Changing Dynamics of Enterprise IT Project and Portfolio Management

What are the changing dynamics of enterprise IT project and portfolio management that organizations are facing today? Let's look at the reasons some of the researches and findings point to understand current state of project delivery for enterprise IT projects: reasons of failure or success of these enterprise IT projects. We should also know 'why IT projects have become so crucial for enterprises these days?' And in subsequent posts in this series we will critical aspects that organizations should ensure for effective management and delivery of enterprise IT projects and portfolios.

Does Your Organization Have Strategic IT Focus?

Large IT projects have become make or break many enterprises. Don’t take it otherwise, I am not talking about success or failure or IT projects. The situation today is such that enterprises are heavily reliant on IT and survival, rather competitive advantage of enterprises depends on effectively leveraging IT for their businesses.

The business strategies are centered on IT driven marketing, sales, business operations, etc. If I were to make a statement: first generation of IT projects were meant to warm up organization to embrace larger change. And today, it has become indispensable for organizations to use IT for day to day operations, analyze dashboards, reports displayed by IT software. Strategic IT focus is crucial for many organizations to catch up with or be ahead of competition.

Changing Dynamics of Enterprise IT Projects? What Is The Current Reality of IT Projects?

More than ever, a lot invested in IT projects today - money, time, resources as well as business interests. Large IT projects have been conventionally complex in terms of technological barriers, IT adoption, dispersed geo located teams of experts-users, stakeholder management and many other aspects. There has been plenty of survey and research findings that point to considerable failure rate of IT projects e.g. Portland Business Journals has concluded based on analysts’ survey that nearly 65-80% of IT projects fail to meet their objectives, run considerably late or overshoot the budgeted cost. Technology is not really the challenge in such projects, change in mindset to adopt new IT systems, resistance to embrace change is the real challenge.

We also have McKinsey&Co research about large scale IT projects that concluded not-so-good statistics of value delivered: About 45% of large IT projects overshoot budget, 7% overshoot timeline and more shockingly surveyed projects delivered 56% less value than desired.

Let me also share KPMG New Zealand report about project management survey 2013.

The average money spent on projects ~ NZ$15m
About 75% of organizations faced at least one project failure in the previous year
More than 50% of representatives from organizations did not attempt to align their projects with corporate business strategy
Only 25% of representatives from organizations have been ready with a justification/ business case for projects being undertaken
And worse of all, more than 50% of survey respondent realized that they did not achieve desired project results consistently.

Is There Any Brighter Side to This?

As a pre-cursor to our discussion about, effective management of large enterprise IT projects, let me quote few observations KPMG made regarding projects within high performing businesses

These projects are accredited and justified with a sound business case showing how it is well aligned with business strategy
These projects have an effective sponsor who gave clear directions for the project
These projects have skilled, capable project managers who consistently used project management methodology
Project managers of these projects managed risks pro-actively, they reported variations, early warning indicators and took corrective actions early on
There has been a coherent approach to drive enterprise IT projects with well-coordinated program management and portfolio management

Now we have noted two ends of the continuum of projects-delivered. No organization would like to be on the other end of continuum where projects are failing, there is chaos, dissatisfaction & uncertainty prevail. No one would like to get counted in negative side of the project statistics.

So what can we do to move towards brighter side of the spectrum? To have a great start and consistently deliver desired value and possibly exceed expectations by delivering large enterprise IT projects?

Let’s look at seven aspects you will have to ensure for effectively managing enterprise IT Projects.

Anchored Technical Leadership as well as Project Leadership
Sound Project Management Processes (deep planning, estimation, scope management)
Be Lean/Responsive, Be Agile, Gone are the days of 3 Year Plan (assumptions change, things change) Rapid Application Development (RAD)?
Well Defined Decision Making and Approval Hierarchy
Strong Management Support
Regular Stakeholder Involvement
Rigorous System Integration Testing

We will delve on each of these points in next post: why technical leadership and sound project management processes are important to ensure for Effectively Managing Enterprise IT Projects.