Balance the skills of inspiring a diverse group of professionals to get the best out of an equally diverse range of technologies, with the vision of the sales and marketing gurus, and the constraints bean counters put on budgets, then funnel all this into delivering the best outcomes for the customer's wishlist - and getting it right at Internet speed is the key to managing projects in today's e-business world. Sue Bushell reportsOrganisations have increasingly paid tribute to the relationship between IT success and strong project management over recent years but it's clear e-business projects are the proof of the pudding.

Many companies immersing themselves in new e-business projects are learning to their cost that managing e-commerce projects poses unique difficulties, especially where outside help is needed to get projects up and running.

In the e-commerce world, project teams may come together from various business units and outside service providers, achieve a desired result then instantly break up, never to work together again. In those circumstances, skills in managing relationships, collaboration, and alliances are likely to count for much more than abilities to balance budgets, schedules and task lists.

Experts say project managers dealing with e-business projects typically find themselves shifting from a project management approach built on staged management of development under their total control to a world where collaboration rules. The various separate groups involved in a project may end up developing modules simultaneously under the guidance of a project manager whose main role lies in keeping the effort focused and the separate groups' efforts coordinated in a vastly more free-flowing and haphazard environment than they've ever known before. Suddenly project managers are being forced to master a new skill: collaborative project management (CoPM).

Project management in Internet environments is an entirely different species, says The Cutter Edge's e-business Application Delivery editor Jim Highsmith.

Where a traditional project is planned, disciplined and measured, an Internet project is improvised, creative and evolutionary. As a result, the Internet project manager is an entirely different animal.

"The difference between saying you're a collaborative team and being a collaborative team involves enhancing collaborative skills - it doesn't happen automatically," Highsmith writes.

"Balancing face time and online time is important. The team members must understand the distributed decision-making process. Every collaborative project needs a collaboration facilitator, or at least someone who assumes that role part time.

Virtual teams can get off track easily; you can't walk by team members' offices and invite them to chat over a cup of coffee. In the stress of high-speed projects, it is easy for people to focus so tightly on their own work that they forget to communicate with others."

But Highsmith says many project managers who have been successful applying traditional project management (TradPM) concepts will have a difficult time adapting to the more fluid, less controlled style of CoPM.

And he says good project managers need to be able to let go - to truly delegate a decision framework to somebody else.

"It's hard enough to empower employees in the next cube, but to empower somebody halfway around the world as part of your team takes a leap of faith."

Remember the 'C' word

With so many parties likely to be involved in e-commerce projects, one key to success is communication, communication, communication, says Simsion Bowles principal consultant Peter Walsh. That means, in the discussion of risk and the strategy agreed, engaging everyone in the organisation as widely as possible as well as selling them on the benefits.

Good project managers take lessons from every project. That's exactly what Walsh has done after project managing the development of retail Internet banking for National Australia Bank and rolling out an e-business platform to help Mercantile Mutual manage its distribution channels.

"E-business projects are frequently dispersed across various organisational structures. That means the project manager must keep talking to all the parties involved, constantly reminding them that at a certain point of time in the development of your project, they will be required to budget in some resources and do some work on their system.

"And sometimes, especially with old systems where you might have a year's backlog or an existing schedule 12 to 18 months out of changes, you have to intersperse your requirements for changes in legacy systems into that change management, because you're very often not the only project on the block. You have to intercept and coordinate your requirements into their change management regimes," he says.

Old rules

On the other hand, no organisation can afford to ignore standard IT best practice project management and methodologies when it comes to Web-based projects. Projects carried out at Internet speed need best practice project management to succeed.

That means building a firm foundation of TradPM concepts, practices and tools then combining those with the ability to facilitate group interaction toward a desired goal.

"Implementing electronic business from a technology standpoint is no different to implementing an enterprise resource planning system, a client service system or a new network," says e-Business Australia managing director Tony Clement. "You just wouldn't give it to a bunch of yahoos out there and say I need a whole new network, give me one."

Clement says whether you're planning a new Web-based e-commerce infrastructure or implementing a global customer support system, there are tangible benefits to the IT organisation from identifying, capturing and using best practices.

"I think a lot of the Web people have a lot of value to add in terms of creative content and vision and ideas, but if you're going to manage this as a project, you have to apply standard project management disciplines."

Don't invest any money until you have a strategy and a plan, Clement advises. Never start development until you're clear on what the goals and objectives are as well as the benefits to the business.

"Every project that I've seen where they started writing code before they knew what their objective was has been a waste of time and money."

Another piece of good advice is to ensure you have bucket-loads of moral authority on your side. Walsh says whether the project manager is an outsider or an insider, it's essential he or she has the "very strong" endorsement of executive management. That's where your moral authority comes from. Without it, you could run into serious difficulties.

And good project accounting and estimating are equally essential.

"E-commerce projects have a very high profile within the organisation," Walsh says. "They are necessarily subject to rigorous review, and so you have to make sure you've got your accounting rules right, and that you're managing your estimates. Failure to achieve your estimates or adequately explain changes in cost or schedule, means the project will be perceived as yet another IT disaster taking three times as long as it was supposed to."

The right questions

Good project managers know how to divide projects up into specific components. In an e-commerce project the only way they can do so is to first understand the architecture of the final application with the help of a core group that fully understands e-commerce architectures. Working in concert with that core group needs to be another core group that fully understands the business vision, Walsh says.

"Broad consultation on what the new business is going to look like can be fairly limited, because most people still think in terms of the old capability. They don't understand what the capability of the new platform can be.

"You have to really find who has the vision of where the organisation is going and what they want to do with this platform. Are they trying to address new markets? What are the competitive threats? In an e-commerce platform, you really have to think very broadly and creatively."

With so many project deliverables driving the IT organisation, your insight into key project information is essential. Being able to identify the factors that can sabotage a seemingly smooth-running project is critical. What will happen to the schedule if a programmer quits? How will a schedule delay in a specific phase impact the total cost of the project? Going beyond traditional project planning and scheduling by proactively seeking out and identifying issues and risks can ensure the successful outcome of the project.

And the size of the reporting task should never be underestimated. Too many people believe that when you're moving into online systems reports are trivial. They're not. Indeed they're an essential component of the delivery of a system. Walsh says reporting is typically 15 per cent of his total budget.

The ANZ Bank is undergoing a five-year journey towards e-transformation, specialisation and the creation of a portfolio of growth businesses designed to push the bank up the value chain under the stewardship of ANZ Bank global operations and technology head David Boyles.

In the customer area a quality program called One Team concentrates on identifying internal customer needs in terms of the services they provide, and on ways to deliver very high quality outcomes.

And to help IT act more like a commercial enterprise, Boyles put in place a comprehensive project management and project billing system.

Answers, answers

He can now provide reports to any of the businesses IT serves detailing the amount of money spent and what it was spent on, who worked on the project for how many hours and just about anything else the business unit might want to know about the project.

"And based on everything we've seen, including the customer surveys we do with the businesses we serve, they're much happier with what we do, they have much more control over the projects that we do and the outcomes. And we just don't have any projects going off track, going over budget or going beyond the deadlines we promised to deliver them on."

Boyles now has more than 300 managers who have undergone project management certification, an indication of the importance he places on that project management task.

And on the process side he quickly realised the lack of effective cross-project communication was hampering development. To deal with the inability of some technical staff who were managing projects to communicate across projects about what was working and what was not, he has put standardised project planning and tracking technology in place.

Experts differ to a degree about the importance of measurement in the e-business world.

Clement believes it's more vital than ever in the e-commerce world for each project to have very specific goals as well as measurable outcomes. That means starting with a clear understanding of your target audience.

"If you don't qualify who your audience is, who you're trying to get to, who is going to benefit from this, then you're going to fail," he says. "So once you've qualified your audience, then you have to understand what value they are going to get out of it."

Clement recommends you find out what will drive your audience to your site, then build your measurement for success around that. A B2B site where five top vendors represent a large percentage of the business might only be interested in signing up five customers.

Ask yourself whether the desired outcome is to reduce costs, to lock in a client or to reduce cost of cycle time. Then you can start to work towards and measure that outcome.

"Then you have something very specific to go on. It might be that you expect to have 20 clients transacting 10 per cent of their business through your site in the next three months. When three months is up you can see there are actually 18 and they're transacting 12 per cent of their business instead of the 10.

"To me that's what the executives and the boards are looking for, particularly in the existing businesses, from their electronic commerce projects," Clement says.

Get flexible

On the other hand Highsmith points out that while traditional projects are characterised by optimising, and tend to be well planned, have strict processes and are able to be measured, the complex project world is more adaptive.

"You have to learn how to be flexible, how to improvise - and you can't get too hung up on measurements and process," told US Computerworld recently.

While being able to execute every project as close to flawlessly as possible matters more than ever to organisations running on Internet time, by itself it is no longer enough to ensure business success.

These days, organisations can't hope to achieve sustainable competitive advantage merely by getting the right outcome from every project: they also need to make sure they work only on the right projects.

But that's a lesson

Australian organisations have yet to learn, according to PA Consulting Group project and program management managing consultant Ken Lowe, and one it could take them a while yet to master.

A recent survey by PA's corporate headquarters of UK-based companies with significant business enhancement programs, soon to be replicated here, found organisations that actively manage their project portfolios achieve significantly superior returns, including:

* Significant increases in the business return from similar levels of investment; * A better strategic fit as funds are directed to initiatives which better achieve the organisations' objectives;* Improved justification for overall spending, resourcing and funding; * Clear alignment between strategy, activity and outcomes.

The more an organisation puts in to managing its portfolio of projects, the more it gets out, Lowe says.

The business case is compelling given the return on investment from improving the organisational portfolio and program management capability of large organisations.

"We have demonstrated 20 times ROI on an investment comprising consulting fees, systems upgrades and development and staff time for this kind of change project where a range of direct and indirect benefits are delivered including by generating significantly increased value from project portfolios," Lowe says.

There's also increasing evidence there's a strong business case for establishing a project office to coordinate e-business projects and to ensure each new project builds on the strengths and capabilities of the one before.

According to Peter Hinde, InTep manager with Research Company IDC, many projects fail because they're managed part-time by people with no formal training in project management. Objectives are often not clarified and there is frequently no business sign-off.

The project office formalises everything and is really the custodian of all the projects the company does. It determines who does what and the methodologies to be used. Projects don't proceed unless they get a business sponsor and the business sponsor is responsible for driving it on the steering committee. The project office oversees all that.

The notion of the project office is fairly new in Australia, but experts say there are many advantages, from ensuring the organisation isn't doubling up on resources to an enhanced ability to set priorities and concentrate on critical projects.

Project offices can provide standard tools and methodologies, not to mention reporting. They provide team support and use project management toolkits to collect information to provide a global view of the IT project portfolio and human resources.

Once they have built up their profiles, project offices can give the organisation an historical view of project estimates vs performance to make it easier to identify exactly where projections part with reality. Although the approaches vary, some staffs see their project offices as centres of excellence for project management.

Handled well, an effective project office can provide a useful reality check on project ambitions, matching desired goals against staff levels and limitations on time and budgets. It helps the organisation prioritise projects and makes it easier to justify calls for extra staffing, funding or time extensions by backing them up with hard data.