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Sunday, January 1, 2012

For Major IT projects, It's All About Scope


If you're a CFO who manages IT and you have a project on the horizon, you're probably aware that most major IT projects run over budget and time - sometimes way over. Comprehensive IT initiatives touch so many functions of an organization that together they can present a potentially significant risk to companies.

The good news is that there are proven ways to manage IT projects - big or small - to a budget. It begins with making a true commitment to properly scoping the project, notes Bruce Kirschenbaum, Partner, Dynamics AX Consulting in Portland, Oregon. To him, it's all about getting a project scoped correctly.

"Companies that put in the time, effort and expense to correctly scope a project in a very granular way end up staying close to their budgets while getting the systems they want," says Bruce, who helps clients manage IT strategy and projects. "There is a significant investment that needs to be made in time and planning prior to launching a project and the more you put into the early scoping phase, the more likely you are to not have an out-of-control project."

Bruce recalls a client; a $300 million semi-conductor company, that had a huge IT footprint; a "spider web of legacy systems" as Bruce calls it. "The team they organized was a very eclectic but very astute at the daily tasks level and therefore very qualified to do the work," he says. The company also opted for a phased, multiyear project. As a result, the company came in very much on budget and through it took a little longer it got precisely what it needed.

Here are three of Bruce's recommendations for CFOs contemplating a major IT project:

Start with the granular - Begin with the most micro-specific details in each area of your company and work backwards from there to the 30,000-foot level. Too many projects get assigned budgets in the board room but it should start on the street.

Recruit top "athletes" - Place more of the "athletes" of your organization on the project team, i.e., those employees who understand where the real bottlenecks and pain points are in their unit. In turn, place fewer "household names," i.e., senior managers, on teams. Their presence, while good in some ways, can also distort communications and sometimes add unnecessary political dimensions into the process.

Give your consultants a hand in identifying team members - This might seem odd, but consultants can add a lot of value here. We always ask if we might assist in assembling a client's IT project team. We bring an objective reaction to everything and we want the best and the right people to be on the project team. We look for people who know what the impact of change is likely to be up and downstream.

 

A team of researchers from the Technical University of Berlin recently studied 200 large German multinationals and their IT projects. They recommend framing IT projects as business or enterprise initiatives, not technology projects. They also recommend:

  • Devising a realistic schedule and not deviating from it.
  • Vigorously resisting change to the project's scope.
  • Breaking the project into generally self-contained modules.
  • Recruiting a great team and keeping that team intact until the end of the project.

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