I am going through a work notebook to make sure I have addressed past outstanding action items and came across some notes I wrote down about managing IT projects. Unfortunately I didn’t write down the author or title of the article but I do remember it was from the monthly Harvard Business Review magazines. In looking up a few key words I did come across the article here. It had some interesting stats and also introduces a new concept for me about Black Swan projects (something I am all too familiar with in practice).
In the projects the author and assumingly his team reviewed, the average overrun was 27%. This is not a surprising statistic based on what I see in my own company. Moreover, one is size projects become black swans where they experience a 200% overrun and delayed schedule of almost 70%. I believe the term black swan refers to how IT projects can seriously hurt the viability of a company. My notes indicate that the more successful projects adhered to the following:
1) Stuck to the schedule
2) Resisted changes to project scope
3) Broke the project into discrete modules
4) Assembled the right team
5) Prevented turnover
6) Framed the initiative as a business endeavor not a technical one
7) Focus on a single target – readiness to go live – measuring activity against it
They also introduce a Black Swan test:
1) Is the company strong enough to absorb the hit if its biggest technology project goes over budget by 400% and if only 25-50% of the projected benefits are realized?
2) Can the company take the hit if 15% of its medium sized technology projects exceed cost estimates by 200%
The biggest message I take from the article in question is to take break big projects down into ones of limited size, complexity and duration, recognize and make contingency plans to deal with unavoidable risks. Also to be willing to terminate unsuccessful projects. This last one is so key and not many people are willing to do this.