Observations From the Titans

Exasperated by multimillion-dollar cost overruns and delays measured in years, a growing number of large corporations are taking an innovative approach to systems development. Sometimes the opportunities that exist mean that you need to reconfigure the existing business model.

In the past two years, American Express Financial Advisors, Inc., United Air Lines, and Ryder Systems, Inc., have all established project management offices because they must manage their methodologies on a regular basis. These offices have the sole mandate and authority to authorize changes in systems development deadlines and budgets. They act as the security check for catching any projects in the red. This is the way effective companies work.

Nynex Corp., meanwhile, requires all outside vendors working on Nynex IS projects to comply with the telecommunications company's project management methodology. Tracking a project's progress against its initial goals not only helps keep a development project on track, but also helps IS measure and document productivity, according to Richard V. Mulcahy (2001), staff director of IS at the company. He said:

When processes were manual, it was easy to measure IS productivity. If you automated payroll, you'd lose 30 clerks. So it was easy to prove IS's worth. Now that we've squeezed out most of the fat from the organization, we need to move to improved project management efficiency.

When American Express Financial Advisors set up its project office, budget overruns of as high as 500 percent were not uncommon at the Minneapolis-based company, according to Warren G. Herreid (2001), a former lieutenant in the military and the office's senior director. Most increases resulted from changes in project requirements and/or development tools. Two years ago, for example, a mid-project switch from Windows operating system to OS/2 caused a 200 percent overrun and more than a one-year delay on a general ledger application. Now, all project change requests with a price tag of more than $250,000 must be approved by a technology council and Herreid's office, which supports more than 70 active projects and a 750-person IS organization. This is a methodology in place that works.

Productivity has increased 40 percent since United Air Lines created its four-person, San Francisco-based IS project office, according to Richard L. Gleason (2001), project office manager. Currently, the office supports 17 major development projects. It also maintains an online electronic library containing all project deliverables, schedules, and documentation. Gleason said:

Before the project office, the planning that got done had the depth of a back-lot facade you see at Universal Studios. Now we have a very standardized way of planning projects with a financial aspect tied in to track how we are doing against those plans. (p. 2)

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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