Project Initiation Chapter 2
Identify projects with business value
How do projects begin?
•Project sponsor: a key person to recognizes business need for new system & desires to see it implemented. •Projects are selected based on business needs and project risks. •Business needs determine the system’s functionality (what it will do). •Project’s business value should be clear.
System Request •A document describing business reasons for project & system’s expected value. •Must pass several tests before it can be approved
•Lists project’s key elements
•project sponsor •business need •business requirements •business value •special issues/constraints
•The approval committee
reviews system requests throughout the organization
selects projects for the benefit of the business
System Request Examples Project sponsor
VP of Marketing
Business need
Reach new customers and improve service to existing customers
Business requirements
Provide web-based shopping capability
Business value
$750,000 in new customer sales; $1.8M in existing customer sales
Special issues or constraints
System must be operational by holiday shopping season
Feasibility Analysis •helps determine whether or not to proceed with the IS project. •worthy projects are accepted & undergo additional investigation •detailed business case for the project -Technical feasibility -Economic feasibility -Organizational feasibility •compiled into a feasibility study •feasibility is reassessed throughout the project
Technical Feasibility The proposed system have to be dropped if the answer to the questions are negative:
1.Can we build it using available hardware resources? 2.Can the hardware support future growth? 3.Does it require special technical expertise?
Project size Number of people, time, and features Compatibility with existing systems • – •
Economic Feasibility Should we build it? •Proposed system must be economically viable •Do the benefits outweigh the costs? •The cost can be one-time or recurring costs Analyst must estimate costs in areas: •Staff costs (programmer, system analyst, etc) •Staff training costs •Hardware & equipment (server, printer, etc) •Software (microsoft project, compiler, etc) •Facility costs •Consulting fees •Fees and licenses
Economic Feasibility The analyst must compare the cost of developing the system with the benefits (tangible/intangible) that system will bring about
Economic feasibility Tangible vs Intangible benefits Tangible benefits - benefits that will increase sales and those that reduce costs, such as increased sales. •Intangible benefits – benefits like customer service and care are more difficult to measure • The analyst must perform a cost-benefit analysis and determine if the system is economically feasible
Economic feasibility Access Financial Viability Break Even Point •How long before the project’s returns match the amount invested •The longer it takes to break even, the higher the project’s risk
Organizational feasibility If we build it, will they come?
Strategic alignment How well do the project goals align with business objectives?
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Stakeholder analysis Project champion Organizational management System users • • •
Project Selection Issues Approval committee works from the system request & feasibility study •Project portfolio – how does the project fit within the entire portfolio of projects? •Trade-offs must be made to select projects that will form a balanced project portfolio •Viable projects may be rejected because of project portfolio issues.
Summary Identifying project size Creating and managing the workplan Staffing the project Coordinating project activities