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Chapter 14

COMMERCE 2KA3 Chapter Notes - Chapter 14: Project Portfolio Management, Software Projects, Project Management

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Commerce 2KA3
Chapter 14: Project Management Business Value, and Managing Change
The Importance of Project Management
On average, private sector projects are underestimated by one-half in terms of budget and
time required to deliver the complete system promised in the system plan. Only 32% if all
technology investments were completed on time, on budget with all features and functions
originally specified. Between 30-40% of all software projects are runaway projects that far
exceed the original schedule and budget projections and fail to perform as originally
A systems development project without proper management will most likely suffer these
- Costs that vastly exceed budgets
- Unexpected time slippage
- Technical performance that is less than expected
- Failure to obtain anticipated benefits
User Interface: the part of the system with which end users interact.
Project Management Objectives
Project: a planned series of related activities for achieving a specific business objective.
Information systems projects include the development of new information systems,
enhancement of existing systems, or upgrade or replacement of the firm’s information
technology (IT) structure
Project Management: refers to the application of knowledge, skills, tools, and techniques
to achieve specific targets within specified budget and time constraints. Project
management activities include planning the work, assessing risk, estimating resources
required to accomplish the work, organizing the work, acquiring human and material
resources, assigning tasks, directing activities, controlling project execution, reporting
progress, and analyzing the results.
Time: is the amount of time required to complete the project. Project managers typically
establish the amount of time to complete major components of a project. Each of these
components is further broken down into activities and tasks.
Cost: is based on time to complete a project multiplied by the cost of human resources
required to complete the project. Info system projects also include the cost of hardware,
software, and workspace.
Quality: is an indicator of how well the end result of a project satisfies the objectives
specified by management. The quality of information systems projects usually boils down
to improved organizational performance and decision-making. Quality also considers the
accuracy and timeliness of information produced by the new system and ease of use
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Risk: refers to the potential problems that would threaten the success of a project. These
potential problems might prevent a project from achieving its objectives by increasing time
and cost, lowering the quality of project outputs, or preventing the project from being
completed altogether
Selecting Projects
Companies typically are presented with many different projects for solving problems and
improving performance. There are far more ideas for systems projects than there are
resources, thus firms need to select from this group of projects that promises the greatest
benefits to the business
At the apex of this structure are the corporate strategic planning group and the information
system steering committee. Responsible for developing the firms strategic plan, which may
require the development of new systems. Often, group will have developed objective
measures of firm performance and choose to support IT projects that can make a
substantial improvement to one or several key performance indicators.
The information system steering committee is the senior management group with
responsibility for systems development and operation. It is composed of department heads
from both end-user and information system areas. It reviews and approves plans for
systems in all divisions, seeks to coordinate and integrate systems, and occasionally
becomes involved in selecting specific information systems projects. This group also has a
keen awareness of the key performance indicators decided on by the higher level
The project team is supervised by a project management group composed of information
systems managers and end-user managers responsible for overseeing several specific
information systems projects. Directly responsible for the individual systems project.
Information Systems Plan: to identify the information system projects that will deliver
the most business value, organizations need to develop information systems plan that
supports their overall business plan and in which strategic systems are incorporated into
top-level planning.
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