In the most recent Project Management Institute (PMI) Report ‘The High Cost of Low Performance’, organizations waste US$122 million for every US$1 billion invested due to poor project performance — a 12 percent increase over last year.1
This is staggering and leads to an important question: How can mature program management practices lead to a competitive advantage?
When I am involved in establishing a new large-scale, complex IT program or assessing the health of an ongoing program, I address five key elements. Each is critically important, and if any one of them is not being addressed appropriately, risk rises significantly and can lead to outright program failure. Further, most troubled programs make major mistakes right out of the starting blocks. Hence, I place tremendous importance on ensuring that a program properly addresses all five areas as it launches.
- Mature Management Processes. There must be an appropriate system development life cycle, which lays out the approach or approaches that will be used to design, develop, test and deploy the system. For complex IT systems, such as HealthCare.gov, there might be different approaches for the various subsystems.
- Solid Business and Technical Architecture. There are many failure mechanisms for programs, but I am surprised by how often there is not a solid high-level business architecture in place early in a program’s life. That absence typically leads to major requirements changes during system development, testing and deployment. Having a solid technical architecture in place, especially for a complex system with a number of subsystems, is also absolutely critical. If subsystems can be “bought” or repurposed from other systems that meet requirements, the organization ought to do so. Buying rather than building lowers risk substantially.
- Proper Governance Model. So many programs falter because the stakeholders are pulling the program in different directions; however an effective governance structure will drive stakeholder alignment and provide clear and informed decisions to guide the program manager.
- Proper Contractor Relationships. Many organizations cannot execute large IT programs without outside support, and those relationships have both formal and informal aspects. The formal aspect is the contract in which the scope of work, terms and incentives are codified. The informal aspect is the management of the contractors via the Program Management Office (PMO). I always look for a program in which the contractors are well integrated into the program and clearly understand their role and the roles of others, and there is open and candid communications among the parties. That type of environment will enable team members to identify issues early, share and discuss innovative ideas, and make informed decisions.
- Skilled Employees. Although contractor personnel can support a PMO, it is difficult to have them in leadership roles given the need to build strong and trusted partnerships with other stakeholders. Given the importance of having a set of skilled and experienced staff to run a program, it is crucial that an IT organization has the culture and makes the investment in developing such staff. It is the number one priority for creating a successful IT organization.
Importance of Collaboration between the Business Analyst, Project Manager and Program Manager
1 – Project Management Institute, The High Cost of Low Performance, P.6. http://www.pmi.org/-/media/pmi/documents/public/pdf/learning/thought-leadership/pulse/pulse-of-the-profession-2016.pdf