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ITM 305 (71)
Jim Tam (16)
Chapter 2

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Ryerson University
Information Technology Management
ITM 305
Jim Tam

ITM305 – Chapter 2 Project Management Introduction  Project Management is the process of planning and controlling system development within a specified time at min. cost with right functionality  A project is a set of activities with a specified beginning and end point meant to create a system that brings value to the business  Project Managers monitor and control all tasks and roles that need to be coordinated  Inception phase: generate a system request based on a business need or opportunity  Perform a feasibility analysis; revise the system request  Approve or decline the project Project Identification  Projects are driven business needs o Identified by business people o Identified by IT people o Identified jointly by business and IT  The project sponsor believes in the system and wants to see it succeed o Normally this is a business person o Should have authority to move it forward  Business Value o Tangible value  Can be quantified and measured directly  Ex. 2% reduction in operating cost o Intangible value  We know it will add value & save time, but we may not be able to quantify or measure its benefits  Ex. improved customer service System Request  A document that describes the reasons for and the value added from building a new system  Contains 5 elements: o Project sponsor: primary point of contract for the project o Business need: reason prompting the project o Business requirements: what the system will do o Business value: how will the organization benefit from the project o Special issues: anything else that should be considered Feasibility Analysis  Is this project feasible? o What are the risks? o Can these risks be overcome?  Major components: o Technical feasibility (can we build it?) o Economic feasibility (should we build it?) o Organizational feasibility (will they use it?) Technical Feasibility  Identify risks in the following areas: o The functional area: are analysts familiar with this portion of business? o The technology: less familiarity generates more risk o Project size: large projects have more risk o Compatibility: difficult integration increases the risk Economic Feasibility (Cost-benefit analysis)  Identify the costs and the benefits  Assign values to the costs and benefits  Determine the cash flow  Determine the value using one or more methods: o Net present value (NPV) o Return on investment (ROI) o Break-even point Organizational Feasibility  Will the users accept the system?  Is the project strategically align with the business?  Conduct a stakeholder analysis o Project champion(s) o Organizational management o Systems users o Others Project Selection  Projects are approved, declined or delayed based on value added vs. risks  Project portfolio management o Goals:  Maximize cost/benefit ratio  Maintain an optimal mix of projects based on:  Risk  Size, cost & length of time to complete  Purpose, scope & business value o Limited resources require trade-offs  Selected projects enter the project management process Traditional Project Management Tools  Aids in creating workplans  Identify all tasks, their sequence and estimate the time to complete each one  Work breakdown structures (WBS): a hierarchy of tasks to identify: o Duration of each task o Current status of each task o Task dependencies (shows which tasks must be completed before others can begin)  Gantt charts: horizontal bar chart that shows the WBS graphically  Network diagrams: PERT (Project Evaluation and Review Technique) and CPM Project Effort Estimation  Estimation involves trade-offs b/w functionality, time and cost  It is the process of assigning projected values for time and effort  Most accurate estimates come from experience  Use-case point method; based on: o Technical complexity factors (13) o Environmental
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