CHAPTER 14 "Managing Projects"
14.1 The Importance of Project Management
There is a very high failure rate among information systems
projects. The development of a new system must be carefully managed and
orchestrated, and the way a project is executed is likely to be the most
important factor influencing its outcome. That’s why it’s essential to have
some knowledge about managing information systems projects and the reasons why
they succeed or fail.
Runaway Projects and System Failure
Many projects are delivered with missing functionality. A systems
development project without proper management will most likely suffer these consequences:
- Costs that vastly exceed budgets.
- Unexpected time slippage.
- Technical performance that is less than expected.
- Failure to obtain anticipated benefits
The systems produced by failed information projects are often not
used in the way they were intended, or they are not used at all.
Project Management Objectives
A project is a planned series of related activities for achieving a specific
business objective. Project management refers to the application of knowledge, skills, tools, and techniques
to achieve specific targets within specified budget and time constraints. Scope defines what work is or is
not included in a project. Project management defines all the work required to
complete a project successfully, and should ensure that the scope of a project
does not expand beyond what was originally intended.
14.2 Selecting Projects
Management Structure For Information Systems Projects
The elements of a management structure for information systems projects
in a large corporation:
- The corporate strategic planning group is responsible for developing the firm’s strategic plan, which may require the development of new systems.
- The information systems steering committee is the senior management group with responsibility for systems development and operation.
- The project team is supervised by a project management group composed of information systems managers and end-user managers responsible for overseeing several specific information systems projects.
Linking Systems Projects to The Business Plan
In order to identify the information systems projects that will
deliver the most business value, organizations need to develop an information systems plan
that supports their overall business plan and in which strategic systems are incorporated
into top-level planning. The plan contains a statement of corporate goals and
specifies how information technology will support the attainment of those
goals. In order to plan effectively, firms will need to inventory and document
all of their information system applications and IT infrastructure components.
Critical Success Factors
The strategic analysis, or critical success factors, approach
argues that an organization’s information requirements are determined by a
small number of critical success factors
(CSFs) of managers.
Portfolio Analysis
Once strategic analyses have determined the overall direction of
systems development, portfolio analysis can be used to evaluate alternative system projects. Portfolio
analysis inventories all of the organization’s information systems projects and
assets, including infrastructure, outsourcing contracts, and licenses.
Scoring Models
A scoring model is useful for selecting projects where many criteria must be considered.
It assigns weights to various features of a system and then calculates the
weighted totals.
14.3 Establishing The Business Value of Information Systems
Information Systems Costs and Benefits
Tangible benefits can
be quantified and assigned a monetary value. Intangible benefits,
such as more efficient customer service or enhanced decision making, cannot be
immediately quantified but may lead to quantifiable gains in the long run.
Capital Budgeting for Information Systems
Capital budgeting models
are one of several techniques used to measure the value of investing in
long-term capital investment projects.
Real Options Pricing Models
Real options pricing models (ROPMs) use the concept of options valuation borrowed from the financial
industry. An option is essentially the right, but not the obligation, to act at some
future date. ROPMs value information
systems projects similar to stock options, where an initial expenditure on
technology creates the right, but not the obligation, to obtain the benefits
associated with further development and deployment of the technology as long as
management has the freedom to cancel, defer, restart, or expand the project.
Limitations of Financial Models
The traditional focus on the financial and technical aspects of an
information system tends to overlook the social and organizational dimensions
of information systems that may affect the true costs and benefits of the
investment. Benefits, such as more timely decisions from a new system or
enhanced employee learning and expertise, may also be overlooked in a
traditional financial analysis.
14.4 Managing Project Risk
Dimensions of Project Risk
The level of project risk is influenced by project size, project
structure, and the level of technical expertise of the information systems
staff and project team. Although the difficulty of the technology is one risk
factor in information systems projects, the other factors are primarily
organizational, dealing with the complexity of information requirements, the
scope of the project, and how many parts of the organization will be affected
by a new information system.
Change Management and The Concept of Implementation
A very large percentage of information systems projects stumble
because the process of organizational change surrounding system building was
not properly addressed. Successful system building requires careful change management.
The Concept of Implementation
Implementation refers
to all organizational activities working toward the adoption, management, and
routinization of an innovation, such as a new information system. In the
implementation process, the systems analyst is a change agent.
The Role of End Users
The relationship between users and information systems specialists
has traditionally been a problem area for information systems implementation efforts.
Users and information systems specialists tend to have different backgrounds, interests,
and priorities. This is referred to as the user-designer communications gap. These differences lead to divergent organizational loyalties, approaches
to problem solving, and vocabularies.
Management Support and Commitment
If an information systems project has the backing and commitment
of management at various levels, it is more likely to be perceived positively
by both users and the technical information services staff. If a manager
considers a new system a priority, the system will more likely be treated that
way by his or her subordinates.
Change Management Challenges for Business Process Reengineering,
Enterprise Applications, and Mergers and Acquisitions
Given the challenges of innovation and implementation, it is not
surprising to find a very high failure rate among enterprise application and
business process reengineering (BPR) projects, which typically require
extensive organizational change and which may require replacing old technologies
and legacy systems that are deeply rooted in many interrelated business
processes.
Projects related to mergers and acquisitions have a similar
failure rate. Combining the information systems of two different companies
usually requires considerable organizational change and complex systems
projects to manage. Without a successful systems integration, the benefits
anticipated from the merger cannot be realized, or, worse, the merged entity
cannot execute its business processes effectively.
Controlling Risk Factors
The first step in managing project risk involves identifying the
nature and level of risk confronting the project. Implementers can then handle
each project with the tools and risk-management approaches geared to its level
of risk
Managing Technical Complexity
Projects with challenging and complex technology for users to
master benefit from internal integration tools. The success of such projects depends on how well their technical
complexity can be managed.
Formal Planning and Control Tools
Large projects benefit from appropriate use of formal planning tools and
formal control tools for documenting and monitoring project plans.
Increasing User Involvement and Overcoming User Resistance
External integration tools consist
of ways to link the work of the implementation team to users at all
organizational levels. Counterimplementation
is a deliberate strategy to
thwart the implementation of an information system or an innovation in an
organization.
Designing for The Organization
Areas where users interface with the system require special
attention, with sensitivity to ergonomics issues. Ergonomics refers to
the interaction of people and machines in the work environment. Although systems analysis and design
activities are supposed to include an organizational impact analysis, this area
has traditionally been neglected. An organizational
impact analysis explains how a proposed
system will affect organizational structure, attitudes, decision making, and
operations.
Sociotechnical Design
One way of addressing human and organizational issues is to
incorporate sociotechnical design practices into information systems projects. The resulting
sociotechnical design is expected to produce an information system that blends
technical efficiency with sensitivity to organizational and human needs,
leading to higher job satisfaction and productivity.
Project Management Software Tools
Commercial software tools that automate many aspects of project
management facilitate the project management process. Project management
software typically features capabilities for defining and ordering tasks,
assigning resources to tasks, establishing starting and ending dates to tasks,
tracking progress, and facilitating modifications to tasks and resources.
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source: "Management Information System" e-book, 12th edition, written by Kenneth C. Laudon and Jane P. Laudon.