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A Three Stage Process for Project Management

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Business People and Jigsaw Puzzle Pieces

Project Management has been and will always remain a challenge.  Tools, including the best of breed, are at best enablers.  Most firms still rely on the project manager and the project team to deliver projects.  In an earlier blog post, I had alluded to the art of simplifying things as a sound guideline in managing projects.  The evolution from control-centric (Theory X) to people-centric (Theory Y) has been in the works for decades, and most firms now have abandoned the older and more rigid models for managing projects. Today it is all about people and process simplification. Management is evolving to focus on simplicity and rapid delivery.

Just being within budget and schedule is not good enough – projects need to deliver value.  While the challenge of managing projects continues to present opportunities for making improvements in how we deliver, the focus on value raises an even more fundamental question.  Which projects do we select?, and equally important, when do we abandon what we have erroneously started?

In larger firms, the traditional focus on execution has shifted to a three stage process:

In order to realize value from projects, larger firms have started emphasizing on developing strategies to select and sequence the projects to be implemented. The focus at this stage is on value.  Once the projects are identified they are generally implemented using a customized collection of processes (both agile and waterfall) to facilitate efficient implementation.  Therefore traditional project attributes such as scope, cost, schedule, and customer satisfaction become the metrics that qualify a project.  Managing risk is critical, and independent project evaluation is essential to ensure that failing projects are either fixed or cancelled.

The discussion above shows that there are three different organizational components to manage projects.  From a tools perspective, the industry has point solutions for managing the three stages identified, but they are expensive, and need significant work to get a 360 degree view of the project.

Larger firms have the luxury of resources and tools to maintain a strategic team to decide on the project portfolio, a PMO (Project Management Office) to manage the portfolio and a Governance/Audit group to assess the project risk and make changes as needed, including the option to terminate dysfunctional projects.

Mid-Market firms do not have this luxury.  They rely on tools, the leadership team and the project manager.   About 80% of the Mid-Market firms rely on Microsoft Office (Excel, Project).  They do not have the resources to integrate progress across multiple projects.   Mid-market firms should not follow the path of their older and bigger brothers.  They should recognize that integrating them to get a holistic view has significant benefits.  Gartner and other analysts have started to endorse this view, and fortunately,  our cloud based project management tool is based on these ideas.

Written by Subbu Murthy

November 18, 2015 at 3:58 pm

CIOs are judged by the Results they Deliver!

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Close up shot of a caliper, measuring the word "Results".

My very good friend, and advisor, Ashwin Rangan, pointed out that in the early stages the CIO focussed on what needed to be done. Later they recognized that processes were needed to deliver technology.  This naturally led to identifying the tools that helped them.  Today’s focus, Ashwin argues, is all about the results they can deliver.  We can use a three stage framework for understanding the paradigm shift:  Corrective, Preventive and Results Driven.

The Shift From Corrective to Preventive

Let us look at how we measure our delivery of services.  SLAs helped CIOs  identify process bottlenecks, and helped them make the necessary corrections to improve the timeliness of the delivered services.  Surveys helped CIOs improve the quality of the delivered services.  While this is great, it was a corrective set of measures – not preventive.    The old adage “An ounce of prevention is worth a pound of cure” had not lost its luster.  CIOs realized the need to empower their organization to take proactive measures to prevent/mitigate gaps in the delivery of products and services they are entrusted to manage.

It was no different when CIOs delivered major IT initiatives.  They identified cost and schedule variance, and took corrective measures when they were off-track.  While corrective measures improve how CIOs delivered technology to the enterprise, preventive measures help them deliver more for less.  As an example, look at traditional project management tools.  Initially, they focussed on using cost and schedule variance as determinants of project success. The key thing they missed was “scope management”.  Scope creep accounted for delays and cost overruns about 70% of the time.  Agile methodologies mitigated this risk to a large extent by delivering projects on a specific schedule by controlling the scope of the delivered product.

The Shift From Preventive to Results Driven

CIOs used ITIL, and ITIL based tools, to help them be proactive.   ITIL, no doubt a great framework, caters to the older school of process adherence.  Most of the tools that support the CIO are focused on process adherence.  But the real challenge was not delivering the project or service efficiently, but did the CIO deliver the results the enterprise needed?

What is badly needed is an outcome focussed tool that helps the CIO define and deliver results to the enterprise.  CIOs need to walk the talk – they talk about the role of technology in transforming the enterprise, yet they fail to use the tools internally.  In an earlier blogpost I identified that “We are so involved with day to day challenges, we seldom get the time to use some of the same tools we are delivering to our customers. The solution is quite simple – we should think and act like CEOs of an IT company. Using Key Performance Metrics (KPMs) to help manage your IT as an enterprise, IT Analytics provides you the ability to prioritize your demand and allocate resources that best serves the interest of the enterprise.”  

However, shifting to Results Driven management is much more difficult.  It requires that IT is aligned to the Enterprise, and more important, the Enterprise has not just accepted the CIO to sit at the table, but to listen and act on the CIO’s advice as well.

Written by Subbu Murthy

October 11, 2015 at 1:51 pm

Five Rules of Thumb to help us Manage IT

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Lance Mooneys CartoonAs CIOs we are used to leveraging our experience and creating a cheat sheet (aka rules of thumb) to manage IT.  When IT was focused on costs, a few of the common measures were:

  • IT Benchmarks:    Our goal was always to be lower than others in our industry, particularly so if we reported to a CFO;  and if we were higher, we justified it by showing other indicators such as higher quality, customer satisfaction etc.
  • Adherence to Project Budget: We targeted actual versus planned consumption of financial and personnel resources to be within x% (we felt good if we were within 10%).
  •  Gaps in Process Automation: We kept the number of identified gaps to be minimal in the core business areas.  We were very good in creating new projects to cover these gaps.
  • Number of Planned New Services: Our goal was that the percentage of new services correlate with the allocated budget. We really did not care how many new services we created as long as they correlated with the IT budgets.
  • Duration of Service Interruptions: We maintained the average duration of service interruptions to be just a few and the impact mitigated in less than an hour.
  • Customer Satisfaction: We used a Likert scale to get responses and if we got within 25% of the top, we felt we had done a good enough job, and if we were within 10% of the top, we were bragging about it in CIO events.

All of these are important, but they do not help us keep the seat at the table.  As we shift our focus from managing cost to creating value for the Enterprise, what are the new “rules of thumb”?

  1. Spend at least 20% on Innovation: If you are spending less than  20% of your IT budget on projects that bring innovation and increased value to the enterprise, you are not likely to get traction at the leadership table.  This generally means that you should be spending less than 50% of the IT budget in maintaining your core IT systems to meet your business needs. Not that this includes applications (licensing, support, changes, etc.) and the infrastructure (data center, network, voice/multimedia and user devices).  If you are spending more, you are likely not leveraging the current technology (Cloud, Mobile Computing, SaaS, etc).  This also implies that managing IT should cost less than 10% of your IT expenditures.  This includes all management costs including the cost of the office of the CIO, PMO, tools you use for service desk, project management, reporting, etc. This implies you have a hands-on management team and are leveraging modern IT management tools – not legacy and onerous IT Governance practices.
  2. Spend at least 20% on shared services:  Build efficiency by sharing services.  Many services are found in more than one part of the organization or group. CIOs recognize this as an opportunity and have funded the development and implementation of shared services.   The services are delivered based on defined measures (KPIs, cost, quality etc.).  Examples of shared services are salesforce automation, employee on-boarding, business project request, adjudication and execution, financial reporting, content management, compliance and other core business activities that are typically not part of an ERP.
  3. Discretionary Projects Should Have an ROI:   Today, the businesses expect you to treat IT as an investment.  What is the return you are providing to the enterprise?  If you carefully observe the proposed metric, there is no specific ROI value I have proposed.  These depend on the type of project.  As a CIO, you should be very proud if you are thinking about ROI. The very fact that you are providing an ROI puts you in a different category of CIOs.
  4. Work Backlog Should be Less than 6 to 9 Months: The business units always wants more IT than you have resources available.    Good CIOs recognize that if you have a very huge backlog, you will be constantly prioritizing and triaging business project requests.  This leads to political friction.  You can minimize it by reducing the backlog.
  5. Most Projects Should be Less Than 6 Months in Duration:  This is probably the most difficult to achieve.  There may be a few that are necessarily longer term, but your goal should be that longer projects should be an exception – not the rule!  Businesses are fickle – they change their needs constantly.  Shorter projects help avoid costly mistakes.  Breaking up complex projects into smaller ones (each one having their own value proposition) is the best way to mitigate IT risk.  In fact in our tool, we have crafted a special 6 Month Project Methodology that combines agile and traditional waterfall models into a nimble yet managed project request and delivery process.

Written by Subbu Murthy

October 11, 2015 at 1:49 pm

The Six Stages of a CIO

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CIO Icon

Background

Over the past several months, I have been researching how best to sell ourintegrated IT Governance solution to a CIO. Being a CIO myself, I realize it is not an easy task.  One of the studies I started was analyzing the different CIO archetypes.  We have seen many theories on the different CIO archetypes.  CIO Executive Council indicates that the CIO role is made up of 3 CIO archetypes, specifically; 1) Operational/Functional (Business relationship: Service provider; 2) Transformational (Business relationship: Partner); and 3) Business Strategist (Business relationship: Peer).  Earlier this year, I felt we needed a more contemporary taxonomy for classifying CIOs. The taxonomy I proposed was on the background where the CIOs come from.

Imagine a three dimensional grid with one axis being business background, the other being technology background, and the third being the leadership skills. Since it is difficult to show a three dimensional grid in a blog, I developed two 2×2 grids. The two grids are separated by leadership skills – those who have it and those who do not. This framework helped me define our market.  Our target was CIOs who exhibit leadership skills to run IT like a business. They feel that their role is no different than that of a CEO of a IT company.

CIOs Based on Age

One of my colleagues asked me why I had not considered the “age factor”.   My first reaction was that age will be an absolutely weak differentiator.  Besides, you cannot discriminate based on age.  So why even look at this analysis.  Strangely enough, if you look at HR consultants they discuss why it is important to understand the various age groups and develop an organization culture that meets the needs of the different segments.  From purely a sociological perspective, I started wondering if these age based segments have any relevance in developing the CIO Archetypes.    I used the common accepted terms for identifying different age groups.  The one from Bank of America was simple and elegant.  They used six age groups: Late Millennials, Millennials, Generation X, Late Boomers, Baby Boomers and the Senior Set.  I looked around my network to see if I knew CIOs in the various age groups.  I have a network of several hundred CIOs, and over the years, I have developed a friendship with them. I found them in all age groups but one – I knew of none under 25.  For the rest of the groups, I asked what was the dominant characteristic of the CIO.  I tried the two frameworks identified in the previous section.  All age groups had overlaps and there was no clear differentiator.  When existing frameworks failed to deliver any meaningful results, a new idea emerged.  I focussed on what would be the focus if I were in the respective age groups.

If I were to be a Late Millennial (under 25), I may be focused on learning the role.  If I were a Millennial and had the CIO title, it is likely I would be in a small to mid sized firm with an eye for growth.  If I were a Gen X, then I likely would be trying to move ahead by leaping firms and gaining expertise in different verticals.  If I were a Late Boomer, I may be peaking in my job, gaining business acumen and maturing as a CIO.  If I were a Baby Boomer, I would probably be feeling that I have learnt all that is there to learn (personally speaking, learning never stops)and my focus may have shifted to stabilizing my job.  If I have climbed the hill and entered the Senior Set, I may be shifting to sharing and coaching. The good news is that there is a role for the CIO to play independent of the vintage!

Written by Subbu Murthy

October 11, 2015 at 1:45 pm

Is the CIO a Transient?

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TRansient

According to Larry Bonfante in CIO insightsAt the lowest point, the average tenure of a CIO was approximately three years. Today, at what is arguably the high point, CIO tenure is still under five years. In the 1990s a lot of this was by choice as venture capitalists were throwing wads of money at anything with .com in the name and IT executives were in high demand and living large.

I publish a newsletter that reaches out to over 4000 plus CIOs.  Over the past year, around 800 CIOs have either lost their jobs, retired or changed their positions.  Using fuzzy logic, we get a sense that the CIO’s tenure is around the five years as suggested by Larry.

Can we label the CIO as a transient leader?

Let us compare the tenure of  a CIO with that of a CEO or CFO or CMO.  CEO’s tenure is around 9 years and a CFO’s is around 6 years.  The CMO’s tenure is around 4 years.  While the CIO’s tenure is considerably less than that of a CEO, it is quite comparable to that of a CFO or a CMO.  On this basis, it is hard to call a CIO a transient.

Diving deeper into Larry’s analysis, why is the CIO becoming more stable?  A shift from 3 years to 5 years is quite significant.  Is it because, the CIO has earned the seat at the table and enjoying the role?  Is it because the CIO is aging and  seeking stability? Please see my blog post on the Six Stages of a CIO. Or is the CIO just taking on roles outside of IT?  Please see the latest article in the CIO magazine Going Beyond IT?  Or is it that the other leaders are falling in love with the CIO and enticing the CIO to stay longer?  May be it is a combination of all of these and more, but it is heartening to see that the tenure of the CIO has jumped over 60%! And please, let us not call a CIO a transient!

Written by Subbu Murthy

October 11, 2015 at 1:42 pm

Posted in Analytics, Helping CIOs

The Art of Simplifying Things

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Project Management Process

Near and dear to our heart is the art of managing IT.  The evolution from control centric (Theory X) to people centric (Theory Y) has been in the works for decades, and most firms now have abandoned the older and more rigid models for managing technology. Today it is all about people and process simplification. IT Management is evolving to focus on simplicity and rapid delivery.

Let us step back a few decades.  Remember ERP Systems – most of us made a career implementing ERP systems. What started as a ERPsimple integration of manufacturing and finance, grew into an integrated business system.  HR, Sales and Marketing and other businessfunctions became a core part of the ERP system.  Managing IT was centered around the Data Center, User Devices, ERP Systems, and a few point solutions that were specific to each industry.  Ratios of IT expenditures to overall revenues provided the benchmark for IT.  As CIOs, we bragged when we were able to deliver IT at the lowest possible cost.  Management of IT was well defined and most of the tools were built around the areas of infrastructure management, IT assets, IT services/help desk, change management, basic project management, and simple cost accounting.

Following the internet revolution came Cloud computing, Mobile Technologies, Big The third platformData and Social Media.  These disruptive technologies led to radical changes in the IT architecture.  Gartner was quickto label it as the third platform. This enabled rapid development of point solutions that were inexpensive and quick to deploy.  So the IT architecture moved away from centralized systems to point solutions that were best of breed.  Sadly the companies that developed these good point solutions found that the revenues were just not there – so they grew to become the big systems we were all used to – a good example of this shift is provided by salesForce.com.

IT Management shifted as well. Management focus turned to integration and making sense of the vast amounts of data we were collecting.  ITIL gained momentum as it simplified managing IT with a set of integrated work flows addressing change management, customer Commsnese KPIsservice, infrastructure management, etc.  It expanded its scope to address projects and innovation, and guess what, suddenly a simple idea became quite onerous.

The focus on security, IT Governance and getting a 360 degree view of IT has become the cornerstone of IT management today.  The secret is in simplifying the proc

esses.  It is not the 100 plus ITIL suggested KPIs that matter, but the focus should be on a handful that drive decisions.  Making things simple, however, is not that simple.  The reason is that we are all creatures of habit, and habit, as most of us know, is difficult to change.  The great CIOs are also great change agents, and those are the ones in demand today.

Written by Subbu Murthy

June 29, 2015 at 8:09 am

CoBIT as it applies to IT Governance

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Cobit At A Glance 1Control Objectives for Information and Related Technology (CoBIT) is a framework created by ISACA for information technology (IT) management and IT governance. At the top level,  CoBIT recommends alignment of IT to business.  COBIT defines IT activities in a generic process model within four domains. These domains are Plan and Organize, Acquire and Implement, Deliver and Support, and Monitor and Evaluate. The domains map to IT’s traditional responsibility areas of plan, build, run and monitor.  CoBIT 5 actually covers a lot more than IT Governance it includes five major components: Audit and Assurance, Risk Management, Information Security, Regulatory and Compliance, and of course, IT Governance.

CoBIT identifies four tracks in implementing IT Governance:

  1. Strategic alignment focuses on ensuring the linkage of business and IT plans; defining, maintaining and validating the IT value proposition; and aligning IT operations with enterprise operations.
  2. Value delivery is about executing the value proposition throughout the delivery cycle, ensuring that IT delivers the promised benefits against the strategy, concentrating on optimizing costs and proving the intrinsic value of IT.
  3. Resource management is about the optimal investment in, and the proper management of, critical IT resources: applications, information, infrastructure and people. Key issues relate to the optimization of knowledge and infrastructure.
  4. Performance measurement tracks and monitors strategy implementation, project completion, resource usage, process performance and service delivery, using, for example, balanced scorecards that translate strategy into action to achieve goals measurable beyond conventional accounting.

CoBIT asks that we gather management information that is presented as dashboards, scorecards and benchmarks.  CoBIT relies on four frameworks:IT Analytics 2

  • ITIL for service delivery
  • CMM for solution delivery
  • ISO 17799 for information security
  • PMBOK or PRINCE2 for project management

One of the challenges in implementing CoBIT is the enormous costs involved in purchasing different tools and integrating them.  Tools like uGovernIT  help provided an integrated solution to manage all aspects of CoBIT.  Another drawback is that CoBIT only focusses on running IT efficiently – true alignment requires not just efficiency but how IT can bring innovation and competitive edge to the enterprise.

Written by Subbu Murthy

January 15, 2015 at 11:27 pm