1. Session 2: Introduction to Project Management

2. 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

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

4. References
Information Systems Project Management, David Olson, Olson, David L., 2003, Introduction to Information Systems Project Management, 2nd Ed., McGrawHill, ISBN:
Schwalbe, Kathy, 2003, Information Technology Project Management, 3rd Ed., Course Technology, Inc., ISBN:

5. Project Management Case

6. 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.

7. 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)

8. 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

9. 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 ; now > 1 million users
over 9000 customers in 90 countries

10. 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

11. 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

12. 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

13. 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

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

15. 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

16. 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

17. 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

18. 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

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

20. 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

21. 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

22. 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?

23. Code of C

24. 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

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