Reducing the Risk of Failure in Project Management: How Managing Stakeholders Effectively Can Lead to Success in e-Government Projects.

1. University of Liverpool
Management School
BAPA 105
Project Management
2011/2012
Coursework Assignment
Reducing the Risk of Failure in Project Management:
How Managing Stakeholders Effectively
Can Lead to Success in e-Government Projects
Author :
Module Leader : Dr. Iain Reid
Marco Rodolfo Marabese
MBA Student
March 22, 2012
The Liverpool MBA Program
ID 200819669
m.marabese@liverpool.ac.uk

2. BAPA 105 – PROJECT MANAGEMENT – 2011/12
Reducing the risk of failure is one of the priorities for a project manager and for this reason
extensive research has been done on this topic. However, in order to lead a project to
success, focusing on critical aspects of the project lifecycle is crucial. One aspect, as stated
by the Project Management Institute (PMI), is related to stakeholders (PMI, 2008). The aim
of this essay is to investigate this feature in a particular branch of Information Technology
(IT) projects: electronic Government (e-Government), which is the use of IT to improve the
efficiency of public administration. According to my experience in such projects, meeting
stakeholders’ needs (especially external stakeholders, notably citizens) is the main goal for
public organisations. In the last decade, e-Government projects continue to have an
important presence in the life of contemporary public sector organisations as they often
play a strategic role in community development. In the European Union (EU), IT expenditures
in 2004 were estimated at about €36.5 billion (eGEP, 2006) with the UK, Germany, France
and Italy as the largest investors. However, as stated by Heeks (2003), despite a huge
investment in new technologies, a large number of e-Government projects fail either
partially or totally. This essay will highlight, with an analytical approach, how risk of failure
in e-Government projects can be reduced by understanding stakeholders’ expectations. It
will also explain the importance of managing stakeholders from a project management
perspective and how they can lead to successful implementation of Information Systems (IS)
in the public sector.
It was not until Freeman (1984) that a thorough, analytical study of stakeholders’
expectations was conducted during the development of a company project. He highlighted
stakeholders’ importance to the long-term effectiveness of a business goal by defining the
relationship between stakeholders’ roles and the organisation’s objective. Freeman further
changed his model (Freeman et al., 2004) and it has been recently developed by
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3. BAPA 105 – PROJECT MANAGEMENT – 2011/12
Achterkam and Vos (2008). However, this essay also draws to some extent on the
approach supported by Stieb, who argued against Freeman’s assumption of ‘creating value
for stakeholders’ via ‘the question of altruism’ (Stieb, 2009). For example, he reported how
the pursuit of personal interests sometimes can overstep the bounds and endanger the
success of a particular project. Furthermore, it is acknowledged that there is a need to be
aware of the possible limitations of understanding the environment from some stakeholders
who are covering the role of decision-makers (Stieb, 2009).
Authors have tended to associate stakeholders’ expectations with the study of a business
facet, such as development management (Cook et al., 1995); urban environmental
infrastructure improvement (Ogu, 2000); teaching and learning methods in an education
system (Wearne, 2008) and all aspects related to large-scale building constructions, such
as an international airport (Toor and Ogunlana, 2009).
The expectation of failure of IS from a stakeholder’s perception has prompted considerable
research. Starting from Freeman’s studies, Lyytinen developed a model that provided
information on the frequency of different types of IS failures (Lyytinen, 1988). In this model,
stakeholders can face problems in two different ways: ‘development failures’ and ‘use
failures’. Both ways can be analysed and predicted to reduce the risk of failure. Pan
(2005) used Freeman’s stakeholder analytical framework and Lyytinen’s considerations to
assess a case of project failure in an IS. Recently, Lyytinen’s model was redefined and
adapted to be used in modern IS by Barclay and Osei-Bryson. Using their model known as
Project Performance Develop Framework (PPDF), they evaluated the impact of
stakeholders’ actions on project performance from a project management view in a
Caribbean-based software organisation (Barclay and Osei-Bryson, 2010).
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4. BAPA 105 – PROJECT MANAGEMENT – 2011/12
Because public administration involves a specific business in the IS field, e-Government, in
the context of this study, it includes electronic services delivered by a local administration.
Several studies have explored the risks and benefits of failure in this project category. The
first example of automation in a government department is described by Gammon (1954),
but it was only after the Internet revolution that e-Government became more popular. As
defined by Heeks (2001), e-Government is the use of new technologies to support
government activities. According to Heeks, this kind of project is no longer strictly related to
‘IT in government,’ but it embraces activities like ‘e-Administration’ (creating efficiency in a
government environment), ‘e-Citizens and e-Services’ (creating an effective connection
between citizens and governments) and ‘e-Society’ (creating good interaction between local
governments and communities)(2001, p.1). Lately, Rowley (2011) highlighted stakeholders’
importance in e-Government projects. These are strictly related to the development of
potential benefits for stakeholders and satisfaction from the service experience that may
affect the results of a project management approach. She also emphasised that ‘in e-
Government, both individuals and organisations can play several roles, either concurrently
or in sequence’ (Rowley, 2011, p. 54). She also defined a list of twelve typologies of
stakeholders’ roles, starting from the common user of the service, notably ‘external
stakeholders’ (citizen or group of citizens), ending with the people who play a back-office
role in these kinds of projects (project managers, developers, partners and researchers).
Among these roles, she identified public administration employees and other government
agencies as stakeholders; notably, they play a fundamental part in the project lifecycle.
According to the EU, e-Government projects can be categorised in a four-level framework.
In the first level (simply website), only information and administrative policies are provided
online and in the second level (online government), additional services, such as email or web
forms, are implemented. The third level (integrated government) is where some
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5. BAPA 105 – PROJECT MANAGEMENT – 2011/12
administrative procedures are provided online with a strong integration between back
office and front office. In level four (transformed government), services are fully automated
and ‘are built up from the viewpoint of internal and external users’ (Epratice.eu, 2011). The
higher the level of interaction, the higher the risk of failure. The main consideration is to
align the system with stakeholders’ ongoing concerns.
The focus of this analysis is the development of new ‘level-four’ IS in Local Government
Authorities (LGA). A comparison of two best practices is provided. The first case study,
examined by Sarikas and Weerakkody (2011), relates to the adoption of e-Government
solutions in a London borough city council (council X). The second case, based on my work
experience and on a quantitative analysis for my prior dissertation project (Marabese and
Roiter, 2007), is related to the implementation of e-Government services in the municipality
of Como (Italy) (ComOnLine). While Sarikas and Weerakkody mainly focus their analysis
on internal stakeholders’ needs in a qualitative way, Marabese and Roiter explore citizens’
expectations in a quantitative approach. Furthermore, to better evaluate the project
management approach from a stakeholders’ perception in both case studies, the 4-D model
(Maylor, 2010) will be used. This framework allows us to use the mechanism of continuous
project improvement to reduce the risk of failure in e-Government practices.
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6. BAPA 105 – PROJECT MANAGEMENT – 2011/12
D1: Define it
D4: Develop it D2: Design it
D3: Do it
Managing the Project Process : The 4-D Model (Maylor, 2010, p.1)
According to the 4-D model, the first step is called ‘Define It’ (D1). To reduce the risk of
failure in this step, it is necessary to identify the right group of stakeholders. It is widely
agreed that one major challenge project managers face with stakeholder identification is
how to clearly define the relevant group instead of considering all groups and individuals.
The argument that e-Government stakeholders’ groups are different from other IT projects
has been well-rehearsed by Jones et al. (2007). The main motivation is to improve and
transform the way of delivering governmental services to citizens and enterprises. The
government sector is not only motivated by financial objectives; the evidence suggests that
the main objectives are related to political and strategic goals defined by local
governments in line with a strategic national (or international) plan. Both projects analysed
in this essay were part of a national strategic plan defined by the central government to
realise fully-integrated e-Government services; ComOnLine was a key strategic assignment
of Digital Public Administration Plan. With this in mind, to reduce the risk of failure, project
managers should identify key stakeholders and consider them in the requirement analysis.
To categorise e-Government stakeholders in a qualitative way, the Power/Interest grid
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7. BAPA 105 – PROJECT MANAGEMENT – 2011/12
(Scholes and Johnson, 2001) can be used. The matrix evaluates how stakeholders can
influence the project (Power) and the impact of the project on them (Interest).
High
Keep satisfied Manage closely
Power
Monitor only Keep informed
Low
Low Interest High
Stakeholders Mapping: the Power/Interest – Mendelow Matrix (Johnson and Scholes, 2001, p.167)
By properly identifying groups of stakeholders according to the grid, risk of failure can be
reduced. The first quadrant (monitor only) is composed of special interest groups, such as
aggregated citizens’ corporations, or other organisations, such as close municipalities. In
quadrant 2 (keep informed) and quadrant 3 (keep satisfied), citizens (over 300,000 for
ComOnLine and over 340,000 for council X), profit and non-profit organisations, and
governments (interaction among local, national and international level) are located. In
particular, citizens’ satisfaction plays a crucial role in this stage. Finally, the last sector
consists of public administration employees and IT personnel. They are the highest priority
for project managers and it is necessary to manage them through continuous involvement.
The evidence from my previous work experience suggests that, in order to better perform,
considering stakeholders with high power and dealing with them in the initial steps of the
project is fundamental to success.
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8. BAPA 105 – PROJECT MANAGEMENT – 2011/12
Moving towards the second step, ‘Design it’ (D2), quality represents the most crucial issue
for project managers in e-Government practices. It is widely agreed that the critical success
factor is creating quality for stakeholders, especially citizens. As stated by Maylor, quality
is ‘the result of expectation and perceptions that can be managed through two-way
communications’ (p. 202, 2010). Citizens inevitably draw high expectations from the
government service they use (or will use) and a gap between perception and expectation is
what a project manager has to deal with. Two examples from literature focus on risk of
failure in government transformation projects: Esteves and Joseph (2008) and Heeks
(2003). They are interesting for the analysis as they adopt strongly different approaches.
While Esteves and Joseph concentrate on the analysis of the gap among strategic,
technological and economical dimensions (in this case, risk assessment identifies threats
inside an e-Government project), Heeks focuses his attention on the analysis of the reality-
design gap from a stakeholder’s perspective by using a model called ITPOSMO
(Information, Technology, Process, Objectives and Values, Staffing and Skills, Management
Systems and Structures and Other Resources) (Heeks, 2003, p. 3). In ComOnline, a Total
Quality Management (TQM) approach was used; this approach, adapted to information
systems by Aggarwal and Rezaee (1996) and then further developed for our analysis,
consisted of a continuous analysis of user expectations, especially external users (notably,
citizens). The following performances involved in the project had been monitored in order to
evaluate citizens’ expectations: cost reduction, time reduction, data entry reduction, service
accessibility, clarity of procedures, user-friendliness, transparency of procedures and
service multimedia. Once these performances had been identified, a survey was conducted.
According to the survey (on a sample of 100 citizens), user-friendliness, cost reduction and
time reduction were the three major customer requirements (with time reduction as the key
driver for non-IT citizens) (Marabese & Roiter, 2007). However, an analysis of internal
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9. BAPA 105 – PROJECT MANAGEMENT – 2011/12
stakeholders’ expectations is important at this stage. As Sarikas and Weerakkody reported
from the project in council X, improving vertical and horizontal integration of new e-
Government platforms and data-sharing is one of the main concerns for project managers.
In both cases, communication with stakeholders plays an active role in order to reduce risk;
furthermore, social contact between project managers and stakeholders can enhance the
level of quality. At this stage, in order to facilitate project managers’ work, as suggested
by Barber (2003), benchmarking the project with other similar case studies could be useful;
furthermore, from my experience in system development projects, knowledge re-use is a
common practice.
In the third step, ‘Do it’ (D3), greater control could help lead the project to a success. In
order to better assess and reduce the risk of failure, it is necessary to implement an
effective system of control. Santaris et al. (2010) proposed a goal-driven framework for
electronic government transformation projects implementation (eGTPM). A definition of a
milestone, through this model, is a tangible step in the project that could be related to a
state; one of these milestones is related to stakeholders’ coordination and communication. In
council X, unclear control and an underestimation of length of activities and number of staff
created a general dissatisfaction because ‘IT staff were struggling to cope with their
increasing workload’ (Sarikas and Weerakkody, 2007, p.163). Within ComOnLine, a
continuous system of control was implemented. A second survey was conducted to evaluate
the satisfaction level of citizens (now e-Government users) after the implementation of a test
environment. A series of Key Performance Indicators (KPIs) was defined at that stage; each
KPI was related to one performance described in the second stage (D2) and the level of
satisfaction was measured based on user experience. It can be argued that people with
various backgrounds or IT skills may incur a different experience. However, one major
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10. BAPA 105 – PROJECT MANAGEMENT – 2011/12
concern as stated by Grimsley et al. (2007) was to create social inclusion and reach all
different classes of citizens.
Finally, the last stage, ‘Develop it’ (D4), is related to project completion and review.
According to my work experience in the IT sector and as highlighted by Wilson et al.
(2007), training is an important part of any e-Government project. In council X, knowledge
sharing at the end of the project was fundamental. The evidence suggests that there is a
strong need for information on how to use these services; the role of project managers is to
assure that all the instruments necessary to share knowledge with stakeholders (both internal
and external) are provided.
In conclusion, this essay has explained how strong stakeholder interaction could lead to
success in e-Government practices. By adopting a project management approach, the
paper has deepened the understanding of the stakeholders’ importance (especially
external, notably citizens) in IT government transformations from a literature perspective
(Maylor, 2010; Heeks, 2003; Rowley, 2010; Santaris et al., 2010) and from a more
practical experience based on a case study (Sarikas and Weerakkody, 2007) and the
influence that my dissertation (Marabese and Roiter, 2007) had on my following career as
a project manager in the public sector. By analysing different steps of the project lifecycle,
several suggestions may be highlighted. The first, relating to the initial stage of an e-
Government project, is the necessity to identify stakeholder groups within the environment –
specifically citizens – and understand their Power/Interest. Secondly, once major
stakeholders are identified, understanding their expectations is crucial in the design step.
Project managers must be aware of citizens’ requirements to plan a project’s future
activities. Furthermore, continuous monitoring of users’ perceptions of the service could
reduce the risk of failure and increase the benefits. At this stage, communication with
stakeholders must be undertaken. Finally, sharing knowledge and training at the end of the
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11. BAPA 105 – PROJECT MANAGEMENT – 2011/12
project could lead to success. I acknowledge that a project manager has to deal with other
aspects of the project, such as time and costs, and for this reason, further studies could
examine the impact of these factors in e-Government practices.
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12. BAPA 105 – PROJECT MANAGEMENT – 2011/12
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