Information Technologies in Organizations

powered by ERPsim

MODULE: IT PROJECTS
IT Development Projects
Ann-Frances Cameron
 MODULE IT PROJECTS

IT Development Projects

In this document, the definitions of project, project management, and IT project are explored. The characteristics that make IT projects different
from and more difficult than other types of projects are also examined. Different development methodologies that can be used on IT projects, such
as the waterfall and agile development methods, are outlined. Using examples of success and failure from real-world IT projects, the importance
of studying IT project management is underscored. Finally, the top ten classic mistakes to avoid on IT projects are presented.

1. What is an IT project?

What is a project? The Project Management Institute (PMI) defines a project as a temporary endeavor undertaken to create a unique product,
service, or result (PMI, 2008). Temporary means that it has a distinct beginning and end. Unique means that it is a one-time rather than a
repeating course of action. A project can involve one individual, a group of individuals, or an entire organization. Developing a new car model,
building an addition on a house, and writing a textbook are all examples of projects.

A project also has specific goals or objectives that should be met. In organizational projects and systems, these objectives usually involve
creating value for the organization and should be stated in a SMART way. That is, objectives for a business project should be Specific,
Measurable, Attainable, Relevant, and Timely (Doran, 1981). An objective such as “Improve customer service” is too general; a more “SMART”
objective would read “Improve customer satisfaction by 10% within 12 months.”

Project versus operations. Projects are similar to operations because both involve people, require the use of limited resources, and are planned,
executed, and controlled. Administering the season pass memberships and implementing a new ERP at a ski resort both involve employees, a
specified budget, and a predefined plan. However, the repetitive nature of administering the season passes, which happens every year, means
that it is not a project. When we administer the season passes for this year, we can rely on and learn from what we did last year. Since it is
repetitive, we can learn from each repetition and improve the process. Unfortunately, this exact ERP has probably never been implemented
at this ski resort before, so we can’t simply do what we did last time. This uniqueness of projects is one characteristic which makes project
management particularly challenging as compared to ongoing business operations.

© 2018, Robert et al. MODULE IT PROJECTS: IT project management and methodology. 2

 Table 1: Comparison of Projects and Regular Operations

Projects Operations
Involve people Involve people
Limited resources Limited resources
Planned, executed, controlled Planned, executed, controlled
Temporary Ongoing
Unique Repetitive

Project management and the project manager. Project management is the application of knowledge, skills, tools, and techniques to meet the
project objectives (PMI, 2008). It is also a knowledge area that involves planning, organizing, managing, leading, and controlling resources to
bring about the successful completion of specific project goals and objectives. The project manager is the person responsible for managing
the project. The project manager is like a cook who has been given a picture of the cake she is to bake, along with a set of ingredients that may
be useful, and has to figure out for herself how to use the right amounts of the right ingredients at the right time to produce the cake. As a
result, the project manager must be a jack-of-all-trades, able to manage multiple dimensions of a project including project costs, scope, time,
human resources, quality, communication, procurement, risk, and integration/coordination of project management activities across the
project (PMI, 2008).

What is an IT project? An information technology project is a project that develops new or enhanced functionality for hardware, software or
IT services (Enterprise Project Management Office, 2012). Some examples of IT projects include developing a new website for an online store,
implementing an ERP in a manufacturing organization, creating a new application to be used on a smart phone, designing the web portal a
government agency uses to track citizen complaints, enhancing data security on a bank server, and developing new hardware to be used with
tablet PCs. Even many projects that are not specifically defined as IT projects, such as a customer service enhancement project, may have a
significant IT component, such as implementing a customer relationship management system. IT projects share all of the characteristics of
projects that were listed above.

What makes IT projects different? Several characteristics of IT projects make them different from, and often more difficult than, other projects.
First, compared to other fields such as medicine and engineering, the field of IT is quite young. In IT, there is nothing akin to the Hippocratic
Oath in medicine in which doctors swear to “First, do no harm,” or the iron ring given to all North American engineers to remind them of their
ethical obligations. The IT industry is still in the process of determining what it means to be an IT person and the corresponding guidelines
are still fluctuating.

© 2018, Robert et al. MODULE IT PROJECTS: IT project management and methodology. 3

A second characteristic of IT projects is that, while our industry is young and in a state of flux, our technologies themselves are also ever-
changing. Engineers construct buildings in ways similar to those used 15 years ago, but an IT project using the technologies of 15 years ago
would be considered outdated.

A third characteristic which makes IT projects particularly difficult is their invisibility. If I visit the job site and the contractor in charge of
building my new house tells me the project is 90% complete, I can readily look at the building being constructed for evidence to support his
claim. If I see that the outside structure is not finished, the windows have not been installed, and the electrical work is not done, I can judge
that his 90% progress report should not be trusted. However, if I visit the cubicles where members of an IT project team are working, and the
IT project manager tells me they are 90% complete, there is nothing I can see to tell me whether or not this is an accurate calculation. In most
IT projects, it is extremely difficult to see or determine the state of done-ness of the project.

The creative element of programming and debugging is a fourth element that makes many IT projects difficult. Creativity is difficult to plan,
manage, control, and monitor. Pablo Picasso’s 2 by 1 ½ foot painting The Weeping Woman took him about five weeks to paint, and a good
project manager would estimate that his masterpiece Guernica, which is almost 10 times as large, should take him 50 weeks. In fact, Picasso
was so moved by the bombing of Guernica that the 11 by 25-foot masterpiece took him only five weeks. Creative work often does not progress
gradually, but in leaps and bounds, which makes it very difficult to plan and predict.

Finally, many IT projects are actually misnamed, as they are projects of major organizational change. A friend who was recently hired to
implement distance education software at a university to enable students to attend classes virtually quickly realized that this was more than
simply an IT implementation. Using the software and allowing the students to attend classes virtually would change the nature of the
relationship between professors and students, which had been face to face for over 100 years. Similarly, implementing an ERP in a large-scale
organization that has never had an enterprise-wide system to manage its business processes – be it a computerized or paper-based system –
is not just an IT project. In reality, it is a project of major organizational change, which will likely modify how the organization does business
and change the day-to-day work of hundreds of employees. Part of the IT project’s task is ensuring that the organization is ready for the change
(Kwahk and Lee, 2008).

2. IT project methodologies

An IT project can be broken down into various phases and steps. There are five major phases in project management.

© 2018, Robert et al. MODULE IT PROJECTS: IT project management and methodology. 4

 Initiate Plan Execute Close Evaluate

Figure 1: Basic Project Management Roadmap

In project initiation, the project objectives are defined, and the management committee gives the project a “green light” to start. In the planning
phase, these objectives are translated into actionable plans which include schedule, budget, and “how-to” management guides. Next, the
project is executed: progress is made towards developing the system, technology, or product. In the closing phase, the project manager ensures
that the work has been completed, that the system or technology that has been developed is transferred over to the group that will support it
in the long term, and that the team members are released to go work on other projects. Finally, after the new system or technology has been
implemented and has been used for an appropriate amount of time, the impacts are evaluated to see whether or not the project objectives
were met. These five phases are not specific to IT projects and do not always occur one after another in a completely linear manner.

Waterfall method. While all projects follow a basic project roadmap, IT

projects also follow a basic blueprint called a systems development
method. There are many different systems development methods such
as the waterfall method, the V-model, the spiral method, and the agile
method. One of the best-known methods is a traditional method called
the waterfall model. In the waterfall method (see Figure 2), there is a
well-defined series of sequential steps. When one step is finished, it is
often hard to revert to an earlier step without significant rework, whence
the image of water cascading downhill.

Figure 2: Traditional Waterfall Method

© 2018, Robert et al. MODULE IT PROJECTS: IT project management and methodology. 5

Agile method. Another popular method is agile software development. Unlike the waterfall method, development does not occur in a linear
fashion but instead is based on many small cycles of iterative and incremental development. In one example of an agile methodology called
SCRUM, the project client, termed the product owner, develops a list of requirements and calls this list the product backlog. Then, a certain
number of these requirements are chosen – called the sprint backlog – to be part of the first project sprint or short 30-day iteration. For
approximately 30 days, the project team works on developing system functionality that meets the requirements listed in the sprint backlog.
During this period, they meet once a day (every 24 hours) to discuss any problems they have and clarify requirements with the product owner.
At the end of the 30 days, the team formally presents what they have created to the product owner and gets feedback. Then, the next group of
requirements is selected from the product backlog and the team starts working on the second sprint, and so on until the project is completed.
In this way, working pieces of the system are delivered every month and the product owner has the opportunity to give feedback during the
systems development process (rather than only at the end, which is often the case in scenarios using the traditional waterfall method).

Figure 3: Agile Method (SCRUM)

Source: http://en.wikipedia.org/wiki/Scrum_(development)

This approach follows what is called the agile manifesto. The agile manifesto called for developers to favor (i) individuals and interactions
over processes and tools, (ii) working software over comprehensive documentation, (iii) customer collaboration over contract negotiation,
and (iv) responding to change over following a plan.

© 2018, Robert et al. MODULE IT PROJECTS: IT project management and methodology. 6

While only two types of methodologies are explained above, many types, variations, and hybrid models exist. There is no one “best” approach;
rather, the approach that should be used is the one that best fits the project type, objectives, complexity, technology, and scope.

3. IT project success and failure

Why study IT project management? IT project failure. In 1992, the new Denver
International Airport was being designed to be the USA’s largest airport; an IT
project to develop a computerized baggage-handling system for the new airport
was involved. This system was supposed to reduce flight delays, shorten
waiting times at luggage carousels, and reduce labor costs for airlines. The
system was to coordinate the safe and timely arrival of passenger luggage by
using 55 networked computers, 5,000 electric eyes, 400 radio frequency
receivers, and 56 barcode scanners. Problems plagued the baggage system
project and kept the entire airport from opening as scheduled in October 1993.
When the airport finally opened in February 1995, a simpler version of the
originally designed automated baggage system was used in only one of the
airport’s three concourses. The $186 million in original construction costs for
the system grew by $1 million per day during months of modifications and
repairs. The automated baggage system never worked well – often ripping and
mangling bags – and most airlines refused to use it. Finally, in August 2005, it
became public knowledge that the last airline, United, was about to abandon the
system, saving $1 million per month in maintenance costs (Johnson, 2005).
Figure 4: 2008 CHAOS Report on IT Project Success
While the example above certainly illustrates an IT project failure, it occurred
over 20 years ago, and one could assume that we have learned much in that time. However, in 2008, history repeated itself. One headline read
“15,000 bags stuck in Heathrow Terminal 5 as misery continues,” as another automated baggage system failure negatively impacted the
opening of a major airport (Harrison & Lusher, 2008). The baggage handling system at London’s Heathrow airport’s new Terminal 5 was
launched to spectacular chaos and, in the week that followed, 42,000 bags did not travel with their owners, over 500 flights were cancelled,
thousands of passengers were stranded, and financial losses of £16 million were experienced. As with Denver International Airport in the
1990s, the IT system at Heathrow Terminal 5 was large and complex, involving 180 IT suppliers and running 163 IT systems, 546 interfaces,

© 2018, Robert et al. MODULE IT PROJECTS: IT project management and methodology. 7

9,000 connected devices, and 2,100 PCs. The problems were linked to a series of terminal-wide IT system and staffing problems, particularly
with the baggage-handling system (Anonymous, 2008).

Unfortunately, these failures are not isolated incidents. The Standish Group’s CHAOS study reported in 2008 that only 32% of IT projects are
successful, while 24% fail and 44% are significantly challenged (see Figure 4). Looking at their biyearly reports which date back to 1994, we
can see that these numbers have not improved much over time (see Figure 5). These statistics suggest that IT personnel and managers still
have a lot to learn when it comes to managing IT projects successfully.

Why keep implementing IT projects? IT project success.

Fortunately, there are also many successful IT projects from
which we can learn. In the 1990s, the Quebec government
created its centralized registry of personal and movable real
rights (RDPRM) to track the ownership of real estate and major
goods (vehicles, boats, machinery, aircraft, etc.). Prior to 1994,
if a bank wanted to give someone a mortgage so they could
purchase a house or car, it would first have to check
information that was dispersed throughout over 221 sets of
records in the province to ensure that no existing loans were
held against the property or good. In 1994, a central paper-
based records repository was developed and clients who
Figure 5: CHAOS Reports 2011–2015 wanted to search the ownership records (e.g., financial
institutions, notaries, lawyers, government departments,
consumers) could pay a fee to access the information. In 1999, a computerized system was launched that was accessible to everyone for a fee;
moreover, it was accessible through a web portal from anywhere. The computerized system was created using an iterative development
approach which involved a gradual roll-out of different parts of the system at different times. In addition, the future users of the system and
clients of the RDPRM were heavily involved in the development process through user focus groups. The system was delivered within the two-
year timeline and the $19 million budget and resulted in many benefits for the RDPRM including a 550% increase in productivity and a
reduction from 96 to 3 hours in the time to process a new property or good. The user fees the system generated were so profitable compared
to the cost of providing the data that the RDPRM helps fill the government’s coffers.

Caesars Entertainment Limited (formerly Harrah’s Entertainment) in Las Vegas successfully implemented several IT projects in the 1990s
and more recently in 2011. In 1994, Caesars started working on the IT infrastructure necessary to develop its Total Rewards program, the

© 2018, Robert et al. MODULE IT PROJECTS: IT project management and methodology. 8

first customer relationship management (CRM) system in its industry to allow real-time communication between all of its properties (casinos
and hotels) coast to coast. The system was up and running in February of 1997 and it allowed Caesars to track what its customers liked to eat,
drink, gamble, and spend their money on. The company could use the information to offer customized promotions such as free drinks, show
tickets, and hotel rooms. It was also able to use the information to encourage cross-property visits. When in Las Vegas, Atlantic City Caesars
customers would be more likely to walk into the Caesars in Las Vegas than another casino since they knew they would be offered promotions
that matched their preferences. Combining all the data from the various Caesars properties in one system saved the company $20 million per
year in overall costs while revenue from cross-property visits increased by $50 million (Levinson, 2001).

In 2010, Caesars implemented another IT system to further improve customer service. Casinos are constantly looking for ways to keep
customers playing their machines longer and with less interruption, trying to fulfill the players’ wants while they are at the machine or game,
so they do not need to leave. A new beverage ordering system was developed in which servers take a player’s drink order at the machine or
game and – using an iPad or iPhone – enter the order directly into the system. The order is then electronically relayed to the bar, where a
bartender prepares the drink and the next available server (often not the one who originally took the order) delivers the drink to the player.
This project resulted in a 50% decrease in the time to deliver a drink order and a 15% increase in servers’ customer service scores
(Anonymous, 2012).

4. Classic mistakes to avoid with IT projects

There are many examples of successful and unsuccessful IT projects, so the question becomes: how do we avoid becoming an example of
failure? In an attempt to learn from our failures, here are ten classic mistakes that most frequently affect failed IT projects (Nelson, 2007).

Table 2: Classic Mistakes in IT Projects

1. Poor estimation and/or scheduling 6. Weak management personnel and/or team issues
2. Ineffective stakeholder management 7. Insufficient project sponsorship
3. Insufficient risk management 8. Poor requirements determination
4. Insufficient planning 9. Inattention to politics
5. Shortchanged quality assurance 10. Lack of user involvement

Poor estimation and/or scheduling. When your boss enters your office and says “I need you to do a task ASAP. How long do you estimate it will
take you?” and you respond “4 hours,” you are not actually giving an estimate – which is an approximate guess of reality – but an estimate of

© 2018, Robert et al. MODULE IT PROJECTS: IT project management and methodology. 9

our best-case scenario. It often means “4 hours, if everything goes well.” While estimating projects, we have to recognize that everything is
not going to go well, and we will encounter some unexpected problems along the way. When our estimates represent the best-case scenario,
we end up with projects that go over their planned schedule (since things rarely go according to the best-case scenario). We should not be
estimating the best-case scenario, but the most likely scenario (knowing that at least one or two things will probably go wrong). We can take
this uncertainty into account by providing estimates in the form of a range or giving a plus/minus amount to demonstrate the amount of
uncertainty. For example, Capital One, a credit card company, gives its project estimates with a 100% cushion early in the project when
uncertainty is high, a 75% cushion in the requirements definition phase, a 50% cushion during the design phase, and so on. In this way, it
acknowledges that uncertainty is higher at the beginning of its IT projects and can plan and schedule projects accordingly.

Ineffective stakeholder management. Stakeholders on an IT project are all of those individuals who have a positive or negative interest in the
project and its outcomes. This includes the project manager, the project team, the client, the future users, and anyone else who may be affected.
Often, we forget that those who will be negatively affected by the project need to be managed during the project period. At one North American
publishing firm that was attempting to implement SAP to streamline its processes, the project management team forgot to manage one
stakeholder group, the unionized employees who performed the day-to-day production activities. These employees greatly endangered the
success of the project when they threatened to go on strike when the system was implemented.

Insufficient risk management. As mentioned above, everything does not always go right on IT projects. Sometimes project team members leave
in the middle of the project, suppliers do not deliver hardware on time, or the organization restructures its departments in the middle of the
project. These events can negatively impact the success of IT projects and should be managed by creating a list of negative events that could
possibly happen, and corresponding lists of actions to take to reduce the probability that each event will happen, as well as actions to be taken
if the negative events do occur. The Quebec government’s register of personal and movable real rights project described above identified and
managed risks throughout its project in order to deliver the system on time, on budget, and with the expected benefits.

Insufficient planning. IT project managers are often in such a rush to build a system and provide business results that they do not take the
necessary time to plan the project. Cutting short the planning period may seem to save time in the short run, but often creates problems and
delays in the long run. It has been estimated that 30% of the total project effort should be spent on project planning (Roetzheim and Beasley,
1998).

Shortchanged quality assurance. When a project starts to go over budget or falls behind schedule, testing is one of the first things to be cut
back. The negative effects of cutting back on testing are usually not felt until after the go-live date, when bugs are found as the system is being
used. Testing should account for almost 50% of the total effort on programming projects (Roetzheim and Beasley, 1998).

© 2018, Robert et al. MODULE IT PROJECTS: IT project management and methodology. 10

Weak personnel and/or team issues. Team issues can be especially problematic on IT projects where tasks are interdependent. The part of the
system that one person develops influences and must interface with a part of the project that a second person develops. These team issues
are becoming even more difficult with the use of virtual teams – teams in which members may be working from different physical locations
so face-to-face discussions are limited – and outsourcing – where team members may even work for different companies.

Insufficient project sponsorship. One of the key critical success factors for IT projects is top management support. Top management provides
not only the funding necessary to execute the project but also the political power necessary to get other people in the organization to help you
as needed. For example, implementing a large ERP throughout an organization requires obtaining cooperation from the different departments
in the organization such as accounting, marketing, and production. Having top management support can mean that these departments are
more likely to provide personnel to help you with the project.

Poor requirements determination. Sometimes the IT project’s client or the future users of a new system do not know exactly what they need.
They do not have the technical knowledge to be able to visualize what is possible, so they can best add value for the organization. It is the job
of the IT personnel on the project team to elicit the list of needs that the clients have in mind, including eliciting needs that are important but
that the clients themselves do not even understand yet. Poor requirements definition can have disastrous effects; for example, it is cited as
one of the reasons the Canadian national computerized firearms registry project failed, with a budget ballooning from $2 million to $1 billion.
The project did not have the exact requirements clearly laid out from the beginning and, during the development phase, over 2,000 different
changes were made to the project scope, requiring 2,000 different instances of reprogramming.

Inattention to politics. Attention to politics is closely related to top management support and management of stakeholders. Understanding
politics means understanding which players have an influence on the project and managing their involvement. It also means that everyone on
the project may not have the same goals and objectives. One project manager may be focused on getting the project done on time and on
budget, while the executive sponsor of the project may be more focused on convincing other members of the executive committee of the
usefulness of the project. The developer may be interested in creating the best and most efficient code, while the end users are more worried
about how the new technology will impact their daily work life. The difficulty is harnessing all of these different directions to serve the overall
project goal and ensure that the IT project will create value for the organization.

Lack of user involvement. Involving users during a project to develop or implement a system has three positive impacts. First, the quality of
the system is often improved as the project receives continual feedback from those most familiar with the business process involved – the
users who perform this business process on a daily basis. Second, users are more likely to use a system which they had a hand in creating.
Third, users are often more satisfied with the resulting system. In the Quebec government’s register of personal and movable real rights
project outlined above, user focus groups were key to creating a system that was widely accepted and used.

© 2018, Robert et al. MODULE IT PROJECTS: IT project management and methodology. 11

 5. Conclusion

IT projects are becoming increasingly important for delivering organizational value, and yet our report card shows that these projects are not
always successful. While the costs of failure can be great, such as with the $1-billion Canadian gun registry, the benefits can also be great, such
as those experienced by the Quebec government or Caesars Entertainment in Las Vegas. Attention needs to be paid to the list of issues outlined
above as well as the IT project methodology that is employed in order to maximize the chances for success.

6. References

Anonymous. (2008). British Airways reveals what went wrong with Terminal 5. Computer Weekly, May 14, 2008.
http://www.computerweekly.com/Articles/2008/05/14/230680/british-airways-reveals-what-went-wrong-with-terminal.htm,
accessed September 20, 2012.
Anonymous. (2012). Winner Profile: Caesars Entertainment Corp. CIO. http://www.cio.com/cio100/detail/2212, accessed September 20,
2012.
Doran, G. T. (1981). There’s a S.M.A.R.T. way to write management’s goals and objectives. Management Review, vol. 70, no. 11, pp. 35-
36.
Enterprise Project Management Office. (2012). What is an IT project? State of North Carolina.
http://www.epmo.scio.nc.gov/library/pdf/What_is_an_IT_Project.pdf, accessed September 19, 2012.
Harrison, D., and Lusher, A. (2008). 15,000 bags stuck in Heathrow Terminal 5 as misery continues. The Telegraph, March 30.
http://www.telegraph.co.uk/news/uknews/1583287/15000-bags-stuck-in-Heathrow-Terminal-5-as-misery-continues.html, accessed
September 20, 2012.
Johnson, K. (2005). Denver Airport to mangle last bag. The New York Times, August 27.
http://www.nytimes.com/2005/08/26/world/americas/26iht-denver.html?_r=1, accessed September 20, 2012.
Kwahk, K. Y., and Lee, J. N. (2008). The role of readiness for change in ERP implementation: Theoretical bases and empirical validation.
Information and Management, vol. 45, no. 7, pp. 474-481.
Levinson, M. (2001). Harrah’s entertainment – Jackpot! Using IT to manage customer information. CIO.
http://www.cio.com/article/29547/HARRAH_S_ENTERTAINMENT_Jackpot_Using_IT_to_Manage_Customer_Information?page
=1&taxonomyId=3154, accessed September 20, 2012.
Montealegre, R., and Keil, M. (2000). De-escalating information technology projects: Lessons from the Denver International Airport. MIS
Quarterly, vol. 24, no. 3, pp. 417-447.
Nelson, R. R. (2007). IT project management: Infamous failures, classic mistakes, and best practices. MIS Quarterly Executive, vol. 6, no.
2, pp. 67-78.

© 2018, Robert et al. MODULE IT PROJECTS: IT project management and methodology. 12

Project Management Institute. (2008). A Guide to the Project Management Body of Knowledge, 4th edition. Atlanta, GA: PMI, Inc.
Roetzheim, W. H., and Beasley, R. A. (1998). Software Project Management: A Unified Framework. Reading, MA: Addison Wesley.
Standish Group. (2009). CHAOS Summary 2009: The 10 Laws of CHAOS. Boston, MA: Author.

© 2018, Robert et al. MODULE IT PROJECTS: IT project management and methodology. 13