Project Assurance

Project Assurance is a discipline that seeks to provide stakeholders with objective oversight of the likely future performance of major projects.

Organisations are under enormous pressure to deliver products and services at a faster pace of change than ever before. Governments at all levels face immense pressure to deliver public services faster and cheaper and this is increasing.

Having a rigorous approach to identifying the right projects to invest in and delivering them successfully will ensure maximum return on investment.

IBRS can help you and your organisation maximise the outcomes from project investment and increase project success. From well-prepared business cases, support through all stages of the procurement phases, effective delivery of project activities through to realising the expected benefits from project investments.

Conclusion: One of the more difficult aspects of the management of projects is the decision making process associated with shutting down troubled projects. There are a range of factors that can influence decision makers and prevent them from making a rational decision to close down a troubled project. These include project related influences, psychological and social factors as well as organisational pressures.

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Conclusion: For a project to be judged a success it must not only provide its deliverables on-time and within budget, it must also deliver the benefits that were outlined in its Business Case. These benefits will normally not be achieved unless there is a successful outcome to the process of change. The change may impact the organisation in a variety of ways, for example through changes to business processes, procedures, products or technology.

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Why do many IT projects that are obviously in serious trouble go well past the point where they should have been shutdown? We can all give examples of where money and resources have continued to be invested in such projects, but do we understand the factors that can impact on decision makers and unduly influence what would appear to be the rational decision to close down a troubled project?

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Conclusion: The continuing widening of the span of control of application systems managers is a major management concern. Unless the span is reduced by initiatives such as replacing systems with marginal value and rationalising the number of application software vendors, organisations will see their systems maintenance costs rising higher than other support costs and the time from program fault to fix blowing out.

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Conclusion: An often reported reason behind failures in complex IT projects has been poor communications between the project team, the decision makers and other parties who were impacted by the project.

To address this project sponsors and project managers should ensure that communication strategies and associated communications plans are developed for all projects that are seen to be complex or have long lifecycles.

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Conclusion: A number of recent high profile IT project failures have involved issues with external suppliers of services. Despite this, the increasing complexity of IT projects and the need to minimise on-going costs of in-house IT resources will necessitate the continued use of external suppliers. The effective management of such suppliers requires project management staff with skills that cover not just project management but also a high level of commercial, contractual, leadership and interpersonal skills.

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Conclusion: Stories of late and failed projects are legion within information technology. Whilst there are may be many reasons for project failure, a key root cause, largely overlooked in the literature, is failure to correctly enunciate user requirements. A less than satisfactory outcome at the requirements definition stage can only become magnified as the project proceeds.

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Conclusion: Benefit management should be an integral part of every organisation’s project management methodology. Its application provides organisations with a clear view of the benefits being realised by their IT projects. It also ensures there is a continuing focus on benefit realisation during the project lifecycle and issues that arise are highlighted and addressed.

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Conclusion: An ongoing process of Project Portfolio Management, managed by a Project Management Office (PMO), can lead to significant improvements in the returns achieved on funds being invested in your IT projects.

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Conclusion: Over the last five years agile software development approaches have become more popular, and are increasingly replacing heavy-handed methodologies. At the same time there is a growing interest in benchmarking the productivity of software projects, and in achieving process maturity that can be measured against certification standards such as CMMI. At first sight it would seem that these two trends represent two mutually exclusive philosophies. When taking a closer look it becomes clear that both trends can indeed complement each other.

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Conclusion: A Project Management Office (PMO) built to a model that is in sync with the organisation’s culture can, over time, have a major impact on project outcomes. To achieve this, the role and responsibilities of the PMO must be defined so that it addresses priority project related issues within the organisation. The office must then be resourced with personnel who have the skills and experience capable of undertaking the role allocated to the PMO.

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Conclusion: Providing it has strong management support and is resourced with the right mix of personnel, a project management office can produce major benefits around:

  1. management of your organisations IT project portfolio; and

  2. the outcomes from these projects.

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Impressive ROI reports based on nebulous benefit predictions often slip through the approval process at big organisations. The numbers presented are often so impressive, or so difficult to understand, that no one bothers to question them. Organisations launch big software projects such as enterprise resource planning (ERP) and customer relationship management (CRM) - which can easily cost $50 million apiece at a large organisation - with a completely false sense of whether the project will pay off. For anything but minor projects, the ROI analysis is essential to the business case. But with the CIO responsible for delivery of the IT component of the project within budget, and a business manager responsible for the realisation of the benefits for the project, finalising the ROI analysis is often difficult.

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Once again some recent high profile failures of IT projects have raised the issue of good project management and its impact on project outcomes. Those organisations that have yet to establish an effective Project Management Office (PMO) should consider the benefits that can accrue in IT projects through the correct application of a PMO.

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Impressive ROI reports based on nebulous benefit predictions often slip through the approval process at big companies. The numbers presented are often so impressive, or so difficult to understand, that no one bothers to question them. Companies launch big software projects such as enterprise resource planning (ERP) and customer relationship management (CRM) - which can easily cost $50 million apiece at a large company - with a completely false sense of whether the project will pay off.

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Conclusion:A prerequisite of a business case is that all the variables are covered; the forecasts of likely outcomes along with the returns on investment and the processes to manage the venture are classified and described. In so doing, risk is averted or minimised, although there may be occasions when a proposed venture is so large a degree of faith in a business forecast is just as influential as the logic or rationale contained in the business case.

As News Corporation emerged became the third largest digital media player in the US in 2005, its approach to managing online strategic investments offer an interesting insight into its strategic direction. For instance the corporation is now committed to digital media to produce a new growth channel as its newspaper businesses suffer decline.

Few mangers will face the scale of what News has done but two useful messages emerge. Firstly, catching up with the early movers is prudent because the risks associated with catching up with them decrease over time. Secondly, management needs to take steps to ensure that a new initiative works across the entire organisation, that is, it produces benefits for most operating divisions. In the case of News, to take a military analogy: they have boosted their right flank and hoped the left can survive – for the time being.

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Conclusion: For CIOs sustaining effective IT Governance in an organisation is hard work, principally because most senior managers are preoccupied with meeting their performance targets and have little time to come to grips with the nuances of IT Governance. Helping these managers understand their role so they become informed participants in governance matters is an ongoing challenge.

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Conclusion:The analysis and discussion in the paper, The Role of Productivity (July05), examined how the productivity equation measures economic output. This paper extends that analysis to examine how productivity can and should be utilised in a business case.

Managers who use productivity as an objective in a business case would be advised to measure the current operational situation within their organisation. At first glance this may appear a difficult task but the reason is straightforward: any claim for a productivity gain will not mean what it declares unless an established benchmark is categorically defined. Moreover it will be useful in dealing with the aggressive productivity claims by vendors for their products when they can be judged in the context of an organisation’s operations.

In so doing managers who define their terms and the input criteria for productivity will be in a stronger position to make business cases and advocate investments in place of assertions.

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Conclusion: At the big end of town some remarkable process improvement breakthroughs are being achieved with a combination of Lean Manufacturing and Six Sigma philosophies. However, the benefits that can be realised from these techniques can also be enjoyed by medium sized enterprises. Using recent work carried out by the Commonwealth Bank of Australia (CBA) through its Commway initiative, this article briefly charts their journey to date and provides advice for those who wish to embark on similar journeys.

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In his excellent book on workplace change management titled, ‘Managing Transitions’, William Bridges focuses on the need for change agents to get the 4 Ps right when promoting their program.

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Conclusion: Most senior managers are unclear whether their organisation is investing too much or too little in Information Management (IM) (IT plus business solutions with redesigned business processes). For some managers who cannot get resources to automate a process or get extra information on their desk tops, too little is being invested. Conversely, other business managers claim IT gets more than its share of resources and they are starved.

A common response when requests for extra investment in IT are made is, “How much are our competitors investing and are we at a competitive advantage or disadvantage?”

These are difficult questions to answer because I have observed:

  • It is hard to get sound and comparable IT related investment data from competitors

  • Published reports provide few performance metrics facilitating comparison

  • Although organisations may be in the same industry, differences in their management priorities and use of unorthodox accounting practices frustrate comparison.

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Conclusion: IT executives are often held accountable for the non-delivery of business benefits when in most cases they are not in a position to ensure the appropriate business process and behavioural changes are made to realise the benefits. To avoid being blamed for someone else’s non-delivery IT executives need to have the governance owners in their organisations introduce a benefits management regime. One useful approach was developed by Cranfield University in the late 1990s.

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Conclusion: It is unwise to initiate a requirements workshop with the view that participants will co-operate, work in harmony and not engage in organisational politics. In reality, the sponsor and the facilitator must assume organisational politics will play an important role and participants will use every opportunity to sell their ideas to their peers and as a last resort negotiate a win / win solution. Sponsors and facilitators of requirements workshop ignore organisational politics at their peril!

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Conclusion: When executive decision makers review business cases and observe a ‘J' curve investment pattern, it generates immediate doubts regarding the project's value. On the other hand, ‘S' curves, which represent competitive advantage or increasing profit, generate enthusiastic responses. Unfortunately, too many IT infrastructure business cases are presented with ‘J' curve profiles due to high initial investment costs. In many cases projects with high initial costs and delayed profits can be legitimately restructured to reflect a better commercial outcome with forethought and strategy. Not every project can be transformed, but two methods of cost structuring and ROI analysis have demonstrated successful results.

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Conclusion: Immediately after the project Kick Off meetings, project managers find it tempting to hit the ground running and tackle tasks identified straight away to communicate a sense of urgency. However, without a comprehensive statement of requirements and having got consensus to them from stakeholders, the probability of design or programming rework is high.

Set out below is a process for capturing requirements and getting consensus to them from business managers. I have used the process successfully many times. It precedes, and must not be confused with, the JAD (Joint Application Design) activity.

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Conclusion: Too often project managers embark on programs of work without sufficient analysis on whether the organisation has the capability or capacity to implement the initiatives. When initiatives inevitably run late most internal observers cite poor project management as the cause of the problem.

Some programs cannot be implemented on time no matter how well they are project managed. These programs go wrong at the planning stage when people fail to identify the work that needs to be done before the proposed project can actually begin.

To avoid inevitable project management failures strategic planners must firstly determine what can actually be achieved in year 1, year 2 and year 3 of the ICT strategic plan. When implementation constraints are known planners can develop a base program of work that is achievable. Once this is done planners should then fine tune the priority of each initiative based on its contribution to business value.

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From time to time our company looks at opportunities to grow the business through the acquisition of other organisations. When this occurs we are asked to review the information technology infrastructure of the target organisation. Our brief is to assess their IT health and identify areas where there may be significant expenditure required to ensure it achieves a level which complies with our standards. We are also expected to recommend how IT should be structured following the acquisition. For example should the company continue with its current processes or should it be partly or wholly, integrated into our network and be subjected to our governance procedures.

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Conclusion: Customer relationship management, business rules, and portals are typical examples of expensive technical solutions that require strong business leadership to deliver their promises of return on investment. Many IT executives have become aware of such solutions and seen their potential well ahead of their operational counterparts. However, many of these innovations have failed to achieve traction in the first instance as a result of poor socialisation prior to project initiation. Often, organisations shelve these projects for several years after initial failure and kick-starting them again is difficult.

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Conclusion: Recently I was at a Christmas party with several 30 year IT Veterans. As usual a few war stories were shared. This paper contains two of the more bizarre stories. Unfortunately neither of these stories would exist if a formal peer review process had been in place in the organisations concerned.

IT departments should have some form of peer review for all initiatives and this should include operations, systems development, purchasing, communications, etc. Failure to implement a peer review process may result in your actions being recounted in war stories some time in the future.

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Conclusion: Most organisations conduct a business case before making major ICT investments and almost all choose not to invest in a system if its business case does not stack up. 

While all this sounds wonderfully logical, it does not explain how we have made investments in products like e-mail.  Few organisations bothered to conduct a business case for e-mail and even fewer have ever attempted to deliver any benefits from their investment in e-mail.

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Conclusion: Company reports used for planning and discussion are not always as clear as they might be. There are a few basic rules which can clarify what is required to be an effective report writer.

Firstly, ensure the argument and the structure is clear; that there is a beginning, middle and end to the flow of ideas to make the report cohesive. Secondly, use short sentences to make the argument unambiguous. Do not rely too much on bullet points in spite of the fact that they are widely used. A sentence argues a case and guides the reader through a thought. On the other hand, a bullet point asserts a point but may not convey an argument satisfactorily.

Most reports will have executive summaries or recommendations. To make the recommendations convincing it is essential that the arguments throughout the body of the report connect with each other. Structure will aid clarity, and these elements are the two hallmarks of good writing.

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Conclusion: Managers that fail to identify the benefits accruing from implementing an ERP will find it difficult to get senior managers to approve investment to upgrade to the next major release of the software.

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Conclusion: The quality and precision of variables used in a plan will decide the fate of any plan. Variables come in many forms: sales, market trends, technological enhancements and so on.

Practical issues, such as the size of any given budget in a plan, may also influence and qualify the variables. Limitations on available resources may influence decisions to account for all relevant variables.

For example, the existing status of technology, or if a competitor has succeeded to your cost, could yield more realistic and sharper variables for planning.

All variables must be included in a general or master, plan, or in the appendix to it. The reason is straightforward, as it will indicate the thought process used to develop the plan and why. This level of information will also assist in subsequent iterations because the elements are discernible.

Two straightforward techniques can improve planning:

  • 1. Review past plans and the logic that gave those plans coherence.
  • 2. Cluster the variables of your current planning so that the relationship between them and net effect of one versus the other is clear.

By doing so the thought processes within the plan should be focused to everyone involved in the process.

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Conclusion: In an ideal world the business case report recommending the organisation invest in a business solution (systems, business processes and workplace change) should act as the cornerstone on which the ensuing project(s) proceeds. If the report is coherent, well researched and presents a credible picture of the future, all stakeholders can use it to guide their actions.

While many organisations have templates of the typical business case report, compliance is no guarantee of quality.

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Usage patterns will be different in every organisation, but the number and size of messages will continue to increase. It is important to watch for shifts in the technology that will help an organisation absorb more data with greater ease. Most of all, it is critical to understand how changes in the business, the technical capabilities of users or their correspondents, marketing plans or external events might create growth spurts or spikes in message size or volume.

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In The Economist’s most recent IT quarterly (September 2003) survey there is a scathing piece about the implementation of CRM in banking, and financial institutions generally. Australia is not mentioned in the analysis, but the point is clear – that as many as 80% of CRM projects fail – which is not news to anyone with experience of CRM projects. There is a gulf between the promise and delivery of CRM.

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Conclusion: Effectiveness is, along with efficiency, the aim of many projects and investments. It is commonly expressed as a ratio, outputs minus inputs. Measuring effectiveness is however a more delicate process of evaluation than employing the blunt, and occasionally, imprecise ratio method, described above.

Comparing effectiveness with other measures of a company’s performance, such as revenue, demonstrates how well a department or a firm is working. It is more valuable than simply comparing a ‘before and after’ financial scenario.

In adopting this type of approach two factors to consider are:

  1. Adequate ‘before” the event data, showing levels of performance is required to assess effectiveness. (Sound after the event data is necessary too.) Measurement of performance and function must use all key variables. These variables may include financial items, benchmarked service levels, and people performance measures such as e.g. job, morale index or similar;

  2. Make any analysis comparative, with the purpose of showing what has been achieved. Grey, and or, so-called mixed results from an effectiveness assessment arise from weak analysis.

Implementing the techniques above should improve the quality of effectiveness metrics and thereby raise the standard of business planning outcomes.

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Conclusion: Inability to manage the plethora of projects cutting across most organisations can lead to failed initiatives, an inability to align ICT and business investments, a lack of confidence in the organisation's ability to innovate and even substandard operational performance - quite simply operational performance can fall because renewal projects become late or are ineffective.

The main reason that these problems occur is that business initiatives are spawned within functional hierarchies and these hierarchies tend to act like silos. Organisations that are looking to effectively balance goal based and role based work need another structure to support the governance process so that resources and initiatives can become visible to the entire organisation. This paper recommends that a project office correctly implemented can play a key role in supporting the governance of goal based activities.

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More than half of all IT projects do not deliver the expected benefits. This is a metric that CEOs do not want to hear in these days of executive dissatisfaction with IT investment performance, and it is the CIO that is called to explain.

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The company has just won the largest job in its history and you are excused for celebrating long into the night and, perhaps, over indulging slightly. However when the baroccas have kicked in, and the effects of the alcohol have worn off, reality sets in.

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