McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 3 Identification and Selection of Development Projects

3-2 Learning Objectives Understand the process by which corporate systems development projects are identified and initiated Understand the geometric truth of systems development Understand the concepts associated with determining project value to the organization

3-3 Learning Objectives Understand the value chain analysis approach to project selection Explore the concept of creeping commitment Discuss the information systems planning process

3-4 Learning Objectives Review the contents of a typical baseline plan Discuss the role and composition of a corporate IS steering committee Review the concepts of logical versus physical models of systems Identify the deliverables from the ISP

3-5 Identifying Potential Systems Development Projects In general, projects are proposed for three basic reasons: –Problem –Opportunity –Directive

3-6 Evaluating Project Potential Criteria –Potential Organizational Benefits –Strategic Fit –Level of Resource Allocation –Value Chain Analysis

3-7 Table 3-1. Examples of Commonly Used Project Evaluation Criteria

3-8 Evaluating Project Potential Potential Organizational Benefits –Direct increase in organizational or business unit profits –Improved customer service levels –Increases in throughput or process efficiencies

3-9 Evaluating Project Potential Strategic Fit –The proposed project must be carefully evaluated to insure that the needs of the few are not subordinating or compromising the needs, and the resources, of the many.

3-10 Evaluating Project Potential Level of Resource Allocation –This method looks at the amounts and types of organizational resources that must be committed to the proposed project to reach a successful outcome. –Project duration and labor commitment

3-11 Evaluating Project Potential Value Chain Analysis –The assessment of an organization’s overall activities associated with the manufacture and delivery of products and services to the marketplace in terms of the value they add to the enterprise.

3-12 Evaluating Project Potential Value Chain Analysis –To envision the organization as a system with definable inputs, processes, and outputs. –Once a particular portion of the value chain is focused on, the costs, and the drivers can be determined and benchmarked against industry norms.

3-13 Table 3-2. Examples of Measurable Versus Unmeasurable Benefits

3-14 Figure 3-2. Porter’s Generic Value Chain

3-15 Figure 3-3. Potential IS Contributions to the Value Chain

3-16 Project Selection The decision rests in the hands of the key decision makers within the organization. It requires a careful blend of those projects that achieve both short-term and long-term goals while maximizing the existing and expected organizational resources.

3-17 Figure 3-5. Factors Affecting Selection of a Proposed Development Project

3-18 The Concept of Creeping Commitment The process of selection and development is an incremental one that requires a reassessment of the value of the project at each step of the way.

3-19 Information Systems Planning Assessing the information needs of the organization, and defining the IS and technologies that best satisfy those needs.

3-20 Information Systems Planning Step 1: Assess and document the current state of affairs with regard to IT assets. Step 2: Create a set of “blueprints” to represent the desired state of affairs for the organization in terms of the relationship among the various IT- related assets.

3-21 A corporate IS strategy is necessary to define: –what IS services will be provided and to whom; –who is responsible for providing specific IS services; –how these services will be provided; –priorities for provision of new facilities and improvement of existing facilities; –who has access to what information; –how access to IS services will be distributed and supported; –what common standards should be applied; –what resources are required and how available resources should be utilized; –the mechanisms for understanding and mapping current and future business processes; –a mechanism for maintaining and renewing the strategy. Table 3-3. Typical Corporate IS Strategy Objectives

3-22 Figure 3-5. Information Systems Planning process

3-23 The Corporate IS Plan Organization Mission Statement –Describes the objectives and goals of the organization, including both current and future perspectives. Inventory of Information Requirements –Contains a summary of both current and future processes, functions, data and information needs of the organization.

3-24 The Corporate IS Plan Information Systems Mission Statement –Describes the objectives and goals of the IS organization with regard to its role in the achievement of the stated organizational goals and objectives. IS Development Constraints –Itemizes and describes the constraints imposed on current and future development including technological, financial, human resource, and operational assets and resources.

3-25 The Corporate IS Plan Long-term IS Needs and Strategies –Presents the set of long-range (2 – 5 year) needs and strategies of the IS department prioritized in keeping with the information requirements previously described. Short-term IS Needs and Strategies –Provides a prioritized list of current projects and a schedule of all additional projects intended to commence within the current year.

3-26 The Corporate IS Plan Implications of IS Corporate Plan –Discusses the various expected impacts on the organization of both the short-term and long-term IS strategies. –This section can be used to discuss any expected changes in the current business environment.

3-27 Table 3-4. Outline of a Typical Corporate Information Systems Plan

3-28 Project Initiation and Project Planning Preliminary Project Feasibility Analysis –Technical Feasibility –Operational Feasibility –Human Factors Feasibility –Legal and Political Feasibility –Economic Feasibility

3-29 Table 3-5. Categories of Project Feasibility Assessment

3-30 Technical Feasibility Focused on understanding the technical resources and their applicability to the needs of the proposed system –Hardware –Software –Operating environments

3-31 Operational Feasibility Focused on whether the proposed project will be used effectively after it has been developed –Schedule –Usability

3-32 Human Factor Feasibility Focused on the managers and end users –Degree of resistance from users –Degree of change to users’ working environment –Current state of human resources

3-33 Legal and Political Feasibility Analyze the potential legal ramification of the new system Understand the key stakeholders within the organization

3-34 Economic Feasibility Determine whether the proposed system will provide positive economic benefits to the organization

3-35 The Baseline Plan A formal project proposal document for management The deliverable from a successful preliminary feasibility assessment

3-36 The Baseline Plan Plan Summary Section –A brief overview of the project –Formal definition of the problem –Project scope

3-37 The Baseline Plan System Narrative Section –System configuration –Possible alternative approaches Commercial off-the-shelf (COTS) In-house development outsourcing

3-38 The Baseline Plan Feasibility Assessment Section –Feasibility study reports –High-level project schedule –Expected refinement of the assessment over time

3-39 The Baseline Plan Managerial Issues Section –Outlines for various cross-life cycle issues –Team members’ roles and responsibilities –Project management method –Communication methods –Evaluation criteria

3-40 Table 3-6. Outline of a Typical Project Baseline Plan

3-41 Structured Walkthrough A formal review of the baseline plan Involves all project stakeholders Serves as a checkpoint before the formal commencement of SAD activities

3-42 The Role of the Steering Committee To review the proposed projects To conduct a formal, structured walkthrough of a baseline plan Committee members should be drawn from non-systems professionals

3-43 The Project Flow Model Illustrates the flow of activities within a development project in terms of the primary focus of attention of the analysts.

3-44 The Project Flow Model Current Physical System Logical Model of the Current System Logical Model of the New System New Physical System

3-45 Figure 3-6. Project Process Flow Model

3-46 “What” versus “How” Logical versus Physical Once we separate how the task is performed from what the essence of the task is, we can easily see the logic of the current system and propose an improved system.

3-47SummarySummary Given the ever-increasing cost of IS, making the correct choice among the many candidate projects is important. Regardless of whether the focus is on selection, prioritization, or development, the same basic structure and process should be applied to the development of an IS.

McGraw-Hill/Irwin Copyright © 2006 by The McGraw-Hill Companies, Inc. All rights reserved. Chapter 3 End of Chapter