I'S'P' Presentation

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IT Risk Management Process, Product, People,
Value The argument for Versatilists Mike
Cook Ottawa October 18th 2006


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Agenda

• IT Risk Surveys
• Conventional Wisdom and Rational Wisdom
• Holistic Risk Management
• The argument for Versatilists

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IT Statistics

• According to 2004 Chaos Report
• In 2004 total project spending was 255 Billion
• 55 Billion of total project waste (38 B in lost
  dollar value and 17 B in cost overruns)
• 51 of all systems development projects are
  challenged (late, over budget and lack critical
  features)
• 15 of all system development projects fail
  (cancelled or never used)
• 2/3 of Projects will either fail or be cancelled
• 43 is the average cost overrun for all systems
  development projects
• 34 of all projects succeeded (on time, budget
  and with required features and functions)
• 65 of upgrade projects are late and over budget
  META Group
• 65 of problems are the result of patches
  Yankee Group
• The cost of the project failure can never be
  fully recovered
• The time invested in the project can never be
  recovered

• Project failures occur every day.
• Project failures cost taxpayers and stakeholders
  billions each year.

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Forresters assessment

• Forresters review of Canadian government
  business and IT executives identified the
  pendulum swing of project authority to Business
  leaders while accountability remains in the CIO
  group.
• Obviously not a viable governance model,
  Forrester argues the remedying solution is a
  strong Program Management Office that includes

• A project planning function that clearly
  establishes dollars, dates, deliverables, and
  resources.
• A project finance function that ties project
  progress to earned revenue or value.
• A risk management function that confirms that
  risk mitigation is in the project plan.
• A change management function that connects
  project change to project funding.
• A quality management function that ensures
  informed sign-off.

• Style of the PMO is equally important a style
  of actively consulting and influencing is
  preferred over the all too common Observe and
  Report style.

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Ontarios Special Task Force

• The Task Force recommendations highlighted the
  challenges of OPS large IIT projects
• Effective, persistent governance of large scale
  projects is lacking
• Project management is not a core capability of
  the OPS but it should be
• The OPS needs to take a portfolio management view
  of IIT investments
• Project Sponsors need to invest in up-front
  planning than they currently do
• The OPS needs a gating process for project
  approvals
• Project Sponsors should prepare more thoroughly
  for procurement and begin projects only when a
  business case has been developed
• Project leads need to be more dominant in RFP
  development than procurement officers
• Contracts should contain off-ramps
• Projects need to separate the Design
  procurement from the Implementation procurement

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Deloitte CIO Survey
16
Management of Change
8
Internal Staff Adequacy
7
Project Team
7
Training
6
Prioritization/Resource Allocation
PEOPLE 61
6
Top Management Support
5
Consultants
4
Ownership (of benefits and other)
2
Discipline
8
Program Management
4
Process Reengineering
PROCESS 15
2
Stage/Transition
1
Benefit Realization
4
Software Functionality
Application Portfolio Management
TECHNOLOGY 9
3
2
Enhancements/Upgrades
2
Data
KNOWLEDGE ASSETS 3
1
Reporting
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0
2
4
6
8
10
12
14
16
Total Mentions
Source Deloitte Consulting and Benchmarking
Partners 2001 (Based on a study of 62 companies
that have gone live with an ERP system)
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Conventional Wisdom?

• Since the Standish and KPMG reports of the 90s,
  surveys about causes of project failure have been
  remarkably consistent and (generally) focused on
  Process failure.
• But isnt process implementation only as good as
  the people doing the work?

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Rational Wisdom

• The IT cost base is 10-20 Technology Cost and
  80-90 Staff Cost.
• We generally agree that Technology is not the
  problem.
• Rational Wisdom suggest we should be looking at
  the human side of this equation.

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Holistic Risk Management

• An effective risk management approach needs to
  manage everything that may fail
• Product failure
• Process failure
• People failure
• Value failure
• Effective Risk Management mandates trusted and
  competent professionals with a broad knowledge
  base because our systems are getting more and
  more complicated.

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Process Risk Management

• PMBOK do it!
• SDLC
• pick one to match the project need,
• train the team and use it
• measure compliance.
• Transformation Methods change management is
  more than training!

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Product Risk Management

• The product can fail at every phase of the
  life-cycle
• Requirements - need to eliminate unstated
  requirements
• these can be surfaced through expectations
  gathering or through user-centric development
  approaches (e.g. Agile, CRP)
• Design main problems are blinded by
  experience or blinded by ignorance
• Architecture/Solution design standards
• Peer reviews external design reviews
• Performance engineering
• Usability engineering

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Product Risk Management

• Build surface product failure risks early
• Continuous integration
• Traceability analysis
• Test a function of people and methods
• Staff with testing professionals (CSTE)
• V-Model of testing or test driven development
• Measure and monitor failures

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People Risk Management

• Use trusted, competent professionals
• Trained and appropriately experienced
• Continuing education
• Certified
• Not all team members are created equal!
• Staff your best to the high risk areas of the
  system
• Manage and measure the key performance factors of
  team and motivation

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Value Risk Management

• Build and manage the business case (hint this
  means more than writing a PPA/EPA)
• Map the business benefits to the system
  components that deliver the benefit and apply
  appropriate focus
• Risks that impact business benefit get more
  attention

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Four Human Faults

• Belief in a silver bullet
• Absence of rigour
• Belief in hope over experience
• Inability to kill a project

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Emergence of the Versatilist
Source Gartner's Top Predictions for 2006 and
Beyond. Gartner Research. Publication ID Number
G00135987. November 28. 2005. Reprinted with
Permission
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CIPS Certified Professionals

• Professionals Who are Trusted
• Professionals Who Understand Broad Range of IT
  Domains
• Professionals Who Adopt Best Practices
• Professionals Who Manage Risk
• Professionals Who Are Accountable for Actions and
  Decisions

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• Canadas Association of
• Information Technology (IT)
• professionals.
• Contact us 1-877-ASK-CIPS or info_at_cips.ca.
• Visit www.CIPS.ca