Traditional project management involves very disciplined and deliberate planning and control methods. With this approach, distinct project life cycle phases are easily recognizable. Tasks are completed one after another in an orderly sequence, requiring a significant part of the project to be planned up front. For example, in a construction project, the team needs to determine requirements, design and plan for the entire building, and not just incremental components, in order to understand the full scope of the effort. Traditional project management assumes that events affecting the project are predictable and that tools and activities are well understood. In addition, with traditional project management, once a phase is complete, it is assumed that it will not be revisited. The strengths of this approach are that it lays out the steps for development and stresses the importance of requirements. The limitations are that projects rarely follow the sequential flow, and clients usually find it difficult to completely state all requirements early in the project. This model is often viewed as a waterfall.
Figure 1: The Waterfall Project Life Cycle Model
Today, business processes are more complex, interconnected, interdependent and interrelated than ever before. Additionally, they reject traditional organizational structures in order to create complex communities comprised of alliances with strategic suppliers, outsourcing vendors, networks of customers and partnerships with key political groups, regulatory entities, and even competitors. Through these alliances, organizations are able to address the pressures of unprecedented change, global competition, time-to-market compression, rapidly changing technologies and increasing complexity at every turn. Because of this multifaceted nature of businesses, projects that implement new business systems are also more complex.
For years, economists have been warning that success in a global marketplace is contingent upon the capability to produce small batches of tailored products on a tight schedule to meet growing demands in emerging markets. However, huge cost and schedule overruns have been commonplace in the past.[1] Looking at the numbers, the past project performance record is troubling:
- $80 -145 billion per year is spent on failed and cancelled projects (The Standish Group International, Inc.)
- 25% - 40% of all spending on projects is wasted as a result of re-work (Carnegie Mellon)
- 50% are rolled back out of production (Gartner)
- 40% of problems are found by end users (Gartner)
- Poorly defined applications have led to a persistent miscommunication between business and IT. This contributes to a 66% project failure rate for these applications, costing U.S. businesses at least $30 billion every year (Forrester Research)
- 60% - 80% of project failures can be attributed directly to poor requirements gathering, analysis, and management (Meta Group)
- Nearly two thirds of all IT projects fail or run into trouble. (See Figure 2 for the results of the 2006 CHAOS Survey.)
Figure 2: Project Performance Track Record – The Standish Group 2006 Chaos Report
Improving these performance records is a goal for any organization. However, if traditional project management is somewhat ineffective, it’s time to examine other methods of designing and delivering projects.
Agile Project Management
For projects involving a significant software component, traditional project management can be somewhat ineffective since the requirements are elusive, volatile and subject to change. An alternative approach, Agile Project Management (APM), is emerging in the industry. APM is a highly iterative and incremental process, where developers and project stakeholders actively work together to understand the domain, identify what needs to be built, and prioritize functionality.[2] Agile methods are used when these conditions are present: project value is clear; the customer actively participates throughout the project; the customer, designers, and developers are co-located; incremental feature-driven development is possible; and visual documentation (cards on the wall vs. formal documentation) is acceptable. Figure 3 depicts the Agile Development Model.
Figure 3: The Agile Project Life Cycle Model
The Agile approach consists of many rapid iterative planning and development cycles, allowing a project team to constantly evaluate the evolving product and obtain immediate feedback from users or stakeholders. The team learns and improves the product, as well as their working methods, from each successive cycle. After a streamlined planning, requirements definition and solution design phase is completed to get the project underway, iterations of more detailed planning, requirements, design, build and test take place in waves. This approach allows for immediate modifications of the product as requirements come into view. APM requires a dedicated full-time project team that includes a customer or end user, where team members work from the same location.
