Once a project’s viability has been confirmed, the project needs to be implemented very carefully to ensure its success. The management of IT projects has become a crucial issue for organizations today because such projects are particu- larly difficult to implement owing to the complexity of the technology involved and the reluctance of employees to use technology in their work. Many IT projects end as failures. Surveys have been carried out from time to time to determine the success or failure rate of IT projects. The Standish Group17
has been conducting such surveys since 1994 and releasing its CHAOS report on IT project success and failure. According to the 1994 CHAOS report, 16.2% of IT projects were consid- ered successful, “having been completed on time, on budget with required features and functions”. As many as 31.1% of IT projects were considered to be failures, “having been cancelled before they were completed or delivered but never
used”. The remaining 52.7% were considered challenged (“finished late, over budget or with fewer than required features and functions”). These figures have improved con- siderably since then. According to the 2009 CHAOS report, 32% of the projects were considered to be successful, 24% failures and 44% challenged. Though the success rate of IT projects in the last 15 years has doubled to 32%, every one in four projects still ends in failure.
Three most common reasons for a project’s failure have been identified: weak business case, poor project planning and a lack of top management involvement and support. It is therefore important to examine the viability of the idea for a project, carefully plan the project’s implementation and secure the commitment and support of top management. As discussed above, the viability of the project’s idea can be evaluated by conducting a feasibility study. Project planning and management’s commitment are discussed below.
Project planning
According to the Project Management Body of Knowledge18,
a project plan is “a formal, approved document used to guide both project execution and project control”. The main uses of the project plan are to “document planning assumptions and decisions, facilitate communication among stakeholders, and document approved scope, cost, and schedule baselines”. PRINCe219 defines project plan as “a statement of how and
when a project’s objectives are to be achieved, by show- ing the major products, milestones, activities and resources required on the project”.
According to these two important industry standards, the crucial steps in a project’s life cycle are the determination of its scope and its planning, implementation, control and evalu- ation. The scope states what the project’s objectives are and what work will be done to complete the project. The scope describes the boundaries of the project (what is included in a project and what is not). The scope may become more refined as a project develops, but it should remain within the initial parameters defined. It also includes project deliverables and acceptance criteria, project assumptions and constraints. The project’s scope needs to be developed in consultation with key stakeholders during the project start-up phase.
BotswanaPost encountered a problem in managing stake- holder expectations. Different stakeholders had “different expectations of what the final Kitsong centre product would look like and this affected inspections during the implemen-
16 Alan Thompson, op.cit. “Five forces” is a framework for industry analysis developed by Michael e. Porter of the Harvard Business School. The five
forces include three forces from “horizontal” competition (threat of substitute products, threat of established rivals and threat of new entrants) and two forces from “vertical” competition (bargaining power of suppliers and bargaining power of customers). PeST is a technique for structur- ing an environmental analysis (a routine early process in a planning exercise) by analyzing the political, economic, social and technological factors.
17 The Standish Group is a globally known source of independent primary research and analysis of IT project performance.
18 A Guide to the Project Management Body of Knowledge (PMBOK Guide) is a project management guide which provides the fundamentals of
project management and contains best practices for managing projects. While it is an internationally recognized standard, it is the leading ap- proach in North America.
19 PRINCe2 (PRojects IN Controlled environments) is a process-based methodology for effective project management. It is more of an implementa-
tion methodology and does not concern itself with the conception and feasibility of the project. It is a de facto standard used extensively by the British government and is widely recognized and used in the private sector, both in Great Britain and elsewhere.
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tation process”. BotswanaPost plans to resolve this problem “by making each stakeholder aware of what the final product will be”.
Projects are no longer defined only by the three constraints of time, budget and quality. It has now become equally important to develop a close relationship with stakeholders (customers, clients, communities, etc.) to understand their needs and expectations. It is important to identify the primary stakeholders and to have a dialogue with them in order to arrive at a consensus on those needs and expectations. Such a dialogue also prevents unrealistic expectations on the part of shareholders. As the stakeholders eventually judge the result, they should also have a role in formulating the criteria for the project’s success.
Planning of the project includes identifying the work to be performed, who will perform it, what their responsibilities will be and how they will be organized. It also includes determining the project cost and the timeline, prioritizing the deliverables to achieve the goals, setting the milestones and identifying key performance indicators. Lastly, it includes identifying the risks present in the project and planning for their management.
Realistic milestones need to be set. In the case of the Banco Postal project, it was ensured that “project milestones were achievable and sustainable over time”. For the Botswana- Post’s project, however, the time earmarked for achieving the milestones in some cases was “too tight”. Stringent schedules for implementing the Kitsong centres “led in some cases to poor quality work, in other cases to missed deadlines and in a few rare cases to contractors abandoning the work altogether”.
Implementation of the project includes identifying the equip- ment required, its procurement and installation, the develop- ment, designing and deployment of applications and systems software, and training.
Project control includes change control, regular inspections, and the monitoring and auditing of progress. For most projects, there are some changes to the project’s scope which may have a bearing on the cost and timeline. It is therefore necessary to put in place a change management process. A chain of command should be established for approving any change to the project’s scope, and no approval given without evaluating risk in terms of cost and time.
Project evaluation includes a post-implementation review and audit. While evaluation is necessary for all projects, it is partic- ularly important for projects that have predominantly societal objectives since their impacts are often based on “hype and uncorroborated self-interest studies”.20 Impacts should be
evaluated objectively, as was done in the case of Bhutan Post’s project and is planned for BotswanaPost’s project.
It is not necessary to follow all the stages of project planning because every project is unique. The projects included in this book did not follow each of the project planning stages, but used variations of all or some of the project stages. In selecting a project management methodology, an approach needs to be selected that is appropriate to the project objec- tives and the development environment. Regardless of the methodology used, careful consideration needs to be given to the overall project objectives, timeline and cost, and to the roles and responsibilities of all participants and stakeholders.
Management and institutional support
It is generally recognized that a strong and committed lead- ership is necessary for the successful implementation of ICT- based projects. These projects are usually so complex and face so many obstacles (including resistance to change) that they require a continuous push from the highest level. It was mentioned earlier in this chapter that Poste Italiane’s CeO himself was behind the idea of launching PosteMobile and was actively involved in the execution of the project. Similarly, in the case of Saudi Post, it was the vision of its President that drove the Wasel and related projects. The Managing Director of Bhutan Post was the driving force behind the proposal to establish telekiosks in post offices. The project also received the continuous support of the country’s top political and administrative officials.For the other projects, while no particular individual can be identified with their success, they have had steadfast insti- tutional support at all levels, including the highest decision- making level. Institutions are important to the successful outcome of projects in as much as they collectively shape the motivation of individuals to innovate, cooperate and take risks. In the Banco Postal project, eCT had the support of the Ministry of Communications and the Central Bank of Brazil. In the case of Korea Post, the project received the support of the highest policy-making level. The post office shopping service had been introduced in 1986 at the behest of the Ministry of Post Office (now the Ministry of Knowledge economy). Towards the end of 1990s, when the service took on the attributes of an e-commerce service, it was designated as “a strategic project within the Korean government’s policy on the promotion of IT industry”. For BotswanaPost’s Kitsong project, it was the government’s decision to roll out the cen- tres through the intermediary of BotswanaPost.
Business strategy
In projects aimed at offering a new service or product, a critical question is how to successfully grow that service or product. In today’s challenging environment, the use of numerous business strategies is required to create and sustain a competitive advantage.
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ICTs, new services and the transformation of the postal sector: GuidelinesMany strategies have been developed over the years to help businesses compete effectively; these include benchmark- ing the competition, generic strategies, value disciplines and the blue ocean strategy. In benchmarking the competition, performance and processes are compared with the “best in class” and the best practices identified and adopted. Three “generic strategies” commonly used by businesses to acquire a competitive edge were defined by Michael Porter.21 They
are the cost leadership strategy, the differentiation (market segmentation) strategy and the focus strategy. The cost lead- ership strategy calls for being a low-cost producer for a given level of quality. The product or service is sold either at the average industry price to earn higher profit than the competi- tors or below the average industry price to gain market share. The differentiation strategy is aimed at creating a product or service that is considered to have unique attributes. Custom- ers regard the service or product as better than or different from the other services or products available in the market. In the market segmentation, the focus is on one or two market segments and within that narrow segment to achieve either a cost advantage or differentiation. Initially, Porter believed that from these three generic business strategies, only one strategy should be adopted. Later on, he conceded that a combination of these strategies or a hybrid business strategy could exist.
Michael Treacy and Fred Wiersema modified Porter’s three generic strategies to describe three basic “value disciplines” that can provide a competitive advantage. According to them, “companies that have taken leadership positions in their industries in the last decade ... have focused on delivering superior customer value in line with one of three value disci- plines – operational excellence, customer intimacy or product leadership”. Operational excellence means “providing cus- tomers with reliable products or services at competitive prices and delivered with minimal difficulty or inconvenience. Cus- tomer intimacy ... means segmenting and targeting markets precisely and then tailoring offerings to match exactly the demands of those niches … and product leadership …means offering customers leading-edge products and services that consistently enhance the customer’s use or application of the product.”22
In the blue ocean strategy developed by W. Chan Kim and Renée Mauborgne, “value innovation is the cornerstone”. Blue oceans denote the “unknown market space” compared with red oceans which “represent the industries in exist- ence today”. Most blue oceans “are created from within red oceans by expanding existing industry boundaries”. It is believed that “in any industry, no matter how competitive it is, a company can create a blue ocean of uncontested mar- ket space”. In the blue ocean strategy, instead of focusing
on beating the competition, companies must look outside their present paradigms to find new value propositions. “The creation of blue oceans is about driving costs down, while simultaneously driving value up for buyers.”23
It is evident from the experience of the postal enterprises included in this book that they followed one or more ele- ments of the above strategies. The differentiation and market segmentation strategies defined by Porter were followed by eCT, Poste Italiane and Korea Post and played a critical role in the success of their ventures. They also followed two of the three “value disciplines” described by Treacy and Wiersema, by providing customers with reliable products or services at competitive prices. They, as well as Saudi Post, Bhutan Post and BotswanaPost, also created “blue oceans” in the sense that they found “unknown market space” and also expanded “existing industry boundaries” and looked beyond their exist- ing customers to non-customers to increase demand for their products/services. It is therefore important to devise a suitable business strategy for introducing new products/services.
Choice of partnership
Strategic alliances or partnerships are an important element of business strategy. Bhutan Post, BotswanaPost, eCT, Poste Italiane, Korea Post, Russia Post and Saudi Post all made good use of partnerships. A partnership today is considered not only a means to an end but also a desirable goal in its own right because of their enormous potential for creating and sustaining a competitive advantage. The benefit of enter- ing into a partnership may have to be carefully assessed. If partnerships can provide an understanding of each others’ strengths, they can increase the substance of a product or service by adding brand value and expertise and reducing its cost through the sharing of infrastructure and the inherent risk involved in any new project. Nevertheless, partnerships are not without challenges (differences in work culture, com- mitment, resources and priorities). While self-interest is an essential element, partnerships should be seen as a means of ensuring benefits for each party that could be achieved independently.