MIS Session 17

Managing IS / IT Projects

Managing IS/ IT Projects

Project
Planned series of related activities for achieving a specific business objective

Information Systems Projects

Development of new Information Systems Enhancement of existing systems Upgrade / replacement of the firms IT infrastructure

Project Management
Application of knowledge, skills, tools and techniques to achieve specific targets within specified budget and time constraints

Managing IS/ IT Projects

On Time

On Specification

On Budget

Balancing all three corners is a challenge

Importance of Project Management

Projects that are not managed properly could have serious consequences
Poor PM consequences
Cost overruns Time slippage Technical shortfalls impairing Performance Failure to obtain anticipated benefits

Project Management Activities

Project Management Activities include
Planning the work Assessing 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 results

Project Management Activities Contd.

Five major variables to deal with
Scope Time Cost Quality
How well the end result satisfies the objective Ease of use of the system Accuracy and timeliness of information produced

Risk

IS Plan
Identify IS projects that will deliver the most business value
Important to link IS plan to B plan

Develop an effective IS plan

Important to understand the organizations short term and longterm information requirements

Establish Information Requirements

Critical Success Factors method (proposed by John F. Rockart)

Critical Success Factors Principal method

Interviews with 3-4 top managers to identify goals and resulting CSFs

Personal CSFs aggregated into small number of firm CSFs Systems built to deliver information on CSFs

Critical Success Factors

Strengths
Shaped by the industry, the firm, the manager and the broader environment Suitable for DSS/ESS

Weaknesses
No clear methods for aggregation of personal CSFs into firm CSFs
Confusion between individual CSFs and organizational CSFs Biased towards top managers

Evaluation/Selection of Projects
Portfolio Analysis Scoring Models Costs and Benefits analysis
Costs (Direct, Indirect) Benefits (Tangible, Intangible) Capital Budgeting models (NPV, IRR, ROI etc)

Real Option Pricing models

Portfolio Analysis

Project risk
Financial models to evaluate projects have limitations There could be several causes that make a project risky There could be several causes that could make a system a failure

Why Do Systems Fail?

Resource failures
Allotted resources are not sufficient to build the required system

Requirements failures/ Goal failures

Incorrect, incomplete or unclear specifications of system requirements/goals

Technique failures
The system builders fail to use, or use incorrectly, effective software development techniques

User contact failures

Inability to communicate with the user community Internal users - leads to poor acceptance of the System External users - leads to contractual problems

Organizational failures
Lack of leadership, large span of control, poor coordination between sub-groups, lack of clearly designated responsibility
Source: Monash University School of Computer Science and Software Engineering (CSE3308/DMS/2005/20)

Why Do Systems Fail?

Technology failures
Failure of acquired hardware or software utilized by the system being developed

Size failures
The system is just too big for the software development group to build

Methodology failures
Failures to perform the activities needed to build the system or performing unnecessary activities May be due to a lack of a formal methodology or due to a rigid adherence to a methodology or due to management directive

Planning and control failures

Failure to track progress, depict plans and schedules and vaguely defining assignments

Personality failures
Clashes between people within the system development group or external to the system development group
Source: Monash University School of Computer Science and Software Engineering (CSE3308/DMS/2005/20)

McFarlans Risk Assessment Method

A simpler method of assessing the risk of a Project Relies upon examining three factors of a project

The measurement of these three factors is conducted via a questionnaire

These questionnaires are most useful when based upon the past experience of the Organization
Source: Monash University School of Computer Science and Software Engineering (CSE3308/DMS/2005/20)

The Three Factors

Project Size
the larger the project, the greater the risk project size is relative to the experience of the software development group

Experience with the Technology

the less experience the software development group has had with the technology used, the greater the risk

Project Structure
How well-defined are the requirements of the project and how liable are they to change High structure where requirements are well-defined and stable indicates lower risk
Source: Monash University School of Computer Science and Software Engineering (CSE3308/DMS/2005/20)

Estimating Project Risk

Source: Monash University School of Computer Science and Software Engineering (CSE3308/DMS/2005/20)

Portfolio Risk Profile

Organizations should not build only low risk projects Organizations should have a portfolio of risks in their system development Organizations should develop a risk profile appropriate for their situation Example :
where IT is strategic (e.g. banking), managers should be concerned if there are no high-risk projects Otherwise competitors will almost certainly get ahead
Source: Monash University School of Computer Science and Software Engineering (CSE3308/DMS/2005/20)

Techniques for Managing Risk

Four main categories of techniques External Integration tools
organizational and communicational tools that link the project teams work with users

Internal Integration tools

ensure that the team operates as an integrated unit

Formal planning tools

help to structure the sequence of tasks in advance and to estimate the time, money and technical resources the team will need to execute them

Formal results-control mechanisms

help managers to evaluate progress and to spot potential discrepancies

Source: Monash University School of Computer Science and Software Engineering (CSE3308/DMS/2005/20)

Source: Monash University School of Computer Science and Software Engineering (CSE3308/DMS/2005/20)

Runaway Projects
At various times during a project, management must evaluate its health Whenever the current resource usage exceeds the budgeted amount, the project is starting to runaway Questions to ponder
Why is it difficult to identify the signs of an impending runaway project? Why is it difficult to react rationally and terminate the project?

Why is it difficult to identify the signs of an impending runaway project?

Attention deficit Information Overload Managerial overconfidence
Source: Stopping runaway IT Projects by Yukika Awazu et al.

Why is it difficult to react rationally and terminate the project?

Conforming evidence
Hear only what you want to hear

Maintaining status quo Sunk costs Power battles Harmony