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Information technology project management Cloud computing and SaaS MBA 501 WEEK 6.

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1 Information technology project management Cloud computing and SaaS MBA 501 WEEK 6

2 What is project management? Project management – a definition “Project management is the process by which projects are defined, planned, monitored, controlled and delivered such that the agreed benefits are realised.” – Association for Project Management Project management is both a discipline and a set of tools and practices Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

3 PM as a profession: Project Management Institute (PMI)  The Project Management Institute is the major project management organization / professional societyProject Management Institute  defines and standardize the body of knowledge (PMBOK)  has an important credentialising function – Project Management certificationProject Management certification  Founded in 1969  Very significant growth from 7,500 members in 1990 to over 260,000 in 2007  The Project Management Journal and PM Network are the leading project management journals Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

4 Why such growth in the profession of PM? Recent Changes in Managing Organizations – – The replacement of traditional hierarchical management with more consensual forms. – The increasing adoption of the “systems engineering” approach to problem solving. – The establishment of projects as the preferred way to accomplish the organizations goals. Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

5 Project management “Managing projects has always been one of the most important, and toughest, jobs in the IS organization” McNurlin & Sprague What is a project? – “collection of related tasks and activities undertaken to achieve a specific goal” Must be a clearly stated goal Must have a clearly stated beginning and end McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

6 Definition of a project  “A temporary endeavour undertaken to create a unique product or service” ▪ Project Management Institute (2004)  How do we distinguish a project from other kinds of work?  Major characteristics of a project  Importance – in the eyes of the organization (not necessarily size)  Performance – well defined set of goals  Life cycle with a finite due date  Interdependencies – interaction between project activities, and with other activities in the organization  Uniqueness – even routine project produce a unique result  Resources – budgets, personnel etc…..are always limited  Conflict – over cost, schedule, resources, requirements. Between stakeholders, between team members. There is always conflict in PM. Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

7 What is not a project? Non-projects: Routine tasks that are performed again and again (projects are one-time events) Quasi-projects (Bill, would you look into this?)are those that do not have a specific task identified, no specific budget, and no specific deadline defined. Although there are some uncertainties, project management skills can still be used to manage them. Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

8 Why Project Management?  The main purpose for initiating a project is to accomplish some goal  Project management increases the likelihood of accomplishing that goal  Project management gives us someone (the project manager) to spearhead the project and to hold accountable for its completion  Better results  Better control  Better customer relations  Better ROI Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

9 Projects Tend to be Large Projects tend to be large – The Channel Tunnel – Three Gorges Dam, China – IT megaprojects (Wikipedia) IT megaprojects Projects are getting larger over time – Flying: balloons  planes  jets  rockets  reusable rockets The more we can do, the more we try to do Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

10 Project Management Also Getting Smaller 1.More people are seeing the advantages of project management techniques 2.The tools are become cheaper 3.The techniques are becoming more widely taught and written about – Wedding and other event planning – A new kitchen – A website redesign – Etc etc – some examples that come to mind? Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

11 Project management Techniques for managing the three elements of any project (the project triangle) Time Cost Performance objectives (scope) Project management is hard – it is all about managing risks! McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

12 The job of a project manager Setting up the project (selecting the team etc) Managing the schedule – WBS and assigning activities/tasks Managing the finances (estimating and managing costs) Managing the benefits (and managing expectations) Managing the risks, opportunities, and issues/threats Soliciting independent reviews McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

13 The Project Life Cycle Figure 1-3 Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

14 Time Distribution of Project Effort Figure 1-4 Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley.

15 Uncertainty and Risk at the Start of the Life Cycle – very difficult to predict with accuracy Figure 1-6 Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley. Estimate of project cost made at the start

16 Risk During the Life Cycle – uncertainty decreases as the project nears completion Figure 1-7 Meredith & Mantel (2009) Project management: a managerial approach. 7th ed. Wiley. Estimates of project cost made at time t 0, t 1 and t 2

17 Project Management Institute Project Management Institute – core competencies for PMs Management of: – Integration / co-ordination – Scope – Time – Cost – Quality – Human resources – Communication – Risk – Procurement McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

18 Software for project management MS Project Wrike Basecamp

19 Example of PMs work: Activity Planning Activity planning includes – Selecting a systems analysis team – Estimating time required to complete each task – Scheduling the project Two tools for project planning and control are Gantt charts and network diagrams McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

20 Work Breakdown Structure (WBS) Project is broken down into phases Further broken down into tasks / activities and sub- tasks Identify task dependencies Estimate the time each task will take – may use “most likely”, “pessimistic”, and “optimistic” estimates for time McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

21 Gantt Charts Easy to construct and use Shows activities over a period of time and illustrates how activities and tasks are interrelated. Good at illustrating tasks that run parallel to one another – Example of Gantt chart McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

22 Sample of a simple Gantt chart Source

23 Network Diagram – Network diagrams show precedence, activities that must be completed before the next activities may be started – Show multiple paths to project completion – Used to calculate the critical path, ie. the longest path through the activities – The critical path will cause the project to fall behind if any delay is encountered on it

24 ActivityPredecessorDuration Critical path = 10 – 20 – 30 – 50 – 60 – 70 – 80 (22 days - the longest path) Non-critical path = 10 – 30 – 40 – 60 – 70 – 80 (16 days) F,

25 Project failure Chaos Report 2011 (The Standish Group)The Standish Group More than half of projects conducted between 2002 and 2010 either described as challenged or complete failures. – 37% Successful: delivered on time, on budget, with required features and functions – 42 % Challenged: late, over budget, and/or with less than the required features and functions – 21% Failed: cancelled prior to completion or delivered and never used

26 Why do projects fail? Any non-trivial project is almost certain to have problems – project management is hard Problems with people – Poor communication – Lack of buy-in from key stakeholders – Resistance from employees / users – Tasks not completed as agreed – Insufficient training Problems with estimating time and budgets – overly optimistic or over-promising Scope creep McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

27 Poor risk management One of the main reasons that IT projects fail is poor risk management – Technical risks: eg. scope creep causing complexity, vendor package doesn’t scale – Business risks: the business doesn’t change properly to use the new system (in a way necessary to reap the benefits) Selecting the right project management approach can help mitigate risk entailed with business changes The business case for an IT project should include the business-change risks McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

28 Risk management - steps Step 1: Assess the risks 1.leadership of the business change 2.employees’ perspective on the change 3.the scope and urgency of the change. Step 2: Mitigate the risks – Risk avoidance – remove source of the risk (eg remove certain functions to avoid hacking) – Risk limitation by implementing controls (eg. System monitoring to avoid disaster) – Risk transfer by letting others assume the risk (eg. by outsourcing) Step 3: Adjust the project management approach McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

29 The role of the Project Management Office (PMO) Large organizations often centralize their PM functions into a Project Management Office Assist CIO in achieving objectives: – Instill project management discipline and knowledge – Standardize project management best practices – Facilitate IT project portfolio management (for better control) – Keep closer watch on project expenses and progress Megan Santosus. Why you need a PMO. CIO Magazine, July 1, 2003.

30 The PMO PMO Models – Consulting model – provides PMs in business units with training, guidance and best practice – Centralized model – PMs loaned out to business units to work on specific projects Payback from the PMO? – Help deliver strategic IT projects – Enable better resource management – Fewer project failures – Only projects that offer the biggest payback are supported Megan Santosus. Why you need a PMO. CIO Magazine, July 1, 2003.

31 OUTSOURCING

32 Outsourcing In the IT world, outsourcing means… turning over a firm’s computer operations, network operations, or other IT function to a provider for a specified time…usually a period of years Not at all common until late 1980s, early 1990s Now, CIOs must demonstrate good reasons NOT to outsource Outsourcing is evidence of a global and mobile trend in the IT labour market – As is “reverse outsourcing” (eg. Wipro presence in US) McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

33 Working outwards: Drivers towards outsourcing Value (cost savings). Forrester research shows that firms save between 12 & 17% of the cost of doing the work in-house – Benefits from economies of scale Focus on core business due to global competition – What business are we in? – Where do we add value? McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

34 Location of supplier of outsourced services Off-shoring: means outsourcing to a provider outside the country (For the US this means India, Ireland, the Philippines, China etc) – Low wage countries – Cultural and time zone issues need to be managed – Political issues at home re the domestic workforce Near-shoring – outsourcing to Canada, Mexico Outsourcing to home country McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

35 Types of outsourcing Project based (eg. Y2K work) Best-of-breed outsourcing – one supplier might handle desktop support, another data centre operations, another network management. Now managed collaboratively, with one supplier taking the lead Business process outsourcing (BPO) – outsourcing all or most of a re-engineered process that has a large IT component (eg. travel agency handing over ticket accounting) eBusiness outsourcing – speed and focus are the big drivers, especially where IT gives no competitive advantage Shared services – a type of “in-sourcing” where economies of scale are achieved by centralizing IT, legal, etc services Utility and cloud computing – pay as you go – Amazon Web Services (SaaS is another variant)Amazon Web Services McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

36 Two statements for discussion Outsourcing offloads a burdensome technical responsibility and allows management to focus on its core business – OR Outsourcing strips a company of an important core competence – IT know-how and creates unnecessary risks McNurlin & Sprague. Information Systems Management in Practice. 7th Ed. Pearson Prentice Hall

37 CLOUD COMPUTING AND SAAS

38 The idea of cloud computing – the big shift “Computers used to be self-contained devices. If you wanted to do something with your PC, you had to buy a piece of software and install it on your hard drive”. The web changed all that. All you needed was a browser and a network connection “The PC began to turn inside out—what was important wasn’t what was inside its case but what was outside it.” Now, we use FB and Gmail, YouTube, and Netflix – this shift has been largely invisible to the consumer “[Computing today] is turning into a service supplied over a network. It’s becoming a utility.” The implications for corporate users are IT are very significant – Why build data centers? – Why bother even having an IT department any longer? Nicholas Carr: The Big Switch.

39 Cloud computing: what is it? “Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction” National Institute of Standards and Technology

40 Three types of cloud computing IaaS – Infrastructure as a Service: computing power, storage, database services eg. Amazon Web ServicesAmazon Web Services PaaS – Platform as a Service: an entire platform to build applications from scratch eg. Windows Azure and Heroku Windows AzureHeroku SaaS – Software as a Service: already built applications (pretty much the same as COTS) eg. Adobe Photoshop Creative CloudAdobe Photoshop Creative Cloud

41 Utility computing Carr (The Big Shift) – in the same way that private production of electricity was replaced by utility companies, private computing is being replaced by utility computing The “cloud” is actually extremely tangible, and a huge user of energy The big players include – Amazon, Microsoft, and Google (this is what one looks like) 6mthis is what one looks like The three reasons to cloud compute (Christopher Barnatt) The three reasons to cloud compute

42 SaaS: what is it? Software-as-a-Service (SaaS) – Software programs offered through “the cloud” usually via a web browser interface – An alternative to packaged application software installed on a local system Example: Salesforce.comSalesforce.com Salesforce.com: What is cloud computing (3m) Salesforce.com: What is cloud computing Why Google Apps for Education (Google) 11m Why Google Apps for Education

43 SaaS - pricing Shift from upfront license fee and service fees for local installation as revenue for software companies Now we see new pricing models: – Monthly subscription fees: On-demand usage – Transaction-based – Advertising supported – Example of Salesforce.com pricingSalesforce.com pricing Cusumano (2010) Cloud computing and SaaS as new computing platforms. Comm. ACM Vol 53 No4

44 SaaS advantages Cheaper Available from anywhere via web browser / mobile devices Pay for it on an as-needed basis No ongoing maintenance fees One price covers everything No need for in-house IT staff to install and maintain – all patches and updates dealt with by the service provider Cusumano (2010) Cloud computing and SaaS as new computing platforms. Comm. ACM Vol 53 No4

45 Risks and disadvantages Risks of downtime are managed by making sure that contracts address service levels (SLAs) No competitive advantage – all your competitors can and do access exactly the same software Security Privacy concerns – a large and growing issue Cusumano (2010) Cloud computing and SaaS as new computing platforms. Comm. ACM Vol 53 No4

46 SaaS as platform / app development ecosystem SaaS providers like Salesforce.com open their platforms via APIs so that other application companies can build products utilizing some features in the Salesforce CRM product So opening up the cloud infrastructure creates an “app” ecosystem and inter-relationships between developers – Eg. All the uses of the Google Maps API such as Zillow.comZillow.com This creates a network effect Cusumano (2010) Cloud computing and SaaS as new computing platforms. Comm. ACM Vol 53 No4


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