PLANNING

Key Ideas

• An opportunity to create business value from using information technology initiates a project.
• Feasibility analysis helps determine whether or not to proceed with the IS project.
• Projects are selected based on business needs and project risks.
• The project sponsor is a key person who identifies business value to be gained from using information technology.
• The approval committee reviews system requests from groups throughout the organization and selects projects for the benefit of the business.

Project Initiation

IDENTIFYING PROJECTS WITH BUSINESS VALUE

How Do Projects Begin?

• Business needs should drive projects.
• Project sponsor recognizes business need for new system and desires to see it implemented.
• Business needs determine the system’s functionality (what it will do).
• The project’s business value should be clear.

System Request

• A document describing business reasons for project and system’s expected value.
• Lists project’s key elements

-          Project sponsor

-          Business need

-          Business requirements

-          Business value

-          Special issues or constraints

System Request Examples

• Project sponsor – VP of Marketing
• Business need – Reach new customers and improve service to existing customers
• Business requirements – Provide web-based shopping capability
• Business value - $750,000 in new customer sales; $1.8M in existing customer sales
• Special issues or constraints – System must be operational by holiday shopping season

Preliminary Project Acceptance

• System request is reviewed by approval committee
• Based on information provided, project merits are assessed.
• Worthy projects are accepted and undergo additional investigation – the feasibility analysis.

Feasibility Analysis

• Detailed business case for the project

-          Technical feasibility

-          Economic feasibility

-          Organizational feasibility

• Compiled into a feasibility study
• Feasibility is reassessed throughout the project

Technical Feasibility:

Can We Build It?

• Users’ and analysts’ familiarity with the business application area
• Familiarity with technology

-          Have we used it before?  How new is it?

• Project size

-          Number of people, time, and features

• Compatibility with existing systems

Economic Feasibility

Should We Build It?

• Identify costs and benefits
• Assign values to costs and benefits
• Determine cash flow
• Assess financial viability

-          Net present value (NPV)

-          Return on investment (ROI)

-          Break even point(BEP)

Assign Cost and Benefit Values

• Difficult, but essential to estimate
• Work with people who are most familiar with the area to develop estimates
• Intangibles should also be quantified
• If intangibles cannot be quantified, list and include as part of supporting material

Organizational Feasibility
If we build it, will they come?

• Strategic alignment

-          How well do the project goals align with business objectives?

• Stakeholder analysis

-          Project champion(s)

-          Organizational management

-          System users

Project Selection

Approval committee works from the system request and the feasibility study

·         Project portfolio – how does the project fit within the entire portfolio of projects?

·         Trade-offs must be made to select projects that will form a balanced project portfolio

·         Viable projects may be rejected or deferred because of project portfolio issues.

Project Management

Key Definitions

• Project management is the process of planning and controlling the development of a system within a specified timeframe at a minimum cost with the right functionality.
• A project manager has the primary responsibility for managing the hundreds of tasks and roles that need to be carefully coordinated.

Four Key Steps in Managing Projects

• Identifying project size
• Creating and managing the workplan
• Staffing the project
• Coordinating and controlling project activities

Identifying Project Size

Project Manager’s Balancing Act

Project Estimation

• The process of assigning projected values for time and effort
• Sources of estimates

-          Methodology in use

-          Actual previous projects

-          Experienced developers

• Estimates begin as a range and become more specific as the project progresses

Project Estimates Based on Industry Standard Percentages

Creating The Workplan

A Workplan Example

Identifying Tasks

• Methodology

-          Using standard list of tasks

• Top-down approach

-          Identify highest level tasks

-          Break them into increasingly smaller units

-          Organize into work breakdown structure

Project Workplan

• List of all tasks in the work breakdown structure, plus

-          Duration of task

-          Current task status

-          Task dependencies

-          Key milestone dates

Tracking Project Tasks

• Gantt Chart

-          Bar chart format

-          Useful to monitor project status at any point in time

• PERT Chart

-          Flowchart format

-          Illustrate task dependencies and critical path

Tracking Tasks Using Gantt Chart

Tracking Tasks Using PERT Chart

Staffing The Project

Staffing Attributes

• Staffing levels will change over a project’s lifetime
• Adding staff may add more overhead than additional labor
• Using teams of 8-10 reporting in a hierarchical structure can reduce complexity

Increasing Complexity with Larger Teams

Controlling Project Activities

CASE Components

Standards

• Examples

-          Formal rules for naming files

-          Forms indicating goals reached

-          Programming guidelines

Documentation

• Project binder
• Table of contents
• Continual updating

Managing Risk

• Risk assessment
• Actions to reduce risk
• Revised assessment

Classic Mistakes

• Overly optimistic schedule
• Failing to monitor schedule
• Failing to update schedule
• Adding people to a late project