Archive for Oktober 7th, 2008

Managing user expectations on software projects – Lessons from the trenches (Petter, in press)

Dienstag, Oktober 7th, 2008

 Managing user expectations on software projects - Lessons from the trenches (Petter, in press)

Petter, Stacie: Managing user expectations on software projects – Lessons from the trenches; in: International Journal of Project Mangement, in press (2008).
doi:10.1016/j.ijproman.2008.05.014

Petter interviewed 12 project management professionals on managing the end-user expectations.  What worked and what did not work?

The conclusions cover three broad areas – end user involvement, leadership, and trust. As far as user involvement is concerned the practices that work included

  • Listening to users
  • Asking questions
  • Understanding concerns about change and actively ease these
  • Working with the user (not at or to them)
  • Let user make tough choices, e.g., on functionality, budget, cost, time
  • Create small user groups to hear them all
  • Giving credit to specific users for ideas
  • Keep users involved and updated throughout the project

What did not work were – not communicating the project status, and trying to outlast difficult users.

On the leadership dimension useful practices mentioned include

  • Ensure project champion
  • Articulate clear vision
  • Motivate team to get it done
  • Educate users on benefits
  • Obtain buy-in from primary stakeholders

Factors leading to end-user dissatisfaction were

  • Scope creep
  • No mission
  • No explanation of purpose/value of the system
  • Follow others

Trust building activities that worked well, were sharing good and bad news, and providing specific times for deliverables. What did not work were hiding the true status of the project, and ‚fake it until you make it‘ also known as hiding knowledge gaps.

Posted in Case Study, Critical Incident Technique, Critical Success Factors, Failed Projects, IT Project, Leadership, Stakeholder Management, Trust | 4 Comments »

A comprehensive model for selecting information system project under fuzzy environment (Chen & Cheng, in press)

Dienstag, Oktober 7th, 2008

A comprehensive model for selecting information system project under fuzzy environment (Chen & Cheng, in press)Chen, Chen-Tung; Cheng, Hui-Ling: A comprehensive model for selecting information system project under fuzzy environment; in: International Journal of Project Management, in press.doi:10.1016/j.ijproman.2008.04.001Update: this article has been published in:  International Journal of Project Management Vol. 27 (2009), No. 4, pp. 389–399.Upfront management is an ever growing body of research and currently develops into it’s own profession. In this article Chen & Cheng propose a model for the optimal IT project portfolio selection. They outline a seven step process from the IT/IS/ITC project proposal to the enterprise success

  1. IS/IT/ITC project proposal
  2. Project type classification
  3. Individual project analysis
  4. Optimal portfolio selection
  5. Portfolio adjustment
  6. Successfully selection
  7. Enterprise success

Behind the process are three different types of selection methods and tools – (1) crisp selection, (2) strategy development, and (3) fuzzy selection.The crisp selection is the first step in the project evaluation activities. It consists of different factual financial analyses, e.g. analysis of discounted cash flow, cost-benefits, total investment, payback period, and the return on investment.Strategy development is the step after the crisp selection, whilst it also impacts the first selection step by setting guidelines on how to evaluate the project crisply. Strategy development consists of a project strategic status analysis. According to Chen & Cheng’s framework a project falls in one of four categories – strategic, turnaround, factory, or support.The last step is the fuzzy selection. In this step typical qualitative characteristics of a project are evaluated, e.g., risk, feasibility, suitability, and productivity improvements. In this step lies the novelty of Chen & Cheng’s approach. They let the evaluators assign a linguistic variable for rating, e.g., from good to poor. Then each variable is translated into a numerical value, e.g., poor = 0, good = 10. As such, every evaluator produces a vector of ratings for each project, e.g., (0;5;7;2) – vector length depends on the number of characteristics evaluated. These vectors are then aggregated and normalised.[The article also covers an in-depth numerical example for this proposed method.]

Posted in IT Project, Life Cycle Managment, Multi-project management, Planning, Portfolio Management, Program initiation, Project Selection, Risk Management, Tools, Uncertainty management, Value | 4 Comments »

Preparing project managers to deal with complexity (Thomas & Mengel, 2008) and Preparing the mind for dynamic management (Hartman, 2008)

Dienstag, Oktober 7th, 2008

 Preparing project managers to deal with complexity (Thomas & Mengel, 2008) and Preparing the mind for dynamic management (Hartman, 2008)

Thomas, Janice; Mengel, Thomas: Preparing project managers to deal with complexity – Advanced project management education; in: International Journal of Project Management, Vol. 26 (2008), pp. 304-315.
doi:10.1016/j.ijproman.2008.01.001

Hartman, Francis: ; in: International Journal of Project Management, Vol. 26 (2008), pp. 258-267.
doi:10.1016/j.ijproman.2008.01.007

Complexity is a meme that just doesn’t want to die. I wrote before about articles on the foundamentals of complexity theory and project management, about the use of autonomous cells in project organisations and how they prevent complex project systems from failing, and the complex dynamics of project entities in a programme. Not surprisingly this meme has spread into the coaching and project management education world where there is some money to make of it.

Thomas & Mengel argue that the current project manager education is not suited at all to prepare for complex projects. The focus on standardisation, control, and hard systems thinking stands in direct opposition to the actuality of projects, which show high complexity in roles, high degrees of chaos and uncertainty.
Theoretically Thomas & Mengel base their discussion on three complexity/chaos theory concepts

  • Chaos theory – explaining the behaviour of dynamic and unstable systems
  • Dissipative structures – explaining moment of dynamic stability and instability
  • Complex adaptive systems – explaining behaviour of systems with a large number of independent agents, and organisational evolution and learning

So what does it take to be a Complex Project’s Manager?
Thomas & Mengel propose that understanding the complex environment is far more important than using tools and techniques of project management. Furthermore they outline three key capabilities to manage complexity

  • IQ – possessing the self-knowledge to adapt existing tools
  • EQ – possessing the emotional skills to coach and manage people
  • SQ – possessing the capacity for finding meaning

In their framework Thomas & Mengel see most of today’s project managers as Experts, these are project managers heavy on the IQ side of their IQ-EQ-SQ-Triangle. The authors see two developmental strategies. One is coping with uncertainty by moving towards the sense-making SQ corner of the triangle and becoming a Leader. The other developmental direction is coping with complexity by strengthening the EQ corner and becoming a Manager.

Similar ideas are discussed in the paper by Hartman. Altough he does not call the elephant on the table complex project management but he names it dynamic management. Blink or not Blink – Hartman argues that wisdom and intuition are the two desired qualities in a leader with a mind for dynamic management. Furthermore he identifies three traits absolutely necessary

  • Pattern recognition & decision-making
  • Relationship building & communication
  • Integrity & trust

Posted in Complexity, Leadership, Methodology, Personality, Program Management, Standards | 3 Comments »

From organising as projects to projects as organisations (van Donk & Molloy, 2008)

Dienstag, Oktober 7th, 2008

From organising as projects to projects as organisations (van Donk & Molloy, 2008)

van Donk, Dirk Pieter; Molloy, Eamonn: From organising as projects to projects as organisations; in: International Journal of Project Management, Vol. 26 (2008), No. 2, pp. 129-137.
http://dx.doi.org/10.1016/j.ijproman.2007.05.006

van Donk & Molloy use two case studies to analyse the antecedents of a chosen project structure. Based on the work of Minzberg (1979) the authors identify five different forms of projects which can be mainly distinguished by their coordination mechanism

  • Simple structure → direct supervision
  • Machine bureaucracy → standardisation of processes
  • Professional bureaucracy → standardisation of skills
  • Divisionalised form → standardisation of outputs
  • Adhocracy → mutual adjustment

The authors identify which antecendents impact the choosen project structure

  • Age and size
  • Regulation and sophistication of the technical system
  • Environmental stability, complexity, market diversity, hostility
  • External control
  • Internal power

Posted in Actuality Research, Control, Organisation, Temporary organisation | 2 Comments »

Multicriteria cash-flow modeling and project value-multiples for two-stage project valuation (Jiménez & Pascual, 2008)

Dienstag, Oktober 7th, 2008

 Multicriteria cash-flow modeling and project value-multiples for two-stage project valuation (Jiménez & Pascual, 2008)

Jiménez, Luis González; Pascual, Luis Blanco: Multicriteria cash-flow modeling and project value-multiples for two-stage project valuation; in: International Journal of Project Management, Vol. 26 (2008), No. 2, pp. 185-194.
http://dx.doi.org/10.1016/j.ijproman.2007.03.012

I am not the expert in financial engineering, though I built my fair share of business cases and models for all sorts of projects and endeavours. I always thought of myself as being not to bad at estimating and modelling impacts and costs, but I never had a deep knowledge of valuation tools and techniques. A colleague was claiming once that every business case has to work on paper with a pocket calculator in your hands. Otherwise it is way to complicated. Anyhow, I do understand the importance of a proper NPV calculation, to say the least even if you do fancy shmancy real options evaluation as in this article here, the NPV is one of the key inputs.

Jiménez & Pascual identify three common approaches to project valuation NPV, real options, and payback period calculations. Their article focusses on NPV calculation. They argue that a NPV calculation consists of multiple cash flow components and each of these has different underlying assumptions, as to it’s risk, value, and return.

The authors start with the general formula for a NPV calculation
NPV = V0 = -I0 + ∑Qi ∏e-rk = -I0 + ∑Q e-∑rk
This formula also gives the internal rate of return (IIR) if V0=0 and the profitability index (PI) is defined as PI = V0/I0. Furthermore Jiménez & Pascual outline two different approaches on how to model the expected net cash flow Qi either as cash flow Qi = ∑qj,i or as value based period gj,k = ln (qj,k/qj,k-1).

The next question is how to model future values of the cash flow without adjusting your assumptions for each and every period. The article’s authors suggest four different methods [the article features a full length explanation and numerical example for each of these]

  • Cash Flow = Cash Flow + independent variable
  • Cash Flow = Cash Flow + function of the cash flow
  • Cash Flow = Function of a stock magnitude
  • Cash Flow = Change in stock magnitude

Finally the authors add three different scenarios under which the model is tested and they also show the managerial implications of the outcome of each of these scenarios

  • Ratios, such as operating cost and expenses (OPCE) to turnover (T/O), labour costs to T/O, depreciation to TIO, not fixed assets to T/O, W/C to T/O
  • Valuation multiples, such as Sales, Ebitda
  • Financing structure, such as short term, long term debt, after tax interests

Posted in Decision Making, Methodology, Planning | 3 Comments »