Muhamad AbduhInstitut Teknologi Bandung7.1 W e e k 7 7 MANAGEMENT OF INFORMATION SYSTEM PROJECT AND IMPLEMENTATION

Muhamad Abduh Institut Teknologi Bandung 7.1

W e e k

77MANAGEMENT OF MANAGEMENT OF

INFORMATION SYSTEM INFORMATION SYSTEM PROJECT AND PROJECT AND

IMPLEMENTATIONIMPLEMENTATION


CAPITAL BUDGET:

• PAYBACK METHOD: How long will it take to pay back the investment?

• RETURN ON INVESTMENT: Does return during useful life of an item exceed the cost to borrow money?

• COST-BENEFIT RATIO: Does the ratio of benefit versus cost exceed 1?

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CAPITAL BUDGET:

• PROFITABILITY INDEX: What is the ratio of present value of cash inflow to initial investment?

• NET PRESENT VALUE: Accounting for cost, earnings & time value of money what is the investment worth?

• INTERNAL RATE OF RETURN: Accounting for the time value of money, what is the return rate of an investment?

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COSTS:

• HARDWARE

• SOFTWARE

• SERVICES

• PERSONNEL

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COSTS & BENEFITS:


TANGIBLE BENEFIT:

• INCREASED PRODUCTIVITY

• LOW OPERATING COSTS

• REDUCED WORK FORCE

• LOWER COMPUTER EXPENSES

• LOWER VENDOR COSTS

• LOWER CLERICAL/PROFESSIONAL COSTS

• REDUCED GROWTH OF EXPENSES

• REDUCED FACILITY COSTS

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COSTS & BENEFITS:


INTANGIBLE BENEFIT:• IMPROVED ASSET USE; RESOURCE CONTROL; PLANNING• INCREASED FLEXIBILITY• MORE TIMELY INFORMATION• INCREASED LEARNING• ATTAIN LEGAL REQUIREMENTS• ENHANCED EMPLOYEE GOODWILL, JOB SATISFACTION,

DECISION MAKING, OPERATIONS• HIGHER CLIENT SATISFACTION• BETTER CORPORATE IMAGE

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COSTS & BENEFITS:


LIMITATIONS:

• Assume all relevant alternatives have been examined; cost & benefits can be expressed as $$

• Ignore intangible benefits

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CAPITAL BUDGETING MODELS


PORTFOLIO ANALYSIS:

ANALYSIS OF POTENTIAL APPLICATIONS TO DETERMINE RISKS & BENEFITS

• DETERMINE DESIRABLE FEATURES, ACCEPTABLE RISKS OF REQUIRED SYSTEM

• GENERATE PORTFOLIO OF CHARACTERISTICS, RISKS FOR EACH ALTERNATIVE

• SCORING MODEL

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• IDENTIFY DESIRABLE FEATURES• PROVIDE WEIGHTS FOR EACH (ADD TO

1.00)• LOOK AT EACH ALTERNATIVE:

– WHICH FEATURES ARE PRESENT?– TO WHAT EXTENT (as an amount)?– SCORE THE ALTERNATIVE

• RANK-ORDER THE ALTERNATIVES• SELECT HIGHEST RANKED OPTION

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SCORING MODEL:


REAL OPTIONS PRICING MODELS

• USEFUL UNDER UNCERTAIN CONDITIONS

• INCLUDE ESTIMATES FOR MANAGEMENT LEARNING, VALUE OF DELAYING DECISION, VOLATILITY OF COSTS & REVENUES


CHANGE MANAGEMENT

WHAT PROCESSES ARE BEST TO CHANGE:

• DESIGN

• DATA

• COST

• OPERATIONS

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CHANGE AGENT

DURING IMPLEMENTATION, INDIVIDUAL ACTS AS CATALYST DURING CHANGE PROCESS TO ENSURE SUCCESS

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APPROACHES ADOPTION MANAGEMENT ROUTINIZATION

ACTORS' ROLE XXXX XXXX

STRATEGY XXXX

ORGANIZATIONAL XXXX XXXXFACTORS

IMPLEMENTATION STAGESIMPLEMENTATION STAGES

ALL ACTIVITIES LEADING TO ADOPTION, MANAGEMENT, ROUTINIZATION OF INNOVATION

IMPLEMENTATION


INNOVATION PROCESSACTOR CHARACTERISTICS & DEMOGRAPHICS

SOCIAL STATUS

EDUCATION

SOPHISTICATION

ACTOR ROLES

PRODUCT CHAMPION

BUREAUCRATIC ENTREPRENEUR

GATEKEEPER

INNOVATIVE

BEHAVIOR


ACTIONS & INDICATORS FOR SUCCESSFUL SYSTEM

IMPLEMENTATION• SUPPORT BY LOCAL FUNDS• NEW ORGANIZATIONAL ARRANGEMENTS• STABLE SUPPLY & MAINTENANCE• NEW PERSONNEL CLASSIFICATIONS• CHANGES IN ORGANIZATIONAL AUTHORITY

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ACTIONS & INDICATORS FOR SUCCESSFUL SYSTEM

IMPLEMENTATION• INTERNALIZATION OF TRAINING PROGRAM• CONTINUAL UPDATING OF THE SYSTEM• PROMOTION OF KEY PERSONNEL• SURVIVAL OF SYSTEM AFTER TURNOVER• ATTAINMENT OF WIDESPREAD USE

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FACTORS IN IMPLEMENTATION OUTCOME

CAUSES OF SUCCESS OR FAILURE:

• USER INVOLVEMENT & INFLUENCE

• MANAGEMENT SUPPORT

• LEVEL OF COMPLEXITY / RISK

• MANAGEMENT OF IMPLEMENTATION PROCESS

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USER-DESIGNER COMMUNICATIONS GAP

DIFFERENCES IN BACKGROUNDS, INTERESTS, PRIORITIES

IMPEDE COMMUNICATION AND PROBLEM SOLVING

AMONG END USERS AND INFORMATION SYSTEMS SPECIALISTS

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USER CONCERNS:

WILL SYSTEM DELIVER INFORMATION I NEED?

HOW QUICKLY CAN I ACCESS DATA?

HOW EASILY CAN I RECEIVE DATA?

HOW MUCH CLERICAL SUPPORT WILL I NEED FOR DATA ENTRY?

HOW WILL SYSTEM OPERATION FIT INTO MY DAILY BUSINESS SCHEDULE?

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DESIGNER CONCERNS:

HOW MUCH DISK SPACE WILL MASTER FILE CONSUME?

HOW MANY LINES OF PROGRAM CODE WILL THIS FUNCTION TAKE?

HOW CAN WE REDUCE CPU TIME?

WHAT IS THE MOST EFFICIENT WAY OF STORING THIS DATA?

WHAT DATABASE MANAGEMENT SYSTEM SHOULD WE USE?

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LEVEL OF COMPLEXITY & RISK

• PROJECT SIZE

• PROJECT STRUCTURE

• EXPERTISE WITH TECHNOLOGY

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CONTROLLING PROJECT RISK

LOW HIGH SMALL HIGH LOW HIGH LARGE VERY HIGH LOW LOW SMALL VERY LOW LOW LOW LARGE LOW HIGH HIGH SMALL MEDIUM-LOW HIGH HIGH LARGE MEDIUM HIGH LOW SMALL VERY LOW

STRUCTURE TECHNOLOGY LEVEL SIZE RISK HIGH LOW LARGE LOW


CONSEQUENCES OF POOR PROJECT MANAGEMENT

• COST OVERRUNS

• TIME SLIPPAGE

• TECHNICAL SHORTFALLS

• FAILURE TO OBTAIN BENEFITS

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CAUSES OF POOR PROJECT MANAGEMENT

• IGNORANCE & OPTIMISM

• MYTHICAL MAN-MONTH: Many tasks sequentially linked, require training

• FALLING BEHIND: Bad news travels slowly upward

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CHANGE MANAGEMENT CHALLENGES

• ENTERPRISE SYSTEMS: High risk of failure, replacing legacy systems, myriad interconnections

• BUSINESS PROCESS REENGINEERING: 70% failure rate, deeply rooted in old processes, employees often unprepared

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CHANGE MANAGEMENT CHALLENGES

• MERGERS & ACQUISITIONS: Decline in shareholder value, difficult to integrate company systems, organizational change, worker morale

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MANAGING IMPLEMENTATION:

CONTROL RISK FACTORS: Gear tools, methodologies to level of risk

INTERNAL INTEGRATION TOOLS:

• FORMAL PLANNING TOOLS

• FORMAL CONTROL TOOLS

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FORMAL PLANNING TOOLSEXAMPLES:

• PROGRAM EVALUATION & REVIEW TECHNIQUE: Diagram of project activities, sequential and concurrent, shows interactions of activities

• GANTT CHART: Shows activities as bars along a time line, with beginning, end of each task

THESE PROVIDE SCHEDULES

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FORMAL CONTROL TOOLS:

BUDGET: Time, money, resources

• MONITOR PROGRESS: Completion of tasks, fulfillment of goals

• CONTROL RISK FACTORS: Cost/benefits

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EXTERNAL INTEGRATION TOOLS

• LINK ALL USERS THROUGHOUT ORGANIZATION

• USE END USERS AS TEAM MEMBERS

• SHARE INFORMATION & PROGRESS

• INCLUDE TRAINING

• AVOID COUNTERIMPLEMENTATION

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ORGANIZATIONAL FACTORS

• JOB DESIGN

• STANDARDS & PERFORMANCE MONITORING

• ERGONOMICS: Interaction of people & machines; jobs, health, interface

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• EMPLOYEE GRIEVANCE RESOLUTION PROCEDURES

• HEALTH & SAFETY

• GOVERNMENT REGULATORY COMPLIANCE

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MONITOR PROGRESS: Completion of tasks, fulfillment of goals

CONTROL RISK FACTORS: Cost / benefits

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ORGANIZATIONAL IMPACT ANALYSIS: How will system impact structure, attitudes, decision-making, operations

SOCIOTECHNICAL DESIGN: Explore group structures, task allocation, job design for human factor

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“FOURTH-GENERATION” PROJECT MANAGEMENT

• EMERGING TECHNIQUES TO DEAL WITH COMPLEXITY

• ENTERPRISE-WIDE FOCUS

• DRIVEN BY STRATEGIC VISION & TECHNOLOGY

• MAY REQUIRE SEPARATE PROGRAM OFFICE

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W e e k

77MANAGEMENT OF MANAGEMENT OF

INFORMATION SYSTEM INFORMATION SYSTEM PROJECT AND PROJECT AND

IMPLEMENTATIONIMPLEMENTATION

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Muhamad AbduhInstitut Teknologi Bandung7.1 W e e k 7 7 MANAGEMENT OF INFORMATION SYSTEM PROJECT AND IMPLEMENTATION