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IT Project Management

IT departments are doing a much better job of soliciting input from the employees who will be served by the projects. But new tools and methodologies have also played a part.

1Apr

While it would be an overstatement to say that IT lives and dies by the project, project management is central to the IT mission. That mission is frequently in need of help. In fact, the "CHAOS Report," produced by The Standish Group, and now in its sixth year, pegs the current success rate at just 28 percent.

Projects that come in over budget, late, or missing some intended functions still account for about half of all projects, although the typical cost overrun is down by 50 percent. Jim Johnson, chairman of the West Yarmouth, Massachusetts, market research firm, says that IT project performance is improving primarily because IT departments are doing a much better job of soliciting input from the employees who will be served by the projects. And projects have also gotten smaller, averaging $660,000 last year, compared with $1.4 million (nonadjusted) in 1995.

But new tools and methodologies have also played a part. Project management software — some of it tailored specifically to the needs of IT departments — abounds. ProSight Inc. takes a different approach: its IT-Enabler software works on a portfolio-management level, helping IT departments prioritize projects and make sure that as business needs change, projects change accordingly.

At its most rudimentary level, CEO John Cimral says, the product doesn't do anything a management team couldn't do with a pen and a legal pad manually. "But once projects have been prioritized," he says, "they often acquire a life of their own, one that gets progressively out of sync with the business over time." ProSight doesn't provide the day-by-day workflow and expense information that a typical project management product would; instead, it provides an automated way to manage and measure projects, one that aggregates data so that IT and business leaders can monitor projects in relation to each other, assess ROI, and agree that resources are wisely deployed.

One early customer, PNC Bank, says the software will aid its decision-making. "It can pull information from different sources and present it in a way that helps executives make faster, clearer decisions," says Bob Bardusch, program office manager at the Pittsburgh-based bank. ProSight runs about $250,000.

CFOs want projects to go smoothly; ideally, they would like a guarantee. Gladwyne Software Surety, based in King of Prussia, Pennsylvania, offers something close: the option of purchasing a surety bond in the event that such large-scale projects as CRM and ERP installations go up in flames. The company's bread-and-butter business is in consulting services that try to ensure such projects stay on track, but the availability of an insurance-backed bond (which costs about 2 percent of the value of the contract) adds an element other consultants lack.

Lee Wilbur, CFO of Jackson Laboratory, a genetics research firm in Bar Harbor, Maine, hired Gladwyne to advise the lab as it rolls out a full suite of Oracle products. "We used them to develop a risk assessment and mitigation plan for us," says Wilbur. Gladwyne also helped negotiate the contract with Oracle. Wilbur didn't take them up on the offer of a surety bond, because Jackson didn't opt for a fixed-price contract with Oracle, which is currently one condition for the bond (although Gladwyne is exploring other options). "But I could see us using it for other projects," he says. "It's an intriguing way to mitigate risk on large-scale IT projects." A Gladwyne survey of financial and IT executives found that the most common way to mitigate risk for IT projects is to budget for contingencies; 70 percent of respondents said they do that, often inflating budgets by as much as 50 percent to allow for disruptions.

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