IT Performance Improvement
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Respect the Iron Triangle
Organizations need to perform and deliver projects under certain constraints, which traditionally include scope,
schedule and budget. Another way to refer to these three constraints is the "iron triangle," with each side representing a
constraint. A passing familiarity with geometry tells us that one side of the triangle cannot be changed without
impact on the others.
The Iron Triangle
While organizations do a competent job managing cost and schedule for information technology (IT) projects, very few do even a basic job with scope management.
There are some inherent reasons for this. Knowing the full scope of an IT implementation is difficult in a project's early stage. Converting this cloudy blend of wishes and wants into concrete entities like screens, windows, servers and workstations is difficult. Because of this difficulty and complexity, there is consistent resistance to the creation of measurement programs until process improvement or Project Management Institute (PMI) initiatives are well under way. This is unfortunate because early implementation of basic measurement programs can provide the necessary linkages between scope, cost and schedule.
Recently, CIO Decisions published results from a survey of chief information officers (CIO) asking if management has the information it needs to effectively manage IT costs. For companies with less than one billion dollars in revenue, 25% said no. In companies greater than one billion dollars in revenue, 39% said no. Therefore, the bigger the company, the bigger the problem.
Why does this still occur when organizations continue to invest valuable time, effort and money into project management, Six Sigma, Capability Maturity Model Integration (CMMI), International Standards Organization (ISO) certifications, PMI training and certifications - not to mention tools?
The Approach: A Repeatable Process
Organizations that deliver projects on time and on budget - and that do not cancel projects on a regular basis - take specific steps to identify all of the "what's" early on in IT projects by integrating basic management of scope into their schedule and budget process.
Organizations must follow these basic steps:
- Implement a process to estimate the size of projects
- Use a repeatable process to identify the cost drivers of projects
c. Team Capability
d. Technology Drivers
Implement a Process to Estimate the Size of Projects
Unfortunately, most organizations estimate IT projects at a detailed, grassroots level, where the issues and problems confronting the project manager providing a technology solution are the basis for planning and estimating. Armed with a repeatable process, organizations gain a precise concept of how much IT capability they can deliver over time. This enables them to trace the IT capability back to their original business functions. This process also allows them to deliver all of their projects within 5% of the initial cost estimates.
Use a Repeatable Process to Identify the Cost Drivers of Projects
Complexity: Aside from the size of a project, the second most important factor to identify and analyze is complexity. Simply put, the more technically difficult a technology is to implement, the more it will cost. Two applications can have exactly the same number of lines of code, screens and reports. Yet one can cost twice as much.
Domain: Where the technology will operate also impacts the effort, cost and schedule needed to implement and maintain it. The more complex the domain, the more documentation, testing, certification and oversight a project will require. What does this mean in practice?
Team Capability: The composition of the team implementing the technology can also be a major cost driver. How long has the team been in existence? Usually a new team will not be as productive as an experienced team. While a new team could be unfamiliar with the development tools and or the technology, an experienced team will be more likely to have a good understanding of the business processes. This in turn should lead to faster delivery and higher quality.
Technology Drivers: The type of technology implemented can impact the project's scope, cost and schedule. What programming languages are utilized? Newer languages tend to be more intuitive and powerful. It is also important to consider what kinds of tools are available to support the language. A new powerful language may only have basic tools available, while a middle-aged language, such as C++, can have fully integrated requirements, design and code, as well as testing tools.
Most organizations would benefit from basic repeatable processes that would enable them to look at IT investments in a more consistent fashion. This process would make it easier to produce estimates on individual projects, which would then streamline the governance process in the organization.
By implementing a repeatable process, project managers can utilize their internal historical data and gauge future investments based on lessons learned and available capabilities. When organizations can understand the efforts behind the cost of a project, it is only then that they can control the scope of it - and learn to respect the "iron triangle."
David Seaver is the Technical Director for Software Estimation and Measurement
at PRICE Systems. At PRICE Systems, Mr. Seaver has supported the National Archives Electronic Record Archive Program, Standard Procurement System for PEO EIS, the IRS, U.S. Army DASA CE, U.S. Navy E-6b Program Office, U.S. Navy HLR Replacement Program office, U.S. Navy Combined Program, Fidelity Investment, Accenture, and Computer Science Corporation.
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