Dr. Honghui Deng

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

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

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 inFrance Working in the United States Working inChina Working inMexico Working inSaudi 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. IS PROJECT TYPES project management characteristics of different IS projects

41. 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

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

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

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

48. Information Systems Enterprise Resource Planning Working as an IT project manager, you’ll find yourself faced with developing and implementing a variety of information technology 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

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…