It Projects Success Rate

Published Date: 02 Nov 2017

Introduction

Based on Association for the Advancement of Cost Engineering international (AACE) Total Cost Management (TCM) framework, "the life cycle of a strategic asset can be summarized in five stages as follows:

Ideation - recognize an opportunity or need for a new or improved asset; evaluate research, develop, and define optional asset solutions that address the opportunity; and select an optimum asset solution.

Creation - create or otherwise implement the asset solution through execution of a project or program.

Operation - deploy or put the new or modified asset into service, function, production, operation, or other use.

Modification - improve, modify, or otherwise change or recycle the asset through execution of a project or program.

Termination - decommission, close, retire, demolish, remove, dispose, or otherwise terminate the asset from the enterprise’s portfolio (often through execution of a project or program)" (AACE International, 2012).

Project is on creation stage in asset life cycle. Product in information technology (IT) projects are considered good asset if:

The product delivered on schedule so meet user needs on that particular time period. Because if the product is so late that by the time it is rolled out, the users either no longer need it or another product has been found to fill the user needs.

Meet user needs. In other words, users feel that the product will allow them to do their work efficiently by using it. The product works as required because if there major bugs in the system, user do not trust the product functionality and hence will not use it.

The product that project produced is not considered overpriced so project should be on budget.

Product that delivered on time, within budget and with all features and functions as specified is asset that created from successful project. Successful project will create asset, so it is important to have successful project.

Based on Standish CHAOS Manifesto 2011 project is classified by following criteria:

"Successful if products were delivered and met its success criteria within a range acceptable to the organization. Completed on time and budget, with all features and functions as specified.

Challenged if products were delivered, but the team did not fully meet all the project's success criteria within acceptable ranges. Completed, but over budget, late, lacking some originally specified features and functions or delivered late.

Failure if the project team did not deliver a solution at all. Abandoned or cancelled at some point, and thus became a total loss" (Standish Group, 2011).

Figure 1. IT Projects Success Rate

The Study shows on IT projects that using traditional waterfall development methodologies 14% of are successful, 29% are failure and the remaining 57% challenged while IT projects using agile development methodologies 42% of are successful, 9% are failure and the remaining 49% challenged. Chart for Projects success rate is presented in figure 1.

On 2010 Collaboration, Management and Control Solutions (CMCS) has done survey on Middle East about factors that contributed to project failure.

Figure 2. CMCS Survey for factors that contributed to project failure

The survey showed in figure 2 which highlighted a wide range of reasons for project failure, with improper planning and methodology cited as the leading factor in project failure, with 78% of respondents reporting it as an issue.

Other contributing factors to project failure included lack of communication (75%), and unrealistic target completion dates (67%), inadequate commitment and involvement from senior management (59%), insufficient budgets and resources (56%), too many assumptions and unknowns (51%), project politics and conflicts (38%), lack of set targets or measurable results (45%), and the formation of the wrong project team (27%).

Projects are investments that organizations undertake to achieve their strategic objectives, regardless of the industry, size and type of projects. When a project is approved for execution, the investment that had been allocated for the project would take into consideration the revenue that this project will generate when completed as well as the level of risk that the project has. Failing to achieve the estimated return of investment would result in unrecoverable losses to the project owner. Of course, the return of investment is not necessarily that always be measured in monetary figures but also in terms of other tangible and intangible benefits.

Project failure has impacts which need to be considered such as:

Cost & Time Overruns

Quality degradation

Frustration, sometimes resulting in people quitting

Stress, sometimes resulting in people quitting

Low job satisfaction

Low corporate market value

Low public opinion

Negative media campaigns

The cumulative effects can be very costly to your company

May even force the company into closure

Based on author experience in IT projects since 2007 until now 2013, there are some major factors which affecting IT projects failure in Indonesia even for company that implements poor practices of project management. This paper will discuss strategies to overcome factors which affecting IT projects in general and especially IT telecommunications projects in Indonesia. This paper will answer for research question below:

What strategies need to be taken for consistently delivering successful IT projects in Indonesia.

Project Life Cycle

In this research author will analyze and find strategy for every condition on each project life cycle phase, showed in figure 3.

Figure 3. Project Life Cycle

The life cycle of project described from Total Cost Management Framework is:

"Ideation - given overall requirements of the project, the project team assesses alternative concepts for performing the project and selects an optimal performance strategy. Strategic performance requirements for the project are established.

Planning - project plans are developed that address the strategic requirements and selected performance strategy.

Execution - the plans are implemented through the execution of planned project activities.

Closure - the asset or deliverable is reviewed, tested, verified, validated, and turned over to the customer. Learnings for future use in ideation are documented" (AACE International, 2012).

Strategy Formulation Framework

Since strategy will determine design and direction deployment of resources to achieve project goal. It is necessary to use methodology in order to strategy choosing become objective. Strategy formulation network is implemented in two main stages.

The Input Stage: concise basic information as input for strategy selection.

The Matching Stage: generate feasible alternative strategy selection where internal and external factors are being matched.

The Input Stage

Figure 4. The Input Stage

The input stage showed on figure 4 SWOT analysis used to provide concise information. Opportunity and threat will be used on External Factor Evaluation (EFE) Matrix while strength and weaknesses used on Internal Factor Evaluation (IFE). SWOT analysis concept to build on strengths, resolve weaknesses, exploit opportunities and avoid threats.

Figure 5. SWOT analysis factors (source: author)

Figure 5 shows SWOT internal factors. Strengths are characteristics of project that give it an advantage over others. Weaknesses are characteristics that place project at a disadvantage relative to others. Both strength and weaknesses are internal factors. Internal factors considered when those factors are covered in activity on project life cycle phases.

Still on figure 5 shows external factors. Opportunities are external chances to improve performance in the environment. Threats are external aspects in the environment that could cause trouble for project. Both opportunities and threats are external factors. External factors considered when those factors are not covered in activity on project life cycle phases but affecting project life cycle phases.

Internal Factor Evaluation (IFE) Matrix

As part of the input stage Internal Factor Evaluation (IFE) Matrix, IFE Matrix identifies and evaluates key inner strengths and weaknesses from all phase of project life cycle showed in table 1.

Table 1. Internal Factor Evaluation (IFE) Matrix (source: author)

This IFE Matrix generates three major strengths that listed below:

Organization has general format of Work Breakdown Schedule (WBS)

Develop scope management plan

Develop requirements analysis

Those major strengths are on planning phase. That inform organization fulfill the requirement for developing a detailed and complete Work Breakdown Structure (WBS) where the project scope of work is decomposed to a level that can identify extra, missing and/ or vague work elements.

And IFE generates five major weakness that listed below:

Unclear goals and objectives (Ideation)

Lack of executive support and user involvement (Ideation)

Failure to plan (Ideation)

Lack of proactive risk management (Planning)

Objectives changing during the project (Execution)

Three major weakness from ideation and one from planning and one from execution. Those major weakness inform that goals and objectives become unclear because project sponsors lack the experience to describe what they really require and inability to provide direct and honest feedback on the progress. Without user involvement nobody in the organization feels committed to the project. IT managers are not given the opportunity to plan because time pressure from senior management take over and most of the time the project is on its way before it has been clearly defined. People see planning as a waste of time because they believe that time is better spent doing something rather than planning.

4.00 is the highest score which shows superior strengths and lowest weakness, 1.00 is the lowest score for strength and superior weakness. Mean calculated from [(4.00 + 1.00) ÷ 2] result for 2.5. If total weighted score above 2.5 it means internal strength is strong but if below 2.5 internal strength is weak.

IFE Matrix total weighted score 2.386 its informed internal organization slightly not strong enough to run the project to succeed.

External Factor Evaluation (EFE) Matrix

Next on input stage is the External Factor Evaluation that includes weighing a list of key factors that are external outside project life cycle phase, showed in table 2.

Table 2. External Factor Evaluation (EFE) Matrix (source: author)

The EFE Matrix generates two major opportunities that listed below:

• Breaking development and implementation into manageable steps. (Planning)

• Executives and business units fast enough to respond to critical issues, risks, or project activities. (Execution)

Those major opportunities are on planning and execution phase. Organizations doing well on choose several smaller project packages where possible since the more clearly defined the project, the easier it becomes to realize. Break down big tasks into several independent project modules. By doing open communication and clear decision-making channels it will set up institutionalized and clearly defined lines of reporting to (internal) customers and to senior management or the project sponsor.

EFE Matrix generates three major threats that listed below:

• Poorly defined requirements, what the customer wants was not clearly documented (Ideation)

• Project politics and conflicts among organizations involved (Ideation)

• Changes that were not initially planned are added to the project (Execution)

Three major threats inform that IT projects are typically already overdue by the time they are initiated. This means that companies have very little time to clearly define their new IT requirements. These three major threats related to lack of user involvement. Users have to know what it is they want, and be able to specify it precisely. From experience that involving many stakeholders means they all try to influence the project's goals. Everyone involved has his or her own agenda and his or her own objectives. Organizations also identified with not having a method to handle or recognize changes.

4.00 is the highest score which shows superior opportunities and lowest threats, 1.00 is the lowest score for opportunities and superior threats. Mean calculated from [(4.00 + 1.00) ÷ 2] result for 2.5. If total weighted score above 2.5 it means external opportunities is favorable to project but if below 2.5 external opportunities not favorable to project.

EFE Matrix total weighted score 2.3125 it’s informed external opportunities slightly not favorable to support the project to succeed.

The Matching Stage

Figure 6. The Matching Stage4

Matching Stage is process to generate feasible alternative strategy selection where internal and external factors are being matched it using two methods that are TOWS Matrix and IE Matrix, showed on figure 6.

TOWS Matrix

TOWS is inversion of SWOT. TOWS Matrix method generates four types of strategies as follows:

SO: strengths-opportunities strategies, build on strength by exploiting opportunities.

WO: weaknesses-opportunities strategies, resolve weaknesses by exploiting opportunities.

WT: weaknesses-threats strategies, resolve weaknesses by avoiding threats.

ST: strengths-threats strategies, build on strengths by avoiding threats.

Table 3. TOWS Matrix (source: author)

From table 3 TOWS matrix generates 17 feasible alternative strategy selections, summarized below:

Strengths-Opportunities (SO) Strategies

1. Have Return on Investment (ROI) case from the start and never ask the management for money, unless it’s going to save or make them money. Management believes that this is actually going to produce something tangible, and then management will be fully committed to the project. Strategy implemented on planning phase.

2. Develop good systems architecture. Break down big tasks into several independent project modules. Good systems architecture will break the system into components with clearly defined interfaces via which information is passed to other components. Team may consult with external consultant which hired in the project as design experts to come up with schema. Strategy implemented on planning phase.

3. Get executive sponsorship for the project to have pre-commitment of resources to the project. And ask them to be open if they have any reservations about the project. Strategy implemented on planning phase.

4. Document which resources and skill sets are needed to get the job done. Strategy implemented on planning phase.

5. A complete and detailed organization chart will be integrated with the WBS developed earlier will provide the project team with what is known as the accountability matrix. This matrix details the parties involved in each element of the project scope as well as the role they have in performing, approving, reviewing, supporting and others in delivering this scope. Strategy implemented on planning phase.

Weaknesses-Opportunities (WO) Strategies

1. On design phase do estimate development costs from those estimate project manager will able to estimate the complete cost of the system to a more accurate extent. Strategy implemented on planning phase.

2. Developing prospects for project critical employees. Company or organization should be able to motivate team members. It is important for colleagues to know that project management will not turn out to be a dead end for their own career. Strategy implemented on planning phase.

3. Develop project plan and monitor project by referring to project plan, existing plan get updated weekly with actual progress information, resources consumed and money spent. Strategy implemented on planning phase.

4. Detailed project closeout report. This report will provide an assessment of the project successes and failures, document lessons learned, confirming to which extent project objectives were achieved and ensuring that the different project contractual obligations had been terminated and transferred to the project owner in a complete way. Strategy implemented on closure phase.

Strengths-Threats (ST) Strategies

1. Apply well-known technologies. Unless the use of new technologies is absolutely necessary, it is better to rely on proven solutions you know will work. Strategy implemented on ideation phase.

2. Have the customer agree to and sign off the business case document, requirement documents, functional specifications, technical specifications and architecture document. Those entire documents have to be made crystal-clear. Strategy implemented on planning phase.

3. Set up a communications plan, which clearly outlines all the interested parties of the project and what information and how frequently such information is disseminated, the methods of distributing the information and responsibilities of each person in the project team for distributing the information. Strategy implemented on planning phase.

Weaknesses-Threats (WT) Strategies

1. Standardized projects performance metrics and reporting. Those metrics provide the project stakeholders with objective status of the project budget, schedule and quality performance and the impact it would have on the project completion date and estimated cost at completion. The metrics will help the organization in setting performance thresholds where alerts will be triggered when a performance metric is over or under desired limits. Strategy implemented on planning phase.

2. Set up a Change Management committee. Document the change management process to be used and followed by the project team. Educate the project team to recognize a change or deviation from the plan and follow the change management processes. Strategy implemented on planning phase.

3. Structured Project Board. Support from senior management via properly structured Project Board, consist an Executive, Senior User, Senior Project Manager to ensure executive management support and user involvement. Strategy implemented on planning phase.

4. Manage the project critical path or paths so the team members can become aware of opportunities to accelerate and/or threats to project success. The critical path provides an objective tool for assessing the impact of today’s decisions on future project results. It also provides an objective tool for setting priorities for taking actions and allocating scarce resources to projects. Strategy implemented on execution phase.

5. Since day 1 start a risk management log Identify risks throughout the project continually revise risk mitigation and contingency plans. Implementing a formal risk management process will ensure that risks are identified, assessed qualitatively and quantitatively, response actions identified and provisions including contingency plans and reserves are allocated for the project. Strategy implemented on planning phase.

Conclusion

In conclusion this paper answer for research question,

• What strategies need to be taken for consistently delivering successful IT projects in Indonesia.

It answered by doing Internal – External (IE) Matrix below,

The Internal – External (IE) Matrix

The IE Matrix based on two previous tools:

The x-axis is IFE total weighted score result that is 2.386 ≈ 2.39

The y-axis is EFE total weighted score result that is 2.3125 ≈ 2.31

Figure 7. The Internal – External (IE) Matrix (source: author)

From figure 7 IE matrix for present condition in Indonesia suggest that IT projects to adopt hold and maintain strategy. Hold and maintain strategy for project means that organizations or company are still able to conducting project but still need to resolve failure factors especially the major factor to escalate to grow and build strategy. On grow and build strategy (I, II and IV) internal organizations or company are stronger and opportunities also supporting project to succeed.

Overall from 17 strategies in TOWS matrix, 14 strategies are need to implemented on planning phase and 3 strategies each need to be implemented on ideation phase, execution phase and closure phase. It shows that planning phase are very important where influence to project succeed are very high. From planning phase it can be seen if organizations or company doing good practices of project management or not.