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SELECTING PROJECTS

In document INSIDE COVER - BLANK (Page 188-191)

Business Value of Systems and Managing Change Contents

B. SELECTING PROJECTS

Because there are far more ideas for systems projects than there are resources, it is important to select projects that promise the greatest benefit to the business and supports the firm's business strategy.

Management Structure for Information System Projects

In a large corporation, the management structure for information systems projects helps ensure that the most important projects are given priority. Each level of management in the hierarchy is responsible for specific aspects of systems projects.

At the top of the structure is the corporate strategic planning group which is responsible for developing the organisation‘s strategic plan, which may need new information systems or changes to existing systems.

The information systems steering committee is the senior management group responsible for systems development and operation. It is made up of managers of departments from both

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end-user and information systems areas. The steering committee reviews and approves plans for all systems.

The project management group is made up of information systems managers and end user managers and is responsible for overseeing specific information systems projects and supervising the project team.

The project teams are responsible for the individual systems project. A team is made up of systems analysts, specialists from the relevant end user business areas, programmers and database experts.

System Projects must be linked to Business Plans

To identify the information systems projects that will deliver the most business value, organisations need to develop an information systems plan that supports the overall business plan and demonstrates which strategic systems are part of high level strategic planning. The information systems plan is a road map indicating the direction of systems development, the logic underlying the plan, the current systems, new developments being considered, the management strategy and the budget. Other important components of an information systems plan include target dates and milestones. These will help evaluate the plan's future progress and drive management decisions regarding hardware and organisational change.

Establishing Organisational Information System Requirements Enterprise Analysis

Two approaches called enterprise analysis and critical success factors (CSF) can be used to establish organisation-wide information systems requirements. Both approaches attempt to gain a clear understanding of the organisations long and short-term information requirements.

Both use interviews of managers to gain an understanding of the requirements.

Enterprise analysis looks at the entire organisation in terms of organisational units, functions, processes, and the information they use. This approach involves taking a large sample of managers and asking them the following questions:

How do they use information?

Where do they get the information from?

What are their environments like?

What are their objectives?

How do they make decisions?

What are their critical information needs?

The data collected is combined to enable conclusions to be drawn about the organisation-wide information systems requirements.

The strength of enterprise analysis is in its complete picture of the way the organisation conducts its business. The weakness of the enterprise analysis is that it produces so much data that it is expensive to conduct and difficult to organise and analyse. A further weakness is that the enterprise analysis tends to look at the way existing information is used and not at the fact that new approaches may be needed in the future.

Page 188 organisations CSFs. Systems that are needed to deliver these critical success factors are then built.

The advantage of this method centres on the fact that the smaller sampling of data involved makes it easier to develop an information plan. It tends to be faster than enterprise analysis and therefore less expensive. The plan will revolve around a few CSFs instead of a large number of information requirements.

Using the CSF method also takes into account how the external business environment affects information needs. Usually top management are the organisational level most involved in this type of analysis as they have a better idea of the environmental effects than lower levels of management.

The main weakness of this method is in the process for analysing and combining the data as it can be difficult to merge individual CSFs into a clear company blueprint. A second problem is that there is often confusion between individual and organizational CSFs, as what can be critical for a particular manager may not be important to the entire organisation. Finally, the CSF approach is biased toward top managers because they are usually the only ones interviewed.

Portfolio Analysis

This approach can be used to select and evaluate information systems investments using strategic and other non-financial considerations. Portfolio analysis compares a portfolio of potential projects based upon the projects expected risks and benefits. Projects are categorised as high or low-risk and high or low-benefits. Thus, four ratings are available:

high-risk/high-benefits, high-risk/low-benefits, low-risk/high-benefits, and low-risk/low-benefits. High-benefit/low-risk projects are generally preferred, whereas low-benefit/high-risk projects are to be avoided. These four rating are summarise in Figure 13.1.

Figure 13.1: Portfolio analysis

Page 189 Scoring Models

The scoring model is a quick method for deciding among alternative systems based on a system of ratings for selected objectives. Criteria are listed and weighted and then alternative projects are rated using these criteria by those involved in judging the projects. Scoring models are meant to be relatively objective techniques, but involve many qualitative judgments. They are used most commonly to confirm and support decisions rather than to make decisions. The challenge with this method is on getting agreement on criteria to be used to judge the system.

C. ESTABLISHING THE BUSINESS VALUE OF INFORMATION

In document INSIDE COVER - BLANK (Page 188-191)