Relevance of Vendor's Business Case with it Project Success

Abstract

The field of Project management has evolved considerably over the last decade. With globalization and the ever increasing complexity of IT projects, project management has become ever more critical for IT consultancy firms and software service/product suppliers. Based on a survey conducted by Sogeti, only 30% of the IT projects undertaken by multiple firms were classified as ‘successful’. What factors do really influence the success of an IT project, is a critical question that has been raised over and over again due to the huge financial losses, alarming rate of unsuccessful projects and failure to establish ultimate goals. Some of the commonly identified factors that influence IT project success are Customer Satisfaction, Internal process, Financial, and perception alignment of the key actors involved in the project. One of the critical success factors for project success is explicit business case. In this research the impact of using an explicit vendor business case over an IT project success is investigated. The word ‘’explicit business case ‘’ refers to a business case which is well formulated, documented and is regularly updated throughout the project life cycle. Furthermore, a vendor business case is a document prepared on the basis of the information shared by the customer. Although vendor business case is built for guiding the vendor, but it’s initiated by the customer. What makes vendor business case special is, it includes the benefits and goals for vendor for taking the project but also includes the key value drivers from the customer’s business case, as customer satisfaction is an important element for the overall success from vendor’s perspective. Considering the vastness of the field of project management, and ensuring that the research is carried out within the established scope, only key aspects of project management relevant to the field of IT projects have been considered. Broadly classifying the success of a project can be measured from two angles; i.e. from the standpoint of a customer and that of a vendor. The research focuses on the success definition and evaluation from the vendor perspective. In the current research undertaken, Sogeti Netherlands B.V. has been chosen as a research partner, which is an established IT vendor with a diverse range of ongoing projects in its portfolio. The above scoping of the research led to a refined subject question as follows - How could the use of an explicit business case affect the IT project success? Note: The business case and success measures are from vendor’s standpoint To initiate the research, an analytical framework was developed to answer the primary research question. The analytical framework encapsulates two different angles; the static and the dynamic. Static angle represents the extent of information exchanged (between customer and vendor) at a given point in time. On the other hand, dynamic format represents a situation when the information exchange is continuous between customer and vendor, and also within the actors (Bid manager, Contract manager and Project manager) involved from the vendor side. A detailed literature review was conducted to build an understanding of the outcomes from similar performed researches in the past. The literature indicates that capturing the vital information and addressing the key issues at the onset of a project is important to the success of the project. Previously conducted researches also established a positive relation between business case and project success but the relation between explicit vendor business case and IT project success perceived from vendor perspective, has not been addressed. Another important finding from the literature review indicated lack of proper communication between key project actors as a key factor responsible for project failure. On basis of the above mentioned findings drawn from the literature review and the analytical framework, a research methodology was designed. This primarily involved qualitative approach of sampling certain projects and investigating all related details. Five different projects (at Sogeti), at various stages in the project life cycle, dealing with different IT technologies and varied project sizes were chosen. All key related managers were selected for personal interviews. Based on the primary research question, a detailed questionnaire was designed to be used for the interviews. The data collection was further refined to capture important aspects of business case usage in IT project management practices at Sogeti, which were identified as critical in addressing the research question. The data received from the interviews were thoroughly analyzed, and one of the approaches used in the analysis was measurement of coherence between different answers. To compare and merge the answers gathered from the interviews, different ranges (high, medium and low) measuring the coherence were developed and introduced. These ranges correspond to the level of coherence of answers given by various actors associated with the project. During the analysis, it was found that, answers give by actors were not completely coherent which can affects the project success. It was also seen that managers follow different strategies in the decision making tradeoff. After analyzing the interview data it can be concluded that with the use of an explicit vendor business case, the coherence in the answers found between the actors can be improved which may also affect IT project success positively. Although various different factors play a role in project success, not only the explicit vendor business case, but framing, maintaining and using an explicit vendor business case throughout the entire project life cycle would increase coherence of project drivers. It was also concluded that having an explicit vendor business case may curtail the ambiguity of decision making on issues related to the tradeoff made by the actors involved from the vendor’s side and increase the overall IT project success. The above mentioned conclusions were further translated into recommendations. One the important recommendations is, it is recommended to use an explicit vendor business case to curtail the subjectivity (in perception and decision making) of the actors (Bid manager, contract manager and project manager) during the complete life cycle of the project. The research findings contribute to the importance of having an explicit vendor business case throughout a project management life cycle and creating an environment which ensures transparent and dynamic information handover among the key actors. The research also aims to contribute positively to the IT project success.