In fact, AG Edwards's holistic approach to project management represents a departure from the standard operating procedure and is worth emulating, say field specialists. "Other companies are doing bits and pieces of what AG Edwards is doing," says Sam Lawler, director of GlassHouse Technologies' project management practice. "What makes AG Edwards unique is that they've made a real commitment as a firm to address project management top to bottom."

AG Edwards's top-to-bottom approach to project management has worked well for the company - and it can work for you too.

The Big Picture

The consequences of poor project management can be dire: Plenty of companies, from Nestle to Nike, have seen earnings negatively affected by botched IT implementations. In spite of the financial risk, many still haven't mastered project management: Just 29 percent of IT projects conducted in 2004 were completed on time, on budget and with all features and functions originally specified, according to The Standish Group, a consultancy that publishes a biennial benchmark report on IT project success rates.

Good project management is crucial to prevent backlogs as IT spending increases and companies take on more IT initiatives in 2006. "There's a strong need for project management today. With market conditions improving and profits starting to reappear in organizations, businesses have money to spend on technology, which increases demand for IT," says GlassHouse's Lawler. Yet CIOs cited project backlogs as their primary barrier to effectiveness in CIO's State of the CIO 06 research (see "The Project Backlog", CIO March). "Project management is the number-one success factor for getting anything done in an organization," says Lawler. "A firm's ability to execute its strategy lies within its ability to manage projects."

But project management isn't easy. A PMO or a formal project management methodology (such as PMI or ITIL) doesn't guarantee success, as AG Edwards, which had both, can testify. "I've gone into many organizations that use a project delivery methodology, yet their projects continue to fail," says Peter Graham, a vice president with consultancy Palladium Group. "If that's the only thing that's done, you may see some incremental uptick in quality or ability to meet deadlines, but you won't get sustainable results."

Projects remain challenged for two reasons. First, implementing formal methodologies requires a change management effort not just in IT but across the business. Second, PMOs often become minibureaucracies that fail to address the problems that dog projects, such as a lack of shared accountability between functional and project managers. The need to address those intractable challenges explains why AG Edwards couldn't simply rely on a new methodology or its existing PMO to improve project success rates.

Start from the Top

When Parker came on board in November 2001, he observed the classic case of the IT department as order-taker - never saying no to the business, and never explaining what it could and couldn't do vis-a-vis projects. He knew that to improve project success rates, he had to change this mentality and the business units' perception that IT staffers were passive or incompetent. "A successful project is really a marriage of businesspeople and IT people," says Parker, who oversaw a variety of successful fast-track projects while serving as Northwest Airlines' VP of information services from 1999 to 2001.

At AG Edwards, Parker's first step was to make IT managers realize they were more than yes-men and yes-women and to build their credibility with the business. He began by providing ongoing leadership training to all 250 employees with management responsibility in his IT department. He wanted them to understand their role in achieving AG Edwards's strategic goals. Parker also reasoned that if the IT managers were positioned as bona fide leaders, their business-unit counterparts would take their opinions more seriously, and the groups would be able to work more collaboratively on projects.

"Leaders set the tone for the relationship with the business community and for the level of efficiency, discipline and performance that you get out of your IT shop," he says. "If your leaders are taking orders, there's no way they can effectively form the right kinds of relationships with the business to drive projects effectively."

The training was particularly important for front-line managers, who had always associated themselves with their teams and never with the IT leadership. Parker sought their participation because of the close influence these managers have on staff who execute the project work, from writing code to testing functionality. So he created a series of quarterly meetings during which line managers learn to work with budgets, provide vision and express opinions diplomatically.

Parker also worked with CEO Robert Bagby and the senior management team to align IT with the business strategy. The goal was to establish a plan to strengthen and streamline business operations and identify the technology to enable growth. To do that, he met regularly with a governance committee that comprised the top eight executives to facilitate alignment and consensus on the most important initiatives. Pinpointing priority projects meant that Parker could focus his troops on their execution. He says if you don't zero in on the initiatives that support business strategy and generate revenue, you end up with your employees working on low-value projects, like changing screen colours.

Transforming how IT managers perceived themselves and did business was a dramatic shift for the department and for the company. Although Parker had support from senior management, he still met resistance from certain "bad actors" in the business community who refused to use the proper channels to request work or to follow the new processes for specifying requirements.