Management Issues in Systems Development

1. Presented by: Genelita Olpindo Vilma Aclin Adonis Supan Bob Julius Gayo Management Issues in Systems Development

2. Project ManagementWhat is Project Management? Project Management is simply the management of a project May sound simple and self-evident BUT = doesn’t make it easy! Many people get confused/concerned because IT project management contains the dreaded ‘T’ word – Technology In reality IT project management is not that much different from other forms e.g. construction

3. Project ManagementWhat is Project Management? cont. A project is a collection of related tasks and activities undertaken to achieve a specific goal. All Projects (IT or other) should: Have a clearly stated goal Be ‘finite’ Clear beginning & end IT Project Management: 10% technical, 90% common sense Management styles vary as do backgrounds Key = keeping in mind, and under control the numerous interdependencies GET THE JOB DONE!

4. Project ManagementWhat is Project Management? cont. Project Management Institute Project Management encompasses five processes Initiating Planning Executing Controlling, and Closing To become a certified PMP = must pass tests covering nine knowledge areas: Integration Scope Time Cost Quality Human Resources Communication Risk Procurement

5. Project ManagementThe Job of a Project Manager Responsible for the following tasks: Setting Up the Project Why A brief background of the project, and The business objectives to be achieved What Key outputs to be produced Benefits When List of milestones and expected timing High level project plan Who Project team Stakeholders – and their expectations How Definition of the work that needs to be undertaken Scope Specific exclusions

6. Project ManagementThe Job of a Project Manager cont. Responsible for the following tasks cont.: Managing the Schedule Schedule / project plan = heart of the project and main communication tool High level first – then break down as you proceed Baseline and track Use automated tools Recommendations: Focus on the date that tasks are/ will be completed rather than on the % of overall project completed Review progress at least monthly, preferably more often Focus on tasks to be completed Vs. those finished Reforecast when new evidence comes to light

7. Project ManagementThe Job of a Project Manager cont. Responsible for the following tasks cont.: Managing the Finances Financial plan, who is accountable, benefits etc. Baseline costs and track They will change! Need to know how much has been spent and how much money is left Managing the Benefits Difficult to estimate but must try Base on same assumptions as costs Look at timings Track Why are we doing this???? Should we still be doing it?

8. Project ManagementThe Job of a Project Manager cont. Responsible for the following tasks cont.: Managing Risks, Opportunities and Threats Risk mitigation and risk management Usually poorly done Risk logs Issue management Soliciting Independent Reviews Health checks (of the project) By someone independent (could be external)

9. Project ManagementChange Management IS often assume a technically elegant system is a successful system. (IT’S NOT!!!) Many technically sound systems have turned into implementation failures because the people side of the system was not handled correctly System is only a success if it meets the users’ requirements and they are happy with it and with using it Information technology is all about managing change New systems require changing how work is done Focusing only on the technical aspects is only half the job – the other job is change management

10. Project ManagementChange Management cont. Changing management = process assisting people to make change in their working environment Change – caused by the introduction of a new computer system People resist change, especially technological change, when they view it as a crisis. ‘Resistance’ includes: Deny the change Distort information they hear about the change Convince themselves and others the new system will not change status quo

11. Project ManagementChange Management cont. ODR (among others) offers a methodology to help companies manage technological change Type of people involved in a change project Sponsor: the person or group that legitimizes the change Change agent: the person or group who causes the change to happen Target: the person or group who is being expected to change and at whom the change is aimed

12. Project ManagementChange Management cont. Methodology to manage technological change Conduct surveys with all three groups to determine: Whether the scope of the project is do-able, or whether the organization is trying to change too much at one time Whether the sponsors are committed enough to push the change through, or whether they are sitting back expecting the organization to change on its own Whether the change agents have the skills to implement the change, or whether e.g. they are not adept at rallying support Which groups are receptive to the change and which are resistant

13. Project ManagementRisk Management Not all IT-based projects succeed Many fail, especially the really large ones e.g. ERP, CRM 30 to 70% fail Why? = Do not overcome their risks Technical Business Technical risks Sub-performance, scope creep making it too complex Can’t always be predicted but they can be contained Business risks Business does not change properly to use the new systems Are not as easily righted Need to: Assess the risk Mitigate the risk Adjust the project management approach

14. Project ManagementRisk Management cont. Step 1: Assess the Risks Three predominant risk factors: Leadership of the business change Employees’ perspective of the change Scope and urgency of the change Decision tree (Figure 10-1) Project leader = executive(s) responsible for the change Must be a business executive It is the business, not IT that is required to change Contributes to success/failure? – 6 questions: Are they committed to the business case? Do they understand the extent of change in work behaviour required for the project to succeed? Are they formally motivated to pull off the change? Are they at the appropriate org. level with the formal power…..? Do they have experience with a project of similar scope, urgency and people impact? Do they have informal power, such as credibility and respect?

16. Project ManagementRisk Management cont. Step 2: Mitigate the Risks Project management styles Authoritative Vs. Participative Project’s budget and timeframe Rigid Vs. Adjustable Figure 10-2 Big Bang Only appropriate when all 3 factors = positive Improvisation Leadership and employee = positive but scope or urgency place the project at risk Committed workforce can adapt etc. Guided Evolution Used when only the employee perception is negative Can be overcome by involving them Top-down Coordination Only works when the leadership factor supports the business change and when the leadership is respected, full-time and highly experienced in leading business change

18. Tips for Good IT Project Management Establish the Ground Rules Open systems, industry standards, web-enabled etc. Foster Discipline, Planning, Documentation and Management If the process is not controlled properly, anything can happen or, more realistically, potentially nothing will happen Obtain and Document the ‘Final’ User Requirements Don’t get too technical Obtain Tenders from All Appropriate Potential Vendors Include Suppliers in Decision Making Convert Existing Data Task might appear quite simple but often causes the biggest headaches Follow Through After Implementation Cross the t’s and dot the i’s in terms of documentation, future maintenance processes etc.

19. Reasons for Success Proper Planning Appropriate User Involvement Strong Visible Management Support Project Manager(s) with Power and Time Good Change Management Working As A Team Proper Project Monitoring and Control Proper Project Closure

20. Project ManagementReasons for Success cont. In all circumstances: KEEP YOUR FOCUS ON THE END RESULT Look at enablers not obstacles

21. Project ManagementDanger signs Top management informed? Top management involved? Sponsorship? Project planning tools? Scope creep? Status reporting? Current capabilities? IT/business interaction? Training/business change management?

22. Improving Legacy Systems Many Information Systems executives feel trapped by the past: Old legacy programs & data they would love to replace However, replacement is not the only option In many cases = not even the wisest Possibly = only delay (the inevitable?)

23. Improving Legacy Systems:To Replace or Not to Replace? Upgrading – sometimes makes more sense More difficult (to sell?) Not as exciting as a totally new system Most replacement projects that failed could have been upgrade projects Many reverted to upgrading anyway When a systems technology is so obsolete that it does not exist in many places, then replacement is probably the only choice – BUT otherwise – perform 3 analyses: Rigorous analysis of the costs and benefits the new system Determine how specialized the new system really is Sometimes = think you need ‘made to order’ when purchased would do just fine KISS Assess the IS staff’s capabilities honestly Can they do the job?

24. Improving Legacy Systems:Options for Improving a Legacy System Figure 10-3 illustrates the choices companies have with dealing with legacy systems Analogy with a home The options can be performed: In-house or Outsourced – including: Transitional Part

26. Improving Legacy Systems:Options for Improving a Legacy System cont. Restructure the system: House = updating the look of a room e.g. repainting or getting rid of clutter Applicable to systems that are basically doing the job but run inefficiently or are “fragile.” Seven Steps in restructuring: Evaluate the amount of structure in the current system - number of layers of nesting, degree of complexity, etc. Use tools to trace program control logic Compile the program, to be sure it is in working order

27. Improving Legacy Systems:Options for Improving a Legacy System cont. Restructure the systemcont.: Run the program through a structuring engine, which cleans up and restructures the code, following structured programming concepts This process does not change the logic of the program, but replaces poor coding: Reduces number of ‘GOTOs’ Removes dead code Highlights loops, and Groups input/output Reformat the listing to make it easier for programmers to understand Ensure that the old and new versions produce the same output File to file comparator Minimize overhead introduced by restructuring (optimizer package) “Rationalize” the data by giving all uses of the same data one data name

28. Improving Legacy Systems:Options for Improving a Legacy System cont. Reengineer the system: A step beyond restructuring, implies extracting the data elements from an existing file and the business logic from an existing program and moving them to an existing platform. See Life Cycle Figure 10-4 House = fixing what isn’t working Reverse engineering: existing programs, along with their files and DB descriptions, are converted from their implementation level description to their equivalent design level components Forward engineering: from requirements level to operational systems

30. GTE DIRECTORIESCase Example: Reverse Engineering Produced, marketed, distributed telephone directories in 14 countries The directory publishing system had four main databases, designed application-by-application, so the data elements were difficult to change, enhance, and reuse The data administration group acquired reverse engineering tools to help them improve these databases

31. GTE DIRECTORIESCase Example: Reverse Engineering cont. In another project, the company used an automated tool to reverse-engineer a poorly designed database from its physical model to its data model, and then create a properly designed data model using entity relationship modeling techniques In a third project, database administrators reused some data elements in a large database for a new production scheduling system, again using reengineering tools

32. Improving Legacy Systems:Options for Improving a Legacy System cont. Refurbish the system House = enhancing the usefulness by replacing furniture, landscaping etc. If the old system is maintainable and causing no major problems; it may be worthwhile to add ‘extensions’ Potential extensions: Supply input in a new manner Make new uses of input, or Allow the programs to deal more comprehensively with the data Occurring quite a bit these days with the ‘web’ Old system an ‘untouchable’ black box surrounded by new systems Note: this method was popular even before the ‘web’

33. Improving Legacy Systems:Options for Improving a Legacy System cont. Rearchitect the System: House = rethinking the use of space by perhaps gutting a major portion of the house and remodelling it This option involves having a to-be architecture for new systems, then using that architecture to upgrade legacy systems Previously not seen as necessary, IT architectures = now mandatory Where possible CTOs work hard to migrate their enterprise to that desired to-be architecture, generally one system at a time

34. Improving Legacy Systems:Options for Improving a Legacy System cont. Replace with a Package or Service: to move an old application to a new operating environment, e.g.: centralized to distributed, e.g., SAP This alternative has become the norm; another option, one being touted as “the future,” is to replace a system with a service delivered over the Internet House = move! Rewrite the System: if too far gone to rescue, obsolete technology; beware of true cost and risk failure RARE! = only ‘specialized’. Normally = go for a package House = knock down and build a new one

35. Part III Discussion Case A DREAM PROJECT TURNS NIGHTMARE: HOW FLAWLESS SOFTWARE NEVER GOT IMPLEMENTED

39. Measuring the Benefits of Systems Measuring the value of Information Systems seems to be a continuing request Never mind that the Internet has changed the world or that e-commerce and e-business are impossible without computers Executives want specific links between new systems and corporate financial measures e.g. Increase in earnings Shareholder value Revenue

40. Measuring the Benefits of Systems cont. Achieving this is very difficult because IT is only one of many factors contributing to the successful use of systems e.g. the value of decision support systems and data warehouses are difficult to measure because they are intended to change such un-measurable actions as: Improved decisions Better identification of opportunities More thorough analysis Enhanced communication among people

41. Measuring the Benefits of Systems cont. E-commerce systems, which aim to improve a firm’s competitive edge or protect its market share, also elude measurement New market systems How do you calculate ROI? Infrastructure investments (upon which future applications will be built) often cannot be justified on ROI because they have none! Can’t however just say “it’s too hard” Three (of many!) suggestions on how to deal with these measurement dilemmas: Distinguish between the different roles of systems Measure what is important to management Assess investments across organizational levels

42. Measuring the Benefits of Systems cont.Distinguish Between the Different Roles of Systems Information systems can play three roles in a company: Help other departments do their job better: “support systems” with the goal to increase organizational efficiency Carry out a business strategy: e.g. CAD systems that customers and suppliers can use together to design custom products Differ from support systems because they are used by customers As a product or service as the basis for a product or service:e.g. testing or design software that a company sells to another firm Measuring the benefits of these three kinds of systems differs

43. Measuring the Benefits of SystemsDistinguish Between the Different Roles of Systems cont. Measuring Organizational Performance: Meeting deadlines and milestones Operating within budget Doing quality work Performance measures internal efficiency of operations Measuring Business Value: Deals with marketplace goals They must have a direct impact on the company’s relationships with customers, clients, or suppliers; e.g. sales/customer Measuring a Product or Service: An IS offered as a product or service to produce revenue = measured as any other business venture e.g. by ROI

44. Measuring the Benefits of Systems Measure What Is Important to Management IS support can only be linked to corporate effectiveness by finding all the indicators management use, besides the traditional financial ones Measure in terms like: Customer relations (incl. satisfaction) Employee morale “Cycle time” How long to accomplish a complete assignment; fast cycle time might mean higher-quality products, beating competitors to the market, winning a bid, etc.

45. IT benefits cross organizational levels, sources of value at three levels: Individual Division Corporation Impact focus of an IT investment extends to Economic performance payoffs - market measures of performance Organizational process impacts - process change Technology impacts - key functionality Combine views to form a 3 x 3 matrix Used by a trucking firm who uncovered benefits that otherwise would have gone unrealized Measuring the Benefits of Systems Assess Investments Across Organizational Levels

46. Do Investors Value IT Investments? An even more intriguing question than how business executives value IT investments is howinvestors value IT investments A study found that every $1 invested in computers yielded up to $17 in stock market value – and no less than $5 Whereas, $1 invested in property, plant, and equipment (book value) only yielded $1 in stock market value; and $1 investment in other assets (inventory, liquid assts, and accounts receivables) yielded only 70 cents

47. Do Investors Value IT Investments? cont. The researchers reason that investors value $1 spent on computers more than the other investments because it leads to organizational changes that create $16 worth of “intangible assets” – know-how, skills, organizational structures, and such Investments in “organizational capital” generally lead to adopting decentralized work practices: Using teams more often Giving employees broader decision-making authority, and Offering more employee training Firms with these three decentralized work practices had a market value of 8 percent higher than the mean

48. Conclusion Managing projects has always been one of the most important, and toughest, jobs in the IS organization Even with outsourcing and software packages, project management belongs in-house because responsibility for project success remains in house Project management skills = critical People job in system development: Managing development staff Helping people adjust to the organizational changes that occur with a new system Successfully implementing systems: Sponsors understand their role in enforcing change – giving change agents the tools & skills to foster the change Assisting the targets in making the change – providing training etc.

49. Conclusion cont. Software – difficult to keep up-to-date: Variety of options (refurbish etc.) as well as replacing it with a package New alternative = rearchitect the system toward a desired “to be” architecture “Rent” software off the Web, per seat, per month Process of justifying a new system can uncover what is important to management Measuring benefits afterward can help companies spot benefits they had not originally planned Investors more highly value companies with higher IT investments and more distributed work practices