Does Formal ProjectManagement Have Value?In 1986 Alfred Spector, <strong>for</strong>mer president of TransarcCorporation, co-authored a paper comparing bridgebuilding to software development. The premise was thatbridges are normally built on time, on budget, <strong>and</strong> do notfall down. <strong>Software</strong>, on the other h<strong>and</strong>, never comes inon time or on budget, <strong>and</strong> it always breaks down.One of the reasons bridges are built on time, on budget,<strong>and</strong> structurally sound is the extreme detail of design.The design is frozen, <strong>and</strong> the contractor has littleflexibility in changing the specs. However, in today’sdynamic business environment, a frozen design doesnot accommodate rapid changes in business practices.A more flexible model is required.Another difference is that when a bridge collapses, theevent is thoroughly investigated, <strong>and</strong> a report is writtenon the cause of the failure. In software development,until recently, failures were covered up, ignoredor rationalized.Project management, used successfully <strong>for</strong> decades inthe construction industry, is still an evolving disciplinein in<strong>for</strong>mation technology.Eighty CIOs in workshop sessions at both <strong>CHAOS</strong>University ® ’98 <strong>and</strong> European <strong>CHAOS</strong> ’98 discussedthe value of <strong>for</strong>mal project management disciplines<strong>and</strong> the merits of adopting <strong>for</strong>mal project managementprocesses to large scale software development. Inother words, why bother?<strong>CHAOS</strong> participants said that a <strong>for</strong>mal projectmanagement process is the only way large-scalesoftware development can be structured <strong>for</strong> success.All-encompassing methodologies address the typicalarray of development problems such as inadequateplanning, inadequate user input, unstable requirements,evolving technology, loose specifications <strong>and</strong>unrealistic cost estimates.Like scaffolding, project management supports definedroles <strong>and</strong> responsibilities to achieve project objectives.The project framework is procedural, rigorous,st<strong>and</strong>ardized <strong>and</strong> documented. St<strong>and</strong>ards arerepeatable. Monitoring, reporting <strong>and</strong> change orderprocedures are in place. Resources can be allocated<strong>for</strong> maximum effect.Formal project management provides a realistic pictureof the project <strong>and</strong> the resources committed to it.Certain steps <strong>and</strong> procedures are reproducible <strong>and</strong>reusable; thus minimizing the tendency to reinvent thewheel, <strong>and</strong> maximizing project-wide consistency.Lessons learned can be incorporated into activeprojects. The process encourages go/no go decisioncheck points, so a project team can proceed with ahigher confidence level, or steps can be halted oraltered to fit changing requirements. This abilityto adjust in real time reduces project risk <strong>and</strong>enhances skills.Predictability is a big benefit, CIOs said. Predictabilityreduces uncertainty, making use of resources moreefficient. A project manager has the ability to predict<strong>and</strong> manage human <strong>and</strong> capital resource issues; <strong>and</strong>can also direct user expectations.Formal project management adds value by mitigatingrisk in almost any development ef<strong>for</strong>t. But projectmanagement is valuable in other circumstances, too,such as in complex situations, when certainty isneeded, or when projects require an extended time tocomplete. Formal project management processesdiminish the level of complexity <strong>and</strong> reduce thecorresponding program risk when structured <strong>and</strong>controlled implementations are planned. That reducedrisk includes this project, future projects <strong>and</strong>overall business.Project management is most valuable when planningnew projects or enlarging existing ones. However, notall projects warrant <strong>for</strong>mal project managementtechniques. Project management adds no value to small,simple projects. Emergency, time-critical projects thatrequire quick delivery bog down under the weight of<strong>for</strong>mal project management techniques. In very maturesituations, where sound processes already exist, <strong>for</strong>malproject management adds nothing, <strong>and</strong> projectmanagement probably should not be used wheninnovation is required, or when the overhead isgreater than the project value.THE STANDISH GROUP INTERNATIONAL, INC. 8COPYRIGHT ©1999
Project Estimating:Lucky or LousyYogi Berra once quipped, “Predictions are hard,especially about the future”. Countless times duringfocus groups, project group therapy sessions <strong>and</strong>failure post mortems, IT executives echoed, “We didour best estimate, we doubled it, added some more,<strong>and</strong> we still missed the mark”.Project <strong>and</strong> program estimating is nothingmore than predicting the futureoutcome of a project or program.It is difficult.In this regard, there are only two kinds of estimates:“Lucky” or “Lousy”. Frequently, different peoplemake these estimates at different times usingdifferent methods. Clearly a more st<strong>and</strong>ardestimating process could generate significantimprovements.One must be realistic; there isno such thing as a reliableestimate. Learning to workbetter with poor estimatesrather than developing betterestimating techniques iscrucial. Nevertheless, projectmanagers who recognize theirlimitations can use some<strong>for</strong>mal estimating tools <strong>and</strong>these tools can greatlyimprove their luck.Many tools offer acombination of statistical <strong>and</strong>judgment <strong>for</strong>ecasts. Thesetools combined with aniterative process developmentstyle enable a projectmanager to react correctly tothe changing programenvironment. Thus, theestimating process itself is iterative through thelife of the project. This will give little com<strong>for</strong>tto the financial officer trying to decide onfunding the project in the first place. It isimperative to know if there is a kill switch <strong>and</strong>how it gets pulled.COPYRIGHT ©19999THE STANDISH GROUP INTERNATIONAL, INC.