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Slide 1 - PMI-GLC

VIEWS: 5 PAGES: 48

									The Death of a Project: Can lessons from yesterday’s
catastrophe prevent tomorrow’s disaster?

                                     Matthew Gillery
                                         Project Manager
                                         Hewlett-Packard
                      Agenda
•   Overview/Purpose
•   What is a project?
•   What is project management?
•   Introducing Risk Management
•   Defining Project Success
•   Common Causes of Project Failure
•   Role of Risk Management in Reducing Failure Rates
•   Risk Classification: ABCD Methodology
            Overview/Purpose
• Problem Statement
   – The purpose of this presentation is to identify the
     common causes of project failure, as suggested by
     members of the academy and industry leaders.
   – Clearly, there is no “one size fits all”
     approach/solution to preventing project failure.
     However, the presentation focuses on how risk
     management can be used to reduce the
     likelihood/impact of project failure.
   – Key question: Are we learning from yesterday’s
     mistakes?
            Project Failure in the 70’s
•   In 1979, IEEE published an analysis on failed “Bankrupt” projects and
    reported:
     – “Bankrupt” projects are those that consistently missed target dates and
        resulted in cost over-runs, or cancellations
     – IEEE argued:
          • By the time the paper was written, the project “bankruptcy”
            phenomena hadn’t been analyzed successfully
          • Occurrence of “bankruptcies” are rarely detected early in the
            development stage. Most are identified during testing.
          • Effective methods for preventing “bankruptcies” are still being
            developed




    An Analysis of Software Project Failure. IEEE, 1979.
    Standish CHAOS Report 2009
Is Project Success Really that Rare?

•   Specifically, 32 percent of IT projects
    were considered successful, having
    been completed on time, on budget
    and with the required features and
    functions.
•   Nearly one-in-four (24 percent) IT
    projects were considered failures,
    having been cancelled before they
    were completed, or having been
    delivered but never used.
•   The rest (44 percent) were
    considered challenged: They were
    finished late, over budget, or with
    fewer than the required features and
    functions.




http://www.cio.com/article/495306/Recession_Causes_Rising_IT_Project_Failure_Rates_
  The Project Management Problem
The Standish Group has reported:
      – IT project success rates rose steadily from 1994 until
        2000, when they dipped, and then began rising again
        from 2002 through 2006. Success rates decreased
        between 2006 and 2009.
      – Many projects experience governance issues:
            • Project take so long to complete that stakeholders lose
              interest and eventually decide to cancel it, or a project that
              eventually gets delivered but doesn't get used because it's no
              longer relevant to the business. In both situations, the project
              is considered a failure.



http://www.cio.com/article/495306/Recession_Causes_Rising_IT_Project_Failure_Rates_
                            What is a project?
• Temporary endeavor with a beginning and an end.
      – The end is reached when the objectives have (or cannot) be achieved.
      – Temporary DOES NOT mean short in duration; many projects last for
        several years but they do, eventually end.
• Creates a unique product, service or result.
      – It’s unique in that it has not been attempted before by the organization.
      – Creates a product or artifact, is quantifiable and can be either and end
        item itself or a component of another item.
      – Performs a service such as business functions that support shipping
        and receiving.
      – Delivers a result such as outcomes or documents like results from a
        research project on drinking water conditions in mountainous regions of
        Ecuador and Chile.
• Is progressively elaborated – distinguishing characteristics of each
  unique project will be progressively detailed as the project is better
  understood (matures).
• It is comprised of interrelated activities.

 Crowe. The PMP Exam. p9. Mulcahy, PMP Exam Prep, p22 PMBOK p5-7.
  What is Project Management?
• Project management is the application of knowledge, skills, tools
  and techniques to project activities to meet project requirements.
    – Project management is accomplished through the application and
      integration of the project management processes of initiating, planning,
      executing, monitoring and controlling, and closing.
    – The project manager is the person responsible for accomplishing
      the project objectives.
• Managing a project includes:
    –   Identifying requirements
    –   Establishing clear and achievable objectives
    –   Balancing the competing demands for quality, scope, time and cost
    –   Adapting the specifications, plans, and approach to the different
        concerns and expectations of the various stakeholders.




   PMBOK p8.
Progressive Elaboration & Risk Management

•    The term “progressive
     elaboration” simply means that
     you do not know all of the
     characteristics about a product
     when you begin the project.
      – Instead, they may be revisited
         often and refined.
      – The characteristics of the          Hig
                                            h                                         Staffing, Resources &
         product emerge over time, or                                                 Project Costs
         “progressively.”

•    Moving forward on a project without
     a proactive focus on risk
     management increases the impact
     that a realized risk can have on the
     project and can potentially lead to
     project failure.                       Low
                                                   Earl                          PHASES                            Late
                                                   y

                                                  Conceptual   Planning   Construct   Testing    Implement       Closure


Crowe. The PMP Exam. p20. PMBOK p6 & 8.                                                                      Page 9
           Defining the term “project”
“A project is a temporary
 endeavor undertaken to
 create a unique product,
 service or result.”

In answer to the question, WHAT IS A PROJECT?
                                  Temporary, Unique.



 Crowe. The PMP Exam. p9. Mulcahy, PMP Exam Prep, p22 PMBOK p5-7.
                     Risk Management
What is Risk Management?
•   Risk is an uncertain event or condition, that if it occurs, may have a positive or
    negative effect on project objectives. Project risk is always in the future.
•   Risk management is the systematic process of planning how to manage, identify,
    analyze, respond to, monitor and control project risks.
•   The objectives of Project Risk Management are to increase the probability and impact
    of positive events and decrease the probability and impact of negative events on
    project objectives.
•   A cause may be a requirement, an assumption, constraint or condition that creates
    the possibility of negative or positive outcomes.
      – Positive risks = Opportunities
      – Negative risks = Threats
      – Known Risks = those that have been identified, analyzed making it possible to
         plan responses for those risks
      – Unknown Risks = cannot be managed proactive, so need a contingency plan
      – Risk Tolerance = varying degrees of risk that organizations and stakeholders are
         willing to accept

•   NOTE: A project risk that has occurred can also be considered an issue
                 Project Risk
• Project risk is always in the future. Risk is an
  uncertain event or condition that, if it occurs, has
  an effect on at least one project objective.
   –   Cost
   –   Time
   –   Scope
   –   Quality
• A cause may be a requirement, assumption,
  constraint, or condition that creates the
  possibility of negative or positive outcomes.
  Risk Management Objectives
• The objectives of Project Risk
  Management are to:
  – increase the probability and impact of
    positive events
  – decrease the probability and impact of
    negative events in the project.
                           Risk Example




               What risk(s) is/are evident in this example?

University of Toronto http://www.cdf.toronto.edu/~csc340h/summer/lectures/w6/L6-part2-risk.pdf
               Risk Semantics
• Risks are typically expressed in the
  form of conditional statements
   – If A occurs, then B…..
• Technology company example:
   – If project resources are not
     trained in the application of
     technology OO prior to project
     start, then the project may be
     delayed and experience cost
     over-runs as a result of on-the-
     job training
    Risk Management Problem
There are several reasons why risk management is
sometimes not undertaken including:

• There is an unwillingness to admit risks exists.
• There is a lack of understanding of the benefits.
• There is a natural tendency to postpone the hard parts of
  a project. (i.e., Do the easy things first.)
• Some believe that it costs time up front without adding
  value overall.
• It is difficult to prove that it’s necessary (e.g., like
  insurance).
            Risk Management
• Risk Management includes the processes of conducting:
   – Risk management planning
   – Identification
   – Analysis
   – Response Planning
   – Monitoring and Control
   Key Project Success Considerations

• How do we define project success?
• How do we get the project team engaged
  in the risk management process?
                            What is success?
  • Answering “yes” to the following questions:
     – Did the project meet its objectives, requirements, budget and
       schedule?
     – Did the project meet the customer’s needs?
     – Was the decision to proceed with the project correct at the time?
     – Would we do the project again, knowing what we know now?
  • A project is a success if it meets its objectives, requirements, budget
    and schedule, and a failure otherwise




Society for Automotive Engineers International Conference on Environment Systems: Explaining Space Project Failures
           A perspective on “Good” vs. “Bad” Projects

  • A project that takes reasonable risks and fails by bad
    luck is not a bad project, since rational decision makes
    would repeat the attempt
  • A project that takes an unreasonable risk and yet meets
    goals by chance is, conversely, not a good project



  • Key question: What is a “failed” project?




Society for Automotive Engineers International Conference on Environment Systems: Explaining Space Project Failures
       Failed Project Defined
• A failed project does not successfully meet
  requirements/objectives
Common Causes of Project Failure
Study conducted by KPMG found several risk factors that lead to project
failure. While focused on the IT industry, these risk factors are general.
Project managers were surveyed. Responses were grouped, based on the
experience level of the project manager.




Controlling Software Project Risks- an Empirical Study of Methods used by Experienced Project Managers. Addison & Vallabh. SAICSIT 2002, pp. 128-140
Anatomy of a Failed Project. 2008. http://blogs.zdnet.com/projectfailures/?p=1100
                        FBI Trilogy Project
•    Goal
      – Upgrade FBI’s technology infrastructure to speed up data entry and analysis
•    Scope
      – Deployment of:
          • An enterprise-wide upgrade if desktop hardware and software
          • Modern network infrastructure
          • An integrated suite of software for entering, finding, sharing, and analyzing
            case information ($170M/$581M Trilogy project cost)

•    History
      – In 2000, started as the UAC project to modernize the FBI’s Automated Case
         System (ACS) and technological infrastructure, by “webifying” the system’s green
         screens
           • Problem: Updating the system’s screens didn’t fix the underlying business
             process issues and architecture
               – System was built on 1970’s standards and equipment from the late
                  1980’s
               – In 2001, the FBI contracted with IT service providers (DynCorp and
                  SAIC) to upgrade the FBI’s after congress approved $379.8 million for
                  the FBI Technology Upgrade Project (FITUP)

http://www.infoworld.com/d/developer-world/anatomy-it-disaster-how-fbi-blew-it-243
                  FBI Trilogy Project
– In 2001, scope changed form beautifying mainframe screens to replacing them
  with an web application for gathering and analyzing intelligence data. Created the
  Virtual Case File Project (VCF)
    • Requirements were difficult to “nail down,” since organizational processes
       were constantly changing as a result of 9/11.
    • Contractors were rated based on customer satisfaction, and continuously
       accepted new requirements
          – At least 30-31 changes were submitted each month
          – Endless change resulted in communications issues
            (misunderstandings)

– In December 2003, SAIC deployed an incomplete system. The FBI was
  expecting the full version.
    • Leadership at all levels was surprised. The FBI had undergone two CIO
       changes.
– In 2004, FBI and Homeland Security began planning an inter-agency Federal
  Investigative Case Management System (FICMS), which would make VCF
  obsolete
    • network infrastructure and desktop hardware/software upgrades were
       completed.
– In 2005, the project was officially cancelled. The software development project
  was not making progress, which continuously resulted in cost and schedule over-
  runs
http://www.infoworld.com/d/developer-world/anatomy-it-disaster-how-fbi-blew-it-243
           FBI Trilogy Project Issues
Issues
• Lack of internal IT expertise
    – Management and IT support
• Scope Creep/Poor Change Management
    – Key change in direction after one year: web application instead
      of upgraded screens
• Leadership Changes
    – Inconsistent IT leadership: FBI experiencd 5 CIO changes
      between 2000 and 2005; each had their own vision for the
      project




http://www.infoworld.com/d/developer-world/anatomy-it-disaster-how-fbi-blew-it-243
      Trilogy Replaced by Sentinel
• As of 2006, a new contract was awarded to Lockheed Martin. The
  Trilogy Project was renamed to become the “Sentinel Project”.
   – At this point, the project was projected to be complete by May
      2010, with an estimated cost of $425 million.
        • This means that over $500 million would be spent on a
          project that was estimated at $170 million in 2001.




http://www.govexec.com/dailyfed/0708/071608rb1.htm
    Sentinel Status: November 2009
Following is in response to the Department of Justice’s Office of the Inspector General
    (OIG) report, “Sentinel Audit V: Status of the FBI’s Case Management System.”
• “The FBI appreciates the Inspector General’s review of the FBI’s Sentinel Program
    progress and recognition of the FBI’s efforts to resolve concerns identified in previous
    Sentinel audits. As the OIG notes, the FBI estimates that Sentinel is scheduled to
    deliver full capability within the $451 million budget in the fall of 2010. The FBI
    already has implemented measures to resolve all six recommendations identified in
    this report and has successfully closed 30 of the 31 recommendations from the four
    prior OIG Sentinel audits.
• “The Sentinel program has steadily improved and refined its business
    practices. During Phase 1 of this project, the FBI and its primary contractor,
    Lockheed Martin, chose to redesign and re-baseline Phase 2 to be more efficient and
    deliver additional capability to users earlier than originally planned. This approach
    reduces overall program risk. It was carefully planned and incorporated a flexible
    aspect to the design to further mitigate risk by shifting requirements forward in the
    program’s development to meet user needs.
• “The FBI is pleased the report concluded the revised Sentinel schedule is more
    realistic. By extending the completion of Phase 2 by three months, requirements
    from the latter phases will be delivered earlier, providing capabilities to users sooner
    than originally planned.
• “The FBI has begun user testing of Sentinel’s Administrative Case Management
    system, including three electronic forms and automated workflows. Following a brief
    pilot in the FBI’s Richmond, Tampa, and Chicago offices, the FBI will deliver these
    capabilities across the FBI, marking the completion of Phase 2.”
  http://www.fbi.gov/pressrel/pressrel09/oigsentinel111009.htm
               Sentinel: Current Status
•   As of April 1, 2010:
     – The Associated Press reports that the FBI's $451 million Sentinel case
        management system is getting slower and costing more, according to a
        Justice Department audit.
     – The project was expected to be complete by September of this year, but FBI
        Director Robert Mueller said it would be delayed until 2011. The bureau is
        renegotiating the budget with Lockheed Martin, as well as the schedule and
        some of the work to be performed.
•   As of April 16, 2010:
      – FBI director reported, " When you have a project that was laid down in concrete
        four or five years ago, [with] technology changes, business practice changes,
          and complexity changes, one can expect some minor delays" – FBI Director




http://www.itbusinessedge.com/cm/community/news/gt/blog/audit-fbi-sentinel-system-facing-more-costs-
delays/?cs=40450
http://www.informationweek.com/news/government/enterprise-apps/showArticle.jhtml?articleID=224400547
        NASA Failed Missions (Projects)
   • NASA has committed itself to organizational and
     project management improvement, by analyzing
     over-looked risk factors on the following space
     programs:

 Program                      Physical Cause                                                            Date
           During re-entry, there was a breach in thermal
           protection shield resulted in the superheating of
           insulation, which melted the left wing and destroyed
Columbia the orbiter.                                                                                        2/1/2003
           O-ring failed in the right solid rocket booster and led
           to a flare that reached the external fuel tank, which
           disintegrated the shuttle. The cabin and crew hit the
           ocen at an unsurvivable speed 2 minuted and 45
Challenger seconds into the flight.                                                                        1/28/1986
Apollo     Apollo 1: Fire. Apollo 13: systems failure.                                                     2/21/1967

 Society for Automotive Engineers International Conference on Environment Systems: Explaining Space Project Failures
           NASA Project/Organization Problems

  • Engineering quality/risk management error
     – “None of us gave any serious consideration to a fire in the
       spacecraft”
                   » Astronaut Frank Borman, Apollo 1 Review Board
  • Lack of cross-functional coordination/informal work-arounds
     – Process changes were made at the work group level, and not
       considered during projects (Change
       Management/Communication)
  • Failed to ask basic questions
     – Example: Challenger. Per NASA study, “No launch incident
       escape system was provided because of the incorrect
       assumption that the shuttle had high reliability” (SAE)
         • Management failed to ask the question: What happens if the
           flight crew needs to escape during a launch?
         • Stated as a risk: If the flight is not able to escape during a
           launch, then…..

Society for Automotive Engineers International Conference on Environment Systems: Explaining Space Project Failures
     NASA: Recommended Remedies




                                          Risk Management as remedy for NASA’s problems


Society for Automotive Engineers International Conference on Environment Systems: Explaining Space Project Failures
                     Risk Management
What is Risk Management?
•   Risk is an uncertain event or condition, that if it occurs, may have a positive or
    negative effect on project objectives. Project risk is always in the future.
•   Risk management is the systematic process of planning how to manage, identify,
    analyze, respond to, monitor and control project risks.
•   The objectives of Project Risk Management are to increase the probability and
    impact of positive events and decrease the probability and impact of negative
    events on project objectives.
•   A cause may be a requirement, an assumption, constraint or condition that creates
    the possibility of negative or positive outcomes.
      – Positive risks = Opportunities
      – Negative risks = Threats
      – Known Risks = those that have been identified, analyzed making it possible to
         plan responses for those risks
      – Unknown Risks = cannot be managed proactive, so need a contingency plan
      – Risk Tolerance = varying degrees of risk that organizations and stakeholders are
         willing to accept

•   NOTE: A project risk that has occurred can also be considered an issue
Role of Risk Management in Reducing Project Failure Rates


• Moving forward on a project without a proactive focus on
  risk management increases the impact that a realized
  risk can have on the project and can potentially lead to
  project failure.
• The intent of risk management practices is to promote a
  proactive stance towards reducing project failure
     Risk Classification: ABCD
• Risk management must be a team effort!
• “Research suggests that a successful project
  environment may be characterized as on in which all
  systems professionals maintain a holistic view of
  organizational risk….”
             » Merrill Warkentin, Mississippi State
               University
• The challenge for project managers is to get the
  entire project team actively engaged in risk
  management
  Scope of Risk Management
      No                   Partial          Complete
 Information            Information        Information
    (Unknown             (Known
    unknowns)            unknowns)            (Knowns)


   TOTAL         GENERAL       SPECIFIC           TOTAL
UNCERTAINTY    UNCERTAINTY   UNCERTAINTY        CERTAINTY



           SCOPE OF PROJECT RISK MANAGEMENT
        Risk Management Processes
                                       11.1 Plan Risk Management (P)
            Major Inputs                        Tools & Techniques                    Major Outputs
1. Project Scope Statement                1. Planning Meetings & Analysis    1. Risk Management Plan
2. Cost Mgmt, Schedule Mgmt
 Communications Mgmt Plans
3.Enterprise Environmental Factors
4.Organizational Process Assets


                                           11.2 Identify Risks (P)
            Major Inputs                        Tools & Techniques                    Major Outputs
1.Risk Management Plan                    1. Documentation Reviews           1. Risk Register
2. Cost Mgmt, Schedule Mgmt,              2. Info Gathering Techniques
 Quality Mgmt Plans                       3. Checklist Analysis
3.Scope Baseline                          4. Assumption Analysis
4.Activity cost estimates                 5.Expert Judgment
5.Activity duration estimates             6.SWOT Analysis
6.Enterprise Environmental Factors        7.Diagramming Techniques
7.Organizational Process Assets


                                  11.3 Perform Qualitative Risk Analysis (P)
            Major Inputs                        Tools & Techniques                    Major Outputs
1. Risk Register                          1. Risk Probability and Impact     1. Risk Register Updates
2. Risk Management Plan                     Assessment
3. Project Scope Statement                2. Probability and Impact Matrix
4.Organizational Process Assets           3.Risk Data Quality Assessment
                                          4. Risk Categorization
                                          5.Risk Urgency Assessment
                                          6.Expert Judgment
       Risk Management Processes
                           11.4 Perform Quantitative Risk Analysis (P)
          Major Inputs                     Tools & Techniques                    Major Outputs
1.Risk Register                      1. Data Gathering and               1. Risk Register Updates
2.Risk Management Plan                 representation techniques
3.Schedule Mgmt Plan                 2. Quantitative Risk Analysis and
4.Cost Mgmt Plan                       Modeling Techniques
5.Organizational Process Assets      3.Expert Judgment


                                   11.5 Plan Risk Responses (P)
          Major Inputs                     Tools & Techniques                    Major Outputs
1. Risk Register                     1. Strategies for Negative Risks    1. Risk Register Updates
2.Risk Management Plan                 (Threats)                         2.Risk-related Contract Decisions
                                     2. Strategies for Pos Risks         3. Project Management Plan
                                       (Opportunities)                    Updates
                                     3. Contingent Response Strategies   4.Project Document Updates
                                     4. Expert Judgment


                             11.6 Monitoring and Control Risks (M&C)
          Major Inputs                     Tools & Techniques                    Major Outputs
1.Risk Register                      1. Risk Reassessment                1. Risk Register Updates
2.Project Management Plan            2. Risk Audits                      2. Organizational Process Asset
3.Work Performance Information       3.Variance & Trend Analysis          Updates
4.Performance Reports                4.Technical Performance             3.Change Requests
                                      Measurement                        4.Project Management Plan
                                     5.Reserve Analysis                   Updates
                                     6.Status Meetings                   5.Project Documentation Updates
         Risk Breakdown Structure
• The RBS is a decomposition of the risk categorization
  and the risks within those categories that could occur
  on a project.
                                             Risk Breakdown
                                            Structure (RBS) for
                                            Construction Project



                                          HVAC
              Architecture               (Climate          Plumbing                Electrical
                                         Control)



                                                                       Electricity at
 Blueprints                  Personnel   Materials         Materials                            Materials
                                                                         location



 Customer                    Personnel
                                                                       Contractor
 Confirms                     doesn’t    Permits            Permits                             Permits
                                                                        Selected
  Design                      change
              Classifying Risks

•Business risks vs. pure (insurable) risks
•Classified by uncertainty (business risks)
•Classified by impact on project elements
•Classified by their nature
•Classified by their source
•Classified by their probability to occur and amount at stake
        Risk Register & ABCD Rating
  Id          Description of Risk             Probabili         Impact        Grade       Cha        Mitigation Actions          Risk Owner           Cost         WBS
            Identify consequences [1]         ty                                          nge                                                                      [2]


  1.1    Inadequate funding to                    M               M              B         NE      Re-scope project,           Project Manager         NA          
         complete the project                                                              W       focusing on time and
                                                                                                   resourcing
  1.2    Lack of technical skills in              H               H              A          ↑      Develop training plan          Consultant         $2000
         Client Business Unit




[1] In larger projects, the consequences of the threat may not be evident, and noting them under each risk, or in a separate column can be useful in identifying
appropriate mitigation actions.
[2] WBS = Work Breakdown Structure, this is to indicate that the identified mitigation action has been included in the WBS (workplan).



Source: PM 007 Project Risk Register Template and Guide:
www.egovernment.tas.gov.au/__data/assets/word_doc/18512/pman-temp-open-risk-register.doc
 ABCD Risk Management Overview




http://www.de-risk.com/page.php?7
                         ABCD Framework

              Sensitivity                            Stability
  How sensitive to the project
                                           How stable is the assumption?
     is the assumption?
 Not sensitive / minimal impact      =A=       Very stable / confident
Not very sensitive / manageable
                                 =B=          Fairly stable / confident
             impact
  Fairly sensitive / significant
                                 =C=       Fairly unstable / uncomfortable
             impact
 Very sensitive/ critical impact     =D=    Very unstable / not confident


 http://www.de-risk.com/page.php?7
           Assumption Analysis




http://www.de-risk.com/page.php?7
                     Benefits of ABCD
• The key features and benefits of ABCD are:
   – Communication - Provides a simple, common, language for the
     communication of risk up, down and sideways within the
     organization, while avoiding the normal problems of political
     sensitivity and dislike of discussing risks.
   – Control - Enhances project control by an exception management
     approach and provides a simple overview of complex risks for
     senior management to prompt decision making
   – Flexibility - An adaptable process which, once tailored, is applied
     to ensure that all significant risks to the projects are identified
     and controlled at the appropriate time.
   – Acceptable - The non-intrusive/non-bureaucratic management
     process improves management discipline across the
     organization and is readily accepted by project teams

    http://www.de-risk.com/page.php?7
       Discussion Question
• In your project management career, what
  has been the most challenging element in
  managing project risk?
• How do you intend to leverage risk
  management practices, as you manage
  projects now and in the future?
                   Recap
• Recent reports have shown that project failure
  rates are rising
• Risk management practices have the potential to
  reduce failure rates
• Research has found that there are
  commonalities between projects that have failed
• Risk management requires leadership and
  proactive thinking
     Risk Management Requires Leadership

• Final thought from John C. Maxwell’s “The 360
  Degree Leader: Developing Your Influence from
  Anywhere in the Organization”
   – Do More than Manage—Lead!
Thank You!

								
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