A better way than ROI? Project management and business value

Organisations could be offered better ways to manage IT-led business change projects in the wake of major research project that promises to challenge conventional wisdom on IT project management.

Organisations could be offered better ways to manage IT-led business change projects in the wake of major research project that promises to challenge conventional wisdom on IT project management.

The project, by Computer Weekly in collaboration with an international team of researchers led by the University of Oxford, aims to re-evaluate the way organisations manage and measure the success of IT projects.

The work is expected to offer alternatives to the widely used return on investment model for measuring the effectiveness of IT projects and could provide organisations with a more useful measure of the impact of IT projects on a business.

The study is led by three internationally renowned professors, Chris Sauer from the University of Oxford, and Blaize Horner Reich and Andrew Gemino from the Simon Fraser University in Vancouver, Canada.

The team, which is inviting Computer Weekly readers to take part the research, has worked for the past seven years on studies into IT project management.

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The study aims to be among the first to systematically assess the impact IT projects can have on adding value to the business. It will supplement a major project management study carried out by the team and Computer Weekly in 2003/4.

"The business value of project management has begun to be studied in the last couple of years, patchily and sporadically, and often through case studies, rather than looking at a large number of projects," said Sauer. "We will be collecting data from a large number of projects. Its not a topic that has been well studied in the past"

The research is likely to challenge conventional project management wisdom, said Sauer, particularly the notion that successful IT projects are completed to budget and to deadline.

"A project manager who encourages a learning orientation in the project may well get better results in terms of business value than one who focuses on efficient completion of tasks," he said.

"Project managers should be able to change the schedule to get better value for the business, but if the schedule is immovable, you are less likely to make that trade-off."

For example, a business could benefit if the project team is allowed to follow a blind alleys and learn from its experiences, rather than sticking to a predetermined deadline, said Sauer.

The work will assess what impact the way a business reacts after it completes an IT project has on the value the project has for the business.

"In the past, projects have been thought to come to a close pretty much after implementation has been completed, which has often meant that much of the organisational change that needs to be achieved has been placed outside the project, " said Sauer.

The study will also assess how businesses should best organise their IT and business teams to maximise the benefits to the business.

"One of the things we are looking at is helping them think about the balance of different kinds of knowledge. Trying to ensure that you have an appropriate mix of technical and business expertise in the team, and that you manage it in a way that enables good cross-fertilisation and integration of that knowledge," he said.

"How do they work together? Do they respect each others knowledge, do they listen to each other? When something changes in the business environment, do the business people say 'we need to tell technologists about this, so that their thinking can be adjusted', or do they say 'technologists don't need to know about this'?"

Pilot studies by the team have suggested that organisations with company-wide change plans in place are more likely to sponsor IT-led projects that add value to the business.

Rather than measuring return on investment, organisations with good change plans in place might be better off assessing whether IT projects have achieved the changes they set out to achieve, as a measure of success.

"Some IT projects deliver business value beyond question. Some don't deliver as much value as the business hopes. Some destroy value. We hope to be able to get a handle on what those proportions look like," said Sauer.

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