BIS 360 – Lecture Four Ch. 5: Identifying and Selecting Projects Ch. 6: Project Initiation and Planning

Objectives Project Identification and Selection General Approaches and Outcomes Integration between Strategic and IS Planning for Project ID and Selection Project Initiation and Planning Basic Activities in Initiation and Planning Deliverables and Outcomes

Where are we in SDLC? Project Identification and Selection Proj. Identification & Selection Proj. Initiation & Planning Analysis Logical Design Physical Design Implementation Maintenance 1. Identifying Projects 2. Ranking Projects 3. Selecting a Project

Where are we in SDLC? Initiation and Planning 1. Initiating the Project 2. Studying the Project 3. Generating BPP and SOW Project ID and Selection Project Initiation & Planning Analysis Logical Design Physical Design Implementation Maintenance

Identify and Selecting IS Projects

Identifying and Selecting IS Development Projects Deliverables and Outcomes Primary Deliverable Schedule of specific IS development projects Outcomes Assurance that careful consideration was given to project selection Clear understanding of project’s relation to organizational objectives

Project Identification General Approaches Top Down: 1. Top Mgmt 2. Steering comm Sources of Potential Projects Schedule of Projects 1. Initiating 2. Feasibility Study 3. Cost/Benefits 4. BPP 5. ... Project Identification and Selection Project Initiation and Planning Evaluate, Prioritize, and Select Projects Bottom Up: 3. User Dept 4. Develop. Group

Who Makes The Identification and Selection ... It really matters! Top-down: by top management and steering committee gain a broad understanding of the information system needs of the entire organization greater strategic focus, cross functional, larger size & duration, riskier Bottom-Up: by user-department and development group solving operational business problems or taking advantage of some business opportunities narrow, non-strategic focus, integration with existing systems, smaller project 1. Top-down planning: extensive analysis of the organization’s mission, objectives, and strategy and determine the information requirements to meet each objective. 2. Bottom-up planning: identification of business problems and opportunities which are used to define projects.

Possible Evaluation Criteria Value Chain Analysis - ident. value-added activities Strategic Alignment - compatible w/ org obj./goals Potential Benefits - any improvements and profits Resource Availability - $$ and resources?? Project Size / Duration - complexity and time Technical Difficulty / Risks - can we make it?

Corporate Strategic Planning An ongoing process that defines the mission, objectives, and strategies of an organization Current Enterprise (where you are) Step 1: Gap is identified Future (where you want to be) Step 2: Strategic Plan (How to get there?) Step 3:

Results of Corporate Strategic Planning Mission, Objective & Strategic Plan Mission Statement: A statement that makes it clear what business a company is in Objective Statements: A series of statements that express an organization’s goals for reaching a desired future position Strategic Plan: The method by which an organization attempts to achieve its mission and objectives Examples: Figure 5-6, 5-7

An Example - Pine Valley Furniture Mission Statement We are in the business of designing, fabricating, and selling to retail stores high-quality wood furniture for household, office, and institutional use. We value quality in our products, and in our relationships with customers and suppliers. We consider our employees our most critical resource.

An Example - Pine Valley Furniture Objective Statements 1. PVF will strive to increase market share and profitability (prime objective). 2. PVF will be considered a market leader in customer service. 3. PVF will be innovative in the use of technology to help bring new products to market faster than our competition. 4. PVF will employ the fewest number of the highest-quality people necessary to accomplish our prime objective. (efficient) 5. PVF will create an environment that values diversity in gender, race, values, and culture among employees, suppliers, and customers. (fair)

Information Systems Planning An orderly means of assessing the information needs of an organization, and defining the systems, databases, and technologies that will best satisfy those needs. Pinpoint Current System (what you have) Step 1: Gap is identified Identify Future IS Needs (what you want) Step 2: Schedule IS Plan (How to get there?) Step 3:

Information Systems Planning Current situation Listing of manual & automated processes Listing of manual & automated data Technology inventory Human resources inventory Future Situation Blueprints of manual & automated processes Blueprints of manual & automated data Technology blueprints Human resources blueprints

A Match between CSP and ISP Strategic Plan (How to get there?) Schedule IS Plan Current Enterprise (where you are) Step 1: Future (where you want to be) Step 2: Step 3: Pinpoint Current System (what you have) Identify Future IS Needs (what you want)

Project Initiation and Planning

Project Initiation and Planning Deliverables and Outcomes Baseline Project Plan (BPP) Scope Benefits Costs Risks Resources Statement of Work (SOW) Describes deliverables Outlines work needed to be performed

Elements of Project Initiation Establishment of project team Development of relationship with customer Project Initiation Plan Establishment of Management Procedures Establishment of Project Workbook

Elements of Project Planning Describe the Project scope, alternatives, and feasibility Dividing the project into manageable tasks Estimating resources and creating a resource plan Developing a preliminary schedule Developing a communication plan Determining Project standards and procedures Identifying and assessing risk Creating a preliminary budget Developing a statement of work (Figure 6-2, p.167) Setting a baseline project plan (Figure 6-10, p.182)

Project Planning Assessing Project Feasibility Economic - benefits outweigh costs Technical - know-how versus risks Operational - consistent with IS plan Schedule - time and duration OK Legal - ownership / licensing issues Political - potential power shift / resistance Technical Feasibility: organization’s ability to construct a proposed system Operational Feasibility: how a proposed system solves business problems or takes advantage of opportunities Schedule Feasibility: time frame and project completion dates with respect to organization constraints Legal and Contractual Feasibility: legal and contractual ramifications of new system Political Feasibility: key stakeholders in organization’s view toward proposed system

Cost-Benefit Analysis (Figure 6-7, p.175) A process used to assess economic feasibility by attempting to quantify benefits and costs associated with proposed information system projects Net present value (NPV) Break even analysis Return on investment (ROI)

Benefits of an IS Tangible benefits: Intangible benefits easily measured in dollars and certainty e.g., Cost reduction and avoidance, Error reduction, Increased flexibility, Increased speed of activity, Improved management planning and control, Opening new markets and increasing sales opportunities Intangible benefits cannot be easily measured in dollars or certainty e.g., Increased employee morale, Competitive necessity, More timely information, Promotion of organizational learning and understanding, Improved asset utilization, Improved resource control, Positive impacts on society

Types of IS Costs Tangible Cost Intangible Cost One-Time Costs easily measured in dollars and certainty; e.g., Hardware Intangible Cost cannot be easily measured in dollars and certainty e.g., Loss of customer goodwill, Loss of employee morale One-Time Costs Costs associated with project initiation and development e.g., equipment purchase, site preparation and modifications Recurring Costs costs resulting from ongoing evolution and use of the system e.g., system maintenance, employee costs

Project Planning Assessing Project Risk Large projects are riskier than small Structured problems are less risky than the messy, ill structured, ill defined ones which are subject to the judgment of an individual Using standard technology is less risky than using nonstandard / new technology User group with knowledge in development process / application area is less risky Figure 6-9 Effects of degree of project structure, project size, and familiarity with application area on project implementation risk.

IS Planning Deliverable Outline for Baseline Project Plan (Figure 6-10, p.182) Introduction Overview Recommendation System Description Project Scope, Objectives, Functions Feasibility Study Cost/Benefits Analysis Management Issues Team Organization, Communication procedure, Preliminary Plan Schedule Figure 6-10 Outline of a Baseline project plan Figure 6-11 Statement of project scope Baseline project plan: a major outcome and deliverable from the project initiation and planning phase which contains the best estimate of a project’s scope, benefits, costs, risks, and resource requirements.