• As information technology continues to become a key business driver, the alignment of IT projects with business objectives will be essential for overall enterprise success. Establishing governance boards and steering committees is imperative to allocate resources properly, manage scope creep, approve or reject changes, and monitor the progress of a project. IT executives should work with other upper management to develop and participate in strong governance boards and steering committees, to help ensure that projects are aligned with overall enterprise strategies, focused on fulfilling business objectives, and maximize ROV.
• Developing reasonable milestones, identifying critical paths, and implementing a work breakdown structure for projects of all sizes are essential to keeping the projects under control. Successful project management should include the ability to manage expectations, balance internal and external issues such as team member conflicts and political matters, in addition to developing and refining the management processes when embarking on new projects. IT executives and project managers should collaborate on identifying problem areas as early as possible and throughout the project, developing methods for improving current processes, and creating metrics that enhance the project management analysis and reporting capabilities.
• As IT budgets continue to be scrutinized, transforming IT into a value center will rely partly on the number of successful projects that are undertaken. Furthermore, good project management is not only successful to the single venture, but prepares the organization for a larger objective – IT project portfolio management. Portfolio management provides executives with an overarching view of all enterprise projects for the purpose of maximizing business benefits via project prioritization or reprioritization. It executives should prepare its organization for the ultimate corporate objectives by developing and exercising best practices for aligning IT with enterprise strategies and maximizing the corporation's bottom line.

A study conducted by the Center for Business Practices found that 68 percent of companies implementing project management techniques increased productivity. More than half of respondents experienced significant improvement in completing projects within budget and on schedule, due to improved project management techniques. Also cited as positive benefits of project management were employee satisfaction (cited by 37 percent of respondents), and customer satisfaction (cited by 32 percent). Overall, more than 90 percent of companies that have used project management techniques saw value in implementing it within the enterprise, the study found.

Users are dealing with a set of major issues within the IT department. These include:

• Cost containment and reduction;
• Prioritization of people, projects and portfolio’s into a single priority list;
• Tool standardization;
• Efficient IT staff utilization; and
• Measurement and analytical metrics proving IT's value to the organization (via cost/benefit, ROI, and/or ROV analysis).

It is against this backdrop that the IT executive must deal with ensuring that project goals are met and deliverables delivered.

Successful project management is achieved through effective balancing of resources, strong management philosophies, and judicious planning. Careful project planning is imperative to reduce the number of problems that will eventually occur during the project. Clearly defining project objectives and being able to understand and credibly communicate the effect of new or additional requirements will maintain focus and help prevent scope creep.

To facilitate project processes, companies must establish a proper project management structure for defining the task at hand, the objective, and the steps to be undertaken to achieve the goal. The structure should include the establishment of a governance board, steering committees, and project management offices (PMO) to coordinate and guide corporate-wide project management efforts. This is essential to ensure that polices regarding project management are established, understood, and agreed upon and, that projects are aligned with business strategies so that resources are allocated appropriately.

A proper governance board sets policies across the entire organization and certifies that IT investments are aligned with the corporate strategy and requirements so that rogue projects are not launched. The governance board may also assign task forces to research the project before approval. If the project is granted, the governance board may set the policy regarding preferred vendors and other technologies and resources that are to be used for the project. (See the RFG Note "Getting Governance to Work," Feb. 24, 2000.)

In some companies, steering committees may conduct the initial research required to provide project justification before approval from the governance board. In other cases, steering committees are not created until after a project has been approved and funded. A steering committee should be comprised of representatives from IT, the LOBs for which the project is intended, and perhaps corporate finance and/or operations departments. Such committees can also oversee project progress and maintain project focus on corporate objectives. A project manager carries out the specifics for the individual projects, while the steering committee would help approve or reject the plan.

Strong and effective communication among the project manager, steering committee, and governance board will be essential to ensure that the IT project remains aligned with corporate goals and to maximize project investments. To minimize political dispute and pushback from other lines of business, project approval should be gained from upper management. IT executives must communicate to upper management that IT is a major driving force and could impact the company's bottom line if it is included in the company's project portfolio creation and prioritization process.

Developing a corporate strategy and prioritizing IT projects based on business drivers and currently available IT resources will help the enterprise speed time to market. Competition is fierce and upper management will have to work aggressively in developing proper processes for driving projects that maximize return on investment and value. Building a proper framework for project management is imperative for managing successful projects and completing them on time and within budget.

Understanding organizational culture is also important to successful project management. Beyond good resource management skills, additional attributes for achieving success include the development of a project-oriented enterprise culture, good communications skills among project participants, and the ability to set clear goals, objectives, and timelines. Proper employee training is also critical, to improve productivity, business knowledge, and self-sufficiency. It is the responsibility of the project manager to plan and nurture the project according to best practices.

Project problems have been known to start at the very beginning of a project. Start dates can slip due to reallocated resources, unavailability of staff expected to help start the project, or even project creep caused by under-the-table commitments. When projects are complex, managers should divide them into smaller and more manageable objectives. When developing schedules for all milestones, they should include buffer time for training, rework, and other mishaps. However, missed milestones can create a domino effect causing other pieces of the project to fall behind. Accountability is essential, to identify problem sources accurately and correct problems quickly. Weekly meetings and reviews of the project plan are usually necessary by the project manager to determine if anything is falling behind schedule.

Team members should be required to submit reports regularly to further ensure that projects are on target. Reports help projects maintain their focus and provide project managers with assistance in identifying, anticipating, and preventing problems before they occur. Enterprise project management tools are available that offer automated evaluation of cost or time overruns, missed critical paths, reporting automation, risk management, and task management.

However, it is the responsibility of the project manager to inform upper management of problems as early in the cycle as possible, before they become insurmountable and jeopardize the entire project. Managers who tend to hide issues or slippages, hoping they can get back on track later, tend to end up with failed projects.

Furthermore, reports should include documentation of resource allocation, in addition to the work accomplished, remaining, and problems encountered during the assignment. This information can help improve estimates of resources required for future projects, and provide a method for measuring improvement areas by performing a gap analysis. The IT executive should understand how long it took to reach each of the milestones and the cost to achieve each mission within the project.

Resource planning is also crucial, to ensure that the appropriately skilled team members are assigned to the project, in and that required technologies are available during the requested times. Some companies have found that developing a centralized repository of team members that includes information about their availability, experience, and specific skills can help improve and speed the allocation of the right resources to each project. Moreover, understanding resource allocation and utilization will also help improve the planning of future projects.

After a project is rolled out, measurements and feedback are essential for measuring project success. A measurement and review of the project helps reassure whether business objectives were realized. Developing careful measurement processes are also essential, as it helps IT executives identify problem areas for improvements. Evaluation of each project will improve gauging, planning, and resource management of future missions. IT executive and project managers should reflect on the following questions:

• Did the project meet its goals and objectives?
• Was the project on time and on budget? Were deadlines and budgets realistic?
• Were the right resources allocated to the project?
• Should the next phase be rolled out as planned or reevaluated?
• Did project members understand the requirements?
• Are projects staffed correctly?
• Who is working on specific projects?
• How much time is being spent on the project?
• Why are projects and milestones late?
• Is there any forecasting available that will alleviate the problem?
• What was the actual cost versus the projected cost?
• If one were to do the project again, what things would one do differently (if any)?

For the longer term, strong project management should lead to effective project portfolio management. Project portfolio management enables executives to maintain a global view of all enterprise projects with the ability to move and match resources with business priorities in order to deliver the maximum business benefits. IT project portfolio management focuses on the corporate strategies and executes prioritized projects based on the business objectives and market drivers.

RFG believes IT project management is a core competency and critical success factor for organizations that want to maximize their bottom lines. IT executives should build strong project management teams and corporate project management structures that help align IT projects with corporate strategies and prioritize those projects for maximum bottom-line impact. To maintain a competitive edge, IT executives and project managers should work on strengthening internal processes and structures, and evaluate project management tools that can help appraising project value, time to market, and resource allocation.

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