1. Associate Professor MIS Department UNLV
MIS 746 IS Project Management
Dr. Honghui Deng
Associate Professor
MIS Department
UNLV

2. Outsourcing: Managing Interorganizational Relations
MIS 746 IS Project Management
Outsourcing: Managing Interorganizational Relations
Chapter 12

3. Outsourcing: Reclining Chair Project

4. Outsourcing Project Work
Advantages:
Cost reduction
Faster completion
Higher level of expertise
Flexibility
Disadvantages
Coordination breakdowns
Loss of control
Conflict
Internal morale issues

5. Best Practices in Outsourcing Project Work
Treat Outsourcers as Partners!

6. Key Practices in Partnering Relationships versus Traditional Practices
Mutual trust forms the basis for strong working relationships.
Shared goals and objectives ensure common direction. Joint project team exists with high level of interaction. Open communications avoid misdirection and bolster effective working relationships.
Long-term commitment provides the opportunity to attain continuous improvement.
Traditional Practices
Suspicion and distrust; each party is wary of the other.
Each party’s goals and objectives, while similar, are geared to what is best for them.
Independent project teams; teams are spatially separated with managed interactions.
Communications are structured and guarded.
Single project contracting is normal.
TABLE 12.1

7. Key Practices in Partnering Relationships versus Traditional Practices (cont’d)
Partnering Relationships Objective critique is geared to candid assessment of performance.
Access to each other’s organization resources is available.
Total company involvement requires commitment from CEO to team members.
Integration of administrative systems equipment takes place.
Risk is shared jointly among the partners, encouraging innovation and continuous improvement.
Traditional Practices Objectivity is limited due to fear of reprisal and lack of continuous improvement opportunity.
Access is limited with structured procedures and self-preservation taking priority over total optimization.
Involvement is normally limited to project-level personnel.
Duplication and/or translation takes place with attendant costs and delays.
Risk is transferred to the other party.
TABLE 12.1 (cont’d)

8. Project Partnering Charter
FIGURE 12.2

9. Advantages of Long-Term Partnerships
Partnering
Advantages of Long-Term Partnerships
Reduced administrative costs
More efficient utilization of resources
Improved communication
Improved performance

10. The Art of Negotiating Project Management Is NOT a Contest.
Everyone is on the same side—OURS.
Everyone is bound by the success of the project.
Everyone has to continue to work together.
Principled Negotiations
Separate the people from the problem.
Focus on interests, not positions.
Invent options for mutual gain.
When possible, use objective criteria.

11. The Art of Negotiating (cont’d)
Dealing with Unreasonable People
If pushed, don’t push back.
Ask questions instead of making statements.
Use silence as a response to unreasonable demands.
Ask for advice and encourage others to criticize your ideas and positions.
Use Fisher and Ury’s best alternative to a negotiated agreement (BATNA) concept to work toward a win/win scenario.

12. Managing Customer Relations
Customer Satisfaction
The negative effect of dissatisfied customers on a firm’s reputation is far greater than the positive effect of satisfied customers.
Every customer has a unique set of performance expectations and met-performance perceptions.
Satisfaction is a perceptual relationship:
Perceived performance Expected performance
Project managers must be skilled at managing both customer expectations and perceptions.

13. Managing Customer Relations (cont’d)
Managing Customer Expectations
Don’t oversell the project; better to undersell.
Develop a well-defined project scope statement.
Share significant problems and risks.
Keep everyone informed about the project’s progress.
Involve customers early on decisions about project development changes.
Handle customer relationships and problems in an expeditious, competent, and professional manner.
Speak with one voice.
Speak the language of the customer.

14. Key Terms Best alternative to a negotiated agreement (BATNA)
Co-location
Escalation
Met-expectations model
Outsourcing
Partnering charter
Principled negotiation

15. Contract Management
Chapter 12.1 Appendix

16. Fixed-price (FP) Contract or Lump-Sum Agreement
Types of Contracts
Fixed-price (FP) Contract or Lump-Sum Agreement
The contractor with the lowest bid agrees to perform all work specified in the contract at a fixed price.
The disadvantage for owners is that it is more difficult and more costly to prepare.
The primary disadvantage for contractors is the risk of underestimating project costs.
Contract adjustments
Redetermination provisions
Performance incentives

17. Types of Contracts (cont’d)
Cost-Plus Contracts
The contractor is reimbursed for all direct allowable costs (materials, labor, travel) plus an additional prior-negotiated fee (set as a percentage of the total costs) to cover overhead and profit.
Risk to client is in relying on the contractor’s best efforts to contain costs.
Controls on contractors
Performance and schedule incentives
Costs-sharing clauses

18. Contract Type versus Risk

19. Contract Changes Contract Change Control System
Defines the process by which a contract’s authorized scope (costs and activities) may be modified:
Paperwork
Tracking systems
Dispute resolution procedures
Approval levels necessary for authorizing changes
Best practice is the inclusion of change control system provisions in the original contract.

20. International Projects
Chapter 15

21. International Projects
Types of Projects
Domestic
Overseas
Foreign
Global
Issues in Managing International Projects
Environmental factors affecting projects
Global expansion considerations
Challenges of working in foreign cultures
Selection and training of overseas managers

22. International Assignments
Negatives
Absence from home and friends, and family
Personal security risks
Missed career opportunities
Difficulties with foreign language, culture, and laws
Positives
Increased income
Increased responsibilities
Career opportunities
Foreign travel
New lifetime friends

23. Environmental Factors Affecting International Projects

24. Environmental Factors
Legal/Political
Political stability
National and local laws and regulations
Government, state and local bureaucracies
Government interference or support
Government corruption
Security
International terrorism
National and local security
Local crime and kidnapping
Risk management

25. Environmental Factors (cont’d)
Geography
Climate and seasonal differences
Natural obstacles
Economic
Gross domestic product (GDP)
Protectionist strategies and policies
Balance of payments
Currency convertibility and exchange rates
Inflation rates
Local labor force: supply, educational and skill levels

26. Environmental Factors (cont’d)
Infrastructure
Telecommunication networks
Transportation systems
Power distribution grids
Unique local technologies
Educational systems
Culture
Customs and social standards
Values and philosophies
Language
Multicultural environments

27. Assessment Matrix Project Site Selection

28. Assessment Matrix Project Site Selection
FIGURE 15.3

29. Cross-Cultural Considerations: A Closer Look
Culture
A system of shared norms, beliefs, values, and customs that bind people together, creating shared meaning and a unique identity
Cultural Differences
Geographic regions
Ethnic or religious groups
Language
Economic

30. Cross-Cultural Considerations… (cont’d)
Ethnocentric Perspective
The tendency believe that one’s cultural values and ways of doing things are superior to all others
Wanting to conduct business only on your terms and stereotyping other countries as lazy, corrupt, or inefficient.
Ignoring the “people factor” in other cultures by putting work ahead of building relationships.
Adjustments
Relativity of time and punctuality
Culture-related ethical differences
Personal and professional relationships
Attitudes toward work and life

31. Cross-Cultural Orientations
Relation to Nature
How people relate to the natural world around them and to the supernatural.
Time Orientation
The culture focus on the past, present, or future.
Activity Orientation
How to live: “being” or living in the moment, doing, or controlling.
Basic Nature of People
Whether people viewed as good, evil, or some mix of these two.
Relationships Among People
The degree of responsibility one has for others.

32. Hofstede Cultural Dimensions Framework
Individualism versus Collectivism
Identifies whether a culture holds individuals or the group responsible for each member’s welfare.
Power Distance
Describes degree to which a culture accepts status and power differences among its members.
Uncertainty Avoidance
Identifies a culture’s willingness to accept uncertainty and ambiguity about the future.
Masculinity-Femininity
Describes the degree to which the culture emphasizes competitive and achievement-oriented behavior or displays concerns for relationships.

33. Sample Country Clusters on Hofstede’s Dimensions of Individualism-Collectivism and Power Distance
FIGURE 15.5

34. Cross-Cultural Considerations (cont’d)
Working in France
Working in the United States
Working in China
Working in Mexico
Working in Saudi Arabia

35. Working in Different Cultures
Relying on Local Intermediaries
Translators
Social connections
Expeditors
Cultural advisors and guides
Culture Shock
The natural psychological disorientation that people suffer when they move into a different culture
A breakdown in a person’s selective perception and effective interpretation system induced by foreign stimuli and the inability to function effectively in a strange land

36. Culture Shock Cycle
FIGURE 15.6

37. Selection and Training for International Projects
Selection Factors
Work experience with cultures other than one’s own
Previous overseas travel
Good physical and emotional health
Knowledge of a host nation’s language
Recent immigration background or heritage
Ability to adapt and function in the new culture

38. Selection and Training for International Projects (cont’d)
Areas for Training to Increase Understanding of a Foreign Culture:
Religion
Dress codes
Education system
Holidays—national and religious
Daily eating patterns
Family life
Business protocols
Social etiquette
Equal opportunity

39. Selection and Training for International Projects (cont’d)
Learning Approaches to Cultural Fluency
The “information-giving” approach—the learning of information or skills from a lecture-type orientation.
The “affective approach”—the learning of information/skills that raise the affective responses on the part of the trainee and result in cultural insights.
The “behavioral/experiential” approach—a variant of the affective approach technique that provides the trainee with realistic simulations or scenarios.

40. project management characteristics of different IS projects
IS PROJECT TYPES
project management characteristics of different
IS projects
This PPT reviews information systems projects from the IS perspective. It is supplemental to chapter 4 on system development.

41. programming more automated
IS Projects
programming more automated
CASE tools, code generators, 4GL,
systems re-engineering tools, OOL
focus therefore on
systems design
development
implementation

42. IS Project Types
maintenance
conversion
new systems development

43. Maintenance Projects by far the most common duration training
categories
fixing errors
minor enhancements
major enhancements

44. Enterprise Resource Planning
What is ERP? ERP stands for Enterprise Resources Planning, which represents an information technology system that support business operations throughout an entire enterprise by optimizing, planning, maintaining, and tracking the use of company resources….
Raw Materials
Equipment
Finished Goods
Human Resources
Facilities 1 1

45. Enterprise Resource Planning
ERP systems have the capability to integrate the functions that make up the backbone of most businesses, such as financials, manufacturing, distribution, and human resources…..
Financials
General Ledger
Accounts Payable
Receivables
Asset Management
Expense Reporting
Cash Management
Manufacturing & Distribution
Inventory Control
Demand Planning
Scheduling
Engineering
Bills of Materials
Production
Human Resources
Benefits
Payroll
Recruiting
Pensions
Time & Labor
Training 1 1

46. Enterprise Resource Planning
The origin of ERP systems can be traced back to the early 1960’s when businesses began looking at improving their operations by automating basic shop-floor systems…..
MRP Systems
ERP Systems
MRP II Systems
The Next Big Thing
1960
1975
1985
1992
1997
2000
2005
Manufacturing Systems Lifecycle 1 1

47. Enterprise Resource Planning
The top tier ERP suppliers include the following software companies……. 1 1

48. Enterprise Resource Planning
Working as an IT project manager, you’ll find yourself faced with developing and implementing a variety of information technology systems….
Information Systems
Strategic Level
Executive
Support Systems
Expert Support Systems
Tactical Level
Decision Support Systems
Management Information Systems
Office Automation Systems
Operational Level
Transaction Processing Systems 1 1

49. Enterprise Resource Planning
It has been estimated that 90% of the fortune 500 companies use ERP systems as the “information technology backbone” to run their business operations… 1 1