On time & On budget

All too often IT projects are judged by cost and the time it takes to complete them. Although valid benchmarks, if a company is to capture real business benefit then success must be measured and managed by more comprehensive methodologies.

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By  Greg Wilson Published  August 26, 2001

Project Management|~||~||~|After an aggressive six-month implementation, the project came in on time and on budget. The information systems department was understandably pleased with itself. Most of the IT personnel took their end of project bonuses and then moved on to the next big contract. Everyone’s happy right?

Well almost. The chief financial officer is sat with the CEO and they are trying to figure out just what they paid for. They can gauge some peripheral benefits, such as a reduction in operating expenditure or more manageable company reports, but is the end result really adding business value? Although delivering projects on time and on budget are always benchmarks in judging a successful implementation, they are certainly not the final word. For companies to maximise the returns of IT implementations, they have to meld the technology with the business need right from the project’s inception. To ensure the implementation provides the maximum possible return it must be measured on broader terms than ‘on time and in budget.’

“With an ERP solution there are go live days, milestones, mobilisation and all these things. But at each stage what is the benchmark that we are following in this region? Well it’s just the question of meeting the deadline within cost,” says Vineet Chhatwal, senior manager, PwC’s global risk management solutions practice. “This comes down to how you measure success. There is the business objective and other parameters for measuring success, other than cost and deadlines,” he adds.

According to Mohammed Shah, vice president of Royah Company, an IT services organisation, which recently spun-off from the Saudi-based SAVOLA Group, businesses should theorise on the possible benefits of a solution. “Companies should try to identify the business pain and the estimated value of the project… it’s like doing ‘what if’ analysis — what could we do if this process was improved?,” says Shah. “There is no point in losing weight if you don’t know how fat you are in the first place,” he adds.

The fact that majority of IT projects continue to be judged on narrow cost/time objectives is indicative of the region’s low awareness to project management issues. If businesses are to maximise project returns they must target more far-reaching goals, which embrace the whole business.

A recent security survey conducted by PricewaterhouseCoopers and ITP.net indirectly turned over interesting figures about the IT department and the use of project management methodologies. When respondents were asked if they had some form of structured system development lifecycle (SDLC) for managing application development, 44% said they had SDLC in some form, while 56% said they had no structure.

Furthermore, when asked if besides SDLC they had a broader project management methodology, and if so what issues it addressed, 40% said the policy only covered allocation of duties and 21% went ahead to say they had no project management methodology at all. “This is a question of maturity,” says Gavin Wehlburg, a partner with PwC’s global risk management practice.

“Speaking in terms of the data we have gathered, the organisations here aren’t even on the playing field in terms of their counterparts elsewhere in the world. Elsewhere they are driven by the business — here it’s being driven by the IT department,” the partner consultant explains.

Other statistics gathered as part of the survey illustrate the working relationship between the IT department and the rest of the business. For example, the IT department alone dealt with 72% of security issues. This statistic goes against conventional wisdom that says security is an issue facing the whole business and consequently must have senior management buy-in if workable security procedures and practices are to be rolled out.

Another interesting statistic from the report was that 52% of companies do not have any links between business objectives/strategies and the security strategy. “It is clear to see that security is still considered an IT problem,” stated the PwC report, compiled by Chhatwal and Wehlburg. It is “reflective of a lack of senior management commitment to the subject.”

||**||Corridors & Closed Doors|~||~||~|Senior business sponsorship has to ensure that business value is added to the methodology and other project dependencies — such as organisational change, business process tweaking and the management of people, change and risk.

However, some companies in the region still demonstrate a ‘corridors & closed doors,’ attitude to IT deployments. “We’re seeing big clients that missed these aspects and the project is still IT driven, with IT objectives in mind. Senior management is only involved to the extent of approving the budget and then receiving reports and validations,” says Chhatwal.

Commonly, “the first person that sits across the table is from the IT department. It’s rare to see functional users. There might be some users there to control costing… but it’s rare to see a non-IT person meeting you with an IT project,” adds the senior partner.

An inability to factor in other elements of project management has led to many big deployments failing in some form or another. According to PwC figures, as much as 70% of projects experience some form of failure, in terms of additional costs, training or unscheduled delays. Gartner Group research puts this figure at between 80-to-90% project failure rate.

Escalating costs, unexpected project interruptions or a disappointing final implementation, can be avoided if change is factored into the bargain. Regional companies commonly deploy a ‘waterfall’ or ‘a-to-b’ approach to projects, completely neglecting the changing nature of a business’ needs. Some “big companies are still staying with the waterfall approach,” says PJ Corum, chairman of the IT sub-committee, Dubai Quality Group.

“This means [they do] requirements, analysis, design, testing and two years later [they] deliver a product. But in the meantime, the market has changed and the requirements have changed, but the project hasn’t,” explains Corum.

To avoid delivering projects already past their sale-by-date organisations must take an incremental route to producing projects, advises Corum, an IT veteran of 25 years, and also managing director the Quality Assurance Institute Middle East & Africa.

Companies need to think on “an incremental basis, addressing areas of high risk first, rather than investing up front for 18-months. [They need] to know what it’s going to take to address these high risk areas,” comments Corum.

However, risk assessment or management expertise is in short supply within many organisations. The PwC/ITP survey stated that only 26% of respondents conducted risk assessment. Combine that figure with the number of respondents which claimed the IT department has sole responsibility for security issues, and it’s obvious that risk assessment skills don’t exist within many IT departments.

PwC defines ‘risk’ as anything that would prevent a project from achieving its objectives. Consequently, risk management must be done from the top down through the organisation, in order to ensure the business pulls together to achieve the project objectives. “What is [the project] doing, why is it doing that, how is it doing that — has it got the company’s objectives in mind, how it is a subset of that and how is it improving things… a lot of those areas are not addressed. This is over and above just putting in a new system,” says PwC’s Wehlburg.

The ability to manage dynamic projects also calls for organisations to take a vastly more proactive stance towards people management. Traditionally, the region has seen imported skills come and go, and it has only been recently that organisations begun seeing its staff as an asset. Project management is the management of change, but that “doesn’t just mean system change,” says Amro Bibi, manager, architecture & standards, MashreqBank. “It also applies to users adopting new practices and adopting change in the way that they [the staff] do their job and the way they work,” he adds.

MashreqBank already considers training as a critical element in the lifecycle of any project, if the organisation is to reach its technical and business objectives. By investing in its personnel, the bank believes it’s investing in the organisation. “By training and educating [our staff], about different research, white papers, and sharing knowledge… we’re benefiting the organisation,” says Bibi.

“There is no fear of investing so much time and money, and thinking that this could be money wasted on a resource, and they might leave in a few months… we don’t think in this way. Enabling our resources is enabling our organisation,” he adds.

||**||Cost management|~||~||~|If the region is to resolve its reoccurring brain drain dilemma, then putting the right expertise in place to manage change is going to be vital. Commonly most IT departments are made up of personnel from a number of different countries and cultures, adding to the challenge of managing change within the organisation. “It’s natural for people to feel threatened by change, people instantly think it means ‘I’m out.’ This feeling is compounded in the high income, but insecure expat environment,” says Royah’s Shah.

By and large says PJ Corum, the only thing worse than the low understanding of project management issues, “is people management.”

The Middle East’s accelerated growth and the influx of Western management practices combined with an abundance of cheap labour are all contributing factors to the region’s poor people management skills, says Corum.

But this is changing, particularly in the IT area as “highly qualified and marketable people arrive. And they expect to one; work for a good manager and two; have a project plan that is rational, do-able, measurable and will bring in a successful project on time, on schedule and with the appropriate quality attributes,” explains Corum.

Ayman Safadi, business development & programme/project manager with
Accenture’s Middle East operation, agrees that the local market has to learn the HR element of deploying IT/business projects. Commonly many IT implementations will require changing the job descriptions or expectations of company personnel.

However, the region as a whole has a low understanding of management concepts such as clear career paths and re-training for new job requirements or expectations.

The whole people issue is made more difficult because “they don’t understand… the people side of the business is considered a minor issue,” says Safadi.

The relatively low understanding of people issues means that Accenture commonly focus on process enhancement and technology aspect of the project, and “swing the people issue in behind these changes,” says Safadi.

“The focus of our proposals would be business processes and technology. At the end of the day this will impact the people side. This way we are mitigating the challenge,” he adds.

As ever, the biggest factor pressing for an end to the corridors & closed doors attitude, is the growing competitive environment. The senior management can no longer afford to be removed from the IT-engine room, if they are to develop and deploy systems that deliver superior customer support and loyalty.

However, to achieve these ends, “we have to build teams that understand what needs to be done and they must have the skills to get it done,” says Corum.

Mohammed Shah, of the Royah Company has a tried & tested model for building implementation teams. He splits the implementation team into three areas; the project manager/director, the business and technology teams and finally a change management team. “The change management team is there to handle the human element. They do everything from the project barbecue, to the newsletter and most of all communicate. They are there to ensure that the business people and the technology people pull together,” explains Shah.

Other businesses, mostly without the in-house expertise, are increasingly warming to the idea of consulting organisations.

All of the established players have their own specific methodologies, demand, senior management buy-in, strict project guidelines, knowledge transfer, people, risk and change management and of course information technology. “Customers have started to understand the concept of project management as a service itself. Previously it was taken for granted,” Ajit Damodaran, professional services, networking solutions, Middle East, Eastern Europe & Africa, NCR.

In some cases consultants are being brought in as substitutes for assembling an expensive in-house project team, says Hisham Hany Elkeraby, executive consultant, KPMG Middle East.

“The market has changed, previously there were companies with IT departments that did everything, now the market is going towards consultation. Instead of hiring people in the IT departments and having a big staff, they are going to consultation,” comments Elkeraby.

However, some end users urge caution when assessing possible consultants. Royah Company, only uses consultants to fill gaps within its own expertise. When they’re in place there is a huge focus on knowledge transfer from the consultant to the IT division. “We use consultants to fill a skills gap,” says Shah.

“We have created our own methodology based on Oracle’s AIM (Application Implementation Methodology) program, but we have trimmed it down and made an express version. Users have to remember that consultant methodologies are designed to maximise the business engagement.”

Accenture’s Safadi emphasises consultants can only be catalysts to change. Project leadership and senior management support are critically important for any successful project.

“We call ourselves catalyst… we filter that is behind that vision into the organisation in an easy language in terms of vision, strategy and direction.”

||**||MashreqBank maps out the route ahead|~||~||~|Most businesses have a vision of where they would like to be in five years, but few of them have a firm notion of how to get there. A similar thing could be said for many IT projects in the region — they start out with good intentions, but fail to achieve the desired business goals.

To ensure that its IT initiatives meet the business objectives, MashreqBank invested in CA’s Platinum Process Continuum (PPC). The tool has helped the bank outline project management procedures for a number of IT deliverables.

“[Project management] is a very critical issue for us over here,” says Amro Bibi, manager, architecture & standards, MashreqBank.

“If we don’t properly align technology to the business direction then [there] will be lots of deviations which will lead to increase of risk, compromise on quality and control, run on targeted time and allocated budget. The selection of PPC is critical to maintain one way of approaching one project… [For either] internal or external initiatives across all IT teams.”

Currently, the majority of MashreqBank’s IT staff are using PPC to provide a tried and tested project methodology to a number of different initiatives. Running in conjunction with a workflow solution, the tool has also been used to help standardise some of the policies & procedures that govern the IT department’s operation.
MashreqBank went for the CA solution only after a stringent selection procedure.

“CA met all the selection criteria — it provided all the methodology (Global Best Practices of an IT solution provider), the estimating tools, scheduling and so on,” says Bibi.

Prior to the deployment of the PPC tool, expertise was brought in from CA’s South African office, to sit with the bank for two weeks. Before training with the user community, the CA consultants conducted a review in order to learn the business culture of the bank. “The only reason we did this was to understand the gap — where we are today and where do we want to be tomorrow,” says Bibi.

The implementation of the tool also meant the IT personnel had to focus heavily on the business-aspects of project work. “This was a major change management issue, in terms of the technology people changing their approach to include business… [They were] documenting, and documenting and trying to catch business requirements in a more technical format, translating them from a business terminology into technical [requirement,]” explains Bibi.

With PPC successfully installed within the IT department, Bibi is keen to investigate the possibilities of customising the solution for business users within MashreqBank. “Particularly with the commitment coming from the CEO and CIO… definitely people will be using these tools more in the future, and changing their approach to technology and business.”
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