The pros and cons of project management

'IT failures are business failures'

There's no such thing as an IT failure — there are only business failures with an IT component.

That's the view of IT project manager KS Muralidhar, who spoke at a CIO lunch last month on the subject of project governance.

Muralidhar cited a KPMG study in the US which revealed 65% of all projects run seriously over budget and used as a specific example the Crane Group's troubled PeopleSoft implementation in Australia, which has led the company to write down $28 million in costs relating to the project.

However, the overall thrust of his presentation was general, referring to how projects often go awry because of lack of co-ordination between the project sponsor, steering group and project manager.

Pitfalls to avoid include letting the steering group intrude into the project manager's patch and not taking enough care when hiring a project manager.

"The first task of the project sponsor is to find the right project manager and who do they choose? The first person off the block, who may not have the necessary skills."

Adding to the mix in the recipe for disaster can be a project sponsor who provides the funding and authorisation, but loses interest thereafter.

The three overlapping disciplines needs for successful project management are general management, project management itself and application-specific areas such as IT.

The level of interface between the three varies from project to project, Muralidhar says, but good governance is essential, no matter what the mix.

"Governance is the organisation of responsibilities and decision making that apply to the project."

Elements of project governance include structure (defining roles and responsibilities), policies (defining standards, processes and documentation) and executive commitment.

The latter, relating to the role of the project sponsor, means the sponsor must understand the strategic fit of the project in the wider goals of the organisation, the financial justification, the risks involved and be able to assess the project's business success.

A well-written, well-defined contract is a vital starting point and measures such as the balanced scorecard will help greatly, Muralidhar says.

"If you're already using it in your organisation, apply it to projects."

In summary, the keys to successful project management are to set expectations, be accountable, keep strategic focus, apply good management principles, and assign a competent project manager.

Indian-born Muralidhar moved to New Zealand in 1994 to work in decision support for Fletcher Challenge energy and has worked on and managed projects in India, Southeast Asia and New Zealand.

Local clients he has worked with include Genesis Energy, ASB Bank and Cavalier Bremworth.

Muralidhar is secretary of the Auckland branch of the NZ Project Management Institute.

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