© mcgraw-hill/irwin 2004 information systems project managementdavid olson 1-2 chapter 1:...
TRANSCRIPT
![Page 1: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/1.jpg)
![Page 2: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/2.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-2
Chapter 1: Introduction
Information System Projects
Systems
Critical Success Factors
![Page 3: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/3.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-3
Denver International AirportBozman [1994]; Zetlin [1996]; Montealegre & Keil [2000]
• Designed as largest US airport
• Cost– Estimate $1.7 billion (to be done Oct 1993)– Pre-construction budget $2.08 billion– Aug 1994 spent $3.2 billion– Final 16 months late, $2 billion over budget
![Page 4: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/4.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-4
Denver International AP
• Functionality– Malfunctioning computerized baggage system
• Cost $193 million
• 55 networked computers, 56 barcode scanners
• Sometimes bags on wrong flights
• Major effort– Many problems
– Functioning airport
– Typical project
![Page 5: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/5.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-5
What is a project?
– definable purpose– cut across organizational lines– unique– ad hoc
![Page 6: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/6.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-6
What is a project?
• everything done the first time is a project• can be constructing something
– road, dam, building• can be organizing something
– a meeting, an election campaign, a symphony, a movie
• GETTING A NEW, COMPLEX ACTIVITY DONE
![Page 7: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/7.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-7
Project Characteristics
• Because projects are new (not at the repetitive operations stage), they typically involve– high levels of uncertainty and risk– difficult to estimate resources required– difficult to estimate time required
• Temporary activities by ad hoc organizations
![Page 8: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/8.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-8
Dimensions of Complexity
• magnitude of effort• number of groups and
organizations to be coordinated• diversity in skills or expertise
neededusually the MORE COMPLEX, the
more time and resources required
![Page 9: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/9.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-9
Group Size Dimension
individual term papergroup wedding
system implementationorganization auditing
plant constructionmultiorganization space shuttle
wars
![Page 10: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/10.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-10
Challenges of Modern Environments
• high levels of risk and uncertainty from many interacting forces and variables
• rapidly changing technology• rising costs• increased competition• frequent resource shortages• many opposing interest groups
![Page 11: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/11.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-11
Project Management Features
• differs from repetitive operations– market and technology much less predictable– greater uncertainty of outcomes– more parties or organizations involved– DYNAMIC environment
![Page 12: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/12.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-12
IS Project Features
• technological explosion– 286; 386; 486; Pentium; ?– CASE tools; C++; GUI;
• highly volatile & expanding market– CAD/CAM; EDI; laptops; Internet
• uncertainty– is what requester wants feasible?– how long will it take to program?– will there be any bugs?
• many people involved– user group; systems designers; programmers; end users;
![Page 13: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/13.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-13
the Systems Approach
• recognize that organizations are made up of interrelated units
• need coordinated goals• integration benefits global objective attainment
– all pull towards same goal• PROJECTS are system of interrelated tasks and work
units• PROJECT MANAGEMENT unifies planning and work
efforts to accomplish multiple goals
![Page 14: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/14.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-14
Project Goal Dimensions
INTERRELATED DIMENSIONS• Cost
– stay within budget• Time
– stay within time schedule specified• Performance
– end product performs to specifications
Maintain focus on all 3, control trade-offs
![Page 15: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/15.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-15
Adages
• Brooks’s LawAdding manpower to a late software project makes it later.
• Throwing money at a project doesn’t solve the problem
• Taking resources away from a project doesn’t always make it easier either
![Page 16: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/16.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-16
Project Entities
• Project Manager – coordinates efforts across functional areas;
– integrates planning & controls costs;
– schedules, assigns tasks
• Project Team– group of people doing what needs to be done
– often from different functions, organizations
• Project Management System– organizational structure, information processing, procedures
permitting integration of tasks and those who accomplish them
![Page 17: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/17.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-17
IS Project Environment
• Risky– Standish Group reports:
• >30% cancelled
• About 40% lack designed functionality
• Only 13% rated successful by sponsors
– Examples• Bank of America project
• American Airlines subsidiary travel reservation
![Page 18: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/18.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-18
FoxMeyer Drug
Large drug distributor, wanted to implement ERP
![Page 19: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/19.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-19
ERP
• Integrate financial, logistics, marketing
• can handle multiple sites worldwide, with global sourcing
• integrate decision making
• coordinates all functions (makes them use same computer software)
![Page 20: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/20.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-20
ERP Market
• Compound annual growth of 37% 1997-2002 (AMR Research)
• Top tier vendors: SAP AG PeopleSoft
Baan J.D. Edwards Oracle• top tier growth 61%/year, have 64% of
market• SAP $5 billion, rest near $1 billion
![Page 21: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/21.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-21
SAP
• Systems, Applications & Products in Data Processing
• founded 1972, Walldorf, Germany• #1 vendor of standard business-application
software in the world - 32% market share• PRODUCTS: R/2 (mainframe; 11 modules)
R/3 (client/server - 1992; now > 1 million users• over 9000 customers in 90 countries
![Page 22: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/22.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-22
FoxMeyer Corp
• Holding company in health care services• wholesale distribution of drugs & beauty aids
• served drug stores, chains, hospitals, care facilities
• US: 23 distribution centers
• Sought market niches, such as home health care
![Page 23: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/23.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-23
FoxMeyer
• Due to aging population & growth in health care, expected high growth
• Market had extreme price competition, threatening margins
• Long-term strategies: – efficiently manage inventory– lower operating expenses– strengthen sales & marketing– expand services
![Page 24: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/24.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-24
Prior FoxMeyer IS
• 3 data processing centers, linked
• included electronic order entry, invoice preparation, inventory tracking
• 1992 began migration of core systems
• Benefits not realized until system fully integrated
![Page 25: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/25.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-25
FoxMeyer Process
• Customer fills out electronic order• Order sent to 1 of the 3 data processing centers• Orders sent to the appropriate distribution center
(within 24 hours)• Orders filled manually and packaged• Had just completed national distribution center
with multiple carousels & automated picking• Could track inventory to secondary locations
![Page 26: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/26.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-26
New System
• Needed new distribution processes & IS to capitalize on growth
• Wanted to be able to undercut competitors• Replacing aging IS key
• PROJECT: 1994 - hoped to save $40 million annually (estimated cost $65 million)– complete ERP installation & warehouse
automation system (another $18 million)
![Page 27: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/27.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-27
FoxMeyer Project
• Select ERP– hundreds of thousands of transactions– meet DEA & FDA regulations– benchmarked & tested for months– picked SAP R/3– hired Andersen Consulting to integrate– hired Pinnacle Automation for warehouse
automation system
![Page 28: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/28.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-28
Operations
• FoxMeyer expected the new systems to improve operational efficiency
• Signed several giant contracts– counted on savings, underbid competitors
• Counted on being up and running in 18 months
![Page 29: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/29.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-29
Problems
• SAP & warehouse automation system integration– two sources, two installers - coordination
problems• New contracts forced change in system
requirements after testing & development underway
• Late, Over budget– SAP successfully implemented
![Page 30: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/30.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-30
Outcomes
• Lost key customer - 15% of sales• To recoup, signed new customer, expected $40
million benefit from ERP immediately - pushed ERP project deadline ahead 90 days, no time to reengineer
• Warehouse system consistently failed– late orders, incorrect shipment, lost shipments– losses of over $15 million
• August 1996 filed for Chapter 11– McKesson bought
![Page 31: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/31.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-31
McKesson
• Bought FoxMeyer operation
• Made ERP work– On time– Within budget– Full functionality
![Page 32: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/32.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-32
Project Critical Success FactorsBelassi & Tukel [1996]
• Goal Definition– Define goals, scope, requirements
• Top Management Support– Continued involvement
• User Involvement• Project Manager
– Competent; on-site
• Others– Project team, manpower, accurate estimates, test & train
![Page 33: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/33.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-33
Project Champion
• Top level executive– Powerful, with access to top
• Don’t need to have authority
– Enthusiastic support leading to adoption– Continued support key to project continuance
• Even if project should be cancelled
![Page 34: © McGraw-Hill/Irwin 2004 Information Systems Project ManagementDavid Olson 1-2 Chapter 1: Introduction Information System Projects Systems Critical Success](https://reader033.vdocuments.mx/reader033/viewer/2022061306/55146c135503462d4e8b5e0c/html5/thumbnails/34.jpg)
© McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson1-34
Summary
• All projects are complex– IS projects even more so– Get diverse people to work together
• Time• Cost• Functionality
• Systems view helps understand projects• Critical Success Factors
• Top management support• Clearly stated objectives• End user involvement