Dr. Angermeier, let’s begin by asking ‘why?’. What is the actual purpose of project management?
Interestingly enough, a topic as dry as project management is quite likely to stir up fierce emotions in people, with some completely rejecting it and branding it ‘devil’s work’ and others hailing it as gospel. Project management consists of quite a banal set of tools. One of the most well known of these is network planning technology which does little more than quantify the time factor, something which we cannot determine intuitively. And from this we can derive the purpose of project management – it provides an objective basis for planning projects and highlights how a project can realistically be brought to a successful conclusion. It is also a key success factor in enabling companies to bring their products onto the market at exactly the right time – and here we need only think of cell phones or laptops. This cannot be managed without professional deadline, workflow and resource management. And that is exactly the point of project management.
What are the most common mistakes made when introducing new software?
First of all it depends on which software is to be introduced. The company-wide introduction of software which maps daily business processes is a special type of project which is often not even considered to be a project. And this is the first big mistake. The reason for introducing new software is to improve a company’s competitiveness and this can never be achieved by software alone, but only by optimizing business processes. That said, new software is often required to achieve this goal. The first step for a company must always be to define and optimize its own business processes. This then provides a basis for determining the requirements that the software must satisfy. The second mistake is believing that buying software licenses also means buying expertise. Consider the analogy with photography – having an expensive camera does not necessarily mean that you will be able to take good photographs. Similarly, introducing new software can only be successful if the primary organizational development project is tackled head-on. The third biggest mistake is buying megatools, as companies generally end up using just a fraction of their actual capabilities. And this comes about, of course, as a result of the first two mistakes. Salespeople can quite quickly talk you into something if you are unsure of what you actually need.
Do shortcomings in project planning and implementation generally tend to be the rule or the exception?
This questions requires a bit more of a general answer. The Project Management Maturity Model (PMMM) was developed by the Software Engineering Institute at Carnegie Mellon University in 1993 from the Capability Maturity Model for software development. The PMMM describes five levels of project organization maturity. The first level is the undocumented, non-reproducible approach to tackling projects, almost based on gut instinct. The fifth level is a fully implemented, company-wide standard for projects which is constantly checked and optimized. According to my personal estimations, the average project management maturity level in German companies stands at 1.5 at most, while the best companies known to me are currently in the process of trying to reach the fifth level. At the same time, we must be aware that standards in quality management already extend to absolutely fault-free process chains with concepts such as Six Sigma (editorial note: Six Sigma is a general quality management concept). Project management still has a bit further to go in order to reach this stage. This ties in with my experience that basic knowledge is most in demand. With “Projekt Magazin”, we therefore concentrate on providing basic information in practical-sized portions that can be implemented immediately.
In a way, new IT projects can be seen as a departure into an unknown world. Are SMBs aware of the risks involved in such an undertaking and do they take the necessary precautions in case worst case scenarios occur?
The success of SMBs in particular is based to a large extent on tackling projects which they intuitively believe will be successful and which would have no chance in a large firm. But there are other requirements to take into account when introducing new software. This software should be treated like a production tool and must be absolutely reliable so that corporate risks can be managed effectively. In my view, installing an IT solution is just as important as constructing a new production facility or moving to new business premises. The framework conditions have to be checked very carefully to see whether the project will pay off and you have to spell out your expectations of the investment. Risk management therefore sets about minimizing your risks from the outset. When software is deployed enterprise-wide, its success is crucial to the success of the business. To really answer your question, an IT project must not represent a departure into an unknown world. Instead you must know exactly where the journey is headed. Many SMBs are not aware of this dimension and believe that a solution can be found no matter what happens. But more likely than not, this solution will not be the most cost-effective.
What are the main cost drivers in (IT) projects?
The main cost drivers are the mistakes mentioned above. If you don’t know exactly what you want, you’ll end up buying whatever marketing strategists suggest to you. The main reason that project overshoots are accepted as inevitable is quite simply down to insufficient project planning and monitoring. In my opinion this is just as much the customer’s fault as the contractor’s. Customers tend to view project planning as a costly process with no end result. They look at the lowest price offered for the license or programming and forget to formulate their specifications exactly. And they get a rude awakening when they discover additional demands incur additional costs. However, professional project planning ensures the outcome, time-scale and costs are all clear from the very beginning. Overshoots can be kept to within five to ten percent of the original specification with professional project management. And compared with excesses of 100 percent and more, this is certainly a great benefit.
What importance is placed on project management (PM) software when planning and implementing a project?
If you can’t manage a project with pencil and paper, you will also be completely helpless when it comes to working with easy-to-use PM software. PM tools provide excellent support in all labor-intensive areas as long as you already have experience of project management. Top of the list is network planning technology which provides an objective basis for determining the time-scale of a project. In this respect, cutting-edge PM tools can prove to be beneficial for SMBs managing small projects. For example, companies are attaching increasing importance to correct forecasting of delivery deadlines. A company which keeps its bottleneck resources under control using project management software has a considerable competitive advantage. The important thing to remember when deciding on a PM tool is that it fits into the existing IT environment. If, for example, you are using an ERP system such as SAP, you should ensure that data can be exchanged between the two systems.
Dr. Angermeier, thank you very much for participating in this interview.