Information Systems II

Lecture 1

Chapter 12: Project Management

Managing Information Systems Projects

Dr. Hany Ismail

 Chapter 12: LEARNING OBJECTIVES

Part 1 The Importance of Project Management

Part 2 Selecting Projects

Establishing the Business Value of

Part 3 Information Systems

Part 4 Managing Project Risk

 IS case: McDonald’s
McDonald’s: Case Description
• McDonald’s developed a project to connect headquarters with its 30,000
restaurants in 120 countries.
• It was meant to provide detailed operational information in real time.
• It was also intended to create a global ERP application touching the workings of
every restaurant.

• The project cost $1billion and takes

several years
What happened to the project?

Some restaurants were in countries that lacked network infrastructures.

After spending over $1 billion, including $170 million on consultants and initial
implementation planning, the project was terminated
 What we can extract from
McDonald's Case Study…

1. IS projects cannot fail !!! (yes/no) (What is the percentage

of IS project failure?)

2. Why projects fail?

3. How can we identify that this project failed? (Totally

OR Partially)

4. What are the consequences of project failure? (cost,

time, social..)

5. How can we stop IS project failure?

Part 1 The Importance of Project Management

Runaway projects and system failure

• Runaway projects: 30-40% IT projects

• Exceed schedule, budget
• Fail to perform as specified

• Types of system failure

• Fail to capture essential business requirements
• Fail to provide organizational benefits

• Complicated, poorly organized user interface

• Inaccurate or inconsistent data
Part 1 The Importance of Project Management

Project Management
Refers to the application of knowledge, skills, tools and techniques to
achieve specific targets within specified budget and time constraints.

Project management
should deal with 5 major variables:

Scope Time Cost Quality Risk

Project Management Activities include

•planning work, •assigning tasks,
•assessing risk, •controlling project execution,
•estimating resources required, •reporting progress,
•organizing the work, •analyzing results
 Chapter 14: LEARNING OBJECTIVES

Part 1 The Importance of Project Management

Part 2 Selecting Projects

Establishing the Business Value of

Part 3 Information Systems

Part 4 Managing Project Risk

 How many Information Systems do we have?

There are many systems to be implemented

Question 1 Question 2
Shall a company implement all of If so, then Which
system
them? OR Select one of them? should be implemented….
Part 2 Selecting Projects

Linking systems projects to the business plan

• Information systems plan Road map indicating

direction of systems development, includes:
Informatio
1. Purpose of plan n Systems
Business Plan
2. Strategic business plan rationale Plan

3. Current systems/situation
Information
Systems
4. New developments to consider Plan
5. Management strategy
6. Implementation plan
Business Plan
7. Budget
Part 2 Selecting Projects
Management structure for information systems projects

Hierarchy in large firms

Level 1- Corporate strategic planning group

Responsible for firm’s strategic plan

Level 2- Information systems steering committee

Reviews and approves plans for systems in all divisions, selecting
specific systems projects.

Level 3- Project management group

Responsible for overseeing specific projects, supervising project team.
Consists of IS managers and end users.

Level 4- Project team

Responsible for individual systems project. Consists of system analyst,
programmers, ….
Part 2 Selecting Projects
Management Control of Systems Projects
Who is
responsible
about what ?
How Information Systems Project are selected?
Part 2 Selecting Projects

(1)Critical success factors

• To develop effective information systems plan, organization must have
clear understanding of both long-term and short-term information
requirements. This is done using critical success factors (CSFs)

Example: Auto industry CSFs might include styling, quality, cost

• Central method:
• Interviews with top managers to identify goals and resulting CSFs
• Personal CSFs aggregated to develop firm CSFs
• Suitable for top management

Disadvantages:
• No clear methods for aggregation of personal CSFs into firm CSFs
• Confusion between individual CSFs and organizational CSFs
• Bias towards top managers
Part 2 Selecting Projects

Using CSFs to Develop Systems

Part 2 Selecting Projects

(2) Portfolio analysis

• Used to evaluate alternative system projects

• Each system has profile of risk and benefit

• High-benefit, low risk

• High-benefit, high risk

• Low-benefit, low risk

• Low-benefit, high risk

• To improve return on portfolio, balance risk and return from systems

investments
Part 2 Selecting Projects

A System Portfolio

Best
Check. Option

Do not
select
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.
Part 2 Selecting Projects

(3) Scoring models

• Used to evaluate alternative system projects, especially when many
criteria exist

• Assigns weights to various features of system and calculates

weighted totals
CRITERIA WEIGHT
SYSTEM A SYSTEM A
SCORE
SYSTEM B SYSTEM
B
% %
SCORE
Online order entry 4 67% 268 73% 292

Customer credit 3 66% 198 59% 177

check
Inventory check 4 72% 288 81% 324

Warehouse 2 71% 142 75% 150

receiving
……… ….. ........ ……. …….. …….
GRAND TOTALS 3128 3300