Question

PM301 ASSESSMENT 2 S118

Case Study: The Case of the Never Ending Scope Creep

In 1999, the XY Department of the Federal Government reviewed its Year 2000 Date Turnover Computer Risks and found that its outdated computer systems for managing public clients needed replacing. A business case was prepared for funding the replacement while at the same time implementing some improvements. The total budget requested was $2.3 million.

In view of a shortage of funds around at the time, government did not approve this amount. Only $1.5 million was authorized. However, the XY Department accepted this amount after they decided that they could maybe do the work for around the $1.5 m.

Accordingly, a project was scoped and planned, with specific milestones for implementing the hardware and, subsequently the software, across 87 sites within its jurisdiction. A final completion date of 30th June 2001 was projected. The original business case had loosely identified some risks to the project that were also included in the project plan. A project steering committee was established, with the department chief (CEO) as the sponsor, and representation by influential managers with differing outcome needs to suit their particular work environment. The project commenced in July 1999.

In view of the shortfall on its original budget request, the committee decided not to employ a project manager. Instead it assigned this responsibility to its Finance Manager, who would undertake the work along with his normal duties.

A Company, called "Good Programs" was contracted to supply the software and assist in the implementation. This company recognized the marketing opportunities of this project, as the XY Department was its biggest client in the region. As a result, they offered, free of charge, many more features that were not in the original scope, provided the department allowed them to be, in essence a research and development (R&D) site. This would assist Good Programs to more readily sell their products elsewhere around the world, while providing the XY Departmentwith additional functionality and benefits.

Initially, the steering committee met regularly, but as new versions of the resulting software were being implemented regularly, meetings became less frequent and Good Programs were left to do more and more of the day to day management of the new version implementations.

These new versions were developed after consultation with the various individual managers to accommodate requested new features with little consultation amongst all of the managers. All the XY Department and steering committee had to do was to identify problems with the software and to make the system testers available for new versions. However, the effect was an unanticipated overhead for the department.

Sometime after the original project was scoped and commenced, both the original CEO and finance manager had been moved out of the department and new officers have been appointed.

At this time, the new CEO has been advised that about $185,000 more is needed for the project, which is not in his current budget. The original project has not been signed off, indeed, it is evident that it has not been completed. The new CEO of the department is not sure of the original scope of the project, what aspects have been implemented, nor what has been spent for which parts. There do not seem to be any reliable reports available as to original scope, scope changes, schedule or budget.

The CEO is concerned that the project has become more of a career than a project, with version 16.5 of the client management system now being tested with yet more features. In addition, there are some past software problems that are still outstanding. Nevertheless, Good Systems have promised that problems will be fixed in the next version ... .

You are a senior consultant with PM Right Track (PMRT), a competent project management consulting company. The CEO has called you in for advice. The information is brief, but this is all the information that he and the new finance manager are able to provide. The CEO's mandate to you is to:

1. Report your assessment of the current project status.

2. Compare your assessment with sound project management practices.

3. Recommend steps to bring the project to a close.

4. Recommend improvements to the XY Department's future project management practices.

5. If a very similar project had to be done again, what attributes and/or skill sets would you recommend in selecting a project manager?

6. What other advice might you give to the CEO?

Answer 1

Part 1 and 2

Project Assessment - Replacement of outdated computer systems for managing public clients

On a careful review of the current status of the project, it is observed that project is running behind schedule and over budget. The replacement project started in July 1999 and due for completion in end of June 2001 won't be able to handle the Year 2000 date turnover. This delay could be attributed to multiple reasons and failure to follow Project management practices The following observations are made about the project:

• Lack of proper budgeting – The original budget was of $2.3 Million, however, the team accepted a budget of $1.5 Million. The team did not match the project scope and estimate a budget again once budget constraints were cited. Instead, the department felt they could accomplish the project. As per Project Management best practices, the department must have done a re-budgeting and prioritized features they needed first and match it to $1.5 Million budget.
• Central Point of Contact (Project Manager) – The project lacked a person or Project manager to control the delivery and operations of the project. The project was run in silos with individual managers approving features rather than all managers sitting together and prioritizing features. This was a perfect job for a PM to coordinate and make sure project is looked at as a whole and not in parts. As per PM best practices, a project manager is required to coordinate and manage project risks and keep the project on track.
• Vendor Handling – Good programs wished to use this project as a model project to gain more clients. However, the additions of extra features did not help much as it delayed the original scope of the project and other features may have taken a precedence over the absolute required features. Good programs must have first delivered the required features of the project and then moved to add-on features. Department must have signed a project plan and deliverable delivery dates with Good programs. Any delay by Good programs should have invited monetary penalties. As per PM best practices, vendor and department must have signed up for a deliverable plan document with fixed dates for delivery of each deliverable. Any change in scope should have gone thru a strict change order process wherein all stakeholders met and decided on change, given the impact of change on cost and timeline. All extra features must have gone thru a Changer control process.
• Lack of robust Governance – As per PM best practices, Governance teams such as Steering committee must meet at various stages of the project and discuss project risks and plans to mitigate risks. As per the case, the Steering Committee lost interest after the initial stages of the project. The decision making was left to individual managers and vendor.
• Software Quality Issues - This must be resolved immediately by Vendor before making further progress on the project. PM best practices recommend fixing issues as it is found and not let them linger on till the last stages of the project.
• Project Communication plan – PM best practices recommend having a formal project communication plan. This plan may include weekly status meetings, monthly governance meetings etc. and the plan defines frequency and quorum required. Any changes to project scope must be discussed in this meeting and any risk to the project can be taken up for discussion during these meetings. The department and Good programs had no formal communication plan in place and ad-hoc decisions were taken related to project features.
• Lack of transition – The outgoing CEO must have had formal meetings with new CEO to make him understand the project details, why it was commissioned, current status and challenges. Without the knowledge, it is a big challenge for new CEO to make any decisions on the project budget.

Part 3

We would make the following recommendations to bring project to a close:

• Address gaps to manage Year 2000 Date turnover – CEO must meet vendor and check with him the status of the project. All features that do not help in managing the requirement, their development must be stopped with immediate effect. All focus should be given to deliver features to manage Year 2000 date turnover and all extra features in development must be looked after the original requirements are delivered, given we have time and budget.
• Project Manager – CEO needs to appoint a PM to make certain that project follows the defined path and no additional scope changes are made unless it is necessary and goes thru a change control process.
• Regular Status meetings and Project Governance – Department needs to establish regular touch-base calls with Vendors to ensure the project is on track and potential risk is mitigated. All stakeholders must meet once a month and collectively decide on any scope changes (if required). No decisions must be made in silos and any communication related to Project must involve the Project manager.
• Monetary penalties – CEO needs to tie the vendor to stricter deliverable SLA’s. For every deliverable date that is missed by the vendor, they must give a discount to the department. A penalty would incentivize Good Programs to complete the project on time and not take up development of additional features during the project.

Part 4

Recommended improvements to the XY Department's future project management practices

• Project management office – For all projects of this nature that involve budget in millions, department should establish a PMO office to coordinate the project and managed day-to-day project operations. A PMO office can help in:
  • Managing project scope
  • Manage the potential risks and avoid siloed decision making
  • Control over project
  • Increased visibility to all stakeholders
• Clear Project Plan and Strong Change Control process – The department must have a crystal-clear project plan with regards to scope to be accomplished and deliverables expected. Ad-hoc changes to project plan or scope must be avoided. Any changes to project scope must go thru a formal change control process and all stakeholders including CEO and managers must authorize any prioritized changes.
• Project manager – A dedicated PM for the project must be deployed. The person must be responsible for ensuring timely delivery of project and within the budget. All roads related to project must lead to the PM. PM should be also responsible for following PMI recommended best practices and standard methodology for delivery of the project.
• Anticipated resources – Before the commencement of project, department must be clear about the time-commitment expected of department resources. All expected overheads must be budgeted, and no surprises should be there at later stages.
• Governance meetings – All stakeholders must be engaged for entire duration of the project. The Governance meetings and reviews can be held monthly or bi-weekly, based on the mutually agreed upon dates with vendor. The broad agenda for these meetings include: project status, ongoing issues, resolution of issues, clients new requirements /enhancements (changes in scope) and new product features that department can adopt. During these meetings, a detailed evaluation of the project's current status vs. the expected progress is completed, and a corrective course of action is developed if required. If the vendor or deparment identifies a potential roadblock or risk for the project that affects scope, quality, time or budget , the review meeting is utilized as a forum to discusss such risks. The probability of occurence of risk and the impact of risk is analyzed and project team is tasked with preparation of a mitigation plan. The mitigations plans are regularly monitored and tracked during every review meeting to ensure successful mitigation of possible project risks.