Information Systems Project Management: Key Concepts and Best Practices

1. Importance of Project Management for Information Systems

Information systems projects have a high failure rate. They often exceed time and budget estimates, or the final product doesn’t function as expected. Understanding how to manage these projects, including their successes and failures, is crucial.

2. Problems Arising from Poor Project Management

Poor project management can lead to cost overruns, missed deadlines, technical deficiencies impacting performance, and failure to achieve the desired benefits.

3. What is Project Management?

Project management involves applying knowledge, skills, tools, and techniques to achieve specific objectives within budget and time constraints. Activities include:

  • Work planning
  • Risk assessment
  • Resource allocation
  • Work organization
  • Resource acquisition
  • Task assignment
  • Management activities
  • Project monitoring
  • Progress reporting
  • Result analysis

Key variables:

  • Scope: Defines the project’s boundaries.
  • Time: The duration required for project completion.
  • Cost: The financial resources allocated to the project.
  • Quality: How well the project meets its objectives.
  • Risk: Potential problems that could threaten project success.

4. Groups Responsible for Information Systems Project Management

  • Corporation’s Strategic Planning Group and Board of Directors: Responsible for the company’s strategic plan, which may necessitate new systems.
  • Information Systems Steering Committee: Oversees systems development and operation.
  • Project Team: Managed by project managers, information systems managers, and end-users, this team oversees specific information systems projects.

5. Main Categories of an Information Systems Plan

An information systems plan includes the development direction, rationale, current situation, management strategy, implementation plan, and budget.

6. Using Business Analysis and Critical Success Factors

Gather information from a large sample of managers about their information usage, sources, environment, objectives, decision-making processes, and data needs. New approaches to business operations may be necessary.

7. Portfolio Analysis and Scoring Models

Portfolio analysis involves inventorying all projects and information systems assets, including infrastructure, outsourcing, and licensing agreements. This creates a risk-benefit profile for the company.

Scoring models help evaluate projects based on multiple weighted criteria. They support decision-making but shouldn’t be the sole determinant.

8. Costs and Benefits of Information Systems

Tangible benefits: Quantifiable and assignable a monetary value.

Intangible benefits: Not immediately quantifiable, but can lead to quantifiable gains (e.g., improved customer service).

9. Capital Budgeting Methods

  • Payback Method: Time to recoup the initial investment.
  • Return on Investment (ROI): Calculates the return by adjusting cash inflows for depreciation.
  • Net Present Value (NPV): The current value of future cash flows, considering time value of money.
  • Internal Rate of Return (IRR): The discount rate that makes the present value of future cash flows equal to the initial investment.

10. Real Options Valuation

This approach uses financial option concepts to value IT projects. An initial investment creates the right, but not the obligation, to pursue future benefits.

11. Limitations of Financial Models

Financial models don’t fully capture risks and uncertainty. Costs and benefits may not occur within the same timeframe.

12. Factors Influencing Project Risk

  • Project size: Larger projects have higher risk.
  • Project structure: Clearly defined requirements reduce risk.
  • Technology experience: Lack of technical expertise increases risk.

13. Change Management

New information systems often change how information is defined, accessed, and used, impacting power and authority. Effective change management is crucial for realizing IT benefits.

14. Implementation and Counter-Implementation

Implementation encompasses all organizational activities to adopt and integrate an innovation. The systems analyst acts as a change agent.

Counter-implementation is a deliberate attempt to obstruct the implementation of an information system.

15. Importance of Management and End-User Support

User involvement leads to systems that better meet business needs. Management support ensures adequate funding and resources.

16. High Failure Rate of Deployments and BPR

Innovation and implementation often require significant organizational change and replacing legacy systems, which can be challenging. Information systems play a key role in the success or failure of mergers and acquisitions by integrating systems from different companies.

17. Project Risk Management Techniques

Internal tools, formal planning, and formal control tools, such as Gantt charts and PERT diagrams, can help manage project risk.

18. Organizational Considerations

Factors to consider include employee engagement, job design, supervision, performance standards, ergonomics, grievance procedures, health and safety, regulatory compliance, organizational impact analysis, and technical partner study.

19. Project Management Software

Software tools automate aspects of project management, such as task management, resource allocation, scheduling, progress tracking, and modifications. These tools can handle large, complex projects and dispersed teams.