Recent Developments in
Information Technology (IT)
Project Management
Kathy Schwalbe, Ph.D., PMP
Associate Professor, Dept. of Business
Administration, Augsburg College
December 4, 2002
schwalbe@augsburg.edu
www.kathyschwalbe.com
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Personal Background
• B.S. in math, 1981 (before Notre Dame
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•
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and most colleges offered computer
science or MIS degrees), MBA in 1986,
Ph.D. in education in 1996
First job was as a project manager in the
Air Force working on advanced
communications systems
Worked on many projects to develop and
install several types of systems
Now enjoy teaching, writing, and
mentoring others
Personality profile: ENTJ, driver, high need
for achievement
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Presentation Overview
• Update on project management (PM) and
progress in managing IT projects
• Key findings from recent PM research
• New developments in software to help
manage projects
• Personal views on what’s changing and
what needs to change
• Suggested references
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Recent Facts
About Project Management*
• The Project Management Institute
•
(PMI) estimates that 4.5 million people
in the U.S. (3.3% of the workforce) and
over 12 million people in the rest of the
world regard project management as
their profession of choice
The U.S. spends over $2.3 trillion on
projects every year, or one quarter of
the nation’s gross domestic product
*The PMI Project Management Fact Book, Second Edition, PMI, 2001
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Certification Updates
• Number of PMPs
•
45,000
40,343
40,000
35,000
30,000
# PMPs
•
continues to grow
PMI’s CAQ for IS
Development came
out summer 2002
CompTIA
purchased the
Gartner Institute
IT PM exams and
launched the IT
Project+ exam in
April 2001
27,052
25,000
20,000
18,184
15,000
10,000
5,000
1,900 2,800
1,000
0
10,086
4,400
6,415
1993 1994 1995 1996 1997 1998 1999 2000 2001
Year
See www.pmi.org and www.comptia.org for more details on certification exams
5
IT Project Demand
• In 1998,
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corporate
America issued
200,000 newstart application
development
projects
In 2000, there
were 300,000
In 2001, the
estimate was
over 500,000
Number of New Application Development
Projects
600,000
500,000
400,000
300,000
200,000
100,000
1998
2000
*The Standish Group, "CHAOS 2001: A Recipe for Success," 2001
2001
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Motivation for Improving IT
Project Management
• A 1995 Standish Group study (CHAOS)
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found that only 16.2% of IT projects were
“successful” and over 31% were canceled
before completion, costing over $81 B in the
U.S. alone. Time overruns were 222%, cost
overruns were 189%, and only 61% of
features were provided
The latest CHAOS Study (2001 data) showed
improvements in all areas but still…
Only 28% of IT projects succeeded
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Recent Research Findings on
Managing IT Projects
• Standish Group
• What the Winners Do (Dragon
Milosevich)
• Project Management and ROI,
Maturity Levels (Ibbs and Kwak)
• Project Management and
Competitive Advantage (Jugdev and
Thomas)
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The 2001 Standish Group Report
Findings (Compared to 1995 Report)
• Time overruns significantly decreased
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to 163% compared to 222%
Cost overruns were down to 145%
compared to 189%
Required features and functions were
up to 67% compared to 61%
78,000 U.S. projects were successful
compared to 28,000
28% of IT projects succeeded
compared to 16%
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Why the Improvements?
"The reasons for the increase in successful
projects vary. First, the average cost of a
project has been more than cut in half.
Better tools have been created to monitor
and control progress and better skilled
project managers with better management
processes are being used. The fact that
there are processes is significant in
itself.”*
The Standish Group, "CHAOS 2001: A Recipe for
Success" (2001)
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“What the Winners Do”
• Companies that excel in project delivery
capability:
– Build an integrated project management
toolbox (use standard/advanced PM tools, lots
of templates)
– Grow competent project leaders, emphasizing
business and soft skills
– Develop streamlined, consistent project
delivery processes
– Install a sound but comprehensive set of
project performance metrics
Dragan Milosevic, Portland State University, “Delivering Projects:
What the Winners Do,” PMI Conference Proceedings, November 2001
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Using a Standardized Project
Management Approach (SPM)*
• Research found that a consistent (one-size-fits-
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all) managerial approach may be essential to
the successful standardization of certain
aspects of project management, and a
contingency approach is needed for certain
aspects, too
Low standardization with a sufficient amount of
variation is the more appropriate approach
SPM factors include process, technology,
organization, methods, metrics, culture, and
leadership
Milesovich and Pantanakul, “The Impact of Standardized Project Management: New
Product Development Projects versus Software Development Projects,” Proceedings of
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PMI Research Conference 2002
Significant Predictors of
Project Management Capability
• For NPD projects: methods, metrics,
and culture
• For SWD projects: metrics, culture,
and leadership
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Metrics, Culture, and Leadership*
• Metrics: Projects using comprehensive
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metrics to measure and monitor
performance will have fewer problems
Culture: In a strong project culture, team
members are more satisfied, engaged, and
mutually supportive
Leadership: Projects managed by project
managers with strong leadership skills are
more successful and effective
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Project Management ROI*
• Over 94% of senior project management
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professionals say that implementing PM
added value to their organizations
Higher PM maturity (PMM) leads to
– Better project schedule and cost performance
– Lower PM costs (ave. about 11% of PM revenues)
• Formula to predict increased company ROI
based on increased PM maturity (PMM) level
– For example, current PMM of 2.3, future of 3.1,
upgrade cost $400K, 5% profit margin, $10
million in revenues, PM/ROI = 40%
William Ibbs, “The $$$ Value of Project Management: Continuing the Search for PM’s ROI,”
PDS ’02 Conference Proceedings, PMI-ISSIG, also see
http://www.ce.berkeley.edu/pmroi/PMROI%20PMI%20Presentation%20Feb2001.pdf
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Project Management Maturity*
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*Figure in my book, Information Technology Project Management Second Edition, 2001
But Today’s PM Maturity Models
Only Measure Explicit Knowledge*
• Explicit knowledge: “know what,” can be put
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into IT, a digital or discrete process that can
be codified and transmitted in formal,
systematic language (Nonaka 1994)
Tacit knowledge: “know how”, in one’s
experience; hard to replicate and can be
transferred indirectly though time consuming
socialization processes (Kaplan et al 2001)
*Jugdev and Thomas, “Blueprint for Value Creation: Developing and Sustaining a
Project Management Competitive Advantage Through the Resource Based View,”
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Proceedings of PMI Research Conference,2002
Need to Make PM a Strategic
Asset (Just Like IT)
• Many executives view project
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management as having worth at the
operational and tactical rather than
strategic level
Resource Based View (RBV) frameworks
emphasize how firms create value and
profits from their internal resources and
focuses on strategic assets
RBV is relevant to project management
because it emphasizes intellectual capital
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RBV Model*
high
Social
Capital
Strategic
Assets
Know How
PM
Maturity
low
Know What
low
*Jugdev, Kam, presented at PMI Research Conference, July 2002
high
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What’s New In Project
Management Software
• By 2001, there were hundreds of different
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products to assist in performing project
management
Three main categories of tools:
– Low-end tools: Handle single or smaller projects
well, cost under $200 per user
– Midrange tools: Handle multiple projects and
users, cost $200-500 per user, Project 2000 most
popular
– High-end tools: Also called enterprise project
management software, often licensed on a peruser basis
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Move Toward Enterprise PM SW?
• Microsoft’s Project 2002 now includes an
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enterprise version
Microsoft suggests organizations plan to
take at least 3-6 months to install their
enterprise software, mostly because
organizations need to standardize a lot of
things and change the way they work to
get the most out of the software
Milesovich’s research did not find PM
software as a distinguishing factor for
what the winners do, perhaps because it’s
still fairly new at the enterprise level
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Personal Views on What’s Changing
and What Needs to Change
• What’s Changing
– More people are
“learning the
language according
to PMI”
– More people are
getting certified
– People are under
even more pressure
at home and work,
often have too many
projects and
unrealistic deadlines
• What Needs to Change
– Top management needs to
emphasize a common
language that fits in their
organizations
– Certification is not
enough: Need to use best
practices
– Organizations need to
focus on sound business
planning: pick the high
value projects and focus
on them, get rid on
unnecessary work
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Suggested References
• Lots available (see citations and next slide)
• Take advantage of PMI’s web sites and
conferences
– www.pmi.org
– www.pmi-mn.org
– www.pmi-issig.org
• My book and web site have lots of references
– www.kathyschwalbe.com (goes to
www.augsburg.edu/ppages/~schwalbe with no
ads/distractions
– Information Technology Project Management,
Second Edition (on www.amazon.com)
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Sources for Project
Management Research
• PMI’s research pages
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(www.pmi.org/research)
Historical PM Research database
(Kloppenborg, Opfer, and Gallagher)
Project management research on the web
(www.fek.umu.se/irnop/projweb.html)
Research methods knowledge base
(http://trochim.human.cornell.edu/kb)
The Standish Group
(www.standishgroup.com)
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PMI’s ISSIG Web Site
www.pmi-issig.org
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Several Free WebCasts and
Great Conferences
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Questions or Comments?
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