Why business projects succeed., Lecture notes of Software Project Management

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MODULE 2 UNIT 3

Why business projects

succeed

© UCT/GetSmarter

Table of contents

• 1. Introduction
• 2. Project management vs. product success
  • 2.1 Project management success..........................................................................................
    • 2.1.1 Further considerations for ensuring project management success
  • 2.2 The categories of project management success
    • 2.2.1 Project efficiency......................................................................................................
    • 2.2.2 Impact on the customer
    • 2.2.3 Business success
    • 2.2.4 Preparing for the future
  • 2.3 Product success
• 3. Summary
• 4. References

Consider multiple aspects

Naturally, successful projects are indicative of effective project management. As mentioned previously, project management success has long been defined as the project’s ability to meet time, budget and performance goals. However, it is obvious that this is not the complete view when assessing the success of projects, and even when this method does prove to be a beneficial strategy, it only offers organisational value in the short-­‐term. Aspects such as user satisfaction with the finished result, and the perceived value of the project are clearly also important aspects to consider. That being said, an agreed framework to measure overall project success (product success + project management success)has yet to be developed.

Prioritise alignment with business goals

Projects are almost always conceived with an organisational goal or strategy in mind. However, during the actual implementation of the project, this is often forgotten, as team members tend to focus on operational aspects, not business goals.

Follow a unique approach with each project

Although it is obvious that projects differ widely in terms of a number of variables, the traditional project management approach treats all projects in the same way. However, not all projects will be successful when following the same management approaches, and unique approaches may be required for projects that differ, for example, in terms of the technology used. Tech considerations: Projects can be defined as low-­‐tech, medium-­‐tech, high-­‐tech and super high-­‐tech (Shenhar, 2001):

• Low-­‐tech projects rely on existing and well-­‐established technologies.
• Medium-­‐tech projects mainly utilise existing and basic technologies but incorporate some new aspect or feature.
• High-­‐tech projects utilise new, but already existing technologies in the implementation of the project.
• Super high-­‐tech projects utilise new technology that has to be developed specifically for the project, as no such technology previously existed. Notice how these definitions relate to how much risk is involved in the project.

Establish criteria proactively

Project management success needs to be measured against pre-­‐determined criteria. In order for these criteria to be effective, they must be agreed upon with stakeholders before the project starts and reviewed on an ongoing basis throughout the project. This will require a high degree of collaboration between the project manager and the project sponsor, and the sponsor needs to provide guidance where necessary. Finally, the project owner should demand and be provided with regular performance reports in order to ensure that the project remains on track.

It is important to differentiate between project management success factors and project management success criteria:

• Project management success factors: These make success more likely. When these factors are used, the likelihood for success is increased. These are covered by all the factors mentioned in this module.
• Project management success criteria: These are used to judge the success or failure of the project and should be developed in the project charter along with the project objectives. The following sections look at important components for determining project management success.

2.2 The categories of project management success

There are four main categories that determine whether or not a project will be successful. Figure 1: Four categories of project management success.

Figure 2 : Different client expectations and benefits as yielded by the successful completion of projects, differentiated by the level of technological advancement. (Ref: Shenhar, Dvir, Levy, & Maltz,

2.2. 3 Business success

Successful projects have a positive impact on the organisation responsible for their implementation. The business success dimension is determined in terms of the direct impact the project had on the implementing organisation, based specifically on the commercial success and the degree to which a larger market share is created. Organisations have differing expectations for different projects, depending on the degree of technological complexity involved. Business and organisational success tends to be more important in high-­‐tech projects. The following table outlines the risk and organisational expectations for different project types: Table 1: Organisational risk and benefits for different project types. Ref: Shenhar, Dvir, Levy, & Maltz,

Project type Risk Benefits Low-­‐tech Low risk and low technological uncertainty Reasonable profit with relatively low margins Medium-­‐tech Common projects with relatively low technical risk Appropriate profits with possible product diversification In some cases, management looks for benefits beyond these,

such as increased capabilities. High-­‐tech More risky with higher probability of overruns and losses in the short term Additional profits in the long run, increased market share, additional product lines or technological capabilities Super high-­‐tech Most risky with high stakes Revolutionary advantages with high profits

2.2. 4 Preparing for the future

The last dimension of project management success is how effectively the project prepares the organisation for future challenges. Success in this dimension is analysed in terms of the new markets, product lines, and technologies created or developed as a result of the project. As with the other dimensions, this is also affected by the technological complexity of the project – the more high-­‐tech and risky the project, the greater the importance placed on the potential future benefits of the project. This is because higher-­‐tech projects are more heavily focused on long-­‐term benefits than lower-­‐tech projects. Generally, different aspects of project management success are measured over different time frames:

• Project efficiency is measured in the very short-­‐term (often while the project is still underway).
• Customer impact is measured in the short term.
• Business and organisational success is measured in the long term (usually one or two years). Preparing for the future, on the other hand, is measured over a much longer period, usually only after two, three or five years have passed. Preparing for the future is more important in super high-­‐tech projects. Although there are no sure-­‐fire ways to guarantee that a project will succeed, as each project is a unique endeavour with different considerations to keep in mind, striving to include all of these elements in a project greatly increases the chances for success. Once the project has reached conclusion, project management success ceases to be the important factor and product success comes into play. The video below shows an interview with several highly skilled project managers, who were asked to reflect on the factors that are most important for project management success in their experience.

depending on the stakeholders involved. For example, an engineer may focus on the technical efficiency of the final product, an accountant on the budget spent, an HR manager on employee satisfaction of the product, and the CEO on the impact on markets and shareholders. The end users will also have different success criteria, depending on what the product is, but in most cases they will focus on whether or not the product does what they need it to do with minimal problems. It is not enough to be on time and on budget in the project management world. Enough attention has to be given to producing a quality product that meets the needs of the specific users who hope to benefit from it. In addition, the product needs to be marketed and sold to the marketplace. Lessons Learned A lot of value can be gained by holding a Lessons Learned meeting (or project Post-­‐Mortem) once the project is complete. Here all of the wins and losses learned from the project are discussed, and a Lessons Learned knowledge base can be created to increase the likelihood of success in future projects. This concept will be covered in detail in Module 11. The factors that contribute to the success of a product are not the same as the factors that make a project successful, since product success and project management success are two different concepts. View the Presentation below for an illustrative explanation of how these two concepts differ. To view this Presentation online, click here: https://prezi.com/ykxl33_7tn5g/project-­‐ success-­‐vs-­‐product-­‐success/.

3. Summary

A successfully run project does not necessarily result in a successful product, and vice versa. This means that project managers need to keep the big picture in mind when planning for project success. The Iron Triangle is one set of measures but the impact and performance of the product is often more important. This can be a challenging stance to take, as many

project managers are more concerned about getting their specific project completed on time so that it will not reflect badly on their performance.