A borland White Paper
MAJOR INITIATIVE SUCCESS THROUGH MICRO-PROJECTS
USING BORLAND® TEMPO™ FOR PROJECT AND PORTFOLIO MANAGEMENT
A powerful approach to dramatically reducing the risk of and increasing the net benefit realized by investments in major Information Technology initiatives.
January 2007
Major Initiative Success Through Micro-Projects
Contents
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Critical Success Factors and Micro-Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 Micro-Project Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Project and Portfolio Management (PPM) Software and Major Initiative Success . . . . . . . . . . . . . . . . . .7
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Major Initiative Success Through Micro-Projects
Executive Summary
IT departments frequently find themselves leading a single major initiative upon which their success as an organization is pinned. These are the initiatives that cut across organizations and that are anticipated to have a transforming effect on how the business as a whole is run. Recent examples include internal software development projects, ERP and CRM implementations, major security upgrades, wide scale integration initiatives, internal and external portals, desktop OS upgrades and the modernization of critical business systems such as e-mail. While these initiatives typically have the potential to deliver tremendous value, they can represent up to a third or more of the organization’s technology investment portfolio in terms of dollars and time spent and they are always fraught with risk. For example, in 2004 the Standish Group found that only 29% of major application projects were completed on time, on budget and with all specified functionality with fully 18% failing altogether1. Business as usual has not been consistent with success. In response to these discouraging figures, critical success factors have been discussed and identified for technology projects by a diverse array of experts. A review of a wide range of findings shows a consensus forming that the following things have the greatest impact on project success: • Executive sponsorship • Short time to initial return • Minimized scope creep • Effective communication of benefits and expectations • User involvement These success factors mandate a new way of looking at major initiatives. Rather than approaching a major initiative as a single very large and complex project, major initiatives should be viewed as a portfolio of micro-projects around a common theme. Micro-projects are defined as self-justifying investments that require no more than six people to execute over a period of no more than six months. The micro-project approach is the best approach for aligning with the success criteria listed above. This paper discusses the factors most closely associated with technology project success, the specific ways that micro-projects make it easy to align with these success factors and the reasons why a complete Project and Portfolio Management solution is essential to success in applying the micro-project approach and therefore to the success of any major initiative. While this approach is essential to reducing the risk of major initiatives to acceptable levels, it does present some unique challenges, including: • Prioritization • Project management overhead • Management of inter-project dependencies • Resource capacity management
1”2004 Third Quarter Research Report – CHAOS Research Results”, The Standish Group
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Major Initiative Success Through Micro-Projects
Project and Portfolio Management (PPM) solutions can address these challenges. This makes PPM Software a crucial component of any major initiative that cannot be overlooked. Borland® Tempo™ PPM streamlines and improves: • Project prioritization • Efficient project planning and execution • Management of diverse inter-project dependencies • Integrated resource management
Critical Success Factors and Micro-Projects
Project success as defined by traditional metrics such as “on-budget,” “on schedule” and “complete functionality” can only be reliably achieved when projects are kept small and approached in an agile manner. This is not the same as having frequent milestones because “project” in this context is defined as the completion of an undertaking that delivers stand-alone benefits for a specified cost. What this means is that successful major initiatives are not major projects that take years to execute and then deliver benefit all at once. Rather they are a collection of carefully coordinated, frequently interdependent micro-projects that deliver incremental value over time as they are executed. This approach delivers an array of benefits, including the following:
Executive Sponsorship
Visible and active executive sponsorship at the outset, and also throughout the lifecycle of a major initiative is one of the most critical success factors. Most broad-scale initiatives require changes in organizational behavior, business processes and technology to deliver desired results. Project Managers can only accomplish these in the context of steadfast executive sponsorship. Executives are busy, tasked with a specific set of corporate goals and have more latitude than most to set their own priorities. Gaining and sustaining executive sponsorship is therefore a continual process. Executive sponsorship can only be sustained when: • Key executives participate in decisions about what aspects of the initiative will be delivered and • Key executives perceive a direct benefit from the initiative in the context of their own objectives and priorities Challenges to a project manager’s ability to sustain executive sponsorship include: • An abundance of interest: Major initiatives often have exactly the opposite problem of some of the more ITcentric technology investments. Several executives see the initiative as important to their goals and have an interest in seeing their specific requirements prioritized. Making sure that the necessary sponsors all feel that the initiative is on track to deliver value against their individual priorities is a constant balancing act requiring project managers to balance multiple requirements and seek maximum leverage in every deliverable.
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Major Initiative Success Through Micro-Projects
• Maintenance of Buy-In: It is neither convincing nor appropriate for a Project Manager to determine the benefits that an initiative will deliver to any specific parts of the business or the business as a whole. To maintain executive sponsorship, the project plan will need to explicitly and continually reflect the benefits identified by the executives that own those benefits. Successfully engaging executives in the establishment of goals and the description and forecast of benefits requires a consistent, repeatable and efficient methodology focused on that goal. Micro-projects present executive sponsors with short-term value. While both long-term and short-term value will be important considerations for any executive sponsor, imminent value tends to attract the most focus. It is easier to define and communicate the strategic benefit of a micro-project. More focused projects are able to concentrate on a tightly defined set of goals, and there is less pressure to try to artificially associate the project with a wide array of objectives. The benefits provided can be more concisely communicated which means executives are more likely to pay attention. Micro-projects carry less sponsor risk. By being a smaller investment with a shorter time to value, micro-projects allow executive sponsors to lend their support with far less risk of failure than with large-scale projects. At the same time, the opportunity for success is in no way diminished as a sponsor may support multiple related micro-projects over time. Maintenance of buy in and attention is more feasible with micro-projects. It is very difficult to sustain the focus and enthusiasm of executive sponsors over a period of years. A well run 6-month project is far more likely to enjoy consistent and meaningful sponsorship.
Micro-Projects Create a Success Spiral
Micro-projects provide project managers with the opportunity to establish a track record of successful delivery that increases credibility and diminishes executive perception of risk over time. This pattern becomes a virtuous cycle that makes it easier to secure budget, manpower, executive support for cultural change and other scarce resources critical to project success. The context for requesting these things is no longer “trust me”, but part of an ongoing and profitable give and take.
Micro-Projects Exploit the Time Value of Money
It is a fundamental truth that anything of immediate value is better had sooner than later. For example, any future financial benefits expected from a major initiative will necessarily be discounted using whatever hurdle rate the company applies to investments in general. Hurdle rates vary based on business, but annual rates of 20% or so are not uncommon. The implication of the timing of benefits can be significant. For comparisons sake, the table below shows the current value of, first, a major project performed over 2 years that delivers $1M in benefits at its conclusion and, second, the current value of a series of micro-projects that delivers $125,000 per quarter of value in the same period.
Present Value at 20% annual discount $676,840 $807,902 $131,062
Mega-Project Scenario Micro-Projects Scenario Time Value:
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 $0 $0 $0 $0 $0 $0 $0 $1,000,000 $125,000 $125,000 $125,000 $125,000 $125,000 $125,000 $125,000 $125,000
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Major Initiative Success Through Micro-Projects
Other Benefits
Micro-projects make it much easier to do other things known to correlate strongly with project success, including: • Maintain a stable set of base requirements - a smaller set is easier to communicate and nail down. A shorter execution window leaves less time for scope creep. • Involvement of the user community – the user community is likely to be smaller and easier to interact with than with a mega-project. The array of topics to be addressed with the user community is also inevitably more focused.
Micro-Project Challenges
Taking the micro-project approach to a major initiative presents the opportunity for increasing net value delivered to the business, improving sponsorship and managing costs and timelines more effectively. This approach does, however, have some unique challenges:
Prioritization
In order to exploit the full benefits of the micro-project approach, once a feasible project portfolio has been described an efficient method for prioritizing the projects that will be performed first needs to be established. There must be a method for rapidly collecting cost, benefit and risk information from the right people in the business and compiling those inputs into summary reports that support decision-making. Such a method will allow the timing of benefit realization to be optimized and allow for critical consensus on priorities to be reached with executive constituents.
Project Management Overhead
There are management processes that have to be performed repeatedly for each and every project. In a mega-project these processes might be performed once as a large undertaking with regular maintenance. When a large initiative is treated as a series of micro-projects, these processes are lighter and easier to maintain but more frequent. The creation of work breakdown structures and project plan elements can mean more work in the end if methods are not put in place to make this process highly efficient.
Dependency Management
When a large initiative is managed as a series (or serial or parallel) micro-projects there is a significant orchestration challenge resulting from a variety of different cross-project dependency types that are likely to emerge. In the interests of avoiding redundancy, there are likely to be an array of cross-project dependencies where work being done for one project will need to be completed for certain steps in another project to be completed. Business dependencies may exist where a certain project must complete in order to enable a business process so that a second project will be of use.
Integrated Resource Management
As multiple projects are being planned and executed together as part of a major initiative, the ability to understand resource constraints will be critical. A methodology will need to exist to allow human resources with select skills and facilities as well as budgets to be identified, secured and reserved.
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Major Initiative Success Through Micro-Projects
Project and Portfolio Management (PPM) Software and Major Initiative Success
A complete PPM Software offering provides an integrated array of capabilities that address collaborative decision-making information collection and audit, and the execution of technology projects. Such a solution can directly address the challenges associated with taking a micro-project approach to major initiatives thereby providing a method for consistent success. Considering this, it is clear that PPM software is an essential component of any major initiative that is likely to succeed. The Borland Tempo PPM Solution addresses the key challenges of successful major initiative execution by providing:
Project Prioritization
• Process automation for processes such as project request, approval, requirements definition, justification and sizing • A simple-to-set-up online forms engine for collecting information about costs, benefits and risks from the right people at the right times as these processes are executed, with mechanisms for ensuring forms are completed • A simple computation system that provides the ability to process raw data provided in forms to develop project level metrics that concisely summarize the costs, benefits and risks of different projects • Business Intelligence analyses that allow project portfolios to be assessed in such a manner as to make prioritization decisions objective and obvious • Mechanisms to capture and communicate decisions
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Major Initiative Success Through Micro-Projects
Project Management Overhead
• An intuitive and efficient system for project planning and the management of work assignments and progress reporting at the project and task level • A library of reusable work breakdown structure templates that can be used to rapidly create new project plans • Facilities to allow existing project work breakdown structures to be rapidly modified and edited including batch task changes and batch work assignments • Streamlined “One-Minute Progress Reports” • Automated management of work assignment notifications with timesheets that integrate to project tasks • Automatic generation of progress dashboards and health tracking
Dependency Management
• A flexible collaborative dependency management system that allows cross-project dependencies of all kinds to be documented and communicated to appropriate project managers • Automated scheduling features that allow task and project start dates to be linked so that schedules always reflect the latest forecasts of when dependencies will be met • A personalized Tracker interface where project managers can keep tabs on and receive notifications about changes to projects that they rely on
Integrated Resource Management
• The ability to categorize resources: • User skill classes • User and spending cost centers • Spending budget types • Task types • Analyses of the resource requirements of selected project portfolios and the capacity of select resource pools to meet them
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Major Initiative Success Through Micro-Projects
• Capacity and allocation analyses by: • People • Skill classes • Budget types • Cost centers • Task types • Assessment of: • Hours planned and spent • Dollars planned and spent • Cost of labor
To learn more about the Borland Tempo PPM Solution and how it can accelerate and maximize the success of major technology initiatives, visit www.Borland.com
Copyright © 2006 Borland Software Corporation. All rights reserved. All other marks are the property of their respective owners. Borland, Tempo and all other product names are service marks, trademarks or registered trademarks of Borland Software Corporation in the United States and other countries. • 25208
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