Chapter 3

Project Management
 Project Management Objectives
• Project: 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
• Activities include planning work, assessing risk, estimating
resources required, organizing the work, assigning tasks,
controlling project execution, reporting progress, analyzing
results

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 Project Initiation
Projects are initiated for the following 3
reasons:
1.Technological factors – new computer systems are initiated due
to the innovation of information technology
o Improve internal operational excellence and maintain a
competitive advantage

2.New operating procedures required – existing procedures have

to be modified in order to meet new requirements
o Fast enough to respond to the requirements of customers
o Provide a superior level of service to customers

3.Unsolved problems or maintenance – problems have not been

solved because there are inadequate financial resources or the
existing one does not meet the user’s needs
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 Project Selection
Five specific criteria for project selection:
•Backing from managerial users.
•Make sure the people involved are capable of making
a time commitment for designing a new computer
system.
•The proposed project should meet the goals set by the
company.
•The proposed project should be practical in terms of
resources and capabilities.
•Basic agreement must be made with organization
about the worthiness of the proposed project relative to
any other possible project being considered.

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 Objectives of designing a new
system
Many possible objectives exist including:

•Reducing errors in input.

•Building up a good reputation.
•Increasing organization integration.
•Providing more timely reports.
•Improving the quality of service delivered.

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 Identifying feasibility

• A feasibility study( 可行性研究 ) is a

study of the current problems to
determine whether the system project
should be pursued.
• There are three types of feasibility:
• Technical feasibility.
• Economic feasibility.
• Operational feasibility.
Kendall & Kendall 3-6
 Technical Feasibility

• Technical feasibility assesses whether

the current technical resources are
sufficient for the new system.
• If they are not available, can they be
upgraded to provide the level of
technology necessary for the new
system.

Kendall & Kendall 3-7

 Economic Feasibility
• Economic feasibility determines whether
the time (those who involved) and
money are available to develop the
system.
• Includes:
• Employee time.
• New equipment.
• Hardware.
• Software.
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 Operational Feasibility

• Operational feasibility determines if the

human resources(end-users) are
available to operate the system once it
has been installed.
• Some users who do not want a new
system may prevent it from becoming
operationally feasible.

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 Activity Planning
Activity planning includes:
•Forming a system analysis (feasibility study) team.
•Estimating time required to complete each task.
•Scheduling the project.

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 Forming a system analysis
team(feasibility study team)
A system analysis team should consist of the
following members:
•System analyst – responsible for planning,
communication and coordination among team
members.
•Programmer – responsible for constructing programs.
•Financial controller – responsible for estimating the
budget for the proposed project.
•End-users(representatives) from affected
departments.

Kendall & Kendall 3-11

 Two tools for project planning and control
are Gantt charts and PERT diagrams

Gantt Charts
• A bar chart is commonly used to depict
schedule deadlines and milestones.
• Easy to construct and use.

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 Gantt Chart Example

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 Two tools for project planning and control
are Gantt charts and PERT diagrams

PERT - Program Evaluation and Review

Technique
•PERT diagrams show precedence, activities that must
be completed before the next activities may be started.
•Once a diagram is drawn it is possible to identify the
critical path, the longest path through the activities.
•Monitoring critical path will identify shortest time to
complete the project.

Kendall & Kendall 3-14

 PERT Diagram Example
Listing activities for use in drawing a PERT diagram

Activity Predecessor Duration/day

A. Conduct interviews None 3
B. Administer questionnaires A 4
C. Read company reports None 4
D. Analyze data flow B, C 8
E. Introduce prototype B, C 5
F. Observe reactions to prototype E 3
G. Perform cost/benefit analysis D 3
H. Prepare proposal F, G 2
I. Present proposal H 2

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 PERT Diagram Example

Kendall & Kendall 3-16

 PERT Diagram Example
• In order to find the critical path(the longest path), now join the events so that
you can add the associate durations(days) together
• There are 4 paths in the project, they are shown below

Path 1: 10+20+30+50+60+70+80
3 + 4 + 8 + 3 + 2 + 2 = 22(days)
Path 2: 10+20+30+40+60+70+80
3 + 4 + 5 + 3 + 2 + 2 = 19(days)
Path 3: 10+30+50+60+70+80
4 + 8 + 3 + 2 + 2 = 19(days)
Path 4: 10+30+40+60+70+80
4 + 5 + 3 + 2 + 2 = 16(days)

• So the critical path(longest path) is Path 1.

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 Critical Path Method(CPM)
• CPM is a network diagramming technique used to
predict total project duration
• A critical path for a project is the series of activities
that determines the earliest time by which the
project can be completed
• The critical path is the longest path through the
network diagram and has the least amount of slack
or float
• Slack or float is the amount of time an activity may
be delayed without delaying a succeeding activity or
the project finish date

Kendall & Kendall 3-18

 Determine the Critical Path for Project
X

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 Using Critical Path Analysis to Make
Schedule Trade-offs

• Free slack or free float is the amount of time an

activity can be delayed without delaying the early
start of any immediately following activities
• Total slack or total float is the amount of time an
activity may be delayed from its early start without
delaying the planned project finish date
• A forward pass through the network diagram
determines the early start and finish dates
• A backward pass determines the late start and
finish dates

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 Calculating Early and Late Start and
Finish Dates

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 Guidelines for Writing Feasibility
Study Report

• Introduction
• Background of the company
• General operations of the current systems
• Reasons of initiating the study
• Problem definition
• Preliminary problems of the current systems
• Opportunities of improving the current systems

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 Guidelines for Writing Feasibility
Study Report

• Determining feasibility
• Technical feasibility
• Availability and knowledge of development
team
• Assumptions
• Operational feasibility
• Availability and knowledge of operating staff
• Whether the system will operate when installed
• Assumptions

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 Guidelines for Writing Feasibility
Study Report

• Financial feasibility
• Hardware cost estimation
• Cost of packaged software or software development
(prepared by software house)
• Cost of personnel’s time spent in constructing the system

• Conclusion and recommendations

• Summarize the report and make suggestions to
decision makers whether the systems project
should be initiated
• Appendix

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 Systems Proposal
In order to prepare the systems proposal,
analysts must use a systematic approach to:
•Ascertain hardware and software needs.
•Identify costs and benefits. -
-
When they were acquired?
Where they are?
- - How many of years
profitsare they in operations already
•Compare costs and benefits.
Volume gained?
- How many years later the new system can
-make a profit?
Costs required to buy both hardware and

•Select the best alternative software

- Recruitment
- Costs costs
required and for developing
benefits personnel
gains using at least
two of the following methods
• In-house development method
• Buy option
• Outsourcing method/SaaS

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 Methods of Hardware
Acquisition
Two options for obtaining computer
equipment(hardware):
•Buying: the company buys its own computer
equipment.
•Using cloud services: the user company uses the cloud
services provided by a third party.

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 Buying
Advantages Disadvantages
Full control over hardware Initial cost is high
and software
Often cheaper than other Risk of obsolescence
methods in long run ( 过时 )
Risk of being stuck if choice
was wrong
Full responsibility for
operation and maintenance

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 Using Cloud Services
Advantages
Maintenance and upgrades
performed by the provider
If business grows, the
organization can easily add
computing power without buying
new hardware
No capital is tied up
Kendall & Kendall
Disadvantages
Company doesn’t control its own
data
Data security is at risk
Proprietary APIs and software
may make switching providers
difficult
- A set of rules defined to enable different
applications to communicate with each other
3-28
 Evaluating Hardware Support
When evaluating hardware vendors, the
selection committee needs to consider:
•Hardware support.
•Software support.
•Installation and training support.
•Maintenance.
•Cloud services.
•Software as a service.

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 Evaluating Hardware Support

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 Software Selection Methods
In selecting software, evaluation team must
consider the following methods:

•Creating Custom Software: the system is designed by

the company.
•Purchasing COTS Package: buy the system from a
computer shop.
•Using SaaS: outsource the software needs to a SaaS
provider specializing in IT applications.

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 Advantages and Disadvantages of
Different Software Selection Methods

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 Software Evaluation
When evaluating the software, the evaluation
team must consider the followings:
•Performance effectiveness.
•Performance efficiency.
•Ease of use.
•Flexibility.
•Quality of documentation.
•Manufacturer support.

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 Software Evaluation

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 Identifying Costs and Benefits

• Systems analysts should take tangible

costs, intangible costs, tangible
benefits, and intangible benefits into
consideration to identify cost and
benefits of a prospective system.
• As they are interrelated and
interdependent

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 Tangible Costs
• Tangible costs are those that can be
accurately projected by systems
analysts and the accounting personnel
for purchasing equipment and system
development.
• Examples:
• Cost of equipment.
• Cost of development time.

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 Intangible Costs

• Intangible costs are those that are

difficult to calculate and quantity
accurately but must be shown on the
report.
• Examples:
• Cost of losing a competitive edge.
• Declining company image.
• Declines in customer satisfaction.
Kendall & Kendall 3-37
 Tangible Benefits

• Tangible benefits are the profits gained

through use of the information system.
• Examples:
• Increased revenue.
• Resource cost savings
• Process improvements

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 Intangible Benefits

• Intangible benefits are those benefits

generated from use of the information
system but are difficult to measure.
• Examples:
• Improved effectiveness of decision-making
processes.
• Enhanced user experience.
• Increased customer satisfaction.
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 Comparing costs and benefits
To select the best alternative, analysts
should compare costs and benefits of
the prospective alternatives using:
• Break-even analysis.
• Payback.
• Cash-flow analysis.

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 Break-Even Analysis
• A financial tool which helps you to determine
at what stage your company will be able to
make profits
• With this tool, it shows the point at which the
cost of the current system and the proposed
system intersect.
• It is only useful when a company is growing
and volume is a key variable in costs

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 Break-Even Analysis

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 Break-Even Analysis(Payback)

• Break-even analysis can also determine

how long it takes for the benefits of the
system to pay back the costs of
developing it.
• As it can determine the number of
years of operation that the system
needs to pay back the cost of investing
in it.
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 Break-Even Analysis Showing a
Payback Period

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 Cash-Flow Analysis

• Cash-flow analysis examines the

direction, size, and pattern of cash flow
associated with the proposed
information system.
• It determines when a company will
begin to make a PROFIT and when it
will be OUT OF RED.

Kendall & Kendall 3-45

 Cash-Flow Analysis

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