Lecture 19 Chapter 10 A Portfolio Approach to Managing IT Projects

2 Announcements Final Exam overview today Business Plans returned today Grades for presentations etc. on Thursday Group project due Thursday

3 Final Exam Outline 8 – 11am, Wednesday June 13 Exam is CLOSED book –No notes or text allowed Three sections: –Short answer questions –Long Answer questions –Case study questions

4 Question 1: Find New Zealand on a world map…

5 Final Exam Sample Questions Short answer: What is the difference between security and reliability? How does standardization affect business opportunities? In what ways is IT infrastructure different from other infrastructure resources? Cite an example from one of the cases we studied that shows how IT professionals with experience in one industry can bring changes to another industry

6 Final Exam Sample Questions Long answer (1 page, ~250 words) Discuss what risks are associated with major IT projects, and what a company can do to mitigate against them Describe the challenges associated with educating users of IT in a company, and what IT-focused companies can do to help their employees

7 Case study questions You will receive a copy of a case in class Thursday Prepare in advance – ie read case before exam! Questions will be short and long answer from the case Identify and analyze core issues

8 IT Portfolio Management

9 IT Disasters are still common Companies fail to realize risk of project Multiple projects lead to larger aggregate risk Different projects require different management

10 Portfolio View of IT

11 Financial Perspective

12 Sources of Implementation Risk 1.Project Size 2.Experience with Technology 3.Requirements Volatility See fig 10.1

13 Fig 10.1 Effect of Adding Risk Factors on Project Risk

14 Barriers to Perspective

15 Governance

16 Strategic Grid and Governance

17 Project Categories and Degree of Risk

18 Risk Assessment Figure 10.3 Risk profile questionnaire Higher risk score, higher management approval required Repeated several times throughout project Different perspectives on risk expectation can lead to disaster

19 Portfolio Risk Multiple projects can add or reduce risk Low-risk not always good All high-risk is vulnerable Identify risks in all projects, then consider combined portfolio of risks See fig 10.5

20 Fig 10.5 Risk and Return Distribution for Portfolio of Projects

21 Project Implementation Dip Most projects don’t go smoothly all the way New system going live common point Expectations not always realistic Short term downward shift may be necessary All happens in middle of business cycle and worker turnover Need to focus on end goal to get through value of change when people are complaining Ideally see it before it comes and get people ready

22 Fig 10.4 Expectations vs. reality

23 Questions, Presentations, Break

24 Project Management No single correct plan Management Tools –External integration tools –Internal integration tools –Formal planning tools –Formal result controls See table 10.1: Tools for project management

25 Table 10.1 Tools for Project Management

26 Influences on Tool Selection Low requirements volatility/low tech projects –Easy to manage –Least common –PERT (program evaluation review technique) –CPM (critical path method) Low requirements volatility/high tech projects –Difficult to manage –Eg. Converting mainframe system, developing web access –Outputs well defined –Technical complexity drives characteristics of successful manager –Formal planning not likely to add as much value

27 Influences on Tool Selection (ctd) High requirements volatility/low tech projects –Involve users in design, development and implementation –Develop user support –Formal planning and control tools help –Close, aggressive management of external integration –Leadership from management not technologists High Requirements Volatility/high-tech projects –Managers need technical expertise –Ill-defined projects common –Formal tools useful once clarity is reached in direction –Cross effects of different factors becomes important

28 Project Management Relative Contribution of Management Tools –Depends on specific project –Results-oriented tools work in structured/formal environment –Depends on corporate culture Emergence of Adaptive Project Management Methods –Approaches to design, deployment, implementation and investment that assume a need to gather information and learn as one goes. –Not really effective universal methods yet Software Development Life Cycles –SDLC breaks down development into stages: –Analysis and design –Construction –Implementation –Operation and maintenance

29 Project Management (ctd.) Adaptive Methodologies –Quickly build rough preliminary version –Iterate through stages rather than finish every stage –Fast cycle through stages –Aim to deliver limited functionality fast –Require skilled staff Adaptive Methods and change management –Intensely involve users in evaluating outcomes –Strictly control migration of system features from development, testing to production –Separating stages avoids major problems

30 Process Consistency and Agility in Project Management Balancing tension between process consistency and process agility Tools useful one place shouldn’t necessarily be applied to everything Success in balance often includes minimal formalization Flow –Understand interrelationships between projects Completeness –Keeping track of all tasks in project Visibility –Getting info on status of rest of project

31 Business Plan Feedback Lots of interesting ideas Make sure the highlights stand out – don’t make a VC look for the main points Simple presentation improvements go a long way – spell check, section headings, …

32 Grading for Business Plan Exec summary /10 Bus opportunity articulated /10 Strategy and milestones /10 Marketing /5 Operations plan /5 Management /5 Financials /5 Convincing case /10 Presentation /20 Total/80

33 Grade summary (out of 80) Lower quartile: 55 Median: 62 Upper quartile: 67 Mean = 60.33

34 Business Plan Grades Distribution scores out of 80