Transcript Chapter 1: Introduction
Information Systems Project Management—David Olson 1-2
Chapter 1: Introduction
Information System Projects Systems Critical Success Factors © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Denver International Airport
Bozman [1994]; Zetlin [1996]; Montealegre & Keil [2000] 1-3 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Denver International AP
1-4 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
What is a project?
1-5 – definable purpose – cut across organizational lines – unique – ad hoc © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
What is a project?
1-6 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Project Characteristics
1-7 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Dimensions of Complexity
1-8
• magnitude of effort • number of groups and organizations to be coordinated • diversity in skills or expertise needed
usually the MORE COMPLEX, the more time and resources required © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Group Size Dimension
1-9 individual group organization multiorganization term paper wedding system implementation auditing plant construction space shuttle wars © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Challenges of Modern Environments
• high levels of risk and uncertainty interacting forces and variables from many • rapidly changing technology • rising costs • increased competition • frequent resource shortages • many opposing interest groups 1-10 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Project Management Features
• differs from repetitive operations – market and technology much less predictable – greater uncertainty of outcomes – more parties or organizations involved – DYNAMIC environment 1-11 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
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; © McGraw-Hill/Irwin 2004 1-12
Information Systems Project Management—David Olson
the Systems Approach
1-13 • recognize that organizations are made up of interrelated units • need coordinated goals • integration benefits global objective – all pull towards same goal attainment • PROJECTS are system of interrelated tasks and work units • PROJECT MANAGEMENT unifies planning and work efforts to accomplish multiple goals © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Project Goal Dimensions
1-14 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Adages
1-15 • Brooks’s Law Adding 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Project Entities
1-16 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
IS Project Environment
1-17 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson 1-18
FoxMeyer Drug
Large drug distributor, wanted to implement ERP © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
ERP
1-19 • Integrate financial, logistics, marketing • can handle multiple sites worldwide, with global sourcing • integrate decision making • coordinates all functions ( makes them use same computer software ) © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
ERP Market
1-20 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
SAP
1-21 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
FoxMeyer Corp
1-22 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
FoxMeyer
1-23 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Prior FoxMeyer IS
1-24 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
FoxMeyer Process
1-25 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
New System
1-26 • 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) © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
FoxMeyer Project
1-27 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Operations
1-28 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Problems
1-29 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Outcomes
1-30 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
McKesson
1-31 • Bought FoxMeyer operation • Made ERP work – On time – Within budget – Full functionality © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Project Critical Success Factors
Belassi & Tukel [1996] 1-32 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Project Champion
1-33 • 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 © McGraw-Hill/Irwin 2004
Information Systems Project Management—David Olson
Summary
1-34 • 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 © McGraw-Hill/Irwin 2004