Project Management Systems: Moving Project Management From an Operational to a Strategic Discipline

Abstract: This article illustrates one aspect of the concept of “fit” between an organization’s implementation of project management and its organizational context by exploring how the underlying drivers of an organization’s strategy might influence not only the nature of the projects that it undertakes, but also the appropriateness of the arrangements that it makes to manage those projects. Using a model conceptualized from the literature on strategic management, an analysis of four organizations that have made significant investments in project management over the past 5 years supports the hypothesis that the degree of “fit” between an organization’s strategic drivers of value and the configuration of its project management system influences the value it obtains from project management.

Reference: Project Management Journal, March 2009, Volume 40, Number 1

Authors: Terence J. Cooke-Davies, Lynn H. Crawford, Thomas G. Lechler

Link: http://doi.wiley.com/10.1002/pmj.20106

This article, though primarily theoretical, is nevertheless fascinating. The primary purpose is to explore the extent to which value is created or destroyed depending on the level of “fit” or “misfit” between the organization’s Project Management System (or PMS) and its strategic drivers of value. In order to get there, they explore each topic.

A PMS is defined as system of management structures, standards, and procedures. The characteristics of a PMS are grouped, as derived from the previous work “Value of Project Management (Thomas & Mullaly, 2008), into 4 groups: Policy, People, Structure, and Processes. Strategic drivers are derived from Porter’s (1985) work and are hereby simplified into two axes: the degree to which differentiation is required, and the need to improve process efficiency in order to create a quadrant:

Context 1: Low process economics driver, low differentiation driver (ad hoc)

Context 2: High process economics driver, low differentiation driver (classic project management)

Context 3: Low process economics driver, high differentiation driver (innovation)

Context 4: High process economics driver, high differentiation driver (entrepreneurship, intrapreneurship)

I have to admit that context 4 was most interesting to me, not the least because the word “intrapreneurship” was new to me. Project managers in organizations in this context need to act like business leaders, and need to be empowered to be entrepreneurial in exploiting market opportunities. The paper claims this is not easily done, and in fact I have known only a couple project managers who were successful in this context, and they were not generally popular with their subordinates. An important source of tension is (it is better to quote here):

Firms need both diversity and structure so that there is an inevitable tension between individual initiative and corporate attempts to impose uniformity

Well said. The paper raises more questions than answers, and although it discusses 4 specific firms within their respective strategic contexts, it does not seriously answer many questions about what specific PMS characteristics are suitable to organizations in each quadrant. Nevertheless the paper is an interesting read.

Challenges Generated by the Implementation of the IT Standards COBIT 4.1, ITIL V3 and ISO/IEC 27002 in Enterprises

Abstract: The main purpose of this paper is to emphasize the importance of the implementation of IT best practices in enterprises and to identify the key challenges managers are facing when creating a standardized IT control framework in order to achieve alignment of best practices to business requirements. First, the authors present the increasing necessity of implementing IT standards in organizations acting in IT environments with focus on the standards COBIT, ITIL and ISO/IEC 27002. Second, the paper develops the analysis of the three standards which is a guidance for organizations wishing to adopt IT best practices on how to integrate the leading global frameworks and other practices and standards in inter-organizational relationships. The last part concentrates on the best methods of implementing in an efficient way the IT standards, which include identifying the use of standards and IT best practices, prioritizing processes according to an action plan and planning the steps of the implementation approach.

Reference: Năstase, P., Năstase, F., & Ionescu, C. (2009). CHALLENGES GENERATED BY THE IMPLEMENTATION OF THE IT STANDARDS COBIT 4.1, ITIL V3 AND ISO/IEC 27002 IN ENTERPRISES. Economic Computation & Economic Cybernetics Studies & Research, (3), 1-16.

Link: http://www.ecocyb.ase.ro/articles%203.2009/Pavel%20Nastase.pdf

From the paper:

COBIT provides best practices and tools for monitoring and mapping IT processes while ITIL aims to map IT service level management and ISO 27002 provides guidelines for implementing a standardized information security framework.

There is nothing in this paper that is original, and even less that is intelligible. Moving on.

Exploring the Role of Steering Committees in Realizing Value From Project Management

Abstract: The impact of steering committees on project performance and their role in creating value from project management capabilities is not well understood. A case study analysis was chosen to analyze the configurations and specific functions of project steering committees. A measurement model for steering committee configurations was developed to enable further survey-based studies. One of the major insights resulting from the authors’ interviews with project managers and senior managers was that they perceived the existence of a project steering committee only when the context was defined and clarified. Furthermore, a large variety of committee involvements was identified, concluding that steering committees per se are very rare. On the project level, the cases clearly demonstrate that committees with project steering functions play an important role in the selection, initiation, definition, and control of projects. On the organizational level, they are important to implement and maintain project management standards. Finally, the results clearly indicate that steering committees directly support project success and are instrumental for attaining value from an organization’s investments in its project management system.

Reference: Project Management Journal, Vol. 40, No. 1, 42-54.

Authors: Thomas G. Lechler, Stevens Institute of Technology; Martin Cohen, Stevens Institute of Technology

Link: http://www3.interscience.wiley.com/journal/122217097/abstract

Comments: My first reaction was: I wonder what relevance this research has to Change Advisory Boards in a Change Management process. However, beyond the superficiality they are not very similar. Projects, and hence project steering committees, are more strategic. Project steering committees consist mostly of executive management; the CAB may consist of representatives of management, users, partners, and vendors among others.

What surprised me the most of the research is how little research has been performed this area. Lechler and Cohen sought to address the questions of project steering committees: 1) what are the various configurations and responsibilities, 2) which project decisions are made, 3) how are they organizations, and 4) do they increase project management value? In order to do this they examined four companies in depth, as part of a larger PMI-sponsored study.

They found wide variety in steering committee composition, which is consistent with my observations of CABs in organizations implementing Change Management. In general they found steering committees are perceived to improve project management performance with minimal detrimental elements, such as political infighting or delayed decision-making. I wonder what would have resulted from the study of project-oriented organizations that lack the element of a structured steering committee–would they perceive lack of a steering committee hinders project management success?

What is the dividing line between a Project and a Change?

When is a Change really a Project? ITIL simply says the following are not changes:

  • Changes with significantly wider impacts than service changes, e.g. departmental organization, policies and business operations – these changes would produce RFCs to generate consequential service changes
  • Changes at an operational level such as repair to printers or other routine service components.

It isn’t clear to me that the natural agency—PMI—offers any clear guidance. PMBOK defines a project as a temporary endeavor undertaken to create a unique product, service, or result. Temporary endeavor implies a definite beginning and end.  Unfortunately, this definition is not inconsistent with a Change.

PMBOK offers little guidance about how big or how little a project needs to be in order to become a “Project” except to say the PMO exists to support project managers including developing a methodology, best practices, and standards. I would say a project is a “Project” when the benefits of managing it as a “Project” outweigh the overheads of the PM method. Hence the answer is organizationally dependent. If the organization’s PM methods are non-existent, then you can call anything a “Project” and send it off the secretary masquerading as a PM.

If the PMO’s PM method is detailed and rigorous, then projects would be greater than 80 hours at a minimum. However, in order to avoid the tendency of middle managers to “break up” projects in order to avoid PMO oversight, PMO’s will generally make the PM method scalable, requiring less overhead and oversight for smaller projects and more for larger projects.

In general time alone is a poor indicator for defining the boundaries of a project. A PMO should also look at factors such as strategic alignment, whether the Change supports or endangers the company’s strategy, and the project’s risk profile. Riskier projects should be overseen by the PMO in order to ensure the risk profile is in line with its support of the strategy.

In most organizations the PMO is more strategic and is independent of the IT operational processes. The Change Manager may hear about projects a few days before they are expected to go live (as a Change). In other words, the Project usually precedes the Change, not the other way.

Building Value Through Sustainable Project Management Offices

Abstract: Organizations’ attempts to implement and gain value from investments in project management have resulted in rapid growth and, in some cases, demise of project management offices (PMOs). The recent research literature on PMOs provides an ambiguous picture of the value case for PMOs and suggests the tenuous nature of their current position in many organizations. In studying project management implementations for the Value of Project Management project, we chose to use three detailed cases and comparisons with the remaining 62 organizations in the value project to study how PMOs are connected to value realization for organizations investing in project management. Specifically, we sought to understand how PMOs deliver sustained value to organizations. Using the theories of Jim Collins (Collins, 2001; Collins & Porras, 1994)) as an interpretive framework, we explore these cases to understand how to create and sustain project management value through investments in PMOs.

Reference: Project Management Journal, Vol. 40, No. 1, 55-72.

Link: http://www3.interscience.wiley.com/journal/122217098/abstract?CRETRY=1&SRETRY=0

The paper reviews three companies’ PMOs in depth and compares them against some principles derived from Collins’ work, including:

  • Build a core ideology for the long term
  • Pick the right PMO leadership.
  • Staff the PMO carefully.
  • Create a culture of discipline.
  • Confront the brutal facts, but keep the faith.

While I have tremendous respect for Collins and his contributions, I am not persuaded his research results are intended to be applied to departments, or even divisions or business units, inside an organization. Thus I find the this research method very curious. I don’t think you can compare PMO leadership with organizational leadership at the top level. In addition, I question how were these three companies chosen (at random, or because they illustrated the conclusions the authors wanted to convey), and how were these particular principles from Collins’ works chosen?

The authors conclude that “we think effective PMOs continue to add value specifically by changing and reinventing themselves–as long as they stay focused on the principle of improving project management in the organization.” There is too little data to have confidence in this conclusion.

Confusion in the Ranks: IT Service Management Practice and Terminology

Abstract: The Information Technology Service Management (ITSM) movement is gaining adopters throughout the world, expanding from the 2005 ratification of International Standards Organization (ISO) ISO/IEC 20000. However, this concept grew out of older frameworks such as Britain’s IT Infrastructure Library (ITIL) and U.S. service level management (SLM). To further confuse the landscape, there are also related terms such as business service management (BSM), the Control Objectives for Information and related Technology (CobiT), and IT governance.

There is a lack of descriptive academic literature currently published, which has mainly focused on prescriptive pieces. This paper gives a background on the several contributing frameworks mentioned above, and reports on a survey U.S. IT managers to determine the extent of understanding of these terms and frameworks. The findings indicate that ITSM adoption and knowledge may be lower than some studies have indicated. There is also conceptual confusion about what constitutes ITSM, with conflation of terms and practices.

Reference: Winniford, M., Conger, S., & Erickson-Harris, L. (2009, Spring2009). Confusion in the Ranks: IT Service Management Practice and Terminology. Information Systems Management, 26(2), 153-163.

Link: http://www.informaworld.com/smpp/content~db=all~content=a910451171

Comments: The authors used a third-party research firm to interview 364 American companies whether they are or are planning to manage IT from a services perspective, which may include ITSM, SLM, or BSM. They found that a little less than half are implementing service management, and another fifteen percent are planning to to do so. The most recognized services frameworks, in order, are SLM, ITSM and IT Governance, followed by CoBIT. Only two-thirds of organizations implementing service management recognized the term ITIL, versus one-third of those not implementing service management. An interesting finding was that even among those implementing service management frameworks, a majority could not correctly identify a service they offer (i.e. quality, which is actually a measurement of service effectiveness).

Among the reasons for not implementing service management included not enough information, costs, belief it isn’t needed, and lack of management support. Less than twenty percent admitted they didn’t want the accountability, though in my experience this number is really a great deal higher.

In my opinion this is one of the better academic studies performed in the area of IT service management. The authors identified lower support for ITSM than purported by other authors in the area. They also identified much greater confusion and much lower awareness of ITSM among practitioners and academic researchers. My own personal observations working with 50+ companies is consisent with the findings in this paper.

Exploring IT Governance in Theory and Practice in a Large Multi-National Organisation in Australia

Link: http://www.informaworld.com/smpp/content~content=a910451709~db=all~jumptype=rss

Reference: Willson, P., & Pollard, C. (2009, Spring2009). Exploring IT Governance in Theory and Practice in a Large Multi-National Organisation in Australia. Information Systems Management, 26(2), 98-109.

Abstract: IT governance is critical to most organisations and has an influence on the value generated by IT investments. Unfortunately, IT governance is more aspiration than reality in many organisations. This research seeks to address the dearth of empirical evidence about IT governance in practice, presenting the findings of an IT governance case study in an Australian organisation. Recommendations are provided to assist organisations to maximise potential of IT governance and insights are provided for researchers.

Comments:

In his book Secrets and Lies: Digital Security in a Networked World, author Bruce Schneier frequently addressed the following comment:

In theory there is no difference between theory and reality. In reality there is.

For this research the authors interviewed 28 senior IT and corporate managers at an Australian MNE in order to address two questions:

  1. What is the nature of IT governance in practice?
  2. What factors contribute to differences between theory and practice?

Their analysis of the interviews identified four major themes that do not entirely overlap with theoretical models of IT governance. For example, although IT governance models frequently deal with risk management of IT-related risks, the subject organization restricts risk management activities primarily to the area of project risk management. The research highlights the importance of visionary leadership and key players in IT-business alignment, and also introduces the importance of historical context in the governance of IT and its initiatives.

Researchers and industry frameworks, such as COBIT and ITIL, frequently document practices that have little relevance in most organizations. For example, during my implementations of CMDB at customer sites, I emphasize the importance of aligning IT service, logical, and phsysical assets with the organization through relationships in a top-down approach. In practice most organizations ignore this advice and build the CMDB bottom-up through the identification of physical assets. In other words, their most pressing concern is to manage the “thinks they can kick” in a way that won’t achieve benefits the CMDB may, in theory, provide. These differences between the theoretical and practical are important, and I would like to see more research like this that covers practical application.

A Conceptual Framework for the Integration of IT Infrastructure Management, IT Service Management and IT Governance

Link: www.waset.org/pwaset/v52/v52-69.pdf

Reference: Knahl, M. (2009, April). A Conceptual Framework for the Integration of IT Infrastructure Management, IT Service Management and IT Governance. Proceedings of World Academy of Science: Engineering & Technology, 40, 447-452.

Abstract: The definition and use of standardized IT Management techniques and processes provide the basis for IT Service Management and IT Governance. With the establishment of de facto standard “Best Practice” reference and process models such as the IT Infrastructure Library (ITIL) or Control Objectives for IT and related Technologies (CobiT), an integrated management architecture for the provision of IT-Services built upon standards based processes and tools becomes feasible. ITIL provides a structured and widely adopted approach to IT Service Management and its processes. ITIL can further be aligned with related standards such as ISO 20000 to manifest IT Service Management practice or CobiT to support IT Governance. However IT Management processes must be developed to align with the existing IT infrastructure and operation and must be modeled around frameworks such as ITIL. This paper illustrates the key IT Management requirements and reviews the current state of the art. A case study highlights the contribution of reference models and management related tools for organizations and presents an integrated management architecture.

Comments: This paper presents a case study, saying the definition of SLA’s and KPI’s are critical to the success of the implementation, and I would have liked to have seen in details what these were. In addition, the first phase of the ITSM rollout includes Configuration Management but not Change Management. I wonder how they plan to keep the CMDB up-to-date.

Wall Street & Technology CIO Round Panel

Here is an interesting round panel discussion on 2009 challenges in the financial industry from Wall Street & Technology. 

There is a major challenge for CIOs because they know what’s coming in the next year or two. They know they are going to be called upon to do much, much more with potentially much, much less. So potentially driving the efficiency in the IT organization is no small feat. They are going to have to figure out ways that technology can help.

The observations are specific to the financial industry, and as such are not very surprising. The industry remains beset by toxic assets on its balance sheets and declining (or highly volatile) asset values. Profitability challenges will constrain spending throughout 2009, on the top and bottom lines. Economists widely blame the current recession on “creative’ instruments and lack of regulatory oversight of the financial industry. In this environment leaders have little choice but to retrench on spending and deal with increasing regulatory scrutiny.

These observations don’t necessarily apply to other industries. Although the economic climate is challenged, there is opportunity in change, and 2009 may become a “breakout” year for aligning IT with organizational drivers. Alignment is a two-way street, and for many organizations it will not occur until IT is more successful in helping define strategic plans, rather than merely reflecting the organizational strategic plan in the IT strategic plan.