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1 Presentation to PMI GT ISLIG January 10, 2001 Hitesh Seth Senior Manager, Cap Gemini Ernst & Young Managing IT Delivery Risk.

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Presentation on theme: "1 Presentation to PMI GT ISLIG January 10, 2001 Hitesh Seth Senior Manager, Cap Gemini Ernst & Young Managing IT Delivery Risk."— Presentation transcript:

1 1 Presentation to PMI GT ISLIG January 10, 2001 Hitesh Seth Senior Manager, Cap Gemini Ernst & Young Managing IT Delivery Risk

2 - 2 - Objectives / TOC Background IT Disasters Common IT Delivery Risks Risk Management Leading Practices To Identify common risk areas and leading practices to overcome risks in IT implementation projects.

3 - 3 - Who is Cap Gemini Ernst & Young? A global Management Consulting and I.T. services firm combining the strengths of Cap Gemini with E&Y Consulting. A company with demonstrated success in outsourcing and joint venture business ventures with companies like Sprint, Farmland Industries, EDF, British Steel and PruessenElektra. With a head office in Paris, it employs more than 57,000 people worldwide, operating in 31 countries and reports global revenues of 7.7 billion euros.

4 - 4 - Who is New Horizons? A joint venture between Ontario Power Generation (itself a successor company to Ontario Hydro) and CGEY to provide full-range IT services to the North American energy marketplace. Immediately focused on continuing to provide IT services to OPG and related entities: Bruce Power, Retail Energy Hub. The North American energy sector (especially energy generation) represents a multi-billion dollar emerging market as a result of Energy deregulation.

5 - 5 - Scope Change Uncertainty Dealing with People Risk Factors Evolving Scenarios Quality Management Challenges of Project Management

6 - 6 - Software Project Statistics : Standish Group 1994 U.S. Application Development 250 Billion / Year 175,000 Projects 250 Billion / Year 175,000 Projects Project Statistics 31% - Cancelled 16% - On time / on Budget 53% - Over Budget / Schedule or under Scope 31% - Cancelled 16% - On time / on Budget 53% - Over Budget / Schedule or under Scope Issues 222% - Average Schedule Overrun 189% - Average Cost Overrun 39% - Average Scope Underrun 222% - Average Schedule Overrun 189% - Average Cost Overrun 39% - Average Scope Underrun

7 - 7 - Common IT Delivery Risks 1.Ineffective Sponsorship & Commitment 2.Loose Definition of Requirements. 3.Misunderstanding success. 4.Doing too much. 5.Technology Complexity 6.Not having the right skills. 7.Demanding business timing. Unrealistic deadlines. 8.Aggressive business change. 9. Pitiful project management.

8 Ineffective Sponsorship & Committment Also Disguised As… Changing sponsorship. Multiple business leaders / companies that do not agree. Key users are different from funder. Wrong Technology Leading Practices Steering Committee for Issue Resolution Demonstrating success to management Apply appropriate priorities Motivating staff

9 - 9 - Keep the sponsor and users actively involved in the entire project life cycle to increase the likelihood that:  The correct problems are addressed  The appropriate priorities are followed  The solution is affordable  The solution deals with the problems  The correct problems are addressed  The appropriate priorities are followed  The solution is affordable  The solution deals with the problems Engage clients:  Task forces  Prototype systems  Incremental implementation  Walkthroughs  Pilot sites  Status reviews  Task forces  Prototype systems  Incremental implementation  Walkthroughs  Pilot sites  Status reviews Sponsorship & Commitment - Risk Management

10 Loose Definition of Requirements Also Disguised As… “Let me describe it verbally…” “Show me a prototype, then I can provide details…” Leading Practices Define the scope & deliverables in a project charter. Model the process and define a process owner. Iterative definition and deployment.

11 Mis-understanding Success. Also Disguised As… Relying on users to know the complete business process. Business case is outdated, or not done. “Out of left field” requirements. Leading Practices Understand / update the business case. Model the process and define a process owner. Find the appropriate business approver.

12 Doing too much. Also Disguised As… It will take over a year to complete… We can correct small problems, after we implement. Leading Practices Deploy solutions iteratively to limit technology and business complexity. Assess size limitations on the project.

13 Schedules  Effort  Elapsed time  Effort  Elapsed time Technology  Interfaces to other systems  Interfaces to other technologies  Bomb-proofing requirements  Extent of functionality  Volume of transactions  Number of vendors  Interfaces to other systems  Interfaces to other technologies  Bomb-proofing requirements  Extent of functionality  Volume of transactions  Number of vendors Organization  Team size  Number of sites  Number of organization units  Team size  Number of sites  Number of organization units Doing Too Much: Size Assessment

14 Technology Complexity Also Disguised As… Multiple mixed e-business tools Unstable development environment High Performance, Reliability or Scalability Requirements Leading Practices Pilot solutions. Use technical experts. Leverage the knowledge of others. Limit the “newness” of the solution

15 Ensure that all pieces of the solution will fit together by the end of the project and improve communication of both the problem and the proposed solution with: Walkthroughs: Analysis Design Programming Testing Technical review group Documentation: Use Cases Prototypes Models Specifications Modular design: Hierarchical Structure Defined interfaces Logical data structure Reusable objects Top down architectures: Application Data Technology Technology Complexity: Define Development Approach

16 Not having the right skills. Also Disguised As… The team is working overtime and stressed. The project estimate was wrong. Leading Practices Find experts in each solution domain: infrastructure, new media, development, business area, etc. Procure experts externally, if not available internally. Triangulate estimates.

17 Team Location Experience of:  Project manager on similar projects  Team members working together  Team with the application  Project manager on similar projects  Team members working together  Team with the application Dedicated assignment of:  Project manager  User and technical staff  Project manager  User and technical staff Project team productivity will be impacted by: Acquiring the Right Skills: Staffing Considerations

18 Demanding business timing. Unrealistic deadlines. Also Disguised As… We will miss the market opportunity if we do not implement by… Leading Practices Manage expectations. Procure experts who have done it before. Consider the implementation approach. Deploy solutions iteratively to minimize technology and business change. Assess implementation readiness to articulate the downside risk.

19 The selected implementation strategy needs to be understood by all management and staff in terms of rationale, benefits, and consequences. Strategies can include: Quick and dirtyBig BangIncremental or phased Demanding business timing: Implementation Approach

20 Aggressive business change. Also Disguised As… We want to eliminate our paper billing system with a “wireless internet CRM system” Leading Practices Deploy solutions iteratively to minimize technology and business change. Implement Communications & Training programs. Pilot solutions and business processes. Prepare contingency plans.

21 Business Strategy Recognize that technology will impact the integration of people / organization, business process and business strategy. People TechnologyProcess Managing business change.

22 Pitiful project management Also Disguised As… Cost overrun, Schedule overrun, scope reduction,... Leading Practices Use PM best practices. Manage “up”. Focus on risk management.

23 System implementation / development methodology Scope control approach Issue resolution approach Quality management strategy Knowledge coordination approach Ability to plan, estimate, schedule, perform to overall plan, and the quality of the final system, will be directly related to use of: Project Management Risk Factors

24 Risk Management 1.Recognize the risks 2.Utilize risk management techniques  Optimize project structure  Plan and control project  Engage users  Perform technical reviews  Conduct risk abatement  Conduct external risk reviews

25 Sponsor Steering Committee Internal Audit Security Project Manager Project Administration Business Coordination Technical Coordination Enterprise IT Planning Enterprise Data Management Enterprise Data Management Operating Users User Administration System Development Data Management Technical Services Operations Services Production Services Project Functional Organization Quality Assurance

26 Limit innovations  Avoid “the bleeding edge”  Match technology literacy  Control rate of change  Avoid “the bleeding edge”  Match technology literacy  Control rate of change Constrain design options  Avoid the “perfect” solution  Recognize unknowns and futures  Avoid the “perfect” solution  Recognize unknowns and futures Limit project size /duration  Phase delivery  Implement 80% solutions  Phase delivery  Implement 80% solutions Establish training programs  Develop standards/guidelines  Deliver training  Provide support  Develop standards/guidelines  Deliver training  Provide support Reward Success Risk Management Utilize Risk Abatement Strategies


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