Professional Program Management: IT’s New Risk Reduction Strategy
Lou Metcalf
Robbins-Gioia, Inc.
11 Canal Center Plaza, Suite 200
McLean, VA 22102
703-548-7006
703-684-5189 fax
loumet@rgalex.com
The enterprise communications and Information Technology (IT) infrastructure has emerged as business’ number one competitive differentiator in the 1990s, as it allows organizations to optimize the use of their personnel and corporate data. As organizations mine internal databases and leverage external partnerships, they are leveling the walls that separated once discrete operations. The ability to recognize interdependencies, map synergies, and facilitate enhanced communication within the organization and among partners is an increasingly critical factor.
The new requirements are now demanding re-evaluation of installed technologies, often driving a major paradigm shift – such as upgrading pieces or the entire network from ISDN or Frame Relay to ATM. Furthermore, due to the integrated characteristics of today’s communications infrastructures, these projects are no longer discrete undertakings that only impact the operations of individuals or small groups. Typically, these upgrade projects involve the entire Information Technology (IT) and telecommunications infrastructure. Organizations are finding that the process involves much more than installing technology – rather, it involves broad, complex change, and significantly, unstable user requirements. If managed incorrectly, IT initiatives can become projects that never end – at great cost.
As this complex infrastructure evolves, the business risk associated with IT endeavors likewise increases. Professional program management is fast becoming a standard institution in many IT organizations. Program management allows organizations to effectively marry schedules and resources to available budgets, bolstering the ability to deliver against high-level management objectives. These objectives, which often are based on increased productivity and financial success, are crucial for companies to stay on the competitive edge.
A number of factors drive the requirement to effectively manage risk in IT endeavors. The IT labor shortage means that organizations must effectively leverage their scarce, in-demand IT resources. This resource crunch means that most IT divisions have a significant work backlog to ensure that project prioritization is in line with business development and expectations. Pressure to reduce risk often comes from the executive ranks, which today will understand the impact of technical lag on the business.
In many circumstances, repeated project failure results in an erosion of executive support – which can be deadly for the IT division and the organization as a whole. CIOs often deploy risk reduction strategies to help build much-needed executive support. End users or constituents often are key drivers for a risk reduction strategy. Their ability to effectively fulfill day-to-day duties are today often closely tied to the IT infrastructure. Finally, the increasing pace of technology change is pushing the requirement for risk reduction. The more rapid the change, the greater the potential for missteps. While organizations have focused increased attention on program and project management, the results to date, particularly in the IT arena, leave room for improvement. The Standish Group’s, “Chaos 1998” report noted that over the previous five years an astonishing 95% of challenged projects were restarted at least once. Application development project failures are common.
Effective program management ensures that an organization’s IT infrastructure investments are in line with high-level business objectives, and that reengineering initiatives and upgrade projects are delivered on time and on budget.
Without systematic program management methodologies, IT projects can be disasters that actually disrupt existing capabilities, and fail to deliver bottom-line business impact. Initiatives designed to boost productivity have the potential to spiral out of control, undermining existing network capabilities and actually damaging productivity. The effects of exceeding time and budget resources could lead to difficulty gaining approval for future projects as many will view these projects as money pits. Furthermore, failure to logically map costs and provide metrics against business objectives will drive significant future challenges for securing budget/funding for similar projects.
Simply said, a poorly managed project can destroy employee morale, stifle productivity, and most importantly, devour remaining time and financial resources.
IT managers are under extraordinary
pressure to prioritize and complete all tasks within a specified time frame and
budget. Traditionally, organizations
would hire additional resources, prioritize and delay certain projects, or push
responsibilities to the end user. In
most cases, these options are no longer available. As project and program management was first introduced into IT
organizations, engineers filled the role of program manager. This approach often backfired because an
excellent engineer may only make a mediocre program manager. Organizations soon recognized that
specialized training was essential for success. Professional program managers provide the expertise to execute
projects on time and on budget, meeting all of the functional requirements. Basic project control mechanics such as setting
dependencies, estimating durations and analyzing variances, along with more
advanced processes including risk management, activity-based costing and
configuration management, are their own areas of expertise. Professionals require specialized training
and significant experience to execute these mechanics effectively. Thus, the 1990’s have seen an explosion in
providing formal education for the program manager and, in fact, recent
developments include professional certification of program managers.
Inefficiently run projects often have significant activity peaks and valleys resulting in unhappy employees due to over-utilization of valuable resources at times and under-utilization of the same resources at others.
Program management involves six key steps:
Ø Planning
Ø Scheduling
Ø Tracking
Ø Analyzing
Ø Reporting
Ø
Forecasting
Planning is
the first and most critical stage of the process. The team pulls together crucial background material. Once relevant background information is
collected, the program manager identifies all stakeholders in the process and
works to obtain a clear definition of a particular program’s success. In addition, the program manager, the
sponsor, and the key stakeholders must agree upon defined measurements for
success. The program manager then
catalogs all activities required to complete the project. At this stage, the program manager works
with the stakeholders to define relevant problemspotential
logjams for each activity.
The program manager examines potential inefficiencies such as:
Ø Resources that are idle
Ø Rresources that are too much in demand and not readily available
Ø Overlapping tasks
Ø Interdependent resources
With this information, the program manager subsequently analyzes schedule, timing, and resources required and places all activities in a logical, workable sequence.
The program manager then breaks down each activity into tasks, including current timing and optimal timing, and identifies bottlenecks within the current system. Once this information is gathered, the program manager can move onto step two, scheduling.
This vital stage determines optimal use of time and resources and changes in employees’ schedules/duties. The program manager takes the schedule to the customer and asks several key questions to determine the schedule’s suitability:
Ø Is this schedule complete?
Ø Will this schedule work?
Ø Where are the gaps and flaws?
The draft schedule is tested for
two or three cycles to uncover any glitches that may have been missed. With lessons learned in hand, the program
manager revises the timeline, budget, and specifications. Once revisions are made and sponsors and
stakeholders reach consensus, the new schedule is implemented. The program manager constantly tracks, reports,
and analyzes progress, using a variety of reporting structures.project
is managed on two levels; the management of the project, and the project
itself. The real value of program
management is using history to get predictive tools on future projects.
Different metrics are utilized to measure the success of a project, but the unofficial industry standard is financial:
Ø How much over/under budget?
Ø How much money will this save us or make us?
Ø How quickly will we see a return on investment?
Numerous industries’
survival depends on cycle time or time-to-market. Automobile manufacturers are constantly fighting the clock on new
auto development and manufacture, and any decrease in cycle time will
subsequently enhance competitive abilities.
Development time-to-market is a critical factor in the pharmaceutical
industry. Effective management of their
pipeline of new drugs keeps them in business and ahead of the competition – and
this depends on effective program management.
Program management drives the successful completion and support of project and business objectives by optimizing use of time, money, and resources. Program management enables organizations to:
Ø Optimize scarce resources to ensure reasonable schedules and employee satisfaction and productivity
Ø Optimize schedules to ensure tasks are not overlapping and that they are completed on time
Ø Track and evaluate project status to ensure the project stays on track and that potential bottlenecks are recognized early and avoided
Perhaps the most significant benefit of professional program management is the development of a repository of lessons learned. Program management provides a history of successes and failures – and significantly, the factors that made the difference between the two. The real value is not in reporting history, but in using history to obtain predictive tools for future projects.
Delivering optimal productivity, program management provides the critical safety net, ensuring that the work undertaken supports high-level goals and that progress is made toward achieving those objectives.