The Hands-On Project Office

Guaranteeing ROI and On-Time Delivery

Richard M. Kesner

• Publisher: Auerbach Publications
• Year: 2003
• ISBN:
  9781135492533
• Edition: 1
• Topic: Business
• Subtopic: Project Management
• Index: Business

Economic pressures have forced IT executives to demonstrate the immediate and calculable ROI of new technology deployments. Unfortunately, existing IT service delivery often drifts without serious thought as to how process improvements could lead to higher performance and customer satisfaction. This volume offers processes, techniques, and tools that IT managers can use to improve the delivery of IT products and services. This compendium details simple frameworks, practical tools, and proven best practices for successful IT project management. By explaining how to streamline the functions that capture and report information about IT delivery, the author clarifies roles, responsibilities, customer expectations, and performance measures, resulting in improved service and efficiency. Emphasizing the establishment of processes that result in repeatable success, the book provides quickly implementable solutions for IT personnel faced with the daily management of large, complex systems.

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THE THREE PILLARS OF IT DELIVERY — PROBLEM RESOLUTION, SERVICE REQUESTS, AND PROJECTS

INTRODUCTION

Although some information technology organizations operate as separate business entities, running on their own profit-and-loss statements, and although a small percentage of companies have outsourced their information technology (IT) operations to third-party service providers, the vast majority of today’s enterprises maintain their own, internal information technology shops. In a world where IT plays an enabling role in almost every aspect of business activity, it should come as no surprise that both the investments and the expectations for the positive impact of information services within these enterprises are on the rise. For IT organizations, the challenge, as always, is how to satisfy the customer, given real-world resource constraints, the actual limitations of available information technologies, and most importantly, the business process and organizational barriers to change and innovation posed by the enterprise itself.

For the IT organization, the true measure of success is easily stated: the consistent and economical delivery of day-to-day services and project work. But how is this to be achieved? The purpose of this chapter is to provide a starting point for the discovery and maturation of an IT organization that excels at delivery. To begin, the author frames a practical model for depicting the so-called internal economy of the IT organization. The chapter then proceeds through a systematic consideration of how an information technology team should define, manage, and measure its deliverables in terms that are meaningful to the enterprise. Throughout, the approach focuses as much on a rigorous application of effective communication and shaping customer expectations as it does on the actual delivery of positive results. In the end, customer satisfaction may be realized, at least in part, through the use of the practices detailed in the text, combined with the associated and necessary internal and external partnering to deliver on time and within budget. A more detailed exploration of these methods and tools are found in subsequent chapters of this book.

THE BUSINESS CONTEXT

Today, every type of enterprise requires some level of information technology enablement. Indeed, one would be hard pressed to identify a corporate board or a chief executive who does not appreciate this need. For its part, the IT vendor community builds on this growing appreciation for the role of IT by overselling the value of investing while understating the total cost of ownership and the difficulties in bringing enabling technologies to bear. In truth, successfully integrating IT into business processes is a complicated, resource-intensive activity, requiring expert technicians working hand-in-hand with the business owners of those processes. Unfortunately, most enterprise business leaders do not want direct involvement in IT service or project delivery, and most information services professionals are not business process experts. Thus, from the outset, IT undertakings tend to be misaligned. Too much is promised; too much is assumed; and too much is left unsaid. These circumstances inevitably lead to misunderstandings, to scrap and rework, to poor results, and, hence, ultimately to unmet customer expectations.

In addressing these issues, it should be clear to the reader that the capacity of the underlying technologies is not the major problem. Most enterprises simply lack a comprehensive process that ensures the synchronization of IT service and project investments with overall business planning and delivery. Indeed, many enterprises fail to clarify and prioritize their information technology investments based on a hierarchy of business needs and values. Some enterprises do not insist that their IT projects have a line-of-business sponsor who takes responsibility for a project’s outcome and who ensures sufficient line-of-business involvement in project delivery. Few, if any, are willing to commit to the internal changes within their own business processes, even though it is only through these transformations that they will realize the return on investment (ROI) on their IT investments. To address these shortcomings, each and every enterprise should embrace a process in which the business side of the house drives IT investment, in which both business and IT management holistically view and oversee IT project deliverables and service delivery standards, and in which ownership and responsibility for IT projects and services are jointly shared by the business and the IT leaderships.

For their part, IT organizations must adopt practices that focus on listening to the voice of the customer, confirming customer requirements, holding IT delivery teams accountable for their commitments, and improving overall communication within IT and between IT and its business partners. Furthermore, IT leaders must concern themselves with measuring and reporting on both the process of delivery and the team’s actual deliverables. To these ends, it is essential that the IT organization clearly and explicitly define and manage projects and services so that both the sponsors and customers external to IT and the IT team itself are clear about what is to be done; by whom; when; at what cost; and how the ultimate measures of successful delivery are defined, understood, and employed by all stakeholders. Embracing these practices may run contrary to corporate culture, but they are nevertheless essential for the continuous improvement of the IT organization and for achieving consistency in serving its customers.

As a starting point, the author offers a simple model of the internal economy for information technology services that in turn drives IT’s allocation of resources between service delivery and project work. For the IT executive who must manage the confluence of activities, the discussion boils down to how best to address the most impactful information technology needs of the enterprise within the constraints of the IT team’s available resources. This internal economy model distills all of the complexity around resource allocations, so that management may more easily consider the larger issues of priorities and alignment with the business. This model also serves as the foundation for a more detailed consideration of two complementary IT business processes: service delivery management (Chapter 4) and project commitment management (Chapter 5). For the moment, let us delve into these activities in a little more detail. The author will then briefly introduce a series of high-level models for the more effective synchronization, communication, and oversight of IT service and project commitments, including the use of measurement and reporting tools. This précis will lay the groundwork for the rationale in creating a project management office (PMO), which will follow in Chapter 2.

THE INTERNAL ECONOMY FOR INVESTING IN IT SERVICES AND PROJECTS

All organizations are resource constrained. Therefore, their leaders must choose where best to invest these limited resources. With the growing use of information technologies across the enterprise, IT’s share of the pie may be increasing. Nevertheless, this too has its limits, requiring planning and prioritization in line with the needs of the greater enterprise. To effectively and efficiently manage IT resources, one must understand the full scope of the demands driving the prioritization of these IT investments.

At the most fundamental level, organizations invest in technology in compliance with mandated legal and accounting requirements, such as those set forth by federal and state taxation authorities, government legislation, regulatory statutes, and the like. At the next level, an enterprise expends resources to maintain its existing base of information technology assets, including hardware and software maintenance; system licenses and upgrades; security services; and desktop, storage, and printer expansions and replacements. These investments are meant to “keep the lights on” and the business going, and therefore are not discretionary. Neither are these costs stagnant. They go up with inflation and as new workers are added or as the network and related IT infrastructures grow alongside the enterprise. Furthermore, as new IT services are introduced, they become, over time, part of the enterprise’s embedded base of IT, expanding the nondiscretionary spending on technology.

Because none of these information technology products and services runs on its own or functions flawlessly, the IT organization must also provide significant and costly end-user, operations, and production support and troubleshooting. Similarly, because neither the requirements of the IT customer nor the evolution of information technology products themselves is static, there is a constant need to enhance existing IT products and services and to invest strategically in new IT capabilities. Thus, day-to-day delivery must balance ongoing services — typically running twenty-four hours a day, seven days a week (24/7) — with a wide range of service and system enhancements and new project work. Often, IT project delivery resources overlap with those focused on service delivery for the simple reason that the development team must understand the current state of the enterprise’s business requirements and IT capabilities if it is to deliver requested improvements. Furthermore, it is a good practice to ensure that those maintaining an IT service have a hand in its creation or, at the very least, thoroughly understand its IT underpinnings. Thus, a balanced IT organization requires a work force dedicated to 24/7 service delivery and ongoing infrastructure maintenance, overlapping a core group focused on technological innovation, development, and systems migrations and integrations. In smaller IT shops, these teams will comprise the same people; in larger organizations, these teams may coexist as separate entities and may even compete against one another for scarce resources.

Taken together, these various layers of IT investment establish the boundaries of the IT organization’s internal economy or what I like to refer to as the total cost of IT ownership. My model groups information technology expenditures into two large buckets: nondiscretionary costs that support existing IT investments and discretionary costs that fund new initiatives, including major system enhancements and new IT projects. Often, IT organizations will establish service level agreements (SLAs) to codify the annualized terms, conditions, and resource allocations associated with these nondiscretionary services. (See Chapter 4 for a detailed discussion of this process.) By contrast, discretionary costs may be treated on a discrete one-time basis and are typically governed by a project plan, detailing the time, people, and financial resources associated with delivery. (See Chapter 5 for a structured management approach to these matters.)

Note that the model depicted in Exhibit 1 comprehends all of the enterprise’s information technology expenditures, including internal labor (IT staff) and external vendor, consulting, and contractor costs. Furthermore, some organizations wisely set aside a reserve each year in anticipation of related but unexpected costs, such as project overruns, emerging technology investments, and IT organization responses to changes in the enterprise’s business plans. This IT investment reserve may serve as a contingency fund for both discretionary and nondiscretionary cost overruns, as well as unplanned initiatives. Driven by the number of users and the extent of services, nondiscretionary costs will typically consume at least 60 percent of the annual IT budget and, if not carefully managed, may preclude the opportunity for more strategic IT (project-based) investments. Put another way, the total sum devoted to IT expenditure by the enterprise is rarely elastic. If nondiscretionary costs run out of control, there will be little left for project work. If the business’ leadership envisions major new IT investments, these may only come at the expense (if possible) of existing IT services or through enlarging the overall IT allocation.* See Exhibit 1.**

Not surprisingly, the enterprise’s leaders usually want it both ways: namely, they expect the IT organization to keep the total cost of its operations steady while taking on new initiatives. For this reason, IT leaders must manage their commitments with great care through a rigorous process of project prioritization, customer expectation management, and resource alignment. To succeed in this endeavor, the information technology organization must keep it simple and keep it collaborative. More specifically, the organization should employ an investment-funding model along the lines mentioned above. It should separate and manage recurring (nondiscretionary) activity through SLAs.* Similarly, it should manage projects through a separate but connected commitment synchronization process.**

Exhibit 1 The Internal Economy of IT Product and Service Delivery

Throughout these labors, IT management should employ metrics that measure value to the business and not merely the activity of IT personnel. Last but not least, although IT management should take ownership of the actual technology solutions, it must also ensure that the proper business sponsors, typically line-of-business executive management, take ownership of and responsibility for project delivery and any associated business process changes in partnership with IT counterparts. The remaining sections of this chapter will consider in broad outline the areas of service and project delivery management.

THE THREE PILLARS OF IT DELIVERY

Whatever your organization’s existing portfolio of information technology–enabled products and services, your customers view these like a utility. Their expectation is that products and services are always available, stable, reliable, and, of course, affordable. Once established, these products and services become part of the fabric of enterprise operations and only merit notice when they fail or when they cease to meet the user’s needs. Thus, IT team delivery revolves around fixing, enhancing, and adding to services, with the existing state of information technology products and services taken as a given. Of course, the IT organization knows better. Keeping current services up and running on a 24/7 basis is no mean task. On the other hand, the perceived value and contribution of an IT team rests largely on the team’s ability to address the notion of IT as a utility, even as it struggles to improve, expand, and enhance services. Though seen differently from a technical and management point of view, all of this effort falls under the rubric of IT team delivery.

In the simplest of terms, most information technology organizations provide services in any one of three logical categories: problem resolution, service requests, and projects. First, IT solves customer problems in support of existing products and services. This type of service usually involves a help desk or call center, hardware and software support personnel, and training and documentation services. Problem resolution aims to address the specific IT product and service issues on behalf of the end user as quickly and as painlessly as possible. Second, IT responds to service requests that call either for the extension of existing products and services to a new employee or for the modest expansion and enhancement of an established product or service to existing employees. Here, too, a help desk or call center is often the intake mechanism for service request work, typically complemented by dedicated support and maintenance teams.

Neither problem resolution nor service request efforts individually entail large capital outlays, major changes in platform technologies, or, in most instances, serious commitments of IT personnel. They either fix or build upon what is already there. The customer’s expectation is that delivery will be immediate or nearly so. Together, problem resolution and service request delivery, along with ongoing operational costs, constitute the majority of nondiscretionary IT spending. Because this may amount to anywhere from 50 percent to 70 percent of the total IT budget, and because it is typically the first and primary way enterprise and external customers are touched by the IT organization, these services remain job one for most IT shops.

The third category of IT team activity — projects — encompasses the significant expansion of existing products and services or the introduction of new ones. Unlike the aforementioned categories, project work typically requires major capital outlays, a project management infrastructure, the involvement of external technology partner providers, and a long (as opposed to a short or immediate) delivery timeframe. Projects tend to push IT organizations onto the bleeding edge of technology adaptation, but these may be viewed by the team as the most satisfying assignments from a purely technical perspective. Unfortunately, projects also typically encompass both high (but unarticulated) business and technical risks and unbridled expectations among the corporate sponsors of these undertakings. Thus, these discretionary expenditures offer their own set of challenges to IT management and therefore demand a parallel, but somewhat different, approach to disciplined delivery.

As a mental exercise, the reader may wish to consider the unique characteristics of IT problem resolution, service request, and project delivery management as these pertain to the reader’s shop and business setting. For example, how does the unique context of your own internal IT economy impact your ability to delivery in these three areas of service? Exhibit 2 shows a matrix that may assist in this effort.

This matrix makes clear that the so-called three-pillars of IT service delivery call upon different types of team skills and resources. In fact, these three pillars often should be treated within IT as three distinct lines of business, procedurally and perhaps organizationally. More often than not, problem resolution services cover familiar territory, involving face-toface interactions among those who use and those who maintain standard, established IT services. Typically, the problems in question impact the enterprise’s ability to service external customers or to execute internal business processes. Solutions will be documented through the help desk and will be familiar to those in IT answering the calls. At times, a problem may escalate into the need to change a major system or infrastructure component, as when the hacking of a server triggers a review of enterprise network security procedures. But more often than not, a quick fix, accompanied by some end-user education, meets the need.

Exhibit 2 IT Services Delivery Matrix

By contrast, a service request may range widely, from adding a new end user to the network to upgrading or patching a major enterprise software application. To address a service request IT personnel may require detailed knowledge of an application suite or a hardware or software environment. In smaller IT shops, the same group may address problem resolutions and service requests, where tier one tasks are the domain of the call center and help desk and where tier two tasks are ...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Dedication
• Web Site Table of Contents
• Preface
• Introduction
• 1 The Three Pillars of IT Delivery — Problem Resolution, Service Requests, and Projects
• 2 The Project Management Office Business Model
• 3 Alignment and Planning — Doing the Right Things
• 4 Modeling and Managing Service Delivery
• 5 Project Delivery and the Project Management Life Cycle
• 6 Collecting and Capturing Business Requirements for IT Projects
• 7 Managing Lessons Learned — the Reuse and Repurposing of IT Organizational Knowledge: A Case Study
• 8 Architecting Success — the Role of Sensible IT Architecture Management in Successful Service Delivery: A Case Study
• 9 Conclusions — the ROI of the PMO
• Appendix A: IT Project Justification Template
• Appendix B: IT Annual Plan Template
• Appendix C: PMO Value Calculation — Model and Template
• Appendix D: Service Level Agreement Template
• Appendix E: Project Management Life-Cycle Framework
• Appendix F: Project Leadership Questionnaire for Change Management Projects
• Appendix G: IT Project Risk Management Matrix
• Appendix H: Commitment Document Template
• Appendix I: Master Project Schedule Template
• Appendix J: Glossary
• Appendix K: Selected Readings