It is essential to have some
knowledge about managing information systems projects and the reasons why they
succeed or fail. A systems development
project without proper management will most likely suffer consequences such as
costs that vastly exceed budgets, unexpected time slippage, technical
performance that is less than expected, and failure to obtain anticipated
benefits. The actual design of the
system may fail to capture essential business requirements or improve
organizations performance. In addition,
the way that nontechnical business users must interact with the system may be
excessively complicated and discouraging.
Also, the data in the system may have a high level of inaccuracy or
inconsistency.
Project management is the
application of knowledge, skills, tools, and techniques to achieve specific
targets within specified budget and time constraints. 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, and
analyzing the results. Project
management must deal with five major variables:
scope (defines what work is or is not included in a project), time (the
amount of time required to complete the project), cost (based on the time to
complete a project multiplied by the cost of human resources required to
complete the project), quality (an indicator of how well the end result of a
project satisfies the objectives specified by management), and risk (potential
problems that would threaten the success of a project).
Firms are presented with
many different projects for solving problems and improving performance. The firm’s overall business strategy should
drive project selection. The management
structure for information systems project helps ensure that the most important
projects are given priority. At the top
of the structure is the corporate strategic planning group, which is
responsible for developing the firm’s strategic plan, and the information
system steering committee, which is the senior management group with
responsibility for systems development and operation. They review and approve plans for systems in
all divisions, seek to coordinate and integrate systems, and occasionally
become involved in selecting specific information systems projects. The next level is the project management
group, which is composed of information systems managers and end-user managers
responsible for overseeing several specific information systems projects. They supervise the project team and they are
responsible for the individual systems projects.
An information systems plan
needs to be developed to identify the information systems projects that will deliver
the most business value. The plan serves
as a road map indicating the direction of systems development, the rationale,
the current system’s situation, new developments to consider, the management
strategy, the implementation plan, and the budget.
Critical success factors
(CSFs) are used to determine the information requirements of an
organization. It relies on interviews
with key mangers to identify their CSFs.
Individual CSFs are aggregated to develop CSFs for the entire firm and
systems can then be built to deliver information on these CFSs.
Portfolio analysis can be
used to evaluate alternative system projects once strategic analyses have
determined the overall direction of systems development. It inventories all of the organization’s information
systems projects and assets, including infrastructure, outsourcing contracts,
and licenses, and each information systems project carries its own set of risks
and benefits. The most desirable are
systems with high benefit and low risk because they promise early returns and
low risks. Next, high-benefit, high-risk
systems should be examined. Systems that
are low-benefit, high-risk should be totally avoided. Low-benefit, low-risk systems should be
reexamined for the possibility of rebuilding and replacing them with more
desirable systems having higher benefits.
Scoring models are useful
for selecting projects where many criteria must be considered because it
assigns weights to various features of a system and then calculates the
weighted totals. This model requires
experts who understand the issues and the technology. These models are used most commonly to
confirm, to rationalize, and to support decisions, rather than as the final
arbiters of system selection.
A system project needs to be
a good investment for a firm, which is determined by the return on invested
capital. Costs of information systems
include the hardware, telecommunications, software, services, and personnel. Tangible benefits are cost savings and can be
quantified and assigned a monetary value.
Examples include increased productivity, lower operational costs,
reduced workforce, lower computer expenses, lower outside vendor costs, and
reduced facility costs. Intangible
benefits cannot be immediately quantified but may lead to quantifiable gains in
the long run. Examples include improved
asset utilization, improved resource control, improved organizational planning,
increased organizational learning, higher client satisfaction, and better
corporate image.
All costs and benefits will
need to be calculated to determine if a project is feasible. If costs outweigh benefits, of course it is
not. If benefits outweigh costs,
additional financial analysis is required to determine whether the project
represents a good return on the firm’s invested capital. One way to measure this is by using capital
budgeting models. This method relies on
measures of cash flows into and out of the firm; capital projects generate
those cash flows.
In some cases management may
benefit from using real options pricing models (ROPMs) to evaluate information
technology investments. These models use
the concept of options valuation borrowed from the financial industry. It gives managers the flexibility to stage
their IT investment or test the waters with small pilot projects or prototypes
to gain more knowledge about the risks of a project before investing in the
entire implementation.
Financial models have
limitations that are often overlooked.
Some companies’ information systems investment decisions do not
adequately consider costs from organizational disruptions created by a new
system, such as the cost to train end users, the impact that users’ learning
curves for a new system have on productivity, or the time managers need to
spend overseeing new system-related changes.
Benefits, such as more timely decisions from a new system or enhanced
employee learning and expertise may also be overlooked.
The level of risk in
information systems projects is influenced by the project size, the project
structure, and the experience with technology.
Other risk factors include 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.
The introduction or alteration
of an information system has an impact on behavioral and organizational
elements. Careful change management is
needed for successful system building.
The process of implementation must be examined to manage the
organizational change surrounding the introduction of a new information system
effectively. Implementation is all
organizational activities working toward the adoption, management, and
routinization of an innovation, such as a new information system. In this process the systems analyst is a change
agent. System implementation generally
benefits from high levels of user involvement and management support. User participation in the design and
operation of information systems has several positive results. However, the relationship between users and
information systems specialists has traditionally been a problem area for
information systems implementation efforts.
Systems development projects run a high risk of failure when there is a
distinct gap between users and technical specialists and when these groups
continue to pursue different goals. 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. In addition, management support ensures that a
systems project receives sufficient funding and resources to be successful.
It is not surprising to find
a high failure rate among enterprise application and business process
reengineering projects given the challenges of innovation and
implementation. These projects typically
require extensive organizational change and may require replacing old
technologies and legacy systems that are deeply rooted in many interrelated
business processes. Also, projects related
to mergers and acquisitions have a similar failure rate. They are deeply affected by the
organizational characteristics of the merging companies as well as by their IT
infrastructures. Without a successful
systems integration, the benefits anticipated from the merger cannot be
realized, or the merged entity cannot execute its business processes
effectively.
Not all aspects of the
implementation process can be easily controlled or planned, however
anticipating potential implementation problems and applying appropriate
corrective strategies can increase the chances for system success. First, the level and nature of risk must be
identified. The success of projects
depends on how well their technical complexity can be managed. Next, implementers can handle each project
with the tools and risk-management approaches geared to its level of risk. Large projects benefit from appropriate use
of formal planning tools and formal control tools for documenting and monitoring
project plans. The two most commonly
used methods are Gantt charts and PERT charts.
Gantt charts lists project activities and their corresponding start and
completion dates. PERT charts
graphically depict project tasks and their interrelationships. They list the specific activities that make
up a project and the activities that must be completed before a specific
activity can start.
Projects with relatively
little structure and many undefined requirements must involve users fully at
all stages. External integration tools
links the work of the implementation team to that of users at all organizational
levels. Overcoming user resistance is
another issue faced when implementing a project. The implementation strategy must not only
encourage user participation and involvement, but it must also address the
issue of counterimplementation. This is
a deliberate strategy to thwart the implementation of an information system or
an innovation in an organization.
Strategies to overcome user resistance include user participation, user
education and training, management edicts and policies, and better incentives
for users who cooperate.
Information systems projects
must explicitly address the ways in which the organization will change when the
new system is installed. Organizational
factors that must be addressed when planning and implementing information
systems include employee participation and involvement, job design, standards
and performance monitoring, ergonomics (including equipment, user interfaces,
and the work environment), employee grievance resolution procedures, health and
safety, and government regulatory compliance.
System analysis and design activities should also include an
organizational impact analysis. This
explains how a proposed system will affect organizational structure, attitudes,
decision-making, and operations. Sociotechnical
design results in blending technical efficiency with sensitivity to
organizational and human needs, leading to higher job satisfaction and
productivity.
Project management software
tools 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. The most widely used project management
software today is Microsoft Office Project 2010. While project management software helps
organizations track individual projects, the resources allocated to them, and
their costs, project portfolio management software helps organizations manage
portfolios of projects and dependencies among them.
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