14.1 © 2007 by Prentice Hall 14 Chapter Project Management: Establishing the Business Value of...
-
Upload
solomon-webster -
Category
Documents
-
view
215 -
download
1
Transcript of 14.1 © 2007 by Prentice Hall 14 Chapter Project Management: Establishing the Business Value of...
14.1 © 2007 by Prentice Hall
1414ChapterChapter
Project Management: Project Management: Establishing the Establishing the
Business Value of Business Value of Systems and Systems and
Managing ChangeManaging Change
Project Management: Project Management: Establishing the Establishing the
Business Value of Business Value of Systems and Systems and
Managing ChangeManaging Change
14.2 © 2007 by Prentice Hall
LEARNING OBJECTIVES
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
• Identify and describe the objectives of project management and why it is so essential in developing information systems.
• Compare models for selecting and evaluating information systems projects and methods for aligning IS projects with the firm’s business goals.
• Evaluate models for assessing the business value of information systems.
14.3 © 2007 by Prentice Hall
LEARNING OBJECTIVES (cont’d)
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
• Analyze the principal risk factors in information systems projects.
• Select appropriate strategies for managing project risk and system implementation.
14.4 © 2007 by Prentice Hall
A.G. Edwards Turns Around Its Project Management
• Problem: Competitive, information-intensive industry.• Solutions: Identify important projects and plan and
monitor them appropriately to reduce costs and increase revenue.
• Primavera project management software increases success rate of IS projects.
• Demonstrates IT’s role in reducing projects costs and completion times.
• Illustrates digital technology as a key to assessing the business value of building new systems and managing the changes that result from new technology.
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.5 © 2007 by Prentice Hall
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
• The way a project is executed is likely to be the most important factor influencing its outcome.
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.6 © 2007 by Prentice Hall
The Importance of Project Management
• Runaway projects and system failure
• How badly are projects managed ?
Private sector projects are underestimated by one-half in terms of budget and time required to deliver the complete system promised in the system plan.
Delivered with missing functionality
Only 29% of all technology investments were completed on time, on budget, and with all features and functions originally specified
Between 30-40% of all software projects are “runaway projects” that far exceed the original schedule and budget projections and fail to perform as originally specified.
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.7 © 2007 by Prentice Hall
The Importance of Project Management
• The system produced by failed information projects are often not used in the way they were intended, or they are not used at all.
• Users often have to develop parallel manual systems to make these system work.
• A system may be designed with a poor user interface
• User interface : is the part of the system with which end users interact.
• For example: as online input form or data entry screen may be so poorly arranged that no one wants to submit data or request information. System outputs may be displayed in a format that is too difficult to comprehend
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.8 © 2007 by Prentice Hall
The Importance of Project Management
• Web site may discourage visitors from exploring further if:
• Web pages are cluttered and poorly arranged
• Users cannot easily find the information they are seeking, or if it takes too long to access and display the Web page on the user’s computer.
• Data in the system may have a high level of inaccuracy or inconsistency.
• The information in certain fields may be erroneous or ambiguous, or it may be organized properly for business purposes.
• Information required for a specific business function may be inaccesible because the data is incomplete.
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.9 © 2007 by Prentice Hall
The Importance of Project Management
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
Consequences of Poor Project ManagementConsequences of Poor Project Management
Figure 14-1
Without proper management, a systems development project takes longer to complete and most often exceeds the allocated budget. The resulting information system most likely is technically inferior and may not be able to demonstrate any benefits to the organization. Great ideas for systems often flounder on the rocks of implementation.
14.10 © 2007 by Prentice Hall
The Importance of Project Management
• Project management objectives
• Project : a plan series of related activities for achieving a specific business objective.
• Information system projects include:
The development of new IS
Enhancement of existing systems
Upgrade or replacement of the firm’s IT infrastructure
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.11 © 2007 by Prentice Hall
The Importance of Project Management
• Project management objectives
• Project management refers to application of knowledge, skills, tools, and techniques to achieve specific targets within specified budget and time constraints.
• Five major variables in project management
1. Scope
2. Time
3. Cost
4. Quality
5. Risk
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.12 © 2007 by Prentice Hall
The Importance of Project Management
• Five major variables in project management
1. Scope
defines what work is or is not included in a project.
2. Time
the amount of time required to complete the project.
3. Cost
is based on the time to complete a project multiplied by the cost of human resources required to complete a project. IS project costs include the cost of hardware, software, and
work space. PM develop a budget for the project and monitor ongoing project expenses.
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.13 © 2007 by Prentice Hall
The Importance of Project Management
• Five major variables in project management
4. Quality
an indicator of how well the end of result of a project satisfies the objectives specified by management.
The quality of IS projects usually boils down to improved organizational performance and decision making.
5. Risk
potential problems that would threaten the success of a project.
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.14 © 2007 by Prentice Hall
The Importance of Project Management
• Project management activities:
Planning the work
Accessing risk
Estimating resources required to accomplish the work
Organizing the work
Acquiring human and material resources
Assigning tasks
Directing activities
Controlling project execution
Reporting progress
Analyzing the results
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.15 © 2007 by Prentice Hall
Selecting Projects
• Management structure for information systems projects
1. Corporate strategic planning group
2. IS steering committee
3. Project management
4. Project team
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.16 © 2007 by Prentice Hall
Management Control of Systems ProjectsManagement Control of Systems Projects
Figure 14-2 Each level of management in the hierarchy is responsible for specific aspects of systems projects, and this structure helps give priority to the most important systems projects for the organization.
Selecting Projects
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.17 © 2007 by Prentice Hall
Selecting Projects
• Management structure for IS projects
1. Corporate strategic planning group
responsible for developing the firm’s strategic plan, which may require the development of new systems.
2. IS steering committee
The senior management group with responsibility for system development and operation.
Composed of department heads from both end-user and IS area.
Review and approve plans for systems in all divisions
Seeks to coordinate and integrate systems
Involved in selecting specific IS projects.
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.18 © 2007 by Prentice Hall
Selecting Projects
Management structure for IS projects (cont.)
3. Project management
Composed of IS managers and end-user managers responsible for overseeing several specific IS projects.
4. Project team
Responsible for individual system projects
Consists of system analysts, specialists from the relevant end-user business areas, application programmers, and database specialists.
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.19 © 2007 by Prentice Hall
Selecting Projects
Management structure for information systems projects
Linking systems projects to the business plan
Enterprise analysis and critical success factors
Portfolio analysis
Scoring models
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.20 © 2007 by Prentice Hall
Selecting Projects
• Linking systems projects to the business plan
IS plan : supports their overall business plan and in which strategic systems are incorporated into top-level planning.
The plan serves as a road map indicating the direction of system development (the purpose of the plan), the rationale, the current systems/situation, new developments to consider, the management strategy, the implementation plan, and the budget.
The plan contains a statement of corporate goals and specifies how IT will support the attainment of those goals.
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.21 © 2007 by Prentice Hall
INFORMATION SYSTEMS PLAN
1. Purpose of the Plan
Overview of plan contents
Current business organization and future organization
Key business processes
Management strategy
2. Strategic Business Plan Rationale
Current situation
Current business organization’
Changing environments
Major goals of the business plan
Firm’s strategic plan
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.22 © 2007 by Prentice Hall
INFORMATION SYSTEMS PLAN (cont.)
3. Current systems
Major systems supporting business functions and processes
Current infrastructure capabilities: hardware, software, database, telecommunication and Internet
Difficulties meeting business requirements
Anticipated future demands
4. New developments
New system projects: project descriptions, business rationale, applications’ role in strategy
New infrastructure capabilities required: hardware, software, database, telecommunication, and Internet
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.23 © 2007 by Prentice Hall
INFORMATION SYSTEMS PLAN (cont.)
5. Management strategy
Acquisition plans
Milestones and timing
Organizational realignment
Internal reorganization
Management controls
Major training initiatives
Personnel strategy
6. Implementation Plan
Anticipated difficulties in implementation
Progress reports
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.24 © 2007 by Prentice Hall
INFORMATION SYSTEMS PLAN (cont.)
7. Budget requirements
Requirements
Potential savings
Financing
Acquisition cycle
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.25 © 2007 by Prentice Hall
CRITICAL SUCCESS FACTORS (CSFs)
• To develop an effective IS plan, organization must have a clear understanding of both its long and short term information requirements.
• CSF analysis are shaped by the industry, the firm, the manager, and the broader environment.
• For example, CSFs for automobile industry might include styling, quality, and cost to meet the goals of increasing market share and raising profits.
• New IS should focus on providing information that helps the firm meet these goals.
• The principal method used in CSF analysis is personal interviews – three or four – with a number of top managers identifying their goals and the resulting CSFs.
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.26 © 2007 by Prentice Hall
CRITICAL SUCCESS FACTORS (CSFs)
• The principal method used in CSF analysis is :
personal interviews – three or four – with a number of top managers identifying their goals and the resulting CSFs.
Focuses organizational attention on how information should be handled.
The method’s primary weakness is:
There is no particularly rigorous way in which individual CSFs can be aggregated into a clear company pattern.
Interviewees (and interviewers) often confused when distinguishing between individuals and organizational CSFs.
This method is clearly biased toward top managers, although it could be extended to elicit ideas for promising new systems from lower level members of the organization.
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.27 © 2007 by Prentice Hall
Figure 14-3The CSFs approach relies on interviews with key managers to identify their CSFs. Individual CSFs are aggregated to developed CSFs for the entire firm. Systems can then be built to deliver information on these CSFs.
Using CSFs to Develop SystemsUsing CSFs to Develop Systems
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.28 © 2007 by Prentice Hall
PORTFOLIO ANALYSIS
• Portfolio analysis can be used to evaluate alternative system projects
• Portfolio analysis inventories all of the organization’s information system projects and assets, including:
Infrastructure
Outsourcing contracts
Licenses.
• Information-intensive industries few high-risk, high benefits projects, to ensure they stay current with technology
• Non-information-intensive industries low-risk, high benefits projects.
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.29 © 2007 by Prentice Hall
A System PortfolioA System Portfolio
Figure 14-5
Companies should examine their portfolio of projects in terms of potential benefits and likely risks. Certain kinds of projects should be avoided altogether and others developed rapidly. There is no ideal mix. Companies in different industries have different profiles.
PORTFOLIO ANALYSIS
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.30 © 2007 by Prentice Hall
SCORING MODELS
• Scoring model : is used for selecting projects where many criteria must be considered.
• It assign weights to various features of a system and then calculated the weighted totals.
• Look at Table 14.2
• It shows that this particular company attaches the most importance to capabilities for sales order processing, inventory management, and warehousing.
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.31 © 2007 by Prentice Hall
EXAMPLE OF A SCORING MODEL FOR AN ERP SYSTEM
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.32 © 2007 by Prentice Hall
Establishing the Business Value of Information Systems
• Information system costs and benefits
• Capital budgeting for information systems
• Case example: Capital budgeting for a new supply chain management system
• The payback method
• Accounting rate of return on investment (ROI)
• Net present value
• Internal rate of return (IRR)
• Results of the capital budgeting analysis
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.33 © 2007 by Prentice Hall
Cost & Benefits of Information Systems
• Costs:
Hardware
Telecommunications
Software
Services
Personnel
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.34 © 2007 by Prentice Hall
Cost & Benefits of Information Systems (cont.)
• Tangible benefits (cost savings):
Increased productivity
Lower operational costs
Reduced workforce
Lower computer expenses
Lower outside vendor costs
Lower clerical and professional costs
Reduced rate of growth in expenses
Reduced facility costs
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.35 © 2007 by Prentice Hall
Cost & Benefits of Information Systems (cont.)
• Intangible benefits : Improved asset utilization
Improved resource control
Improved organizational planning
Increased organizational flexibility
More timely information
More information
Increased organizational learning
Legal requirements attained
Enhanced employee goodwill
Increased job satisfaction
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
Improved decision making
Improved operation
Higher client satisfaction
Better corporate image
14.36 © 2007 by Prentice Hall
• Dimensions of project risk
• Change management and the concept of
implementation
• The concept of implementation
• The role of end users
• Management support and commitment
• Change management challenges for business process
reengineering, enterprise applications, and mergers and
acquisitions
Managing Project Risk
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.37 © 2007 by Prentice Hall
• Controlling risk factors
• Managing technical complexity
• Formal planning and control tools
• Increasing user involvement and overcoming user resistance
• Designing for the organization
• Sociotechnical design
• Project management software tools
Managing Project Risk
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.38 © 2007 by Prentice Hall
Figure 14-8A GANTT CHART
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.39 © 2007 by Prentice Hall
Figure 14-9 This is a simplified PERT chart for creating a small Web site. It shows the ordering of project tasks and the relationship of a task with preceding and succeeding tasks.
Managing Project Risk
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
A PERT ChartA PERT Chart
14.40 © 2007 by Prentice Hall
• Read the Interactive Session: Management, and then discuss the following questions:
• What are some of the risks involved when one firm acquires another firm’s IT infrastructure?
• Why do firms often fail to take the target firm’s information systems and IT infrastructure into account when purchasing other firms?
• How would you go about assessing the value of another firm’s IT infrastructure and operational capabilities? What questions would you ask?
Managing IT in the Merger and Acquisition Game
Managing Project Risk
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change
14.41 © 2007 by Prentice Hall
• Read the Interactive Session: Organizations, and then discuss the following questions:
• Why was the director of IT assigned the job of implementing a CRM
system? Would this job be better performed by the sales manager?
• Why were sales reps reluctant to share customer information with
other sales reps? What strategies did Kirstin Johnson use to
overcome user resistance? How would you recommend the firm
overcome this problem?
• What do you think the metrics for CRM success should be in a firm
like this? How would you change the sales rep compensation plan to
support more effective use of the CRM system?
Getting Buy-In and ROI for CRM
Managing Project Risk
Management Information SystemsManagement Information SystemsChapter 14 Project Management: Establishing the Business Value of Chapter 14 Project Management: Establishing the Business Value of
Systems and Managing ChangeSystems and Managing Change