Review of IT Project Management Practices in the UAE
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A Study on the UAE IT Industry
"I keep six honest serving men, (They taught me all I know);
Their names are What and Why and When And How and Where and Who".
This report presents findings of a research project that explored the distinct approaches of UAE-based IT organisations in following different project management practices to deal with their IT projects. Not too much of project management data on UAE IT industry exists today. Therefore it was decided to do a study on it. The research findings are based on a questionnaire survey conducted between July and August 2008 among 200 organisations of UAE. A total of 48 valid responses were received, representing an overall response rate of 24%.
The study achieved a primary aim of explanatory and constructivist research, which is to enhance knowledge and understanding of a phenomenon. An emergent-based, general systems approach was adopted for the whole project. General System theory is a holistic and analytical approach to solving complex problems. It recognizes relativity of perception and is a general science of 'wholeness' (Bertalanffy, 1968). The theory was used to break down the whole research technique into various components yet still maintaining the integrity of the research objective.
A key finding was the high amount of failure risks that came along with IT projects. In addition, it was found that project management added a lot of value to IT projects and if carried out efficiently it could help avoid the failure risks.
A surprise discovery was that although most of the organisations valued project management a lot, they did not have a dedicated Project Management Office (PMO) in place. Further, it was found out that high involvement of external organisations could be one of the factors responsible for the high amount of risks involved with IT projects. It was observed that 25% of the project managers were not aware of the project management maturity levels of their organisations. Project managers seemed to have tough times managing time, cost and risk in IT projects. Also, most of the organisations did not believe in recording the lessons learned and hence knowledge was not transferred to the new projects from the previous ones.
Strong indicators probably exist to warrant further research into investigating the basic reasons behind a high percentage of failed IT projects. Further research into the relationship between project management methodology and project success seems warranted on behalf of the indicators provided by the respondents.
"I have not failed. I've just found 10,000 ways that won't work."
-Thomas Alva Edison (1847-1931)
"If your project doesn't work, look for the part that you didn't think was important"
- Arthur Bloch
"The significant problems we face cannot be solved at the same level of thinking we were at when we created them."
-Albert Einstein (1879-1955)
"The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency."
"The Roman bridges of antiquity were very inefficient structures. By modern standards, they used too
much stone, and as a result, far too much labor to build. Over the years we have learned to build bridges
more efficiently, using fewer materials and less labor to perform the same task."
-Tom Clancy (The Sum of All Fears)
In 1986, Alfred Spector, president of Transarc Corporation, stated that bridge building could be compared to software development. He added, "The premise: Bridges are usually built on-time, on-budget, and do not collapse. On the other hand, software never comes in on-budget or on-time. Also, it always breaks down."
One of the biggest reasons why bridges come in on-time, on-budget and do not collapse is because their designs are extremely detailed. Once the designing phase is over, it is then frozen and the contractor has very little flexibility in changing the specifications. However, in today's fast moving business environment, having a frozen design in place means no changes in the business practices. Therefore efforts must be made to use a more flexible model. This could be and has been used as an explanation for development failure.
But beside 3,000 years of experience, there is another difference between software failures and bridge collapses. When a bridge collapses, investigation is carried out and a report is written on the cause of the failure. It is not so in the IT industry where failures are covered up, ignored, and/or rationalized. As a result, the same mistakes are repeated over and over again.
According to the Standish Group report, more than $250 billion is spent every year on IT application development of approximately 175,000 projects in the United States. The average cost of a development project for a small company is $434,000; for a medium company, it is $1,331,000; and for a large company, it is $2,322,000. A great number of these projects will fail. IT projects have always known to be in chaos.
The research showed that a staggering 31.1% of projects got canceled before they ever got completed. Further results indicated that 52.7% of projects had cost 189% of their original estimates. The cost of these failures and overruns were just the tip of the proverbial iceberg. The lost opportunity costs were not measurable, but could easily be in trillions of dollars. The extent of this problem can be realized by looking at example of the City of Denver. The failure to produce reliable software to handle luggage at the new Denver airport was costing the city $1.1 million per day.
Based on this research, in 1995 American companies and government agencies spent $81 billion for canceled software projects. These same organisations paid an additional $59 billion for software projects that were completed, but had exceed their original time estimates. Risk is always a factor when pushing the technology envelope, but many of these projects were as ordinary as a driving license database, a new accounting package, or an order entry system.
On the success side, the average was only 16.2% for software projects that were completed on-time and on-budget. In the larger companies, the news was even worse: only 9% of their projects came in on-time and on-budget. And, even when these projects were completed, many were no more than a mere shadow of their original specification requirements. Projects completed by the largest American companies had only approximately 42% of the originally-proposed features and functions which goes to show that these projects lacked scope management. Smaller companies fared much better in this aspect. 78.4% of their software projects got deployed with at least 74.2% of their original features and functions.
48% of the IT executives in the research sample felt that there were more failures during that period than those five years ago. But it was also observed that over 50% felt that there were fewer or the same number of failures at that point of time than there were five and ten years ago.
So the Standish Group reported an improvement in IT project success rates and claimed that it was due to an increased ability to know when to cancel failing projects. Standish Group Chairman Jim Johnson commented: "The real improvement that I saw was in our ability to-in the worlds of Thomas Edison-know when to stop beating a dead horse...Edison's key to success was that he failed fairly often; but as he said, he could recognize a dead horse before it started to smell...In information technology we ride dead horses-failing projects-a long time before we give up. But what we are seeing now is that we are able to get off them; able to reduce cost overrun and time overrun. That's where the major impact came on the success rate." (Cabanis, 1998)
There is a new or renewed interest in project management today as the number of projects continues to grow and their complexity continues to rise. As already observed, the success rate of IT projects has more than doubled since 1995, but still only about a third are successful in meeting scope, cost, and time goals. More and more projects and organisations can succeed consistently by adopting a more disciplined approach to managing projects.
This study provides first-hand information on success and failure rates of IT projects in the UAE and on distinct approaches and methodologies followed by all different kinds of IT organisations in governing IT projects. It also aims to survey attitudes of organisations towards distinct project management processes like cost management, time management, risk management, etc. and establish a future direction for organisations so that they realize the value of the most significant process groups of project management and do not neglect them in the forthcoming projects.
It could be useful in the following four areas : (1) it can be helpful for relevant government departments in preparing strategies for project management in the IT industry; (2) it can promote the awareness of commercial benefits of project management among managers in IT companies of UAE and encourage them to seriously consider project management in their businesses; (3) it can increase the competence and confidence in applying project management by local companies by providing management guidance on the selection and development of project management methodologies; and (4) it can be beneficial to the educational institutions of UAE for teaching and conducting further research on information technology project management.
According to the Global Industry Classification Standard (GICS), 'the IT industry consists of three primary sub-sectors : firstly, Technology Software & Services, including companies that primarily develop software in various fields such as the Internet, applications, systems, databases management and/or home entertainment, and companies that provide information technology consulting and services, as well as data processing and outsourced services; secondly Technology Hardware & Equipment, including manufacturers and distributors of communications equipment, computers and peripherals, electronic equipment and related instruments; and thirdly, Semiconductors & Semiconductor Equipment Manufacturers.' This particular report is confined to the use of project management among the areas of Technology Software & Services and Technology Hardware & Equipment only. The research was not conducted on the Semiconductors & Semiconductor Equipment Manufacturers in UAE.
Contents of this Report
Chapter Two introduces project management and its significance for any business sector. It then demonstrates the rapid growth in adoption of project management in IT projects. This is followed by a synopsis of the UAE market and the UAE IT industry. The chapter ends signifying the impact of project management on the UAE IT industry. Chapter Three expands on the significance of project management as viewed through academic literature. This outlines how project management is known to add value to IT projects and some characteristics observed by organisations that have gone through the process of formalizing project management (Center for Business Practices). Using past works of the last 20 years, it also highlights the most predominant factors responsible for high failures rates of IT projects. This is followed by views of authors on various project management process groups and methodologies.
Having discussed not only the pros of project management but also the problems faced during the entire process, Chapter Four is concerned with the research methodology and detailed analysis of the survey conducted. Chapter Five brings out the key survey findings in detail and compares these with the literature surveyed in Chapter Two indicating the extent to which the survey findings break new ground.
Chapter Six builds up on the key findings outlined here, their practical implications, and a look towards how this research could be developed. This includes a brief description of limitations of this study and of recommendations on how these limitations could be overcome in subsequent studies.
Project management is the most critical business skill and competency of today that forms the basic building block of a knowledge based company for businesses and professions in oil and gas, petroleum, petrochemicals, chemicals, metal and mining, infrastructures, buildings, IT, Healthcare, Finance, Telecoms, Manufacturing, and many more services and banking industries. Project management was declared to be" the best career on earth" by the Fortune magazine. Recently, PMI reported that nowadays more and more organisations and government agencies are adopting and making project management a strategic competency.
Information systems (IS) and information technologies (IT) are the fastest growing industries in developed and most of the developing countries. Huge amounts of money are still being invested in these industries (Abdel-Hamid & Madnick, 1990). Every organisation wants to gain a competitive advantage, maintain it and lead from the front. Hence, there is a corresponding pressure to increase productivity. To maintain a competitive edge in today's fast-changing world, the success of an organisation depends on effectively developing and adopting information systems.
According to Zells (1994) and other studies, approximately 85% of IT projects under-taken in the western countries are at the lowest level of capability maturity model (CMM). The challenges at this level are to have project planning, project management, configuration management, and quality assurance in place and have them working effectively. To improve project delivery performance, a number of organisations are adopting project management approaches and setting up project management offices (Barnes, 1991; Butterfield & Edwards, 1994; King, 1995; Munns & Bjeirmi, 1996; Raz, 1993; Redmond, 1991).
Current literature on IT projects shows that most of the IT problems are not technical, they are of management, organisational or behavioral nature. (Johnston, 1995; Martin, 1994; Whitten, 1995).
Fisher's (1991) survey of technology firms showed that if project management improved, time and cost could be reduced by more than 25% and profits would increase by more than 5%. This has since been validated by using different project management methodologies and analyzing the extent to which these practices can be adopted, based on internal benchmarking by the companies involved in the field trials.
The UAE Market & the UAE IT Industry
UAE has realised the significance of project management in the IT due to its rapid growth in the IT industry. As expected by Business Monitor International (BMI), the total size of the UAE IT market is to increase from around US$3.4bn in 2007 to close to US$4bn in 2012. With IT a key element of the Emirates' development, a number of major local and federal government initiatives together with a strong and diversifying economy should ensure continued growth over the forecast period. Meanwhile, the oil-led boom across the Middle East will continue to be a boost to IT and infrastructure spending in the UAE. (Marketresearch.com, 2007)
As per the BMI report, the federal government is also encouraging the development of 'smart cities', another regional trend. In 2007 the government announced that its target of getting 90% of businesses online by the end of the year was likely to be met. Services are becoming an increasingly significant component of many deployment contracts, as evidenced by recent projects by leading UAE corporations such as Emirates Airlines and the local telecom provider Etisalat.
Investment is expected to be strongest in the government, financial, and oil and gas verticals. Other key non-oil sectors driving the economy include banking and finance, which are likely to be the single largest industry vertical in terms of IT investments over the forecast period. Real estate has also experienced a massive investment boom in the past five years, and this is expected to continue and grow, with the National Bank of Dubai projecting at least US$50bn in outlays in property development in the emirate by 2010. (Mindbranch.com, 2007)
The BMI report states that the UAE federal government's recently announced UAE Strategic Plan calls for a strengthening of e-government programmes. The focus of the programme is to support implementation of programmes at federal government level. The federal government ministries have often lagged behind progress by the leading local governments, particularly Dubai. As such, Dubai government, which has had many of its departments and services online for some time, will lend expertise to the project.
However, local government continues to dominate and accounts for around 20% of total IT Services spending. Dubai Municipality announced that it expects to spend anything between US$1.6mn and US$2.2mn per year over the next few years implementing its plan of getting 90% of government services online. It is likely the organisation will spend at least US$2.8mn annually on e-government initiatives. Abu Dhabi is accelerating its efforts to emulate Dubai, led by the Abu Dhabi Systems and Information Committee (ADSEIC), a body created in 2005 to develop and drive initiatives to transform government services in the Emirate. (Marketresearch.com, 2007)
From the above trend, it can be observed that the number of IT jobs in UAE has gone up by 5000 percent since 2005. This goes to show how rapidly the UAE IT Industry has grown in the past three years and that it is still going strong.
According to BMI, with government accounting for as much as 40% of IT spending, and e-government programmes alone around half that, vendors are continuing to find opportunities. Recently the Ministry of Development for the Government sector signed a strategic agreement with Microsoft Gulf whereby Microsoft will support federal e-government programmes with training and technical support. Under the agreement Ministries will also use legal Microsoft software. Meanwhile, the leading body for Abu Dhabi's e-government programme, the Abu Dhabi Systems and Information Committee (ADSIC) signed an Enterprise Licence Agreement with Oracle. The agreement establishes Oracle as a key technology partner and provides for the Abu Dhabi Government to buy Oracle software solutions and support and maintenance services.
The continuing growth in PC sales in 2007 in the UAE did not significantly alter the competitive landscape of a market which accounts for approximately 40% of the overall regional PC sales. Today the market remains dominated by international players such as Acer, Dell and HP with the top five brands accounting for more than 50% of the market. Meanwhile, the share held by local assemblers continues to dwindle, due in part to their relative weakness in the growth area of notebooks. However, local assemblers hope that their future will be brighter since UAE-based firms such as Sky Electronics have already been fighting back. (Mindbranch.com, 2007)
The UAE hardware market is estimated at about US$1.4bn in 2007, which shows a 12% growth from US$1.2bn in 2006, and is one of the largest in the region. Much of the growth is due to small and medium enterprise spending, particular on mobile computers, which are expected to account for around 60% of sales over the forecast period. Notebooks are also proving to be popular with the consumer segment, particularly with the introduction of features such as integrated wi-fi, webcam and entertainment features such as HD DVD. Sales of PC notebooks and accessories have been expected to reach more than US$1bn by the end of 2008, while the compound annual growth rate (CAGR) for the 2007 to 2012 period as a whole is expected to be in the region of 8%. Current and future investments in education and e-government, fuelled by new oil revenues, will lead to desktop rollouts in schools, colleges and government offices across the Emirates. (Marketresearch.com, 2007)
BMI estimates that the UAE's software spending will pass US$400mn in 2008, representing around 17% of the IT expenditure. CAGR for spending on packaged software is put at 10% over the 2007 to 2012 period, with the UAE being of the region's fastest-growing ERP markets, as more businesses realise the benefits of efficient management of resources within their internal processes.
The UAE also has one of the region's lowest software piracy rates at just 35% according to the Business Software Association (BSA), which has praised the UAE government and Ministry of Economy for its efforts in promoting anti-piracy initiatives. The government has combated illegal software in a number of ways, both through anti-piracy legislation and enforcement measures. Customer relationship management (CRM) will be one of the growth areas with fewer than 2% of small- to medium-sized enterprises (SMEs) in the Middle East region having a specialised CRM application in place. BMI predicts plenty of room for growth in the forecast period as numerous untapped sub-sectors still exist. Key verticals include process manufacturing (mainly oil and gas), followed by the financial services industry. Two other key segments are the telecom and the public sectors. During the next five years high-growth categories are set to include CRM, enterprise resource planning (ERP) business intelligence, storage and security products. (Mindbranch.com, 2007)
BMI expects that the IT Services market will reach a value of more than US$1,003mn by 2012, with outsourcing accounting for an increasingly large portion of up to 25%. IT services revenues compound annual growth rate (CAGR) over the 2006 to 2012 period is expected to be 10%, encouraging vendors to shift their focus away from simply shifting boxes. Services are becoming an increasingly significant component of many deployment contracts, as evidenced by recent projects by leading UAE corporations such as Emirates Airlines and Etisalat. Outsourcing is also predicted to be a growing trend, with recent landmark outsourcing deals awarded by entities such as the Abu Dhabi Water and Electricity Authority (ADWEA)and civil service departments. Global vendors such as IBM Global Services are competing for its business with local companies such as Injazat Data Systems, which with its good government connections has grown to be a major force in the market, reporting BPO deals with 13 leading private and public organisations. (Marketresearch.com, 2007)
The recent Global Information Technology report sponsored by Cisco noted the UAE's success in creating a good ICT environment by placing it top of the rankings for 122 countries. The survey, which looks at the preference of countries to leverage the opportunities offered by ICT for development and increased competitiveness, praised the UAE's good regulatory environment, and clear government leadership in leveraging IT and promoting its use. According to the report, ICT has empowered individuals and revolutionised the business and economic landscape while fostering social networks and companies.
Overall internet penetration in the UAE was estimated at close to 40% by the end of 2006, far above the Middle East and North Africa (MENA) average, reflecting the UAE's status as one of the most advanced IT countries in the middle-east. Broadband penetration is around 10% and is expected to rise 60% over the forecast period. In terms of e-government development, additional new phases to be introduced in the project last year (as mentioned in the Industry Developments section) include e-portal, e-project, the HR Management System (HRMS) and the Financial Management Integration System (FMIS) projects. The e-government High Committee has expressed satisfaction with the progress made on implementation of the e-government initiative to date. (Mindbranch.com, 2007)
Impact of Project Management on the UAE IT Industry
Project management has already had a significant impact on IT organisations in UAE and much more dramatic effects are anticipated for the years to come. Greater attention needs to be paid to the interaction of information technology with business methods, work patterns, employees and organisational culture.
It was observed that not too much of research work has been carried out on project management in the IT industry of UAE and this is the precise reason why this study was conducted on the UAE market.
"If we built houses the way we build software, the first woodpecker to come along would destroy civilization."
- John J. Hamre, U.S. Deputy Defense Secretary
Phillips (2004) states that IT project management could be as "as exciting as a white water rafting excursion or as painful as a root canal". In addition, Anthes (2008) points out that IT project management has always earned a high ranking on the annual list of IT managers' worries, but in the first-half of the 2008 Vital Signs survey, it took the No. 1 spot. In other words, the process is all about efficiently handling the complexities that come along with IT projects, right from the word go. The study aims to investigate on how difficult it is for organisations to manage IT projects efficiently.
Richardson et al. (2006) claims that project failure is based not only on economic criteria but also on requirements, cost and time parameters. He builds up his reasoning by citing examples of the following project surveys :
The Robbins-Gioia Survey (2001)
The Conference Board Survey (2001)
The KPMG Canada Survey (1997)
The Chaos Report (1995)
According to IT Cortex (2004), the results of these surveys showed that most of the organisations suffered from high project failure rates and that they heavily exceeded the time and budget constraints.
Similarly, Schwalbe (2007) reports that IT projects come along with high failure risks. He defends his thoughts with a study which was conducted by the Standish Group (CHAOS) in 1995. In the survey it was found that only 16.2% of IT projects were successful and over 31% were cancelled before completion, costing over US$81 billion in the US alone.
However, when the CHAOS study was conducted again in 2001, the results showed improvements in all areas but still only 28% of IT projects succeeded.
The 2001 Standish Group report findings as compared to those of the 1995 report were as follows :
Time overruns significantly decreased from 222% to 163%
Cost overruns were down from 189% to 145%
Required features and functions were up from 61% to 67%
Successful IT projects rose from to 16% to 28%
One of the objectives of this report is to carry out similar work on finding the failure rates of IT projects but on the UAE market, one on which not much research has been carried out till date.
In many previous studies, project failures due to time delay, cost overrun, and abandonment of IT projects have been widely reported (Bailey, 1996; Gibbs, 1994; Lucas, 1995; Martin, 1994; Ward, 1994). In other industries, causes of project failures are investigated and reports written, but in the IT industry their causes are either covered up or ignored. As a consequence, the IT industry keeps repeating the same mistakes over and over again (Johnston, 1995). This report takes this a step further by observing what percentage of IT organisations in UAE believe in maintaining project reports and lessons learned logs for their subsequent projects.
In many previous studies, the most commonly reported causes of IT project failure were traced out. They were as follows (based on a content analysis of the cited literature):
Misunderstood requirements (business, technical, and social) (King, 1995; Lane, Palko, & Cronan, 1994; Lavence, 1996);
Optimistic schedules and budgets (Martin, 1994);
Inadequate risk assessment and management (Johnston, 1995);
Inconsistent standards and lack of training in project management (Jones, 1994; O'Conner & Reinsborough, 1992; Phan, Vogel, & Nunamaker, 1995);
Management of resources (people more than hardware and technology) (Johnston, 1995; Martin, 1994; Ward, 1994);
Unclear charter for a project (Lavence, 1996);
Lack of communication (Demery, 1995; Gioia, 1996; Hartman, 2000; Walsh & Kanter, 1988).
On the other hand, Karten studies reasons for failure by compiling a list of ten ways that can guarantee project failure :
Abbreviate the planning process
Don't ask "what if?"
Minimize customer involvement
Select team members by seeing who is available regardless of skill
Work people long and hard
Don't inform management of problems
Allow changes at any point
Discourage questions from team members
Don't give customers progress reports
Don't compare project progress with project estimates
However, this survey goes a bit deeper and also explores the role of project management methodologies and process groups in helping deliver successful projects. The project management frameworks which are rapidly gaining recognition are ITIL, PMBOK and PRINCE2 (Phillips, 2004).
Although Leuenberger (2007) considers ITIL to be one of the world's best ways to align IT with business objectives,
he also claims that his research conducted through IDC shows points out that 60% of mid-sized businesses in Australia either are unaware of, or have no plans to implement ITIL and also that on a global scale, only 20% of the mid-market companies are currently using ITIL.
In contrast to ITIL, PMI claims that it has grown to become the most widely recognized - and the only global - certification for the project management profession with more than 260,000 members in over 171 countries.
The survey aims to study the UAE IT industry and clarify such claims made by authors and institutes so that the growth of IT project governance methodologies can in an IT industry of a booming economy can be analyzed.
Bainey (2004) states that so many IT projects tend to go over budget, run behind schedule, and deliver products or services poor in quality due to the negligence of integration, consistency and standardization. The report builds up on this by going ahead and investigating the significance of integration management for project managers.
Harris (2005) asserts that it is high time that the PMO function is placed in its proper organisational alignment. He believes that not only can it combine the corporate planning process with effective delivery of products and services but also provide external clients with traditional client services for the enterprise as a whole or for respective enterprise business units. In addition, Bohner (2000) suggests that if IT organisations need to use PMOs efficiently they must assess the maturity of PMOs to determine appropriate performance levels and plan for their improvement overtime. Jaques (2001) defends the concept of PMOs by indicating that implementation of a PMO does not require vast resources or technical expertise. KPMG Australia reports that organisations do not take PMOs seriously because they feel that establishing and maintaining a PMO adds up an additional layer of complexity to manage - organisational change and resistance. The report written in 2005 also shows organisations claiming that PMOs do not have a clear purpose. The study attempts to probe into the UAE market and measure the significance of PMOs in the IT industry there.
Charvat (2002) writes that among all the stakeholders, sponsors and end-users seem to have the highest involvement in IT projects. But his work seems to be lacking in certain areas. It does not look at the large number of external organisations involved in engineering projects like the clients, contractors and sub-contractors. This survey tries to build up on this shortcoming taking even these external organisations into consideration and tries to analyze their involvement in IT projects.
The study carried out by Curtis et al. (2002) shows that Watts Humphrey's Capability Maturity Model (CMM) helps organisations in assessing their maturity level and then forming a specific plan to get to the next level. However, the authors also state that CMM can be combined with other methodologies in some cases, for example, many organisations have been commonly using it in conjunction with the ISO 9001 standard, as well as with the computer programming methodologies of Extreme Programming (XP), and Six Sigma. Harder (2002) stresses the significance of CMM by stating that it provides a framework for the evaluation of processes used by software development firms to create software. He also considers CMM to be a vital tool which helps in measuring the organisation's ability to repeat the successful processes as documented and specifies that the only way to do this is to document processes and collect metrics so that these can be used in subsequent IT projects. The study evaluates the maturity levels of various IT organisations in order to help them analyze where they stand in the IT industry.
Steve Fahrenkrog, the Standards Manager for the PMI, highlights that the project management process groups are often not correctly understood as a process for project teams to execute projects. He says, "New project managers often utilize these concepts too literally rather than to judiciously use the methodology in the execution of projects." (Liss, 2005)
This study projects the project management process groups which are used in abundance in IT organisations and also highlights those process groups which are neglected due to which IT projects suffer.
Dinwiddie believes that the major return on investment (ROI) in improved information management systems comes, not from the automation of existing business processes, but from modifying and improving the processes themselves to take advantage of increases in productivity and efficiency offered by information technology. The study confirms if project managers also feel the same about continuous improvement in project management processes.
Schwalbe (2007) states that project managers should be able to listen actively to what others are saying, help develop new approaches for solving problems, and then persuade others to work toward achieving project goals. She adds that project managers must lead their project teams by providing vision, delegating work, creating an energetic and positive environment, and setting an example of appropriate and effective behavior; they must focus on teamwork skills to employ people effectively and need to be able to motivate different types of people and develop the spirit of being a group within the project team and with other project stakeholders. This approach will be used in the report by observing the number of organisations in which the project manager acts as the coordinator between the project team and the other stakeholders.
Srinivisan (2005) recalls that while 26 per cent of knowledge in the average organisation is stored on paper and 20 per cent digitally, an astonishing 42 per cent is stored in employees' heads. He states that information of is of utmost importance in IT projects and it is in these projects that knowledge is lost and not transferred onto subsequent projects due to lack of knowledge management in organisations. His study concludes that knowledge management requires lot of voluntary contribution by members and that an organisation needs to ensure that tacit knowledge is harnessed and is available to all. This research investigates the significance of knowledge management.
Wideman added a fourth element, 'quality', to the "iron triangle of project management" which already comprised of 'time', 'cost' and 'scope'. However, Marasco (2004) argues that the model should contain one more element aka 'risk'. He considers risk to be perhaps the most important parameter to consider in funding and planning a project and adds that it is worthwhile to assess the risks before deciding what resources to allocate to a project.
Taking into consideration Marasco's model, among all the five basic elements of project management, scope management is a neglected area in most IT projects. However, it is the foundation on which the schedule, budget and resource plans are built. Getting it wrong means that everything else will be wrong. (Turbit, 2004)
Robertson (1996) criticizes IT organisations for their typical development processes that do not produce adequate output quality. He believes that quality needs to be built into the product instead of being inserted later through various tests and that the level of quality desired must be defined right at the beginning of any IT project. In addition, Gilb (2002) considers quality to be an organisational attitude.
Lovelady et al. (2004) states that any kind of project comes along with risks attached to it but some of these risks in the project management process can be significantly reduced or virtually eliminated, thus increasing the probability of project success. Similarly, Glazewski (2005) states the significance of risk management in project management by saying, "The cost and effort to prevent a fire is almost always far less than the cost and effort to rebuild after the fire is out." Also, Martens et al. (2003) takes this further by devising a new framework for enterprise risk management and claiming that efficient risk management can help an organisation achieve its goals while avoiding failures and shocks along the journey.
The study carried out by Warko (2001) shows that for following time management practice in project management, one needs to get the math of schedule estimation right. He believes that the best schedule estimate should take into account not only duration but also effort along with gut feeling and intuition. Jones (2002) adds to this by stating that schedule estimation in practical life is one of the most challenging bits of the whole software estimation process. Again, Peters (1999) claims that a schedule estimation rule of thumb could be used to get a rough idea of the total calendar time required to complete a project :
Schedule in months = 3.0 * (effort - months) 1/3
Longstreet's (2005) study indicates that software development project estimates can be done using Albrecht's Function Point Analysis in order to overcome difficulties associated with lines of code as a measure of software size, and to assist in developing a mechanism to predict effort associated with software development.
Wilkens (1999) introduces the concept of "Earned Value" which is a contemporary standard for defining cost, schedule, and functional project status. He states that it in project management, this value is earned with completion of activities.
In an article adapted from the U.S. Air Force's Software technology Support Center's Guidelines for Successful Acquisition and Management Checklist, project cost management is broken up into a sequence of four processes: Resource Planning, Cost Estimating, Budgeting and Cost Control. (Richardson and Butler, 2006)
Barber's (2004) study focuses on the significance of communicating effectively to support business objectives. Similarly, Davis-Muffett (2004) advises project managers on how to communicate information effectively to diverse stakeholder groups in order to gain and maintain their support. Also, Jackson (2004) advises project managers how to effectively direct informational interactions of those they supervise and others elsewhere in the organisation.
Richardson and Butler (2006) describe IT project governance to have the following four responsibilities:
Alignment of IT with the enterprise and realization of the promised benefits
Use of IT to enable the enterprise by exploiting opportunities and maximizing benefits
Responsible use of IT resources
Appropriate management process applied to IT-related tasks
Thorp (2003) believes that the total focus of strategic governance should be on optimizing business value through effectively managing change in an ever changing business environment.
This study looks at the most vital project management processes and their implementation in IT organisations. It attempts to do so by taking distinct opinions of IT project managers from different organisations. In general, research related to understanding the impact of project management in the UAE IT industry appears to be limited. Various survey findings and reports were primarily identified through articles in journals and industry magazines. Various articles from the internet were also used.
The very first task was to find out contact addresses of the organisations which dealt with IT projects. The mailing list to which the survey questionnaire was distributed was obtained from the Dubai Internet City website (http://www.dubaiinternetcity.com/complete-list-of-partners/). There were approximately 600 organisation addresses in the mailing list representing all regions of UAE. Every fourth organisation address was selected from the mailing list and recorded in a spreadsheet. A total of 150 organisation addresses were thus identified, a mailing list was compiled, and the survey questionnaire for this research (described later), plus a stamped return envelope, was sent to each organisation on the list. Among the questionnaire survey forms mailed, 5 were returned undeliverable. Out of the 200 survey questionnaires sent, 48 organisations ( 24 % of total ; 24.6 % of delivered ) responded to this survey questionnaire form.
The questionnaire responses were entered into a spreadsheet for collation and analysis. The details of the response analysis are shown in the Response Analysis section.
The questionnaire was designed to achieve the stated objectives and to encourage a high response rate. Ideas on the type of questions to be asked and the associated methods were generated and developed over a period of two weeks, based on the pattern of questionnaires on the international journal of project management web site. A draft version of the survey questionnaire was generated specifically for IT organisations in the UAE. After comments and amendments, a final version of the questionnaire was produced.
The whole questionnaire was broken up into seven major categories.The first four questions were meant to identify the responder, his/her role in the organisation and his/her expertise in IT project management. The next two questions inquired about the size and business of the organisation they worked for. The third category focused on the structure of the IT department. The next category focused on the facts and figures of the IT projects carried out in the past and relevance of project management in IT projects for the organisation. It also inquired about the kind of project management methodology used for IT projects in the organisation. There was question on the extent to which the stakeholders were involved in these projects. The level of maturity of the organisation with respect to IT projects was also recognised. The last section was based on the responder's personal opinion of the organisation's project management processes, implementation and outcomes.
Prior to posting the questionnaire, a cover letter was attached to the front page of the survey questionnaire for each organisation in order to identify the most senior person in the organisation with responsibility for information technology. In some organisations, this person was known as the IT Project Manager but in the majority of cases this person had other responsibilities apart from project management of IT projects.
RESPONSE TO QUESTIONNAIRES
Identification of responder :
With the exception of ten respondents, all the others were either IT managers or IT project managers. The rest of the ten respondents were IT administrators. None of the respondents were presidents or vice-presidents.
Approximately 58% of the respondents had 0-10 years of project management experience, 28% had 10-20 years and 14% had 20-50 years.
With today's competitive world, certifications are becoming more and more significant along with professional expertise. More and more project managers are becoming certified in order to have an edge over the others and in order to stand out of the rest. In the survey carried out, almost 48% of project managers were certified and the remaining relied only on their past work experience.
Out of the 23 certified managers, majority of them were PMP certified. Only 2 of them were PRINCE2 certified and 11 were ITIL certified. The Project+ certification was held by 3 managers. There were quite a few managers who held more than one certification.
Just 4% of them had been responsible for defining and authorising projects, roughly 14% had been involved in the planning of the projects, 40% had been executing projects, 26% had been responsible for monitoring and controlling projects and the remaining 16% had been responsible for the closure of projects.
Identification of organisation :
As far as specialisation is concerned, just 2% of the organisations were into manufacturing, 25% into software development, 26% into sales and distribution, 13% into consulting, 3% into networking, 2% into assembling, 24% into web designing and the rest 5% into e-business.
Out of the 48 organisations that responded to the questionnaire, 33 were small businesses with 1-99 employees, 12 were midsize organisations with 100-999 employees and the rest 3 were large companies with 1000 or more employees.
Structure of IT department :
Outsourcing whole projects has become a common practice for organisations now and when asked how often did their organisation outsource its IT projects, 50% of the respondents answered "never", 6% said "seldom", 4% went with the option of "sometimes", 22% answered "often" and 18% said "always".
IT project governance :
Time and cost are two of the biggest constraints in completing a project.
When asked about the percentage of projects completed within the allotted time, 14 said less than 25%, 20 answered 25-50%, 8 replied 50-75% and the remaining 6 said more than 75%.
When the same question was asked with respect to the allocated budget, 18 said less than 25%, 16 answered 25-50%, 9 replied 50-75% and the remaining 5 said more than 75%.
If the resources are not managed properly, failure or termination of a project midway is not very unusual. 9 respondents expressed that less than 25% projects failed or terminated, the remaining 27 said that 25-50% projects failed. 12 said that more than 50% projects failed in their organisations.
There can be a range of factors responsible for dragging back a project. When asked if there was a lack of general agreement on a well-articulated set of project goals and objectives, 10 said "never", 13 replied "seldom", 15 went in for "sometimes", 7 said "often" and 3 replied "most of the time". Another factor is a weak project team; when asked about it, 20 said the project "never" failed due to a weak project team, 18 said "seldom", 5 went in for "sometimes", 3 replied "often and 2 replied "most of the time". At times, although the project team might be strong, it might not work well together as a team. When asked if there was lack in team coordination, just 1 said "never", 5 replied "seldom", 12 said "sometimes", 14 replied "often" and 16 said "most of the time". Weak project management can lead to waste of resources and hence disasters later on. 3 respondents said that they never faced weak project management in their IT projects, 10 replied back saying that they seldom faced weak project management, 12 said that they faced weak project management but only sometimes, 13 said "often" and the remaining 10 complained that weak project management was dominant in their projects most of the time. Monitoring projects is also very crucial so that the project manager has an idea of the progress and also has an updated status on the resources being utilised. By doing so, weak areas can be identified and measures can be taken accordingly to overcome those weaknesses. When asked if their organisation had a poor system to measure project progress, 6 said "never", 8 replied back saying "seldom", 12 said "sometimes", response of 12 was "often" and the remaining 10 opted for "most of the time". Leadership is another aspect which can be very crucial for the success of a project. 6 respondents said that their projects "never" faced poor leadership when critical decisions were needed, 9 replied back saying that their projects seldom faced poor leadership, 21 said that it happened only "sometimes", 8 replied saying "often" and the remaining 4 believed it happened "most of the time". Technical expertise and technical skills are a must for implementing an IT project. Sometimes a team lacks these skills and hence the project suffers. 19 respondents thought that the project team "never" lacked the technical capability required for the project, 14 said thought the team "seldom" lacked the skills required, 5 said "sometimes", 8 replied back saying "often" and 2 said "most of the time". Involvement and support of senior managerial staff is also very important if projects need to be successfully completed. Just 2 respondents stated that their project "never" lacked sufficient senior management support and involvement, 12 said "seldom", 18 replied back saying "sometimes", 6 stated "often" and the rest of the 10 said "most of the time".
When asked about the significance of project management in their organisations and whether project management added value to their organisaitons, all of them agreed. None disagreed in this case.
But when asked how valuable project management was to their organisations, their responses differed : 14 stated that it was "very valuable", 15 said that it was "valuable", 15 said that it was "moderately valuable" and 4 said that it was "of little value". None of them replied back stating that it had no value at all for the organisation which goes to show that everybody thought that project management was significant, beneficial and valuable for their organizations, it's just that the level of significance varied for different organisations.
There are several project governance methodologies used today, some of them devised specially for IT projects and the others for all sort of projects in general.
The SOX 404 auditing framework represents a solid IT foundation on which broader data governance programs are built. This helps IT demonstrate a higher return on investments supporting critical enterprise initiatives. (www.tizor.com) Just 1 out of 48 said that his organisation used the SOX 404 framework for its IT project governance.
ITIL is intended to assist organisations to develop a framework for IT Service Management. Worldwide, ITIL is the most widely used best practice for IT Service Management. (www.itil-officialsite.com) According to the survey, 16 organisations used the ITIL methodology for their managing their IT projects.
PMBOK is the most commonly used project management methodology and is an internationally recognised standard (IEEE, ANSI). (www.12manage.com)The same was proven even for the IT projects in UAE when the survey showed that 28 organisations used this methodology.
PRINCE2 is a de facto standard used extensively by the UK Government and is widely recognised and used in the private sector, both in the UK and internationally. (www.prince2.com) Just 4 organisations claimed that they used PRINCE2 and 3 out of these 4 organisations were UK-based firms.
When asked what affected their IT projects the most, 9 said that it was the misalignment of the IT strategy with the business strategies, 22 blamed it on the poor integration of the PMO/PM with the IT project teams and the rest held the IT project governance responsible for not being able to integrate well with the overall corporate governance.
6 of the organisations did not have an IT PMO in place to oversee and provide direction to IT activities, 25 stated that they had an IT PMO in place to some extent but it was pretty much informal and 17 said that they had a dedicated and a formal IT PMO in place.
Stakeholder involvement :
When the involvement of project sponsors was questioned, 9 said that they were poorly involved, 26 replied back saying that they were fairly involved and the remaining 13 said that they were involved to the core.
Upon asking the same thing in the case of end-users, 18 said that they were poorly involved, 20 replied back saying that they were fairly involved and the remaining 10 said that they were highly involved.
Involvement of service beneficiaries was poor for 16 organisations, fair for 23 and high for the remaining 9.
As far as involvement of external organisations was concerned, it was high for 36 organisations, fair for 7 and poor for 5. Most of the respondents claimed that consultants, contractors and sub-contractors were involved in most of the projects due to which the involvement of external organisations was quite high.
Project management maturity model :
Every organisation falls under a certain maturity level with respect to its project management. Just 4 respondents said that their organisations operated without a structured IT plan, 9 stated that their IT departments could perform similar work on a repeated basis due to key staff members and their expertise, 11 declared that their IT processes are constant and well defined with quantifiable value of the process attributable to cost and schedule estimates, 8 said that their IT department could predict trends and establish quantitative boundaries for quality control and that the conduct of comparative analysis was common and 4 showed pride in stating that IT plans and processes were optimised through incremental improvements and that innovation differentiated the organisation from others. 12 said that they were not sure about their organisation's project management maturity level.
Project management methodology :
The survey inquired about rating the various processes of project management used in organisations. For risk management, 38 said that it was poor, 5 said it was fair, 3 stated it was average, 1 said it was good and 1 claimed it to be excellent.
Coming onto integration management, 10 said that it was poor, 13 stated that it was fair, 15 claimed it to be average, 8 said that it was good and just 2 claimed it to be excellent.
17 said that time management was poor in projects, 14 stated it to be fair, 11 claimed it to be average, 5 said that it was good and just 1 stated that it was excellent.
Scope management was excellent for 2, good for 16, average for 15, fair for 9 and poor for 6.
Talking about cost management, 22 said that it was poor, 13 stated that it was fair, 6 claimed it to be average, 6 said that it was good and just 1 stated that it was excellent.
17 said that human resource management was poor in their IT projects, 13 stated that it was fair, 10 said that it was average, 4 said that it was good and 4 claimed it to be excellent.
The survey showed that communication management seemed to be better off as compared to the other processes of project management. 8 said that it was excellent, 22 claimed it to be good, 7 stated that it was average, 9 said that it was fair and just 2 claimed it to be poor.
The responses were good even for quality management which is a very significant process in project management. 4 claimed it to be excellent, 18 claimed it to be good, 10 said that it was average, 7 said that it was fair and 9 said that it was poor.
Almost all of the respondents came with a "yes" when they were asked if an improved project management process could help enhance productivity of their organisation. 44 opted for a "yes" and 4 went in for a "no".
When asked usually who was the liaison between the project team and the project stakeholders in their organisations, 9 said that it was a member of the executive team, 3 said that it was the functional manager, 28 said that it was the project manager and 8 said that it was a member of the project team.
16 respondents claimed that the provision of status and progress reports given to the stakeholders by the project managers during the project life cycle was frequent, 17 claimed it to be somewhat frequent, 13 said that it was carried out only when one of the stakeholders requested for this information and just 2 said that there was no communication at all with the stakeholders until project completion.
On the question on knowledge management, 28 replied back stating that project managers in their organisations never recorded the lessons learned and other important information in organisations' PM knowledge base, 4 said that it happened sometimes and 16 claimed that it happened all the time.
The respondents were asked to identify the most important area that could be improved in how their organisations managed projects. 8 opted for risk management, 4 went in for integration management, 18 zeroed in on time management, just 1 opted for scope management, 14 went in for cost management, and 1 each for human resource management, communication management and quality management.
When asked what were the project management practices they felt were good practices within their organisations, 13 opted for communication management, 14 went in for quality management, 8 for human resource management, 1 for cost management, 6 for scope management, 2 for time management,1 for integration management and 3 for risk management.
KEY FINDINGS AT A GLANCE
The most significant findings are the organisations' distinct approaches in managing IT projects on the following grounds :
The governance of IT projects
The involvement of stakeholders in IT projects
The maturity model of IT project management in different organisations
The project management methodologies used in IT projects
The governance of IT projects
Failure of most IT projects to get delivered on time
Poor track record of IT projects in meeting budget goals
High probability of failure of IT projects
Range of factors responsible for holding back a project
Value added to IT projects through project management
Project management highly valuable to organisations
PMBOK & ITIL most widely used project governance methodologies
Poor integration management affects IT projects
Informal PMOs in most organisations
The involvement of stakeholders in IT projects
High involvement of external organisations
The maturity model of IT project management in different organisations
Most organisations in repeatable and defined stages
The project management methodologies used in IT projects
Risk management, cost management, human resource management and time management poorest processes in handling IT projects
Improved project management important to boost up productivity of organisation
Project manager usually the coordinator between the project team and project stakeholders in most organisations
Status and progress reports provided to stakeholders by project manager during project life cycle in most organisations
Lack of knowledge management in most organisations
Improved cost management and time management could help the most in achieving efficient IT project management
Scope management and quality management usually good in most IT projects
Each of the key findings is presented in detail on the following pages.
Respondents were asked," What percentage of IT projects is completed on time in your organisation?". 29% of respondents indicated that less than 25% of projects were completed within the allotted time. 42% said that 25-50% of projects were completed within time. It can be concluded that time plays a pivotal role in the successful completion of a project.
Project time management is often cited as the main source of conflict on projects. Most information technology projects exceed time estimates. (Schwalbe, 2007) This survey also depicts the fact that most information technology projects are delayed. Just 12% of the respondents stated that they finished more than 75% of their projects within time. This goes on to prove that most organisations have tough times controlling projects with respect to time.
According to the survey, about 38% believed that less than 25% of the projects were completed within the set budget. Precisely one-third of the organisations could complete 25-50% of their IT projects without going over budget.
Project cost management is a traditionally weak area of information technology projects. Most of the information technology projects go on to spend extra and hence undergo huge losses. (Schwalbe, 2007) The survey also goes on to show that only for 10% of the organisations more than 75% of the projects got over successfully within their allotted budgets. About 25% of the respondents also stated that most of their projects had to undergo huge losses due to poor time management.
25% of the respondents replied back stating that in their organisations, 50% to 75% projects failed. But there no one stating that his organisation had a project failure rate of more than 75%.
75% of all large systems are "operating failures" that either do not function as intended or simply are not used at all. (Gibbs, 1994) As per the survey, the majority of the organisations faced 25% to 50% of failed projects. The respondents also stated that once the decision has been made to terminate a project, it takes far too long to really shut it down and that is what hurts organisations the most.
Most of these projects are eventually terminated or significantly redirected, however anecdotal data suggests that they are allowed to continue for far too long before action is taken. (Keil, Mixon, Sarinen & Tuunainen , 1995). The responden To export a reference to this article please select a referencing stye below:
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