Project Management Effectiveness: the choice - formal or informal controls

Abstract

Development failures and runaway projects in the information systems (IS) area can result in substantial losses to organizations, either financially or to a company’s reputation. One important strategy in mitigating risk is the use of effective controls over IS projects. This research investigates the effectiveness of control mechanisms in IS projects, i.e., how they have been established, applied, and how they have evolved throughout the project. We conducted an in-depth study of six information systems projects with six different project managers. We found that formal controls were adopted on project elements with clearly defined project outcomes and informal controls were adopted mainly on project elements that were unclear and often related to people. Furthermore, formal controls were dominant at project initiation and in most cases these controls became less dominant over the project duration. These formal controls were more rigorously applied in external IS projects while informal controls increased in importance throughout the project duration in internally developed projects. We found the existence of informal controls to be very important in helping ensure successful project outcomes.