Wednesday, November 14, 2007

How to better manage fixed bid IT Projects?? -Part 1

"Project Management" always sparks an interest in my usually tranquil mind. Well, project management as a job was more of a serendipitous choice for me. Glimpse of my managerial skills was first spotted by my mom who used to compare me with my dad when it came to people management. She always used to think that I can manage people pretty well.

Now, let me first define the word "Project Management". It is all about managing the resources associated with the project in terms of scope, cost, quality & time. Now let's see why Project Management is so important??

“History has shown that almost half of IT projects fail & over 80% run late or over budget.” – Source “PMI”

So, all my IT brethren wake up & understand that PM is not an easy job. It requires a lot quality managerial time & acumen. In my current organization Satyam I come across so many fixed bid projects failing either in terms of running late or going over budget.

Fixed bid projects have their own challenges as the end date is fixed and we work backwards to organize the various modules/ phases in the project. Moreover having a fixed budget the profitability factor is directly related to the time spent or resources working on it.

So, where is the problem?? Let us analyse it.

  • Scenario 1 - How many times have you realised that the client is asking for more functionalities that are not originally part of the scope and eventually either extra resources / extra hours being spent on the project? - Clear problem of Scope not being defined & agreed with the client

  • Scenario 2 - Project has started & resources have started working. But suddenly we realise that the team does not have the necessary skills / resources to handle the technology involved. - Indication of lack of resource planning & mix which is a result of poor Document of Understanding & backup or training plan.

  • Scenario 3 - The project team has the right mix of resources with high skill levels & credibility, however the project is proceeding at an alarmingly slow rate or with lots of rework. - Problem of lack of motivation / Internal politics within the team.

  • Scenario 4 - The project team has the right mix of resources with high skill levels & credibility, however the work is delayed due to unidentified risks - Please do proper risk management.

  • Scenario 5 - Business Metrics used for tracking the progress not being agreed to by the client as indication of the successful progress of the project. - Business metrics fall into several categories: Scope and deliverables, timeliness, budget and quality. For many organizations, developing solid business metrics often means changing the nature of the relationship with the client. So, please identify these metrics at the planning phase itself to avoid discrepancies.

  • Scenario 6 - The project cost is skyrocketting due to more number of high cost resources working on the project. - This is clear case of lack of good recruitment strategy and team organization planned at the beginning of the project which creates a costly resource mix.

So, please ensure that these scenarios are minimised (if need be create a check list) to the extent possible to ensure a decent success rate for the projects you handle. Please feel free to add any other scenarios you might come across.

Until next... Ciao......