Good Planning Is Halfway to Success

Feature Article | February 4, 2004 by admin

There is a substantial need for professional consultancy when it comes to project management. If you have a quick look at the website of the online bookseller Amazon, you will find numerous specialist books on the subject by searching under the term “project management”. Titles such as “Project Management for Dummies”, “Efficient Project Management” and “Surviving projects” are, on the one hand, evidence of the great need for information but imply on the other that projects can become a “question of survival”. But what does project management actually entail? According to DIN 69901, project management embraces “all the management tasks, organization, techniques and means for handling projects.” According to Dr. Georg Angermeier, a project management consultant and member of the DIN committee for project management, this “definition, although somewhat unwieldy, does make it clear that project management can encompass the entire range of activities from operative methods to strategic management tasks.” The “character” that project management actually takes depends, according to Dr. Georg Angermeier, on whether a project manager, as in the case of straightforward project organization, has total professional and disciplinary responsibility for the members of the project team. Max Wideman, a leading expert in US project management, encapsulated the meaning of the term with the three words “Getting Things Done”. “Agreed results must be achieved by the specified deadline with the means provided”, explains Dr. Angermeier. For project management expert Petra Meier from business consultants DANNER & MEIER Software, “managing projects” means “leading and controlling” them.

Systematic planning minimizes risks

However, companies seem so far not to have properly implemented these guidelines. A study published by US business consultants Standish Group comes to the conclusion that, at the current time, over 33 percent of all IT projects are successfully completed. However, in an average of 43 percent of cases, the actual costs were higher than initially planned. Moreover, hardly any projects were completed on time. Compared with 2000, the percentage had increased from 63% to 82%. The experts from Standish estimated that the total spending on projects in the USA in 2002 was around USD 255 billion. However, this has to be seen in the light of the USD 55 billion lost as a result of additional costs or unsuccessful projects.
Is it therefore impossible to carry out IT projects in time and on budget? This almost seems to be the case, but it is possible to minimize project risks through systematic planning and by defining objectives in advance. “Realistic planning can only be achieved through a clearly defined project objective”, writes Regina Wolf of SAP Business Partner Sercon in a specialist article. If this is not done, the consequences can be disastrous, since “there is a high price to pay for lack of preparation when it comes to IT projects”. A study carried out by the deutsche Gesellschaft für Projektmanagement (GPM, German Association for Project Management) in conjunction with PA Consulting on the efficiency of projects within businesses confirms this view. According to this study, 38 percent of those surveyed stated that the most common causes of unsuccessful projects are unclear objectives and unclear requirements.
In terms of overall costs within companies, more than half of those surveyed spent more than 10 percent a year on projects, while the figure for project costs was more than 50 percent a year in 22 percent of those surveyed. The authors conclude from these figures that projects are becoming “increasingly important” as an organizational form, since, as a result of the dynamism of the market, more and more companies have to have a more flexible approach to organizing and controlling projects if they are to be able to respond to changes effectively. However, project management expert Petra Meier cites “lack of control” as one of the most common errors in ongoing projects. Current project status, she states, has to be continuously reassessed in order to be able to document and evaluate progress. “Companies should therefore make proper use of project management tools”, says Dr. Georg Angermeier and lists the three key points in his view:

  • The result must be described clearly and verifiably in the form of professional performance specifications.
  • A contract schedule must be in place which can be assessed as to its feasibility using a network plan.
  • Continual monitoring is required using simple planned/actual comparisons, trend analyses or a sophisticated earned value analysis, depending on the requirements of the particular case.

Between theory and practice

In practice, this “tool” is often not used properly, if at all. There is very often a lack of proper project management in IT projects, currently the “most common form of project” according to the GPM study and one where particular care is required. According to a survey by GEI Aachen carried out in 1997, only two percent of all IT projects were completed without any problems. There is an enormous range of reasons which could account for the potential failure of projects. “The first major error is that IT projects are a very particular type of project which is often not even perceived as a project”, explains Dr. Angermeier. The product of this shortcoming is a lack of project preparation and “a lack of or even absence of long-term project planning and control”, adds Petra Meier. Technical problems occur when introducing software packages because the new software package does not fit seamlessly into the existing IT landscape and existing business processes. The first step must always be to define and optimize the individual business processes. This provides a basis for determining the requirements in terms of the software to be used. When procuring a new software solution, small and midsize businesses in particular want a “miraculous cure-all”, comments Dr. Angermeier.
Once a business software package has eventually been installed after much delay and numerous modifications, it may be very difficult to transfer data from the legacy system and, in some cases, this may even be impossible. The project may also be out of control both in terms of time and cost. According to Meier, it is rare for the project status to be updated and compared with the available budget on the basis of the actual data. The scenario at the end of such “planning” is likely to be disastrous for everyone involved. In the worst case scenario, the project team is hopelessly divided, the individuals involved are demotivated and costs are (or have become) exorbitantly high.

Perfect project planning

Project management expert Petra Meier therefore recommends that with IT projects the technical requirements should be adapted to the particular situation in which the package is to be used, and not vice-versa. “The software should meet the criteria which are essential for a company to improve its operating activities in the long-term. Project managers should thus be selected according to their knowledge of the field”, states Meier. If a few other basis rules are adhered to when carrying out projects, the stress for all those involved is minimized. The basic rule is that the management team must issue a clear project definition, preferably in writing. A feasibility study should be carried out prior to any project. If this study produces a positive result, outline plans for the project should be drawn up first. The key aspects here are roughly defined objectives and a preliminary schedule and budget. In the case of IT projects involving the introduction of a new software package, careful evaluation is required prior to the start of the project as to whether and how the implementation of the new software package will affect existing systems directly or through interfaces. If these conditions are met, the next step is detailed planning and carrying out the project. Project progress is documented in a project manual. Finally, the project results must be transferred into ongoing operation.

Transparency in the war room

End-to-end transparency during the entire course of the project is vital. This can be achieved through a project room – what US project management guru Tom DeMarco calls a “war room” – in which all the information relevant to a project can be accessed by those involved or using project management software. “It must however be ensured that such a tool fits into the existing IT environment”, explains Angermeier. If small and midsize businesses or branches of large groups use an ERP system such as SAP R/3, it must be possible to exchange data between the two systems. With SAP PS (Project System), SAP offers a module integrated in SAP R/3 which supports the entire lifecycle of a project from the project idea, planning, budget allocation and implementation right through to analysis and billing. The link between a standard software package such as SAP Business One and a project management software package through a powerful interface is ideal for smaller businesses in particular. Such a system has been established by SAP Business Partner Maringo Computers. SMBs can save time, labor and thus money by using an automated data exchange system, e.g. when posting costs.
“But project management software can only help users who are already familiar with project management”, warns Dr. Angermeier. Anyone planning a project should also be clear that they are “by definition, always breaking new ground.” In principle, there can thus be no such thing as an error-free project “and, if that were the case, project management would be terribly boring”, concludes Angermeier.

Further information:

General information: www.gpm-ipma.de, www.ipma.ch, www.pmforum.org, www.pmi.org (Project Management Institute), www.pmi-muc.org
Studies: www.standishgroup.com,
SAP AG: www.sap.com

Dr. Andreas Schaffry

Dr. Andreas Schaffry

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