Reducing Project FailuresThrough Value-Driven

Change Leadership (VDCL)

VDCL

Gezinus J. Hidding, Ph.D.Loyola University Chicago

ghiddin@luc.edu, 312.915.7059Joint research with

John Nicholas, Ph.D.jnichol@luc.edu, 312.915.7060

VDCLObjective

By the End of this Session:

You Will Understand How

Business Analysts

Can Contribute to Success

Of I.T.- Intensive Business Projects

This is YOUR Session: Feel Free to Interrupt Whenever

VDCLOverview

There Are (Still) Many (I.T.) Project FailuresNeeded: A New Paradigm

for (I.T.) Project Management (P.M.) Value-Driven Change Leadership (VDCL)

Our Empirical Research (Ongoing) Find Project Management Practices

Associated with Project Success or Failure

Research Results To Date PMBOK/VDCL Success Factors Observations That Are Striking (to Us)

VDCL

I.T. Project Failures:There Are (Still) Many

Standish Group - Chaos 2006 19% of Projects Canceled before Completed 46% of Projects Over Budget, Late and/or Less Features 35% of Projects On Time, On Budget, as Specified

Department of Defense Software Projects 29% - Paid for, but not delivered 46% - Delivered, but not successfully used 20% - Used, but extensively reworked or abandoned 3% - Used after changes 2% - Used as delivered

Diamond Consultants’ Digital IQ study 43% of IT executives:

90% of projects meet initial expectationsSee also: “Common Sense in Project Management”Paul Tedesco, Thomson Publishing, 2006.

VDCLCommon Failure Factors

Bad Project Planning Poor Specification of End-Item Wrong Estimate of Cost/Resources

Bad Project Management Bad Scope Management Ineffective Change Control Poor Issues Management

Bad Monitoring & Control Projects up to 20 times more likely to

escalate in terms of time and costs(Mark Keil – Georgia State University)

VDCLCause: Wrong Success Measures

If a Project Was:

“Ahead of Schedule” and “Below Budget,” Was It Successful?

“Behind Schedule” and “Over Budget,”Was It a Failure?

“Ahead of Schedule” but “Over Budget,”What Is It?

“Behind Schedule” but “Under Budget,”What Is It?

VDCL

Root Cause:Traditional P.M. Paradigm

The Traditional P.M. Paradigm Focuses OnActivities Being “On Schedule” and “Within Budget,”Not on Value Added by the Delivered Products.

Planned AddedValue Value

Planned DeliveredProducts Products

Activities“Goal-Directed Project Management: Effective Techniques and Strategies”,Erling Andersen, Kristoffer Grude , Tor Haug, Kogan Page, 1995.

VDCL

Needed: New ParadigmValue-Driven Change Leadership (VDCL)

3 Key Aspects:Change

Leadershipbased on

Solution

Architecture towards

Business

Value

VDCLDifferences

Traditional P.M.

Manage AdministerActivities

throughPhases

towardsOn-Time/ Budget

based onPERT Chart

VDCL

LeadPeoplethroughReleasestowardsValue (End results)based onSolution Architecture

VDCLWho Is Involved in VDCL?

20 Seasoned I.T. Project Managers

With Average Experience of 20 years:University faculty: with Practical ExperienceConsultants: I.T. and BusinessProject Managers: at Real CompaniesI.T. Architects: of Large SystemsVendors: of Software ToolsAuthors: Books about Project Management

VDCL

Our View: Projects ImplementStrategy Through Change

Strategy

Project Change

VDCL

Let’s Go Out ThereAnd Shift Some Paradigm!

From: Pepper … and Salt, The Wall Street Journal

VDCLVDCL: Fundamental Principles

“There Are No I.T. Projects.There Are Only Business Projects.Some Have More I.T. than Others.”

Value-driven Value-added over Budget/Schedule

Change Leadership Human Change over Repeated Activities

Based on Architecture Business Solution over Architecture Framework

VDCLValue - driven

“Firms Invest in I.T. to Create Value, Not Software.”

Value-added overBudget/Schedule Measuring Business Results over

Measuring Project Conformance Managing the Business Case over

Abandoning the Business Case Quantifying the Financial Impact of Risks over

Identifying a List of Risks

VDCL

B.A. “How To”:Manage Change Requests to Value

Budget Schedule and Value

Change 1 . . .Change 2 . . .Change 3 . . .Change 4 . . .

…

VDCLChange Leadership

“It’s the People, Stupid”

Human Change overRepeated Activities Changing Organizations over

Delivering Products Improving Activities over

Repeating Activities Developing Human Relations over

Interchanging Resources

VDCL

“The ‘Soft Stuff’ Is the ‘Hard Stuff’”

Leadership Executive Support Change Management Assign Well-Suited Personnel

Communication With Customer With User Within Management Hierarchy Within Project Team

Team Cohesion Commitment to Project/Goal and

Team Intercultural Issues Conflict Management

VDCLB.A. “How To”:Time to Learn from Others

Learn from Customers:How Can We Serve You Better?

Learn from Team Members:How Can We Work Smarter?

Learn from Other Current Projects:What Should We (Not) Do?

Learn from Previous Projects:If You Had To Do It Over,What Would You (Not) Do?

VDCLBased on Architecture

“Skyscrapers Are not Built Wall by Wall,but Floor by Floor, around the Core.”

Business Solution overArchitecture Framework Designing Business Solutions over

Debating Generic Frameworks Releasing Frequently over

Releasing with One Big Bang Flexible Architecture Alternatives over

One Architecture Design

VDCL

Definition: Architecture IsRepresentation of Structure

Architecture of Application/ Solution Representation Describing Structure of a

Specific System: Configuration of Common Modules Relations between Modules (I/O, Control) Specific Syntax of Modules’ Interfaces

Specific Business Drivers Lead to a Specific Architecture

20% of the Code Drives 80% of the Requirements (20/80 rule)

VDCL

Definition: Architecture Is NotInfrastructure

Infrastructure Is a Supersystem Offering Common Functionalities to Be Used by the Application/ Solution

Structure Is Common Functionalities in the Application/ Solution

Infrastructure and Application/ Solution Both (Can) Have an Architecture

VDCL Is Agnostic about Development Method Calls for Explicit Attention to Architecture Does Not Require a Particular Method

VDCL

B.A. “How To”:Prioritize What Is (Not) Essential?

Which Objectives Are Essential?Which Functionalities Are Essential?Which Modules Are Essential?What Can Be Delivered

Sooner/Later?

VDCLVDCL Paradigm: Summary

1. Decide How Much Value To Deliver When

2. Decide Which Deliverables Make Up Each Release

3. Plan Each Release As Usual (Schedule, Budget, …)

4. Manage Based On Results Achieved

Value Value Value Value ...

ArchitectureReleaseReleaseRelease ...

Activities Activities ...

Time

VDCL

Empirical Research:Does VDCL Make a Difference?

VDCL: Business Value Change Leadership Solution Architecture

ProjectPMBOK

9 Knowledge AreasSuccess

Project Demographics Project Project Manager Organization

VDCLResearch Design

Study Medium-Sized I.T. Projects

In Large(r) Chicago-based Organizations Sofar: Sixteen Projects in Seven Organizations

Not enough yet for solid statistic analysis (e.g., PLS)

Per Company, Compare Projects Pair(s): Successful – Unsuccessful

Structured Interviews Standard Questionnaire

Secured IRB Approval Interview Project Manager

VDCLInterview Questionnaire

Organization BackgroundProject BackgroundProject Manager BackgroundMeasures of Success/ FailurePM Practices

PMBOK VDCL

VDCL

Sample Statements (on a 7-Point ScaleStrongly Disagree – Strongly Agree)

From the Perspective of the Organization’s Value Added (Taking into Account All Benefits and All Costs),This Project Was a Success

From Beginning to End, The Business Case Was Kept Up-To-Date and the Project Stayed Focused on Achieving It.

The Project Plan Adequately Reflectedthe End-Product’s Architecture.

From Beginning to End, The Project Focused on People Having to Change.

VDCLNon-parametric Analysis

Project Pair 1 2 3 … n Correlation

PM Practice 1 + + + + Positive

PM Practice 2 + 0 0 - None

…

PM Practice n - - - - Negative

+/- When Practice Was Used More/Less

in Successful Project in Pair i

than in Less-Successful Project

VDCL

Preliminary Results to Date:Correlation with Success

PMBOK: (T1) Time Management (S1) Scope Management (Com1) Expectations Management

VDCL: (V2) Keep Business Case Updated Throughout (V3) All Stakeholders Agree on Project Purpose (A) Project Plan Reflected Solution Architecture

VDCL

Keep Business Case UpdatedThroughout the Project

Before Project Starts Clarify project purpose and success metrics Evaluate alternatives

During Project Implementation Evaluate change requests Make trade-off decisions

After Project Ends Analyze business value / project outcome

VDCL

All Stakeholders Agree onProject Purpose

Reach Agreement and Understanding among Key Stakeholdersand All Project Participants

on the Project’s Value / Outcomesand Clear Success Metrics

Give Project Participants a Personal Stake in the Project’s Success or Failure

VDCLStriking Observations

Almost ALL Projects Overran

Schedule and Budget “Successful” and “Unsuccessful” Projects Alike But, Successful Projects Had Smaller Overruns

Almost ALL Projects Do NOT Track:

- Employee Labor Hours

- Benefits Neither During Development Nor After Delivery

Some “Failed” Projects Did Not Deliver due to Dependency on Larger Program

VDCLDiscussion

Questions?Reactions?Feedback?Agreement?Disagreement?

VDCL

Preliminary Results to Date:No Correlation with Success

PMBOK: (HR1) Human Resource Management

VDCL: Negatively Correlated?

(V5) Quantify Financial Impact of Combined Risks (A3) Deliver in Multiple Releases

Inadvertent Sample Bias? (P7) Project’s Riskiness (as Perceived at the Start)