Session 2: Introduction to Project Management

Learning Outcomes Students be able to identify the importance of project management in Information System Students be able to define the importance aspects in managing project

Discussion Topics IS Project management Critical Success Factor Cases in IS Project Management

References Information Systems Project Management, David Olson, Olson, David L., 2003, Introduction to Information Systems Project Management, 2nd Ed., McGrawHill, ISBN: 0-07-282402-6. Schwalbe, Kathy, 2003, Information Technology Project Management, 3rd Ed., Course Technology, Inc., ISBN: 0619159847.

Project Management Case

Large drug distributor, wanted to implement ERP FoxMeyer Drug Large drug distributor, wanted to implement ERP This PPT describes implementation of an ERP by FoxMeyer Drug. It is a student project done by Jason Donalson, June Seibold, Matthew Welch, and Sok Woo Yoon in the INFO Department, Texas A&M University, Spring 1999.

ERP Integrate financial, logistics, marketing can handle multiple sites worldwide, with global sourcing integrate decision making coordinates all functions (makes them use same computer software)

ERP Market Compound annual growth of 37% 1997-2002 (AMR Research) Top tier vendors: SAP AG PeopleSoft Baan J.D. Edwards Oracle top tier growth 61%/year, have 64% of market SAP $5 billion, rest near $1 billion

SAP Systems, Applications & Products in Data Processing founded 1972, Walldorf, Germany #1 vendor of standard business-application software in the world - 32% market share PRODUCTS: R/2 (mainframe; 11 modules) R/3 (client/server - 1992; now > 1 million users over 9000 customers in 90 countries

FoxMeyer Corp Holding company in health care services wholesale distribution of drugs & beauty aids served drug stores, chains, hospitals, care facilities US: 23 distribution centers Sought market niches, such as home health care

FoxMeyer Long-term strategies: Due to aging population & growth in health care, expected high growth Market had extreme price competition, threatening margins Long-term strategies: efficiently manage inventory lower operating expenses strengthen sales & marketing expand services

Prior FoxMeyer IS 3 data processing centers, linked included electronic order entry, invoice preparation, inventory tracking 1992 began migration of core systems Benefits not realized until system fully integrated

FoxMeyer Process Customer fills out electronic order Order sent to 1 of the 3 data processing centers Orders sent to the appropriate distribution center (within 24 hours) Orders filled manually and packaged Had just completed national distribution center with multiple carousels & automated picking Could track inventory to secondary locations

New System Needed new distribution processes & IS to capitalize on growth Wanted to be able to undercut competitors Replacing aging IS key PROJECT: 1994 - hoped to save $40 million annually (estimated cost $65 million) complete ERP installation & warehouse automation system (another $18 million)

FoxMeyer Project Select ERP hundreds of thousands of transactions meet DEA & FDA regulations benchmarked & tested for months picked SAP R/3 hired Andersen Consulting to integrate hired Pinnacle Automation for warehouse automation system

Operations FoxMeyer expected the new systems to improve operational efficiency Signed several giant contracts counted on savings, underbid competitors Counted on being up and running in 18 months

Problems SAP & warehouse automation system integration two sources, two installers - coordination problems New contracts forced change in system requirements after testing & development underway Late, Over budget SAP successfully implemented

Outcomes Warehouse system consistently failed Lost key customer - 15% of sales To recoup, signed new customer, expected $40 million benefit from ERP immediately - pushed ERP project deadline ahead 90 days, no time to reengineer Warehouse system consistently failed late orders, incorrect shipment, lost shipments losses of over $15 million August 1996 filed for Chapter 11 McKesson bought

McKesson Bought FoxMeyer operation Made ERP work On time Within budget Full functionality

Project Critical Success Factors Belassi & Tukel [1996] Goal Definition Define goals, scope, requirements Top Management Support Continued involvement User Involvement Project Manager Competent; on-site Others Project team, manpower, accurate estimates, test & train

Code of Ethics Code of Ethics for the Project Management Profession: Accept responsibility for their actions Undertake projects and accept responsibility only if qualified by training or experience, or after full disclosure to their employers or clients of pertinent qualifications Maintain professional skills at the state of the art and recognize the importance of continued personal development and education

Code of Ethics Code of Ethics for the Project Management Profession: Advance the integrity and prestige of the profession by practicing in a dignified manner Support this code and encourage colleagues and co-workers to act in accordance with this code Support the professional society by actively participating and encouraging collegues and co-workers to participate Obey the laws of the country in which work is being performed?

Code of C

Project Champion Top level executive Powerful, with access to top Don’t need to have authority Enthusiastic support leading to adoption Continued support key to project continuance Even if project should be cancelled

Summary Systems view helps understand projects Critical Success Factors Top management support Clearly stated objectives End user involvement