This document discusses using life cycle management to demonstrate value and drive performance in IT projects. It argues that poor requirements management and estimation are leading causes of project failure. An effective life cycle methodology can help ensure projects meet expectations on time and budget by prioritizing requirements, tracking traceability, using incremental delivery, and taking an integrated view of the organization. Attributes of successful projects include being agile, keeping teams small, committing business stakeholders, and being prepared to cancel projects that are not working. The document provides an example estimating spreadsheet and case study of an agile ERP and MS Project integration.

1. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Using
Life Cycle Management
to Demonstrate Value
&
Drive Performance
July 15, 2004
VAIT Stephen W.A. MacLean, P. Eng.
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Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only
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2. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Overview
Ensuring that projects meet expectations on schedule and budget is a complex
challenge for any I/T executive or manager.
This paper represents the author’s experience in commercial software
development and I/T environments in aerospace, automotive, engineering and
manufacturing industries.
The methodology and approaches described can be applied both to software
development and selection/implementation projects in any industry.
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Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only
author’

3. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
VALUE :
Etymology: Middle English, from Middle French, from (assumed) Vulgar Latin valuta, from
feminine of valutus, past participle of Latin valEre to be worth, be strong
Date: 14th century
1. a fair return or equivalent in goods, services, or money for something exchanged
2. the monetary worth of something : marketable price
3. relative worth, utility, or importance
something (as a principle or quality) intrinsically valuable or desirable
4.
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4. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
I/T Value
1. Keeping the ‘lights' on
2. Productivity/process Improvements
3. Business/Asset Transformation
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5. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
I/T Value Drivers
Integration
Flexibility
Ease of access to data
Degree of collaboration
Data is entered once and reused.
Make it easy for customers to do business with you
Forge and enforce an alignment between business
Strategy and the I/T function.
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Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only
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6. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
I/T Value
Today, the value provided by effective I/T can go well beyond
cost reduction and increasing productivity.
However, achieving the ‘basics’, which are so often not achieved,
must be a minimum in the much tougher business climate we live in
today.
Today, I/T has the potential to help transform the way businesses
operate – to trigger massive changes in culture, process and the way people
interact with one another.
These changes can be akin to opening Pandora’s box if not managed
properly. Even then, many of the significant benefits are intangible
and very difficult to measure and comprehend.
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Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only
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7. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
An example of Bad Value and existing I/T approaches applied to building cars
The CIO’s new ‘Ride’ !!
Your, ah,
new car is ready
but it’s only got 3
wheels, 2.5
cylinders and 3
seats. BUT, the
GOOD news is
that we managed
to include the
latest gee-whiz
bang inertial
navigation system
at NOOO extra
cost
Straight from Kars by Komponents, Inc.
- your VIRTUAL car company !!!
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Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only
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8. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Why Building Software
Is Not Like Building Cars
• A car begins with a design, based upon market needs/assessments and customer
requirements.
• Developing a car follows well defined principles and processes, with predicted
levels of tolerance and safety factors
• The blueprint is followed precisely. Changes are costly and therefore anathema.
• The tools used to build the car also follow well-defined principles and generally
don’t change during production.
• The materials are familiar and generally behave predictably.
Because of all that, some people are pretty good at building cars.
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Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only
author’

9. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Software Project Failure Statistics
There is substantial industry evidence1 that two of the leading causes for project
failure are poor requirements management and poor project estimation.
Consider that :
• The average project exceeds its planned budget by 90% and its schedule by 120%.
• 33% of all projects are over budget and late.
• 52.7% of projects will cost 189% of their original estimates.
• The average time overrun is 222% of the original estimate. In large companies,
only 9% of projects come in on time, on budget.
1 Standish Group survey of 8,000 software projects
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10. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Large Systems Project Failures
A major running shoe manufacturer had a serious problem with it’s inventory
software project, which prompted their CEO to state, quot;This is what we get for
our $400 million?quot;
A Canadian grocery chain that suddenly and publicly canned it’s ERP
project, after spending $50 million.
A 100-year-old management consulting firm that spent tens of millions on a
failed ERP deployment, then tried and failed again after sinking another $8 million
into the black hole.
A litany of failures with depressingly familiar advice :
one needed to test more;
the other needed a project sponsor;
while another should have killed the project
This simply restates what everyone already knows. The problem isn't with the
advice; the problem is the development/ implementation methodology itself.
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11. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Primary Reasons for poor Value from
Software/Systems Projects
• Poor Requirements Definition :
• Lack of Value to the customer due to reduced functionality caused by missed
requirements
• Poor Project Estimation :
• Results in insufficient time/money to deliver a quality result, even if requirements are
well defined – requirements will be left out and/or quality will suffer.
• Poor or Missing Requirements Traceability :
• Lack of Value to the customer due to not ensuring that the design and resulting code
effectively embody and deliver on the agreed upon requirements.
• Lack of an Agile Life Cycle methodology :
• Lack of Value as evidenced by poor quality and missing/delayed requirements due to
not quoting and delivering the project using an agile life cycle methodology.
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12. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
I/T Value Measurement
However, the problem is actually deeper than this!
According to Paul Strassman1 , there is no relationship between what a company
spends on I/T and it’s profitability.
Furthermore, every seven years, we have torn up what has gone before and started
again. There have been, according to him, 8 cycles of build and scrap since 1946
and he has the data to prove it.
Others, such as David Norton, one of the two original developers of the Balanced
Scorecard methodology, have agreed that there isn’t a direct relationship between
I/T investment and the bottom line.
So, in the long term, across multiple projects and technology shifts, how does
I/T achieve value for the business?
1 Financial Times : June 27, 2001
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13. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Life Cycle Management
Principles for High Value
Development/Delivery
• Prioritise requirements and weight them if possible.
• Track requirements traceability and use metrics to measure the quality of the
system as it moves from a working prototype to a full product.
• Incorporate formal configuration control & change management practices.
• Requirements Release. Only the functionality that the customer has selected for
the next iteration is considered and built. The customer doesn't pay for
functionality that he/she might not select, and the developers don't have to code,
debug, and maintain irrelevant code.
• Practice incremental delivery, based upon a formal Release management
process - don’t compromise quality for the sake of banging functionality into a
release at the last minute.
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14. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Principles for High Value
Application Development/Delivery
• Take a holistic, integrated view of the organisation :
• Deliver integrated solutions that meet common needs first
• Resist the urge to deliver so-called ‘best-of-breed’ (aka silo) applications
The COST of No Integration
“ Every big company collects, generates and stores vast quantities of data.
In most companies, though, the data are not kept in a single repository. …
Each of these so-called legacy systems may provide invaluable support for a
particular business activity.
But in combination, they represent one of the heaviest drags on business
productivity and performance now in existence.”
HARVARD BUSINESS REVIEW
July - August, 1998
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15. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Project/Team Attributes
for High Value
Application Development/Delivery
Agile
• Fast and efficient.
• Small and nimble.
• Less money, fewer features, shorter projects.
• only 7 percent of the features of any given application are actually needed.1
• If it doesn't work, kill it.
• Commit business people to the development team.
How to Be Agile
• Slash the budget.
• Set a $ ceiling on all software projects- No exceptions.
• Keep the development teams small.
• Always be prepared to roll out the last stable build – incremental delivery.
1 Standish Group survey of 8,000 software projects
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16. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Estimating Spreadsheet Duration
100.00% 100.00
Project Management 10.50% 10.50
Ongoing project review 6.30
Change Management 3.15
Management Review 1.05
Requirements Planning 12.00% 12.00
Review existing system 1.15
Model process 1.44
Identify user requirements 2.53
Prototyping (iterative) 3.28
Prepare Software Requirements Specification 3.11
Software Requirements Review(s) 0.50
Requirements Frozen 0.00
Design : Conceptual & Detailed 37.00% 37.00
Estimating Prepare Design 25.55
Document design 7.30
Spreadsheet Prepare Software Test Plan 3.65
Design Review(s): PDR & CDR 0.50
- uses life cycle Design Frozen 0.00
Programming 13.50% 13.50
metrics. Develop Programmes/Assemble Components 7.80
Test Programmes (complete test plan) 2.60
Document code & prepare for code review(s) 2.60
Code review(s) 0.50
Programming Complete 0.00
Quote and Development Functionality testing 9.00% 9.00
Prepare Software Test Plan 2.13
Deliver the work Functionality Test 6.38
Test review 0.50
Functionality Testing Complete 0.00
based upon a Development Integration Test 13.00% 13.00
Enhance test plan 3.13
Formal Life Integration Test 9.38
Test review 0.50
Cycle approach. Coverage Testing Complete 0.00
User Documentation 5.00% 5.00
Customer UAT 7.00
Conduct Software Acceptance Review 0.50
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17. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
The Life Cycle
Model drives
the structure &
phases of the
project plan.
NOT the other way
around!
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18. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Case Study :
Agile Development and Delivery
ERP - MS Project Enterprise
Integration
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19. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
ERP - MS Project
Rev 1.0.0, 2004.6.30
Integration Architecture MSP Client
AIM Client or Web
or Web
MSP DB
Integration (.Net)
ERP DB
Application
DTS API
ODBC
ODBC ODBC
DTS
Staging Staging
DB DB
Case Study :
Rapid Development of ERP – MS Enterprise (ERP side)
(MSP side)
Project Manager Integration
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20. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Case Study : Rapid Development of ERP – MS
Enterprise Project Manager Integration
Project Master data in the ERP
Project in Project Web Access
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21. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Case Study : Rapid Development of ERP – MS
Enterprise Project Manager Integration
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Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only
author’

22. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Case Study : Rapid Development of ERP – MS
Enterprise Project Manager Integration
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23. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Case Study : Rapid Development of ERP – MS
Enterprise Project Manager Integration
Principle : Integration
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24. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Case Study : Rapid Development of ERP – MS
Enterprise Project Manager Integration
Principle : Rapid, Collaborative Development
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25. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Case Study : Rapid Development of ERP – MS
Enterprise Project Manager Integration
Principle : Track requirements traceability
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26. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Case Study : Rapid Development of ERP – MS
Enterprise Project Manager Integration
Principle : Prioritise requirements, Change/Config. Management
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27. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Agile
• Fast and efficient : Time from inception to Release 1: 3 months
• If it doesn't work, kill it : Tried triggers & replication to move
data between DB’s. DTS faster, simpler and more reliable +
works across servers.
• Commit business people to the development team : Business people
provided the requirements, vetted designs and tested.
How to Be Agile
• Slash the budget : < $ 50,000
• Keep the development teams small : On average : 3 people
• Always be prepared to roll out the last stable build – incremental delivery :
Had some unforeseen technical problems with one feature just prior to
Code freeze. Rolled back to the last version and released it.
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Stephen W.A. MacLean, P. Eng. 2004/7/15 The views expressed in this paper are the author’s only
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28. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
I/T Value Measurement
While I/T spending is critically important to an organisation, it is, however, in
largely a catalytic role.
I/T Spending promotes factors that clearly influence and determine profitability,
but which are generally very hard to measure on their own.
Factors such as :
• Competitive advantage
• Strategic positioning
• Organisational knowledge and competencies/learning
• Collaboration and knowledge sharing
• Management style and competencies
• Quality
etc. ….
In other words, intangible assets …
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29. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Management skills
Organisational capabilities
Intellectual capital/knowledge
External relationship capital
This can be further broken down into :
Brand equity/Reputation
Alliances and networks
Human capital
Technology and processes
Innovation
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30. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Normalised Incremental Change Cost by Stage
$ 1,000
Incremental Change Cost
Post
Roll Out
At the end of the Day …
Enabling the business
Testing
to do things it couldn’t $ 100
do before and/or to do
them earlier in the $ 10 Coding
product/service life
Design
cycle than was previously $1
Life Cycle Stage
possible.
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31. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
Resulting Improvements
• Iterative, rapid prototyping, when combined with demonstration based
evaluation, results in significantly higher value/quality solutions being delivered
‘out of the box’.
• Focus on agile delivery and requirements traceability results in much higher value
solutions, with much higher % requirements delivery.
• More efficient resource management and fewer delivery problems by using a Life
Cycle model to quote, manage and deliver the work.
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32. Using Life Cycle Management
VAIT
to Demonstrate Value & Drive Performance
THANK YOU !!!
QUESTIONS?
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