Stories on CIO Update|
Cost vs. Value
IT Forecasts, Budgets and Post Audits
PPM and Project Estimation Part I
PPM and Project Estimation Part II
Alas, at many companies, this is not the case. Hundreds of millions are often wasted because the inability of the CIO and/or the business to identify and eliminate non-performing projects. One large insurer, for example, has spent the better part of the last six years trying implement a real-time transaction processing system for their geographically distributed agents.
After spending nearly $300 million to date, the company is on its third go around and prepared to spend another $90 million to get this mission-critical project done. But, because of the projects status as mission critical, it is very difficult for the company to justify anything but success.
Is This You?
There many reasons why projects tend to take on a life of their own: cultural issues, political issues, and sunk costs are the main drivers. Even so, it is up to IT to lead the charge when it comes to failing projects that are diverting valuable resources from other, more promising efforts. It is up to IT to inform the business when a project is looking bad and to educate the business as well; laying the groundwork for future decision-making and building trust between IT and the business.
For the IT department, its got to be whats good for the business, said Thomas Cutting, a senior principal consultant for Keane, Inc. A project manager cant think along the lines his specific project, hes got to think outside that: Is this project good for the company in the long term? Is this project going to save the company money or cost the company money?
Of course, IT can only really recommend. It is generally a business decision to cancel projects. It is up to IT to become the trusted advisor in that process. The better the help they provide, the better the relationship between IT and the business can become.
Part of being a seasoned IT professional is to be able to educate those around you as to not only what the metrics are, but what they mean and how to read them, said Stephan Wyman, VP of Technology at custom software developer TandemSeven.
Like most things, this is easier said than done. If the culture of a company is such that dissent is squashed, then it becomes an uphill battle to get your voice heard; especially, if you are in line to take the blame when a project fails. Still, its better to say, I told you so, than thinking I wish I had told you so as youre walking out the door, file box in hand.
If the problem is political, like when a projects sponsor is high up in the firm, there probably isnt much you can do except spend some time on education efforts and hope for the best. One tack to take in this instance is to show how the resources diverted to the executives pet-project are either hampering efforts on other important projects or just being wasted.
If the problem is financial, the general advice is to cut you losses, said Keanes Cutting.
That sunk-cost factor is something that shouldnt be considered as much as it usually is in determining if a project should be cancelled or not, he said. First of all, the sunken cost, youre not going to recoup those anyway so not stopping a project just because you spent a lot of money on it doesnt make sense.The flip side of this coin, however, is if it will cost more to cancel the project than see it through. Then the answer is obvious: Get it done and move on as quickly as possible so minimal resources are wasted.
The ability to kill projects indicates a mature project management process is in place, said Jeff Monteforte, owner of Exential, a Cleveland-Ohio based project management consultancy. But, boys will be boys, and maturity is something hard to find at many companies. Too often, projects are not stage-gated, e.g. viewed at different times along the way to determine go/no-go status. Also, frameworks such as the CMM (capability maturity model for software development (now replaced by the CMMI capability maturity model for integration)) or portfolio project management (PPM) are non-existent. This leads to an absence of objectivity in the project review processif there is one.
To remedy this situation, even if CMM or PPM are not in use, is fairly straightforward, said Tandems Wyman. When he was working as a consultant, one of his clients set up quarterly meetings with all of the projects managers, project sponsors and need-to-know execs to go over what projects were in the pipeline, where they were at and whether they should continue. Good preparation meant this meeting lasted no more than two days and, because of the cross-communication between the business and IT, sound decision-making was facilitated.
If you can set that up so that it only takes a day or two of time and it only takes a couple of days to prepare for it, you can step back and be able take a look at your entire portfolio of projects and be able make an evaluation of what is really going on, he said.
Another, less tactful approach to the lack of proper project management is to put together Hit Squads that are charged with putting off-the-track projects back on track. This is a much more painful approach than the one outlines above and will undoubtedly lead to hurt feelings and loss of goodwill, but, said Monteforte, the project will get done.
They beat up the vendors, they beat up the development team, theres lots of dead bodies on the side of the road when they are done, he said.
It is better than nothing but thats hardly justification for relying this approach for project management. It is far better to facilitate good, lasting relationships with your business peers that will ease future project management issues and failings. A PPM approach, for example, puts the onus on the business to a) justify in business terms why a project needs to be done in the first place and b) allows the CIO to move out of reactionary mode to become more proactive, said Monteforte.
If youre not using them already, there are many frameworks and methodologies to get you started, said Tandems Wyman.
The techniques we use are techniques you can use both externally and internally and should use, he said. There should always be these feedback loops. Ive never been one to believe in the big-bang theory: In the last day everything comes together and the whole world is happy.