Tuesday, May 9, 2000

The Impact of Logistics Innovations on Project Management

A project is a “temporary endeavor undertaken to create a unique product or service” (Project Management Institute, 1996). Projects include building a structure, developing a product, and executing a contract. Logistics “plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption” (Council of Logistics Management, 2000). Logistics is usually thought of in connection with military or manufacturing operations. However, there can be projects involved in logistics (eg. building a bridge to move troops) and logistics involved in projects (eg. supplying material to a construction site). It is not surprising, then, that these two disciplines interact and learn from each other. In this paper, great events in logistics are examined to uncover their impact on project management.

Great Logistics Feats of Antiquity
In May of 218 BC, 29 year Hannibal led about 40,000 troops, thousands of horses, and 38 elephants over the Pyrenees and Alps from Spain to Italy, a feat which had been considered impossible. During this 15 day ‘project’, his troops built jetties and rafts for the elephants to cross the Rhone River, raided towns for provisions, and struggled through avalanche-blocked mountain passes while under attack. Many of the troops and most of the elephants were lost, but even in this weakened conditioned, Hannibal defeated the Roman army that awaited his arrival. (Encyclopedia Britannica: Hannibal)

Hannibal has been singled out as a forerunner of grand strategy in military campaigns. His superb logistics while crossing the Alps is a precursor of military logistics today, a discipline in which the US military is considered the world leader. The routine logistics of military operations are interspersed with unique, temporary ‘projects’, of which Hannibal’s crossing is a prime example. The project management challenges of crossing the Alps included fixed resources, limited time, physical obstacles and troops with mixed allegiances who were ill-suited to the task. The techniques Hannibal used to meet these challenges (planning, field engineering, rapid movement, periodic re-supply, and attentiveness to troops and animals) are standard military practice today. (Encyclopedia Britannica: Strategy)

There are other great feats of antiquity which are forerunners of today’s project management practices. Building the pyramids comes immediately to mind. The Great Pyramid in Egypt was built around 2500 BC. It took about two decades and somewhere between 20,000 and 100,000 laborers to erect. Stone was cut with crude hand tools, transported without wheeled vehicles, and put into place without lifting machinery. This “masterpiece of technical skill and engineering ability” remains “perhaps the most colossal single building ever erected on the planet”. No taller building was built until the 19th century. (Encyclopedia Britannica: Giza, Pyramids of; Building Construction)

Construction projects today are not significantly different than those which built the pyramids. An architect designed the building, materials were obtained from quarries and transported to the site, experts in various ‘trades’ prepared the materials and constructed the pyramid. Built to a fixed plan, time and resources were more or less unlimited for the pyramids (unlike today).

There is another impressive feat that has been executed from the most ancient of times and continues to this day: The Event. Perhaps it is a wedding or a funeral or a coming-of-age ceremony – just about any large gathering has always required serving a lot of food to a lot of people in a very short time. Perhaps several clans gathered once a year, and there was a woman who was particularly good at organizing such events. Planning, gathering food, attending to living quarters, cooking, serving, might be a tradition or a ritual, but the event always came off best if someone behind the scenes was coordinating it all. In some sense, the most seasoned project managers throughout various cultures and times might be the event organizers who really knew how to throw a good party on a inflexible schedule with limited resources.

From Logistics to Project Management
All of the knowledge areas of project management were are developed in these three examples of logistics from antiquity: staging a celebration, managing construction, and executing a military movement. A celebration required excellent procurement, scheduling, quality and resource management. Construction projects required superior planning, managing a fixed scope over a long time, procurement and human resource management. Military movements needed excellent execution, careful management of fixed resources, precise timing, superior human resource management and continual risk assessment.

Viewed from a different perspective, advances in logistics might be thought of as starting with project management. For instance, military logistics may start with unique projects, like ferrying elephants over a river, but once the technique is developed, it can be reused to ferry other large items over a river. Feeding a large number of relatives may be a project the first time it is done, but feeding hundreds of people a sit-down dinner in fifteen minutes is routine logistics at conventions held every day. Even the pyramids were more or less standard burial structures for a period of over 500 years. (Encyclopedia Britannica: Pyramid)

The disciplines of logistics and project management overlap in such a way that it is not always possible, or even necessary to tell them apart. Projects that are repeated and standardized may become exercises in logistics, while the first implementation of a logistical solution might be considered a project. Since both disciplines often address similar problems, there is likely to be a significant transfer of ideas from one discipline to the other.

Traditionally, logistics has been the focus of much study and innovation. Since logistics is usually applied to on-going operations, improvements in logistics usually result in increasing benefits over time. If, for example, the cost of a single car can be reduced by a dollar, then in a factory making 250,000 cars annually, a quarter million dollars will be saved each year.

The author has observed that major advances in logistics usually make their way into project management in ten or fifteen years, since the same forces that spurred the paradigm shifts in logistics are usually at work in the broader economy. Below are two examples of logistics innovations moving from manufacturing to construction in one or two decades.

Standardized Parts
Two hundred years ago, the US military wished to procure 40,000 rifles. At the time, rifles were made by skilled workers who fashioned one rifle at a time. Each rifle was different from the next, so maintenance required individually fashioned parts. Unfortunately, there were not enough skilled workers in the country to make the necessary rifles, let alone maintain them.

In 1798, Eli Whitney, the inventor of the cotton gin, proposed that he could make an incredible 10,000 rifles in two years by designing machinery (templates and fixtures) to make standardized, interchangeable parts. This was a major paradigm shift for manufacturing. It took Whitney over ten years to perfect his manufacturing system, which is regarded as the birth of the tool and die industry. Ultimately the system was successful, and the rifles in the war of 1812 were produced much faster, had higher quality, could be more easily maintained, and cost a great deal less than previous rifles. (Encyclopedia Britannica: Eli Whitney; Tool and Die Making) (Taylor, 1990)

In the 1820’s, US sawmills began producing standard dimension lumber in quantity, and in the 1830’s cheap machine-made nails became available. The first ‘balloon’ frame building is thought to be a warehouse in Chicago built in 1832. Standard construction techniques rapidly evolved: 2x4 studs placed 16 inches on center, 2x10 joists spanning up to 20 feet, stability provided by ¾” sheathing through which windows and doors were cut. Machine-made nails were easily driven into the soft wood and a building could be rapidly assembled from manufactured materials by (relatively) unskilled workers. Houses are still built this way, almost two centuries later. (Encyclopedia Britannica: Building Construction)

It’s easy to visualize how standardized, interchangeable manufacturing parts influenced the development of standardized, interchangeable building parts. The entire direction of the construction industry was heavily influenced by Eli Whitney’s rifles. Although a construction project was still a unique and temporary event, it took on many of the features of standardized manufacturing.

Mass Production
In 1908, Henry Ford introduced the Model T Ford. It was so successful that Ford had to continually invent faster, cheaper ways to manufacture the car. Over the two decades of the Model T’s life, Ford perfected the assembly process, introducing the first moving assembly line in 1913. In 1927, the River Rouge plant received just enough iron ore each morning to make a day’s worth of cars; 28 hours later the ore had become the steel in a finished car. In two decades, Ford produced almost 17 million Model T’s, displacing many horses in the process. The Model T precipitated one of the most rapid and pervasive changes of the lifestyle of common people in history. (Encyclopedia Britannica: Henry Ford)

The steel coming into Ford’s plant also moved into the building industry. During the 1920’s between World War I and the Depression, steel framed high-rise buildings came to the cities of America. As these buildings went up, specialized trades became more important, since framing, sheathing, plumbing, heating, elevators, etc. each required full time specialists. (Encyclopedia Britannica: Building Construction) The various trades required someone to sequence their activities, supply materials, assure safety standards were met, and generally manage the project. Thus the construction project manager emerged to coordinate a complex series of specialized but interrelated construction tasks, each of which contributed to the completion of the building. A well-managed construction project bears quite a few similarities to an assembly line.

Just In Time
Henry Ford’s River Rouge plant was an excellent example of Just-in-Time manufacturing, but his ideas on inventory were not widely held. After World War II, operations research developed theories on inventory management which determined optimized lot sizes, reorder points, and distribution stocking levels. In the 1970’s, a radically different theory was developed in Japan, spearheaded by Toyota Motor Corporation. (Shingo, 1981) The concept that inventory should be kept at a minimum, lots should be very small, and products should be built ‘on demand’ rather than stocked, ran contrary to the current manufacturing ‘wisdom’ in the US. However, Just-in-Time models proved to have significant advantages in capital reduction, plant throughput, quality assurance and market responsiveness.

The benefits of Japanese manufacturing techniques began to dawn on the US manufacturing community in the 1980’s. Eliyahu Goldratt’s 1984 novel, The Goal, popularized Just-In-Time concepts and introduced the ‘Theory of Constraints’. (Goldratt, 1984) This theory suggested that finding and ‘feeding’ the bottleneck workstation in a manufacturing plant would allow all other processes to hold to a steady and predictable pace. Pacing manufacturing with the ‘constraint’ workstation required the manufacturing logistics community to abandon many long-held beliefs about inventory management. But the new logistics paradigm worked so well that it rapidly became standard practice in manufacturing and distribution logistics.

If the author’s thesis that logistics innovations make their way into project management in about a decade is true, then Just-In-Time concepts or their derivatives should have impacted project management in the mid 1990’s. Sure enough, in 1997, Goldratt published Critical Chain, a novel in which he applies the Theory of Constraints to Project Management. (Goldratt, 1997)

The Theory of Constraints is useful in project management when multiple projects are competing for the same resources. Similar to its application in manufacturing, Theory of Constraints project management finds and ‘feeds’ critical path tasks and bottleneck resources. Most of the ‘common wisdom’ embodied in project scheduling techniques must be re-thought for this to work in the project environment. For instance, task durations are planned at 50% probability of completion. Thus it is expected that half of the time, tasks will be late. Indeed, it has proven to be difficult to abandon the perception that it is ‘good’ for all tasks to be completed within their estimated time.

Just-In-Time and Theory of Constraints focus on optimizing the entire flow of material or work, instead of sub-optimizing individual areas. The organizational structure and reward system in the US is often set up to reward individual effort, without much regard to (or understanding of) the impact of that effort on the ‘big picture’. Since World War II, the US economy has became increasingly globalized, and countries with different cultures and reward systems are selling products in the US. Unconstrained by ‘standard practice’, these countries consider and optimize manufacturing from a different, often broader perspective. This globalization of the economy has played a large role in bringing Just-In-Time and the Theory of Constraints to logistics.

Globalization has influenced project management also. In the electronics industry, very rapid time-to-market with ‘cast-in-stone’ release dates are required for new products, and Theory of Constraints project management is being widely applied to meet these challenges.

Lessons for the Information Industry
One of the fundamental driving forces behind paradigm shifts in logistics is an overwhelming need for lower cost and less specialized labor, which leads to standardization. This is often followed by an opposing force, the desire for customization.

In 1800, the lack of enough skilled workers to make rifles in the face of an impending war was an unacceptable situation that demanded the invention of standardized, interchangeable parts. In the early 1900’s, the demand for inexpensive transportation that allowed ordinary people to travel great distances was a key forcing function in the emergence of mass production.

It’s easy to see this drive for standardized, interchangeable parts at work in the information industry. In 1983, the IBM PC took the world by force, rapidly becoming the standard of the industry and soon outstripping IBM’s ability to maintain control. (One can imagine that Henry Ford had to invent the assembly line to avoid the same fate as IBM.)

Standardized Internet access, embodied in standard web browser capability, has driven the on-line revolution that is sweeping the country. A single cell phone frequency in Europe has spurred European cell phone use to a far greater level than in the US, which has multiple cell phone frequencies. In the face of a huge demand for a standardized document format, Microsoft jeopardized its position by releasing incompatible versions of Microsoft® Word, while Adobe® Acrobat® filled the vacuum with a standardized ‘Portable Document Format’ (PDF).

Standardization is driven by an insatiable need which cannot be satisfied at an acceptable price by the available techniques or skilled people. Today the software industry has an enormous gap between the need for programming and the available programmers. It should be obvious to students of economic history and that the software development environment is ripe for a massive switch to standardized, interchangeable, mass-produced components.

Mass Customization
As brilliant as Henry Ford was, he missed out on a major trend that overtook the success of his Model T. After two decades, people began to get tired of black (the only color of the Model T). Copying Ford’s methods, other manufacturers figured out how to make inexpensive cars, and they started adding new features. Ford’s failure to recognize the shift in customer desires caused his company to loose its overwhelmingly dominant position in the industry. (Encyclopedia Britannica: Henry Ford) In the 1970’s the same thing happened to the US car makers – their failure to respond rapidly to the huge demand for fuel economy and high quality allowed Japanese car-makers to gain a large market share.

It is not surprising that one of the latest logistics innovations is mass customization, enabled by the information revolution. Dell Computer builds computers only after receiving an order, and ships the customized computer within days. Anderson Windows custom-builds windows to fit individual residential houses. Mass customization, a key advance in new product development and logistics, requires modular architectures and standardized components that are not assembled until individual customers place orders. Sophisticated information system support, especially in order management, is necessary for successful mass customization. (Gooley, 1998)

Products are not the only things that can be customized; the Internet has abundant examples of customized marketing, customer service, and information delivery. ASPs (Application Service Providers) are rapidly positioning themselves to ‘rent’ applications through the web. ASPs sell common applications that can be rapidly configured to meet individual customer requirements. In fact, the appearance of ASPs is probably a direct result of the pressure to produce ‘standard’ software in the face of a severe programmer shortage. ASPs success will depend on how they manage to retain the advantages of standardization while moving toward mass customization.

Software project management is also being influenced by mass customization. Instead of finalizing system requirements at the beginning of a project, it is considered good practice these days to allow users and customers to modify the requirements on-going basis as the software is being developed. The concept of continuing user feedback during software development started with the spiral life cycle, originally proposed in 1988 (Boehm, 1988), and evolved to The Unified Software Development Process (Jacobson, 1999). Common wisdom today holds that IT projects should iterate toward an increasingly competent set of capabilities through incremental builds which allow continued customization of the software during its development lifecycle.

Summary and Conclusion
Logistics innovations are not accidents. They are driven by economic forces which demand a paradigm shift to keep an undesirable situation from overwhelming the economy. Once the paradigm shift occurs, the forces that caused it continue to exert pressure on other areas. Over time, the new paradigm will make its way into project management practice.

Often the economic driving force behind innovation is an overwhelming need for something in far greater quantities at far cheaper prices than current practices allow. This drives innovation in the direction of standardization. However, once standardization becomes the common paradigm, a shift in expectations usually occurs. Customers begin to expect tailored products, without increasing the cost, of course. This drives innovation in the direction of mass customization.

Another driving force behind innovation is globalization, which brings unique perspectives to logistics and project management. A fresh look at a problem by someone who doesn’t know the ‘right’ answer can lead to out-of-the-box thinking and new approaches.

By looking for trends in economic driving forces and noting innovations in logistics, project managers can predict the forces which will drive project management practices in the future.
Barry W. Boehm, “A Spiral Model of Software Development and Enhancement”, IEEE Computer, Volume 21, Number 5, May, 1988, Pages 61-72

Council of Logistics Management, “Definition of Logistics”, retrieved March 29, 2000 from http://www.clm1.org/

Goldratt, Eliyahu, Critical Chain, North River Press, 1997

Goldratt, Eliyahu, The Goal, North River Press, 1984

Gooley, Toby B., “Mass Customization: How logistics makes it happen”, Logistics Management and Distribution Report, April, 1998, retrieved on March 29, 2000, from ‘Logistics Online’

Jacobson, Ivar, Booch, Grady and Rumbaugh, James; The Unified Software Development Process, Addison-Wesley, 1999

Project Management Institute, Guide to the Project Management Body of Knowledge, 1996, The definition of ‘Project’ is in Section 1.2, Page 4.

Shingo, Shigeo, Study of ‘Toyota’ Production System form Industrial Engineering Viewpoint, Japan Management Association, 1981

Taylor, David, Object-Oriented Technology, A Manager’s Guide, Addison-Wesley, 1990, Reference to Eli Whitney, Pages 85-87

Screen Beans Art, © A Bit Better Corporation

Monday, April 3, 2000

A Rational Design Process – It’s Time to Stop Faking It

The literature on Object-Oriented software development processes has proposed a lifecycle which is often found to be at odds with the established software engineering processes of organizations. In particular, more established software engineering processes at higher CMM (Capability Maturity Model) levels often have deep roots in the ‘Waterfall’ lifecycle. Some of these mature processes might be evolving into legacy processes.

The emerging Software Engineering Body of Knowledge (SWEBOK) is more appropriate than the Project Management Body of Knowledge (PMBOK) as a course of study for potential project managers of software projects. PMBOK has a tendency to emphasize scope management and task decomposition, while SWEBOK focus on requirements analysis and architectural design. Recent developments in Object-Oriented software engineering assert that an emphasis on requirements rather than scope, and on architecture rather than tasks leads to superior software development processes.

Specifically, organizations should not demand detailed fixed scope, cost and schedule plans at the beginning of a significant software development effort. There is a lesson to be learn from the building industry, which allocates up to half of the overall development time to architectural design, and does not create a controlled project environment until the construction phase.

When developing e-commerce applications, requirements analysis and system architecture remain critical, but they should be expanded to a broader context. The business plan replaces a project plan in e-commerce; marketing (and even sales) drive requirements analysis; and architectural design should be broadened to include infrastructure design. E-commerce system design encompasses system-wide issues, including hardware, networks, purchased components and partnerships, as well as interfaces with back-end fulfillment and collection capabilities.

1. Introduction
The Minneapolis Star/Tribune [17] recently reported that after an international search, the Walker Art Center has selected a Swiss architect for a $50 million, 110,000 square foot expansion project. “Design details still are scarce to nonexistent…. The site plan, scheduled to be announced in four to six months, calls for a two-year design phase followed by three years of construction.”

A recent issue of Computerworld [9] reported that a grocery chain’s announcement of plans for a four-year, $250 million systems overhaul sent its stock “into a tailspin”.

Computerworld [8] also noted that a managed care organization has finally recovered from a financial disaster caused by “major computer system problems”. The company showed its first profit since 1997; posting a loss of almost $20 million last year, including $5 million spent to fix the problems.

People are confident that Minneapolis will have a spectacular new art center in five years; after all, we know how to design and build buildings. Unfortunately, announcements of new information systems do not generate the same level of confidence. After 40 years of software development, a cloud of skepticism continues to hang over promises of new and improved systems

2. Software Engineering Processes
Many, many attempts have been made to bring discipline and predictability to the software development process. There is no doubt that software engineering can benefit from a disciplined process. However, utilizing the wrong software development process can interfere with discovering and applying truly beneficial software engineering processes.

2.1 Legacy Processes – Emphasis on Scope
It is well known that in the fast moving software world, legacy systems have a tendency to prevent a company from responding rapidly to new opportunities. The limited number of large company successes in the dot-com world is but one example of this commonly held belief. This paper contends that legacy processes can be much a problem as legacy systems in developing truly extraordinary information systems.

This is not to say that software engineering should proceed in the absence of a process. But a mature software engineering process that is the wrong process can be significant handicap to producing excellent software systems. Let’s look at a hypothetical case.

To reach process capability level three, an organization determines that it is important for software project managers to have a common approach to project management. Casting about for a project management process, the organization decides that PMI (Project Management Institute) has both a Project Management Body of Knowledge (PMBOK) [19] and a certification process which can be used for all types of projects, including software development.

The organization decides that all software project managers should either hold or work toward PMP (Project Management Professional) certification. The message sent throughout the organization is that projects must be managed using processes found in PMBOK.

There are many good processes in PMBOK, but it has a significant flaw when applied to software project management. Although PMBOK claims to be independent of lifecycle, an examination of the body of knowledge indicates otherwise. With its roots in government contracting, PMBOK places very strong emphasis on determining scope, decomposing tasks into a Work Breakdown Structure, and managing each element of that structure to the scope it represents.

Here are some quotes from PMBOK to emphasize this point:
“When properly defined, the scope of the project – the work to be done – should remain constant.” (Chapter 1)
“Core planning processes….include:
  • Scope Planning
  • Scope Definition
  • Activity Definition
  • Activity Sequencing
  • Activity Duration Estimating
  • Schedule Development
  • Resource Planning
  • Cost Estimating
  • Cost Budgeting
  • Project Plan Development” (Chapter 3)
“A written scope statement is necessary for both projects and sub-projects…. Proper scope is critical to the project’s success.” (Chapter 5)
Chapter 5 goes on to champion the Work Breakdown Structure (WBS) and the associated work decomposition as the tool to use to establish and manage scope. The clear message is that a project without a Work Breakdown Structure is a poorly managed project indeed.

2.2 A Lesson from the Building Industry
Let’s return to the Minneapolis Art Museum and the 40% of the project which constitutes the design phase. In this project, the cost and schedule are fixed, as is the size of the expansion and its purpose (to make the art center a “gathering place”). So a vision exists, and the architect is expected to select a design and materials to realize the vision. However, during the design phase – a significant portion of the project – neither scope management nor a Work Breakdown Structure are critical to the overall success of the project. In fact, this phase is dedicated to understanding requirements and establishing the building architecture. The scope is not going to deviate significantly from the 110,000 square foot $50 million building. Beyond that, scope management and work decomposition are not dominant issues during the design phase.
It is also clear that the ultimate success of the new museum depends largely on the insightfulness of the requirements analysis and the brilliance of the architectural design. An extensive search process has already taken place to select an architect who can be trusted to be insightful when gathering requirements and brilliant when designing the building. Adding the search time to the project, note that the first half of the allotted time is spent focusing on the building’s architecture.

For the first two years, the architect will be expected manage the project, including gathering requirements and delivering the final design. A ‘project manager’ will be assigned about the time the project goes out for bids, although the architect will provide oversight and retain responsibility throughout the project.

2.3 Toward a Modern Process – Emphasis on Requirements Analysis and Architecture
Consider the developing SWEBOK (Software Engineering Body of Knowledge) document [12]. Here the primary planning process is software requirements engineering rather than scope definition. This may seem like a similar activity, but it is different in that requirements analysis is a discovery, elaboration and negotiation process that occurs throughout the lifecycle of a project.

Consider the following quotes from the Software Requirements Engineering Knowledge Area in the Iron Man version of SWEBOK: “In practice, many things conspire to make requirements engineering one of the riskiest and most poorly understood parts of the software lifecycle….All of these things mitigate against the ideal of having a requirements baseline frozen in place before development begins. Requirements will change, and this change must be managed by continuing to ‘do’ requirements engineering throughout the life-cycle of the project.”

The same document [12] notes that “The maturity of most software development organizations’ requirements engineering processes lags well behind that of their down-stream life-cycle processes.” It further notes:
“Software engineers … cannot be expected to take a list of user requirements, interpret their meaning and translate them into a configuration … that satisfies the user requirements. In most cases … user requirements are elaborated … into a number of more detailed requirements that more precisely describe what the system must do. This usually entails deploying engineering skills to construct models of the system in order to understand the logical partitioning of the system, its context in the operational environment and the data and control communications between the logical entities. A side effect of this is that new requirements … will emerge as a conceptual architecture of the system starts to take shape. It is also likely to reveal problems with the user requirements … which have to be resolved….”

The bottom line is that SWEBOK recognizes that requirements are gathered, refined, negotiated, and modified throughout the entire project, with particular emphasis on flexibility during the design phase. On the other hand, studying for PMBOK certification will give an novice project manager the impression that the waterfall lifecycle is in fact the only ‘rational’ life cycle for a software development project.

To quote from Cantor [4], “…much of the overall project management literature is better suited to construction projects than software. The science of project management was developed as a tool to aid the construction manager to plan and tract the required schedule, budget, and resources…. Building a bridge is an exercise in dependency management, managing software is primarily an exercise in content management…. Bringing the construction management mentality to software development leads to a waterfall lifecycle: …taking this rigid approach appropriate to construction adds risk to the projects.”

2.4 The Waterfall and the Project Office
The classic “Waterfall” lifecycle (see Figure 1) does not make a lot of allowances for continuing requirements analysis throughout the development cycle. The on-going nature of requirements analysis has been embodied in virtually every software development life cycle except the “Waterfall” lifecycle. (See chapter 7 of [16] for a comparison of ten lifecycle models.)
Figure 1:  The Waterfall Lifecycle
There are IT projects where the waterfall lifecycle is appropriate – an excellent example would be Y2K projects. The requirements of these projects were completely clear; requirements analysis was not very critical. Rarely did a Y2K project attempt to establish a new architecture. Fixing the date fields of all the systems in the world would be analogous to changing out all of the lead pipe in every plumbing system that exists. This takes some very skilled and creative plumbers and good project management, but you don’t need an architect or a deep analysis of what the project is supposed to accomplish.

Computerworld [7] reported in an article titled The Y2K Dividend, “The big winner, most Y2K veterans say, has been project management. … An important side effect of the new emphasis on project management has been the project office, which in many cases began as the Y2K office.” If, however, new projects which require in-depth user understanding and careful architectural design are subjected to a Y2K style of project management, these projects are could be at risk.

2.5 Object-Oriented Processes
In 1986, Dave Parnas [18] equated a ‘rational’ design process to a ‘waterfall’ lifecycle, and suggests that even though such a process is impossible to follow, perhaps we should ‘fake it’. Some years later, Booch [3] proposed that a two-dimensional set of processes is a good way to ‘fake it’. On the macro level, we manage the project using the phases that management expects, while on the micro level, and different process is going on. Booch’s motto for the macro process is “Make it so.” (from Star Trek), while his motto for the micro process is “Just do it.” (from Nike®).
Figure 2:The Unified Lifecycle
What is clear is that the software engineering community has gone to great effort to put the waterfall lifecycle behind it, while continuing to acknowledge that this may be the ideal lifecycle, but it is simply impossible to follow. Perhaps it is time to acknowledge that a software engineering process which demands a detailed scope definition to be fixed at the beginning of a project is not an ideal process, but is instead a “legacy process”.

In [15], Leffingwell hints that IEEE 830: Standard for Software Requirements Specification (1994) might need updating. In its place, he recommends using a “Modern Software Specifications Package,” which is a “logical structure” that flows from the vision document and contains an “elaboration of the various requirements for the system.” The Modern Software Specification contains a fairly detailed system design, and is produced at about the 30-40% point of a project.

The software development process is beginning to look like the one used for our art center building. Recall that from the start, there was a vision (110,000 square feet, $50 million, 5 years). In a couple of years, we can expect detailed architectural drawings and specs to go out for bids.

It is time to admit that it is not ‘ideal’ or even ‘rational’ to start with a detailed requirements definition at the beginning of a software development process; the requirements specification should be developed as on-going part of the project. If we want a good system, we must allocate a significant portion of the total time for the really important activities of the project, namely requirements definition and architectural design. Scope management and work decomposition are simply not important during this fairly large phase of the project. In fact, if they are emphasized, they will tend to impede the important work that needs to be done to lay the groundwork for an excellent system.

2.6 Developing the Architecture
Although the analogy to designing a building has been followed thus far, there are a significant differences between building software and buildings. In both fields, a model is often used to demonstrate concepts, help gather requirements, and prove the architectural design. However, while scale models of a building are throw-away items, it is common to build usable portions of a software system as part of the design process.

In fact, the iterative approach used in Object-Oriented projects recommends designing, coding, and testing architecturally significant portions of the system during the design process. This is not throwaway code; it is a usable, tested implementation of a select set of requirements. The reason for implementing portions of a system during the requirements gathering and design process is to provide design feedback and customer verification that the system architecture is sound.

Further, accepted OO project processes call for continued incremental implementation throughout the project. The second iteration incrementally refines the architecture and functionality of the first iteration. Subsequent iterations add new features and elaborate on the capability of already implemented features. Each iteration is implemented and tested and then used to provide development and customer feedback.

Leffingwell [15] notes: “It is worth pointing out that use case elaboration is not system decomposition. That is, we don’t start with a high-level use case and decompose it into more and more use cases. Instead, we are searching for more and more detailed actor’s interactions with the system. Thus, use-case elaboration is more closely aligned with refining a series of actions rather than hierarchically dividing actions into sub-actions.”

Similarly in refining the system through incremental iterations, the core system is not decomposed, but instead it is broadened. For instance, early iterations might implement the most common paths through a system, while subsequent iterations might address increasingly less likely deviations from the general flow.

2.7 Iterative Construction
When building a building, the construction phase is generally though of as the start of ‘traditional’ project management. At this point, drawings and specifications define the scope, and contractors bid on this well-defined scope. However, it is quite difficult to divorce design from implementation when using an iterative approach to software. In fact, as was mentioned earlier, requirements analysis and design continue at some level throughout the project.

However, after one or two iterations, the architecture is largely established, and the focus shifts to refining and implementing the requirements. In an OO project, the requirements are generally captured in use cases, and the process focus shifts during construction to iterative use case realization.

Iterations are not the same as phases in a ‘classic’ project. PMBOK [19] notes, “The conclusion of a project phase is generally marked by a review of both key deliverables and project performance…. These phase-end reviews are often called phase exits, stage gates, or kill points.” The deliverables are usually presumed to be complete at the end of a phase.

On the other hand, the end of an iteration is marked by acquiring enough information to move on to broader elaboration. Work products (artifacts) produced by an iteration will continue to evolve. The end of an iteration marks a change in focus, perhaps an elevation of formerly subordinate goals to a higher level, or turning attention to details that were previously tabled.

Project iterations are generally released according to a planned schedule. The scope included in an iteration usually may be modified (if necessary) to meet the schedule. Since subsequent iterations provide a mechanism for recovering scope, and since a functional system results from each iteration, OO projects tend to be managed to meet time commitments rather than scope commitments.
The iterative approach is not a new or unique concept. Most software project lifecycles employ some form of iteration. (See [16].) The problem is, many people still consider the waterfall lifecycle to be an ‘ideal’, if unattainable goal. It’s time to recognize that the software development process is fundamentally iterative, and stop trying to ‘fake it’.

There is another change shaking the software world which is perhaps more profound than the evolution of software project management processes. Internet startup companies have been springing up like wildfire for the past couple of years, challenging the foundations of existing corporate systems and software development practices. A new dot-com company can generate an idea, get financing, implement a massive hardware and software system and be generating an enormous amount of business, all in the span of a few months.
How do they do it? They don’t seem to spend much time gathering and analyzing system requirements; they seem to know going in what they want to do. The startup company’s system seems to be build on purchased components and rapidly formed partnerships; internal development appears to be limited. Change is constant, from the content of the web site to the products and services offered to the infrastructure used to deliver the goods.

How is an established organization with mature software development processes supposed to compete with these upstarts? Perhaps the only way is to examine and adopt the best parts of the software development processes used in a dot-com company.

In the previous section, a case was made that requirements analysis and architectural design are the key ingredients for successful software projects. In this section, we look at the equivalent of these processes in the dot-com software development model: marketing and infrastructure design.

3.1 Practices in a Startup Company
Taking a step back, consider the mechanism through which a startup company obtains funding: the business plan. This is much more than the vision document of a project plan. The business plan starts out by identifying a market need, then makes the case that the company will be able to satisfy that need through a set of products or services which will (eventually) generate profits.

Business plans are usually quite detailed and always carefully reviewed by potential investors. They are scrutinized, questioned, refined and revised by venture capitalists, boards of directors and potential partners. Few software project plans are as thoroughly reviewed as a startup’s business plan.

It is a mistake to think that startup companies have not done requirements analysis. However, since their stakeholders are customers, they do it with marketing. Marketing is a well known discipline, and there are plenty of marketers available. A key difference between marketing and requirements analysis is the strong element of sales that is associated with marketing. If a customer doesn’t appreciate a product, there is always a sales function to foster that appreciation.

Any existing company that wants to ‘get into’ e-commerce should realize that e-commerce means selling products or services to customers. Therefore, marketing and sales are key elements of e-commerce. However, the synergy between marketing and the software development team must be high. If marketing simply tosses a laundry list of requirements at the development team, we have the worst embodiment of the waterfall process.

In a startup company, the founder (who perhaps hired the system developers) will be a very persuasive product champion. The requirements analysis process is fast and effective because it is closely linked to both the business plan and to the software development team’s motivation (eg. to their paychecks). Moreover, a startup company will generally use a Design-to-Tools lifecycle [16] for all except the unique core of the system. When coupled with an Evolutionary Delivery Lifecycle [16] this strategy allows fast initial implementation and provides a learning environment.

3.2 From Architecture to Infrastructure
The previous section hypothesized that the architectural design is the second critical success factor in a software system. This sections proposes that infrastructure is the equivalent of architecture in e-commerce environment. Successful e-commerce is dependent not only on a solid software architecture, but also on the ability to expand hardware and network capacity aggressively, and the ability to mesh seamlessly with an effective order-fulfillment and revenue collection infrastructure. How do dot-com companies come up with a workable infrastructure in just a few months?

The first thing to note is that designing exceptional infrastructures and architectures does not take lot of people, it requires a few exceptional people. This is why the Walker Art Museum did an international search for its architect. Venture capitalists will tell you that their investment decisions are based almost exclusively on the management team of a company, not the proposed product. Why is this?

In lieu of detailed project plans, investors in startup companies are looking for people who have already proven that they know how to develop a similar product or service, market it, and establish excellent operations. Since an investor is unlikely to be able to evaluate a project plan in any case, all they have to go on is the quality of the management running the business.

In a fast-moving e-commerce project, there is a great need for top notch design of the entire infrastructure, including hardware, response time under volume, and scalability; to say nothing of the software architecture. A recent Computerworld article [6] suggested that corporations can be at a significant disadvantage when designing web-based systems, because the complete infrastructure design is often not in the domain of a single person. One function may be responsible for the network while another handles servers, a third does the software development, and so on. This pigeonholing of responsibilities tends to create components that are individually optimized, to the detriment of system-wide optimization.

A further difference between dot-com infrastructure design and corporate system infrastructure design comes from the dot-com’s limited resources. A startup company is does not have the resources to develop software when an existing tool will do the job. Whether it’s a survey capability or a link to MapQuest, if the solution exists, it is not re-developed. Partner and purchase is the name of the game. On the other hand, as noted in [6], these companies are not going to shell out a lot of money for software licenses. And of course, a dot-com must develop a core capability if the company is to have any uniqueness and staying power. But dot-com companies know instinctively that re-inventing an existing wheel will sap valuable resources at best and result in an inferior wheel at worst.

So how does an established organization compete against the dot-com’s when designing the system infrastructure? First, work from a business plan rather than a project plan. Second, search for and retain top-notch infrastructure and system architects. Then be sure their charter is broad enough to allow a holistic system view. Be sure they have the charter to rapidly purchase and partner where practical. Be sure the project is adequately funded and has proper organizational sponsorship (the equivalent of venture funding). Be sure the architects and marketers are synchronized. Finally, a tight timeframe (as opposed to prescribed scope) tends to inspire creativity in the Internet environment.

3.3 Rapid Implementation
What about implementation? The pattern for rapid development of dot-com systems is well known. First, a limited deployment model is developed. For instance, the business model may be tested in a limited geographic area; or a limited number of products may be offered for sale; or a limited audience may be engaged. This ‘limited edition’ is debugged, along with its supporting infrastructure. Once the offering is stabilized, it is rapidly scaled up to the full intended audience.

The tendency to ‘go live’ to a limited audience is analogous to the beta testing common to with all software products. Since beta testing is such a common and effective practice for software products, it is a wonder that it has not been more widely adopted as a standard practice in software development projects. In fact, the Unified lifecycle of incremental iterations embodies both successive ‘builds’ and the moral equivalent of beta releases. In addition, since the early iterations are aimed at risk reduction, this process is similar to the model-then-scale implementation strategy of the dot-com’s.

Software projects should begin with a ‘Vision Document’ that states in general terms what the system should do and what it’s boundaries are. The vision document should clarify the business purpose of the system, along with the overall cost and timeframe which is justified and required by the business objective.

The next step is to choose the architect(s), a small group of people with proven credentials . The architectural team coordinates requirements engineering, system modeling, and architectural design. They will require significant input from users (sometimes represented by business analysts). They also need a configuration management system to tracks requirements as they are defined, elaborated, and realized. An iteration or two of the system should be developed to help define the architecture and address key risks.

This initial phase of the project should be expected to take perhaps 40% of the allotted timeframe. At it’s conclusion, a fairly detailed set of system requirements should be available. At this point, a project manager can add staff and begin to manage scope. More important, the project manager should pace the project through frequent, planned iterations that are managed to schedule.

If this seems like a risky lifecycle, consider the risks in a legacy software lifecycle. We would not consider erecting a large building without an architect. We probably wouldn’t launch a large advertising campaign without careful design by an agency. So why would we consider developing a large software system without chartering an architect to analyze the user requirements, establish a system architecture, and oversee its construction?
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[6] Computerworld, 1/31/2000, Dot-coms’ Newest Secret Weapon Doesn’t Have a Name

[7] Computerworld, 2/7/2000, The Y2K Dividend

[8] Computerworld, 3/13/2000, Oxford Rebounds From IT Disaster

[9] Computerworld, 3/20/2000, A&P’s 250 M IT Plan Shunned by Wall Street

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[16] McConnell, Steve; Rapid Development, Taming Wild Software Schedules, Microsoft Press, 1996, Chapter 7

[17] Minneapolis Star/Tribune, Wednesday, March 22, 2000, B Section, Page 1.

[18] Parnas, David L. and Clements, Paul C.; A Rational Design Process: How and Why to Fake It, IEEE Transactions on Software Engineering, Vol. SE-12, No. 2, February, 1986

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