Analysis of Effect of Project Management Maturity on Project Success in the Indian IT Industry

Abstract

The research on topic “ANALYSIS OF EFFECT OF PROJECT MANAGEMENT MATURITY ON PROJECT SUCCESS IN THE INDIAN IT INDUSTRY” analysed project management maturity, project success, project challenges, and the association between project management maturity and project success in the IT industry. A survey was conducted among large, medium, and small firms, combining the nine knowledge areas of the Project Management Body of Knowledge (PMBOK Guide) with a Project Management Maturity Model (PMMM). The results show that integration, cost, and communication processes are mature, as they are at level 4 in maturity, which means that processes are managed and regularly measured. Scope, time, quality, and procurement processes indicated less maturity compared to other processes. HR and risk management showed the least maturity among the nine knowledge core areas. Key areas that require special attention are project control processes, informal communication, and risk management. Lack of communication between project team members, lack of executive support, unclear business objectives, incorrect auditing of processes, inappropriate formal methodologies, and other factors contributed to project challenges. Quadruple constraint, system use, and user satisfaction are important factors for project success. Project management maturity and project success were found to be highly correlated.

Introduction

I. INTRODUCTION

In the last Twenty years, many organizations have started using project management to gain an advantage over their competitors. The organizations that have been most successful have used project management to drive change and reach their business goals.

A. Project Management 

Project management is a well-established discipline that has grown significantly over the years. There are now standards, methodologies, international best practices, and bodies of knowledge to educate and inform practitioners. From 1950s, it has gone through several stages of development, including, Critical Path Planning and Network Planning techniques were introduced in the 1950s and 60s, followed by planning and tracking integrated time, cost, and quality using integrated computer systems in the 1970s. In the 1980s, matrix management and training in the role of the Project Manager were introduced, along with the concept of Project Management competencies and Bodies of Knowledge. The 1990s saw the introduction of other Project Management roles, such as Sponsor and User, and the measurement of project success for each role. Programme Management and Project Benefits Management were introduced in the 1990s and 2000s. Finally, Maturity Modelling was introduced in the 2000s and beyond.

???????B. Project Management Maturity   

Good project management is essential for the success of any project, regardless of the field. The popularity of project management has been increasing rapidly over the last decade, with its techniques being used in various industries such as engineering and construction, manufacturing, and computer software development. Without a developed project management system, organizations cannot fully benefit from project management techniques.

In the IT industry, project management has matured over the years due to its constant usage. The term "project management maturity" refers to the level of proficiency and effectiveness of an organization's project management processes, documentation, management, and metrics. Many models have been developed to assess the maturity of project management in different industries. In the IT industry, project management maturity can be evaluated using the nine knowledge areas in the Project Management Body of Knowledge (PMBoK) and the Project Management Maturity Model (PMMM).

The maturity models have five level of maturity ranging from 1 (initial process) to 5 (optimized processes), as given below: -

1. Maturity level 1 (lowest):  Initial process (no or little formal and /or documented processes being used)
2. Maturity level 2:  Structured processes and standards (Basic processes are in place and used most of the time)
3. Maturity level 3:  Organizational standards and institutionalized processes (majority of project management processes are in place and are used by the majority of people)
4. Maturity Level 4:  Managed processes (All project management processes are in place and these are regularly measured)
5. Maturity level 5 (Highest):  Optimized processes (All project management processes are in place, measured and continually improved upon)

???????C. Project Success   

This study is to understand the maturity of project management in IT industry of India with the help of PMMM and whether there is any association between project management maturity and project success. A successful project is one that is completed on time, within budget, and meets all the requirements for quality and scope. This kind of project delivers good value to the customer. A challenged project is one that is completed, but is either late, over-budget, or doesn't meet all the requirements. This project delivers less value than expected. A failed project is one that is never completed or doesn't meet the customer's requirements. It delivers very little or no value at all. There are many factors that contribute to project success. Few of them are The project manager, Project team, Project, Organization , External environment, Establishing quantitative and measurable KPIs on priority basis, Aligning KPIs with business objectives, Setting realistic / achievable targets and project's quality.

II. REVIEW OF LITERATURE 

A study conducted by Kwak and Ibbs in 2000 and Kwak in 2001 analysed the development of a project management maturity model (popularly called Berkeley project management process maturity model) and an analysis methodology to assess the maturity of project management processes. The Berkeley model helped the organization and its people accomplish higher and more sophisticated project management by a systematic and incremental approach. The study by Reginato and Ibbs (2002) showed that companies with high project management maturity benefited from a high return on their project management investment (PM/ROISM) and had a unique advantage in the marketplace due to their superior project management practices. Brooks and Clark (2002) and Kerzner, 2002 evaluated the role of Project Management Maturity Models (PMMM) in improving practice and performing strategic planning for project management. Jugdev and Thomas (2002) determined that project management maturity models are important assessment tools for the professionals. Andersen and Jessen (2003) researched level of project maturity in 13 organizations with a hypothesis that project maturity develops through a maturity ladder where the ladder steps were proposed to be project management, program management and portfolio management. Sonnekus and Labuschagne (2003) in a survey based on Project Management Body of Knowledge and PMMM undertaken to investigate the state of IT projects in South Africa and comparing it with IT Project Management in USA highlighted three key areas that needed special attention and suggestions were made to improve each. Niazi et al (2003) suggested a maturity model that had three dimensions-- maturity stage dimension, CSF dimension and assessment dimension to assess and improve software process improvement (SPI) implementation processes. Cooke and Arzymanow (2003) highlighted the results of an investigation into the nature and extent of variations between project management practices in 21 organizations drawn from six industries on the basis of 10 domains which were identified using qualitative methods. In some industries like petrochemical and defence, project management models are more developed compared to others like pharmaceutical, R&D, construction, telecommunications, and financial services. Bay and Skitmore (2006) conducted a survey in Indonesian companies that do not use project management methodologies to assess their project management maturity using Kerzner's Level 2 assessment tool. Beset (2007) developed a 5-level maturity model to evaluate the current project management maturity level of architectural design offices. Project integration and scope management were highly mature, while project risk management was the least matured function area. Guangshe et al (2008) analyzed the feasibility and limitations of OPM3 in large construction projects in China and proposed key points to improve project management level. Hellered (2010) benchmarked two organizations' project management maturity criteria to compare project teams with similar objectives but not competing with each other.

III. OBJECTIVES OF STUDY

The need for this study arises from the lack of research on project management maturity and project success in the IT industry of India. The IT industry plays a crucial role in the Indian economy, contributing significantly to its GDP (9.6% in 2022).

However, there is limited knowledge about the maturity of project management processes in the industry and the factors that contribute to project success or failure. As the IT industry exports most of its products and services, understanding project management maturity and project success in the industry is crucial for the growth and development of the sector. Thus, the objectives of this study are as under: -

1. To study the project management maturity of IT companies in India.
2. To study the project success, challenges and failure in IT companies of India
3. To study association between IT Project Management Maturity and IT project success.

IV. RESEARCH METHODOLOGY

The methodology used in this research was exploratory, with a focus on studying the project management maturity and success of IT companies in India.

???????A. Design 

Project management is the intricate process of overseeing a project and its various deliverables with the ultimate goal of producing a finished product or service. This process involves identifying the necessary requirements, setting clear and attainable objectives, balancing the competing demands of different stakeholders, and ensuring that everyone involved is working towards a common goal. The Project Management Institute (PMI) produced a set of ethics and standards for project management, which eventually evolved over time to become the PMBoK, a book used to describe the collective knowledge of the project management profession. The PMBoK includes nine areas of knowledge, divided into two main categories: core functions (scope, time, cost, and quality) and facilitating functions (human resources, communication, risk, and procurement), all of which are integrated through management. These knowledge areas are further broken down into processes, which can be mapped onto five process groups: initiating, planning, executing, controlling, and closing - as illustrated in Table-1 at Annexure-A These processes are then applied to a Project Management Maturity Model (PMMM), which is a framework designed to help organizations improve their processes and systems. Project Management Maturity refers to processes, documentation, management, and metrics. This concept of maturity modelling is increasingly being used to map out logical ways to measure project management maturity and improve an organization's services, particularly in IT industry. So, this study tries to determine the maturity of IT Project Management by mapping the nine knowledge areas of the Project Management Body of Knowledge (PMBoK Guide) onto a Project Management Maturity Model (PMMM). The Project Management Maturity is a Independent Variable and Project Success is dependent variable in our statistical model.

???????B. Sample Design & Sampling

To achieve the goal, all the IT companies in India involved in software development projects for different companies were considered as the population of the study. For the purpose of this study, these companies were further divided into three categories: large, medium, and small IT companies. Large IT companies are those that work for many different industries or domains and provide solutions with employees over 50,000. Medium IT companies work for a few limited industries or domains and provide solutions in the form of software, projects, and the internet with employees ranging from 25,000 to 50,000. Small IT companies work for very few industries with employees less than 20,000. A sample size of ten IT companies was chosen for the study, including 5 large, 3 medium, and 2 small-sized IT companies. From each of the 5 large-scale companies, 5 projects in different industries were chosen, resulting in a total of 25 projects. From each of the 3 medium-scale IT companies, 3 projects in different industries were selected, totalling 9 projects. From each of the 2 small-scale IT companies, 2 projects in different industries were chosen, resulting in a total of 4 projects. A total of 38-40 projects were selected for the study, as large companies provide projects in many domains and small companies provide projects in only one or two domains. Convenience and willingness to respond were the basis for selecting the companies and projects. Primary data was collected from project managers, project coordinators, group leaders, business analysts, IT managers, and other related positions within the selected companies. A total of 38-40 respondents were contacted through tele/message/email. The selected companies were from Noida (being hub of IT companies) and Vadodara (being local city).

???????C. Data Collection

The data was collected through the survey method using a questionnaire attached as Annexure - B. This questionnaire was divided into three subsections. The questionnaire consisted of questions regarding project maturity, project success and other details of projects, and was based on a 5-point scale showing five maturity levels.

The association between project success and project maturity was tested. The questionnaire was pre-tested in two companies. Questionnaire was forwarded through departmental channel to all respondents and feedback was also collected in similar manner. In this study, the correlation and regression were used to observe the relationship between project management maturity (Independent variable) and project success (dependent variable). The details of these statistical techniques are given in subsequent paras

The correlation coefficient is a statistical tool used to assess the strength and direction of the linear relationships between two variables.  The most common correlation coefficient is Pearson’s correlation coefficient. It is denoted by ‘r’ which lies between -1 to +1. Its formula is as under: -

The maturity level for project integration management is 4.01 for all companies, indicating that project planning is done with the stakeholders and behaviour planning efforts to create a project management plan are in place. Planning, execution, and control of projects are coordinated across different knowledge areas and projects. The maturity level of the project scope management was 3.99, showing that the product and scope management are integrated to ensure project success. Also, scope-change-control and verification processes are documented and integrated. Completion of projects on time is one of the major challenges for project managers. The level of maturity in time management for projects was found to be 3.76 in the IT industry, showing that a variety of scheduling tools and techniques are available for effective schedule control and formal schedule control processes and practices are integrated.

Project quality management was found to be at 3.95, indicating that the objectives to achieve high quality project management processes and project quality are integrated. Also, project progress toward accomplishing project quality is quantified, implemented, and integrated. The maturity level of project HR management was found to be at 3.66, indicating that the identification and documentation of project roles and responsibilities are done, both individual and group skills are improved to enhance project performance, team members are tracked for performance and development, and timely feedback is provided. Project communication management was found to be at a maturity level of 4.12, showing that communication plans are made and information on project scope, schedule, cost, risk, quality, human resource, and procurement is collected and disseminated for project performance reporting. Well-defined information distribution paths are in place. Risk management for projects in the IT industry has a maturity level of 3.63, indicating that organizations use past experiences for risk identification, response, and control. Potential risk sources are prepared and reviewed for the use of other Project Management knowledge areas. Also, risk identification, quantification, and response plans are integrated across multiple projects to minimize risk. The cost management of projects was found to be at a maturity level of 4.02 in IT firms. This means that formal resource planning, cost estimating, and budgeting processes are integrated. Also, project stakeholders have wide perspectives of different project cost metrics. Procurement management was found to be at a maturity level of 3.84 for the overall industry. This level of procurement management reflects the establishment of long-term relationships between companies and suppliers. This level of maturity further indicates that consistent project quality is being delivered, and the identification of suppliers and contractors is being planned out carefully. Moreover, the monitoring of contracts is well integrated into multiple levels and each phase of project management, making it an integral part of the entire process. Interestingly, this maturity level seems to be consistent across all types of organizations, including large firms (3.98), medium firms (3.66), and small firms (3.87).

A. Factors Contributing to IT Project Success

The findings as given in Table – 3 at Annexure – D indicate that the factors affecting project success can vary depending on the scale of the company and the nature of the project. In the context of IT companies, the factors that were perceived to be most important in achieving project success were the quadruple constraint and system use, with 92.11% and 86.84% of the respondents rating them highly, respectively. The triple constraint was also considered an important factor, with 57.89% of the respondents acknowledging its impact on project success. Moreover, user satisfaction was rated as an important factor by 52.63% of the respondents, while meeting project requirements and sponsor satisfaction were identified as key factors by 47.37% and 42.10% of the respondents, respectively. These findings highlight the importance of a multi-faceted approach in ensuring project success in IT companies. The six major factors contributing to project success are shown below in Figure - 3.

TABLE – 1

MAPPING OF PROJECT MANAGEMENT PROCESSES TO PROCESS GROUPS & KNOWLEDGE AREAS

      Source: PMBOK Guide

Annexure-B

Survey Questionnaire

This questionnaire is developed for analysis of the effect of project management maturity on project success in the Indian IT industry. This questionnaire is divided into Three parts Part-A, Part-B & Part-C: -

SECTION - A

Project Management Maturity.    Please rate each of the following statements according to the maturity levels on the previous page, by making a TICK mark in the appropriate box. If your organization does not implement a specific section, please mark the N/A (not applicable) box.

SECTION - B

Factors Challenging IT Project Success.    Please rate each of the following statements by making a TICK mark in the appropriate box. If any specific section is not applicable, please mark the N/A (not applicable) box: -

Factors contributing in IT Project Success.    Please rate each of the following statements by making a TICK mark in the appropriate box. If any specific section is not applicable, please mark the N/A (not applicable) box: -

SECTION – C

Project Details.     Please answer each of the following: -

Annexure-C

TABLE -2

PROJECT MANAGEMENT PROCESSES IN LARGE, MEDIUM AND SMALL IT COMPANIES

  Source: Author's calculations based on primary data

Annexure-D

TABLE - 3

FACTORS CONTRIBUTING TO IT PROJECT SUCCESS

        Source: Author's calculations based on primary data

Annexure-E

TABLE - 4

FACTORS CHALLENGING IT PROJECT SUCCESS

  Source: Author's calculations based on primary data

Conclusion

The study revealed that surveyed IT companies had a maturity level of 4.1, indicating that all project management processes were in place but not optimized. Project integration management, cost, and communication processes were more mature as compared to other processes. However, less maturity was found in HR and risk management. The study also identified communication as a major factor affecting both project success and challenges. While formal communication processes and procedures were matured, informal communication channels needed attention. Risk management also required attention as most project challenges could be avoided and managed before they impact the project. The study found a high correlation between project management maturity and project success, indicating a high success rate of projects in the industry and its continuous growth.

References

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Copyright

Copyright © 2023 Vivek Hamal, Prashant Tyagi. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.