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Chapter 2:
The Project Management and
Information Technology Context
Information Technology
Project Management,
Fifth Edition
2
Projects Cannot Be Run in Isolation
 Projects must operate in a broad organizational
environment
 Project managers need to use systems thinking
 Taking a holistic view of carrying out projects within the
context of the organization
 Senior managers must make sure projects
continue to support current business needs
Information Technology Project Management, Fifth Edition, Copyright 2007
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A Systems View of Project Management
 A systems approach emerged in the 1950s to
describe a more analytical approach to
management and problem solving
 Management must see how projects relate to the whole
orgnaization
 Three parts include:
 Systems philosophy: an overall model for thinking about
things as systems
 Systems analysis: problem-solving approach
 Systems management: address business, technological,
and organizational issues before making changes to
systems
Information Technology Project Management, Fifth Edition, Copyright 2007
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Media Snapshot
 The Press Association Ltd, the largest news agency in the
United Kingdom, hired a consulting firm to help turn things
around after management noticed its profit margins were sliding
 The organization’s rapid growth rate and acquisition of several news
organizations help extend its reach throughout the country but these
disparate groups were not sharing work processes and technologies
causing high operating costs
 The consultants suggested using a holistic view and a top-down
strategy to make sure projects supported key business goals
 Everything must be seen as being connected in order for
organization change to be accomplished
 They also suggested releasing short-term results to accrue
benefits on an incremental basis and reviewing projects on a
regular basis to ensure strategic alignment
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Opening Case Analysis
 Tom Walters did not use a systems approach – the
IT department did all of the planning
 He did not address many of the organizational
issues involved in such a complex project
 He did not clearly define the business,
technological and organizational issues
associated with the project
 He did not involve the stakeholders which led to
his being blindsided by the problems raised at
the meeting
Information Technology Project Management, Fifth Edition, Copyright 2007
Three Sphere Model for
Systems Management of Laptop Project
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Understanding Organizations
Structural frame:
Focuses on roles and
responsibilities,
coordination and control.
Organization charts help
define this frame.
Human resources frame:
Focuses on providing
harmony between needs of
the organization and needs
of people.
Political frame:
Assumes organizations
are coalitions composed
of varied individuals and
interest groups. Conflict
and power are key
issues.
Symbolic frame: Focuses
on symbols and meanings
related to events. Was it
good the CEO came to the
kickoff meeting? Culture is
important, particularly in
international projects.
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What Went Wrong?
8
 Many enterprise resource planning (ERP) projects fail due to
organizational issues, not technical issues. For example, Sobey’s
Canadian grocery store chain abandoned its two-year, $90 million ERP
system due to organizational problems.
 As Dalhousie University Associate Professor Sunny Marche states, “The
problem of building an integrated system that can accommodate different
people is a very serious challenge. You can’t divorce technology from the
sociocultural issues. They have an equal role.”

People in different parts of the company had different terms for various items.

People had their daily work to do and did not want to take the required time to get
the new system to work
 Sobey’s ERP system shut down for five days and employees were
scrambling to stock potentially empty shelves in several stores for weeks.
The system failure cost Sobey’s more than $90 million and caused
shareholders to take an 82-cent after-tax hit per share.*
*Hoare, Eva. “Software hardships,” The Herald, Halifax, Nova Scotia (2001).
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Organizational Structures
 Related to political and structural frames
 Three basic organization structures
 Functional: functional managers report to the CEO
 Project: program managers report to the CEO
 Matrix: middle ground between functional and project
structures; personnel often report to two or more
bosses; structure can be weak, balanced, or strong
matrix
Information Technology Project Management, Fifth Edition, Copyright 2007
Functional, Project, and Matrix
Organizational Structures
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Organizational Structure
Influences on Projects
Project
Characteristics
11
Organizational Structure Type
Functional
Matrix
Balanced
Matrix
Low to
Moderate
15-60%
Project
Little or none
Weak
Matrix
Limited
Virtually none
0-25%
Functional
manager
Functional
manager
Mixed
Project
manager
Project
manager
Project manager’s
role
Part-time
Part-time
Full-time
Full-time
Full-time
Common title for
project manager’s
role
Project
Coordinator/
Project
Leader
Part-time
Project
Coordinator/
Project
Leader
Part-time
Project
Manager/
Project
Officer
Part-time
Project
Manager/
Program
Manager
Full-time
Project
Manager/
Program
Manager
Full-time
Project manager’s
authority
Percent of
performing
organization’s
personnel assigned
full-time to project
work
Who controls the
project budget
Project
management
administrative staff
PMBOK Guide, 2000, 19, and PMBOK Guide 2004, 28.
Strong
Matrix
Moderate
to high
50-95%
High to
almost total
85-100%
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Organizational Structure
 Project managers have the most authority in a pure project
organizational structure and the least in a pure functional structure
 A project leader in a functional organization who requires strong
support from several different functional areas, should ask for top
management sponsorship
 The sponsor should solicit support from all relevant functional managers to
ensure that they cooperate and that qualified people are available to work
as needed
 Even though PMs have the most authority in the project organizational
structure, this is often inefficient for the company as a whole
 Assigning full-time staff to the project an lead to underutilization and/or
misallocation of resources
 A full-time technical writer that has no work on a particular day is a wasted
resource
 Using a systems approach might lead the PM to suggest hiring an independent
contractor to do the writing instead of using a full-time employee, thus saving
money
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Organizational Culture
 Just as an organization’s structure affects its ability to
manage, so does an organization’s culture.
 Organizational culture is a set of shared assumptions,
values, and behaviors that characterize the functioning of
an organization
 Many experts believe the underlying causes of many
companies’ problems are not the structure or staff, but the
culture
 Even within one organization, one department’s culture
may be different from another department’s culture
(technology vs. finance)
 Some cultures make it easier to manage projects
Information Technology Project Management, Fifth Edition, Copyright 2007
Ten Characteristics of
Organizational Culture1
 Member identity*
 Risk tolerance*
 Group emphasis*
 Reward criteria*
 People focus
 Conflict tolerance*
 Unit integration*
 Means-ends
 Control
orientation
 Open-systems focus*
1
as per Stephen P. Robbins
*Project work is most successful in an organizational
culture where these items are strong/high and other
items are balanced
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Ten Characteristics of
Organizational Culture
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1. Member identity: The degree to which employees identify with
the organization as a whole rather than with their type of job or
profession.


A PM or team member might feel more dedicated to his or her
company or project team than to their job or profession, or they
might not have any loyalty to a particular company or team.
An organizational culture where employees identify more with the
whole organization are more conducive to a good project culture.
2. Group emphasis: The degree to which work activities are
organized around groups or teams, rather than individuals.

An organizational culture that emphasizes group work is best for
managing projects.
Information Technology Project Management, Fifth Edition, Copyright 2007
Ten Characteristics of
Organizational Culture
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3. People focus: The degree to which management’s decisions take into
account the effect of outcomes on people within the organization.


A PM might assign tasks to certain people without considering their
individual needs, or the PM might know each person very well and focus
on individual needs when assigning work or making other decisions.
Good PMs often balance the needs of individuals and the organization.
4. Unit integration: The degree to which units or departments within an
organization are encouraged to coordinate with each other.


Most PMs strive for strong unit integration to deliver a successful product,
service, or result.
An organizational culture with strong unit integration makes the project
manager’s job easier.
5. Control: The degree to which rules, policies, and direct supervision are
used to oversee and control employee behavior.

Experienced PMs know it is often best to balance the degree of control to
get good project results.
Information Technology Project Management, Fifth Edition, Copyright 2007
Ten Characteristics of
Organizational Culture
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6. Risk tolerance: The degree to which employees are encouraged to
be aggressive, innovative, and risk seeking.

An organizational culture with a higher risk tolerance is often best for
project management since projects often involve new technologies, ideas,
and processes.
7. Reward criteria: The degree to which rewards, such as promotions
and salary increases, are allocated according to employee
performance rather than seniority, favoritism, or other nonperformance factors.

Project managers and their teams often perform best when rewards are
based mostly on performance.
8. Conflict Tolerance: The degree to which employees are encouraged
to air conflicts and criticism openly.

It is very important for all project stakeholders to have good
communications, so it is best to work in an organization where people feel
comfortable discussing conflict openly.
Information Technology Project Management, Fifth Edition, Copyright 2007
Ten Characteristics of
Organizational Culture
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9. Means-ends orientation: The degree to which management
focuses on outcomes rather than on techniques and processes
used to achieve results.

An organization with a balanced approach in this area is often best
for project work.
10. Open-systems focus: The degree to which the organization
monitors and responds to changes in the external environment.

Projects are part of a larger organizational environment, so it is
best to have a strong open-systems focus.
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Stakeholder Management
 Project managers must take time to identify,
understand, and manage relationships with all
project stakeholders
 Using the four frames of organizations can help
meet stakeholder needs and expectations
 Since organizations have limited resources,
projects affect top management, other functional
managers and other project managers by using
some of those resources
 Senior executives/top management are very
important stakeholders
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Opening Case Analysis
 Tom Walters focused on just a few internal project stakeholders
 He did not involve the main customers of his project - the
students – nor did he hold meetings with senior administration or
faculty
 At the faculty meeting, it became evident that there were many
stakeholders Tom had excluded from his original plan
 Structural frame – by looking at an organizational chart of the entire
college he would have been able to see that his project would affect
academic dept heads and members of different administrative areas
 Human resource frame – tap his knowledge of the college and
identify individuals who would most support or oppose his project
 Political frame – consider the main interest group most affected by
his project’s outcome
 Symbolic frame – address what moving to a laptop environment
would really mean to the college. He could have anticipated some of
the opposition and solicited a strong endorsement from the college
president or dean before talking to the faculty
Information Technology Project Management, Fifth Edition, Copyright 2007
The Importance of
Top Management Commitment
one of the key factors
associated with virtually all project success is the
 Several studies have found that
commitment and support PMs receive
 A senior manager, called a champion, acts as a key proponent
for the project
 Makes sure adequate resources are provided – money,
human resources, visibility
 Help PMs meet specific needs in a timely manner – realize
that unexpected problems can and will arise and support is
needed to overcome them
 As most IT projects cut across functional areas, assists in
obtaining cooperation from people in other parts of the
organization; fight political battles
 Mentors and coaches PMs on leadership issues since most
IT PMs are not experienced in management
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Best Practice
 IT governance addresses the authority and control for key IT
activities in organizations, including IT infrastructure, IT use, and
project management
 A lack of IT governance can be dangerous, as evidenced by
three well-publicized IT project failures in Australia (Sydney
Water’s customer relationship management system, the Royal
Melbourne Institute of Technology’s academic management
system, and One.Tel’s billing system)*
 Senior management had not ensured that prudent checks and
balances were in place to enable them to monitor either progress of
the projects or the alignment and impact of the new systems on their
business
 Project level planning and control were absent or inadequate –
project status reports to management were unrealistic, inaccurate
and misleading
*Avison, David, Gregor, Shirley and Wilson, David, “Managerial IT Unconsciousness”,
CACM, vol 49, No. 7, P.92
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Need for Organizational Commitment
to Information Technology (IT)
 If the organization has a negative attitude toward
IT, it will be difficult for an IT project to succeed
 Having a Chief Information Officer (CIO) at a high
level in the organization helps IT projects
 Assigning non-IT people to IT projects also
encourages more commitment
 Some CEOs take a strong leadership role in
promoting the use of information technology in
their organizations
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Need for Organizational Standards
 Standards and guidelines help project managers
be more effective
 Senior management can encourage:
 The use of standard forms and software for project
management
 The development and use of guidelines for writing
project plans or providing status information
 The creation of a project management office or center
of excellence to help PMs achieve project goals
 Development of career paths for PMs and/or requiring
PMP certification
Information Technology Project Management, Fifth Edition, Copyright 2007
Project Phases and the Project Life
Cycle
 A project life cycle is a collection of project
phases that defines:




What work will be performed in each phase
What deliverables will be produced and when
Who is involved in each phase
How management will control and approve work
produced in each phase
 A deliverable is a product or service produced or
provided as part of a project
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More on Project Phases
 In early phases of a project life cycle:
 Resource needs are usually lowest
 The level of uncertainty (risk) is highest
 Project stakeholders have the greatest opportunity to
influence the project
 In middle phases of a project life cycle:
 The certainty of completing a project improves
 More resources are needed
 The final phase of a project life cycle focuses on:
 Ensuring that project requirements were met
 The sponsor approves completion of the project
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Phases of the Traditional
Project Life Cycle
27
Information Technology Project Management, Fifth Edition, Copyright 2007
Phases of the Traditional
Project Life Cycle
 Concept phase – managers briefly describe the project
 Develop a very high-level or summary plan for the project
describing the need for the project and basic underlying concepts
 Rough cost estimate is developed and an overview of the work
involved is created
 A work breakdown structure (WBS) outlines project work by
decomposing the work activities into different levels of tasks
 The WBS is a deliverable-oriented document that defines the total scope of the
project
 Tom Walters should have created a committee of faculty and staff
to study the concept of increasing the use of technology on campus
 They might have developed a management plan that included an initial,
smaller project to investigate alternative ways of increasing the use of
technology
 Prepare a report that studies what are similar campuses doing,
surveys students, staff and faculty and estimates the impact of using
more technology on costs and enrollments.
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Phases of the Traditional
Project Life Cycle
 Development phase – project team creates more
detailed project management plans, a more accurate cost
estimate and a more thorough WBS
 If the concept phase suggested that laptops were one means
of increasing the use of technology on campus, then further
study would be required in this phase to determine
buy/lease, type of hardware and software, how much to
charge students, how to handle training and maintenance,
etc.
 If the concept phase suggested that laptops were not the
way to go, the project would have been cancelled at that
point thereby saving time and money
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Phases of the Traditional
Project Life Cycle
 Implementation– project team creates a very accurate
cost estimate, delivers the required work and provides
performance reports to stakeholders
 Acquire the hardware and software, install necessary
network equipment, deliver laptops to the students, create a
process for collecting fees, provide training, etc.
 Faculty need to consider how to take advantage of the laptops,
security prepare for potential problems, admissions include this
in recruiting brochures, etc.
 Close-out – all the work is completed, customer
acceptance of the entire project
 Project team should document their experiences on the project
 Survey students, faculty, administration on impact of technology
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Product Life Cycles
 Products also have life cycles
 The Systems Development Life Cycle (SDLC) is a
framework for describing the phases involved in
developing and maintaining information systems
 Systems development projects can follow:
 Predictive life cycle: the scope of the project can be
clearly articulated and the schedule and cost can be
predicted
 Project team spends a large portion of the project attempting to
clarify the requirements of the entire system and then producting
a design
 Users are often unable to see tangible reults in terms of working
software for an extended period
Information Technology Project Management, Fifth Edition, Copyright 2007
Predictive Life Cycle Models
32
 Project team spends a large portion of the project attempting to
clarify the requirements of the entire system and then
producing a design
 Users are often unable to see tangible results in terms of
working software for an extended period
 Waterfall model: has well-defined, linear stages of systems




development and support
Spiral model: shows that software is developed using an
iterative or spiral approach rather than a linear approach
Incremental build model: provides for progressive
development of operational software
Prototyping model: used for developing prototypes to clarify
user requirements
Rapid Application Development (RAD) model: used to
produce systems quickly without sacrificing quality
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Product Life Cycles
 Adaptive Software Development (ASD) life cycle:
requirements cannot be clearly expressed, projects are
mission driven and component based, using time-based
cycles to meet target dates
 Development proceeds by creating components that
provide the functionality specified by the business group
as these needs are discovered in a more free-form
approach
 Requirements are developed using an iterative approach
and development is risk driven and change tolerant to
address and incorporate rather than mitigate risks
Information Technology Project Management, Fifth Edition, Copyright 2007
Product Life Cycles
 Large IT projects are usually composed of several
smaller, more manageable projects, especially
when there is a lot of uncertainty involved
 Some aspect of project management need to occur
during each phase of the product life cycle
 Systems planning phase for a new information system can include
a project to hire an outside consulting firm to help identify and
evaluate potential strategies for developing a particular business
application
 Implementation phase might include a project to hire outside
programmers code part of the system
 Close-out phase might include a project to develop and run several
training sessions for users of the new application
Information Technology Project Management, Fifth Edition, Copyright 2007
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The Importance of Project Phases
and Management Reviews
 A project should successfully pass through each of the
project phases in order to continue on to the next
 Management reviews, also called phase exits or kill
points, should occur after each phase to evaluate the
project’s progress, likely success, and continued
compatibility with organizational goals
 At the end of the concept phase, the project team could have
presented information to the faculty, president and other staff
members that described different options for increasing the use of
technology, an analysis of what competing colleges were doing and
results of a survey of local stakeholders’ opinions on the subject.
Unfavorable results could have resulted in stopping the project at that
point and not investing more time, effort and money.
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What Went Right?
"The real improvement that I saw was in our ability toin the words
of Thomas Edisonknow when to stop beating a dead
horse.…Edison's key to success was that he failed fairly often; but as
he said, he could recognize a dead horse before it started to
smell...In information technology we ride dead horsesfailing
projectsa long time before we give up. But what we are seeing now
is that we are able to get off them; able to reduce cost overrun and
time overrun. That's where the major impact came on the success
rate.”*
Many organizations, like Huntington Bancshares, Inc., use an
executive steering committee to help keep projects on track.
*Cabanis, Jeannette, "'A Major Impact': The Standish Group's Jim Johnson On
Project Management and IT Project Success," PM Network, PMI, Sep.1998, p. 7
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The Context of IT Projects
 IT projects can be very diverse in terms of size,
complexity, products produced, application area,
and resource requirements
 IT project team members often have diverse
backgrounds and skill sets
 IT projects use diverse technologies that change
rapidly; even within one technology area, people
must be highly specialized
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Case Wrap-Up
 Due to the concerns raised from many people at
the meeting, the president directed that a broadbased committee be formed to investigate the
technology issue and report back in a month.
 Not surprisingly, the committee recommended to
terminate the concept
 Tom Walters learned the hard way about the
need to pay more attention to the needs of the
entire college before proceeding with future
technology plans.
Information Technology Project Management, Fifth Edition, Copyright 2007