Business-led project management finally becoming a realistic concept

Business units are supposed to “own” IT projects — in theory. But the reality in many organizations is that IT departments drive IT projects on behalf of business units.

This leads to an all-too-familiar cycle of recrimination. The business units provide their requirements to IT, who are responsible for delivering them. When delivered, business users complain the system doesn’t work. IT counters that they delivered to the best of their ability on the vague system requirements they were provided.

“That pizza-ordering approach doesn’t work and never will,” said Dr. Janice Thomas, director of Athabasca University’s MBA program in project management.

Things could be changing, however. The business-led IT project has been a slowly-maturing trend in the making for almost 20 years, she said — one that is finally coming to fruition in some organizations.

The Toronto Dominion (TD) Financial Group is a case in point. The bank has been successfully evolving this approach over the past five years, said Linda Vella, program director at TD and chair of strategic planning at the Newton, Penn.-based Project Management Institute (PMI).

“This is a trend that is slowly moving its way through the business community,” she said, pointing out that most business trends and their associated methodologies start in larger organizations such as banks and the public sector, then move on to medium and smaller organizations.

TD started down this path in 2000, said Vella, after its merger with Canada Trust. The bank struggled with major post-merger system integration issues, and set up a formal project management office (PMO) to deal with them. “Our CEO believes in business-led IT project management, as he’s seen better results post-merger,” said Vella. “He is adamant about business ownership of projects.”

The PMO at TD owns the project management methodology defining controls, scope management, critical path lines and so on that are applied consistently to all projects throughout the bank, she said.

TD initially started out by hiring project managers and lending them to business units. Over the years, this has evolved to the point where most business units have their own project managers, specializing in running projects on behalf of their areas.

TD has also progressively stepped up the professionalization of the function: about half its project managers have earned the project management professional (PMP) designation granted by the PMI Institute, and next year, virtually all project managers will be required to have the designation.

Projects are structured so these project management experts guide the project, said Vella, ensuring requirements are defined properly — but it is not their role to define them. Instead, a team of subject matter experts (SMEs) is responsible for defining requirements.

Project staff are culled from both the business and technology units. A senior SME looks after technical components, while another looks after business components.

The project manager is a third type of SME, expert in orchestrating the overall project on behalf of the business unit. “The project manager is accountable for making sure the project is driven through to the end,” said Vella.

For smaller projects, a project manager may also be a subject matter expert, for example, in retail banking or lending, but this arrangement is unsuitable for larger projects, said Vella. “We have large projects of over $1 million, and some are in the $5-20 million range. There are not physically enough hours in the day to both run the project and be the subject matter expert.”

Vella believes hiving off the project management function and formalizing the role between the business and technology units are suitable for smaller organizations, not just big banks with generous IT budgets. “Your PMO may only have 5-10 people, but you still need to have them there. Every organization can benefit from having expert project managers.”

Thomas agrees the professionalization of the project management function offers many benefits, but sounds a cautionary note. “Over the past 10 years, project management has focused on delivering projects on time, on budget,” she said. “For straightforward projects, that approach works very well. But for complex ones, if you put a control-oriented project manager on that, there’s no room for learning or growth.”

By limiting scope creep and requirements revision, the business side has not always received what they really needed, she said; it may be what they thought they needed or what they asked the project manager to give them originally. “Something that needs to happen more in project management is an understanding that it’s not necessarily about control, sometimes it’s about learning and adapting.”

To illustrate her point, Thomas advised drawing a triangle and labelling one side ‘cost’, another ‘time’ and the third ‘scope’.

“Mathematically, if you change any one of those angles, the other two change,” Thomas said. “So there is no way to deliver on time and on budget unless nothing changes. And we know stuff happens: the stock market dies, the cost of oil goes up, the world changes.”

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