Managing Application Development

1
Chapter 9

• Managing Application Development

2
Introduction

• Firms can choose to develop applications
  internally for
• Large, unique applications
• Important strategic applications
• This allows firms to
• Control proprietary information
• Retain ownership of exclusive / valuable databases

3
Introduction

• Successfully directing internal application
  development is a critical success factor for
  managers
• Weak or ineffective management is the most
  frequent and expensive source of developmental
  difficulties
• Delivering on-time, on-budget, applications that
  fulfill the clients expectations is a true test
  of a manager's skill

4
Challenges of Application Development

• History is littered with huge application
  development failures and enormous waste
• FAA air traffic control system - 7 billion
• IRS computer auditing system - 4 billion
• Denver International Airport - 190 million
• The cost to industry of small failures in total
  easily surpasses all of the above combined
• The hidden cost of IT failure is never
  advertised

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Reasons for Development Difficulties

• Program development is extremely difficult
• The task itself is complex
• Large application programs consist of many parts
  that must function together
• No one person understands the entire task
• The environment is complex
• Multiple agendas, priorities, goals, and
  directions
• The business has changed and evolved during the
  development lifecycle, and the product is out of
  step with the current environment

6
Size and Cost of Common Application Programs
7
Reasons for Development Difficulties

• The process of programming is still a cottage
  industry
• Skilled coders produce better code than poor
  coders, but the management tools to distinguish
  the two are lacking
• Rigid programming environments yield more
  predictable results, but dont incorporate
  changes well
• Flexible environments respond well to change but
  have difficulty producing a usable product

8
Firm Induced Difficulties

• Environmental factors
• Inadequate developmental and testing tools
• Improperly skilled coders
• Failure to incorporate best practices
• Weak management control systems
• Large differences exist between executive
  expectations and program managers ability to
  deliver

9
Application Project Management

• Application development managers often achieve
  low success rates due to critical differences
  between managing application projects and other
  projects
• Successful managers must implement a stepwise
  approach of activities and corresponding controls
  that together guide the development effort

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Steps in the Application Project Management
Process

• Business case development
• Phase review process
• Managing the review process
• Resource allocation and control
• Risk analysis
• Risk reduction strategies

11
Application Life-Cycle

• Concepts for new applications emerge
• Ideas are developed
• Applications are designed and implemented
• They are maintained and enhanced
• They are replaced

12
Traditional Life-Cycle Approach

• The complex development task is divided into
  phases, each of which culminates in a management
  review. There are many advantages including
• Complex activities are more easily understood
• Skill sets can be more closely matched to the
  task
• Requires managers to evaluate the project and
  make corrections midcourse

13
The Waterfall Life Cycle
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Phases in the Development Life Cycle

• Initial Investigation
• Requirements Definition
• General Design
• Development
• Installation
• Post-Installation Activities

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Business Case Development

• The business case itemizes investment resources
  and estimates investment returns
• Must address tangible and intangible costs
• Application owners must be responsible for
  producing the business case
• The application development manager must propose
  the most cost effective solution

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The Business Case

• Establish objectives that the development
  activity must meet
• Objectives are the reasons to pursue the activity
• Analyze the costs and benefits associated with
  application development
• This must be repeated for each alternative
• Understanding the current situation is key to
  analyzing future solutions

17
The Business Case

• To accurately assess the operational costs, the
  analysis period may extend out to five years
• Need to consider the time value of money
• Judgment calls are needed to quantify cost across
  all departments involved
• Costs must include personnel, benefits, training,
  hardware, travel, and other related expenses

18
The Business Case

• Return on investment calculations
• Payback Method predicts when operating benefits
  exceed operational cost
• Net Present Value (NPV) incorporates the time
  value of money into calculations
• Internal Rate of Return (IRR) takes into
  account time value of money and the projects
  lifespan
• Much more involved analysis of cost than the
  other two methods

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The Phase Review Process

• Phases are logical segments of work
• Control aspects of each phase include
• Scope
• Content
• Resources
• Schedule
• The phase review process allows managers to
  inspect the progress made and make decisions for
  future work

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Information for a Phase Review

• Written project description
• Well-defined goals, objectives, and benefits
• Budgets and staffing plans
• Specific tasks planned vs. tasks accomplished
• Risk assessment
• Statement of plans vs. actual accomplishments
• Asset protection / business control plans
• Client concurrence with objectives and plans

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Information for a Phase Review

• Phase reviews produce documented results that are
  helpful for implementation of future phases
• The applications owner must concur that the work
  meets expectations before proceeding
• Phases can overlap, but checkpoints must be
  established allowing managers to track, measure,
  and authorize continuation

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Phase Review Objectives

• The goal of phase reviews is to measure the
  accomplishment of agreed-upon objectives within
  the planned time and cost parameters
• Must lead to an accurate analysis
• Managers must be prepared to develop alternate
  action plans based on findings
• Reviews must be inclusive
• Documentation of the review must be produced

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Timing of Phase Reviews

• Phase reviews occur at the end of each phase
• If phases are longer than 6 months then interim
  reviews should be planned
• In large projects with multiple subsystems, phase
  reviews are necessary for each subsystem
• Each review must establish, alter, or confirm
  schedules for subsequent phase reviews

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Phase Review Contents

• Phase 1 Initial investigation phase
• Begins with an idea for new application or
  enhancement
• Usually originates within the department using or
  needing the application
• Analysts conduct preliminary reviews and generate
  requirements
• Develop preliminary system concepts and generate
  design alternatives

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Phase 1 Review

• Statement of need and estimate of benefits
• Schedule and cost commitments for Phase 2
• Preliminary project schedule
• Preliminary total resource requirements
• Project dependencies
• Analysis of risk
• Project scope
• Plans for Phase 2

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Phase 2

• The requirements definition phase
• Consists of modeling the existing system and
  deriving a logical equivalent to which the new
  system requirements are added
• Creates a logical model of the new system
• Updated costs and benefits are developed
• Auditability requirements are established
• System performance criteria are created

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Phase 3

• Development of external and internal general
  design specifications
• System software specs are refined
• Utility program requirements are specified
• Hardware requirements and system architecture
  definitions are finalized
• System documentation and user training plans are
  created
• Plans for Phase 4 are created

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Phase 4

• Actual program development
• Development
• Building
• Unit testing
• System installation
• File and data conversion strategies are addressed
• User training plans and program documentation are
  completed

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Phase 5

• Application installation
• User training and application documentation is
  completed
• Acceptance testing is completed
• File and data conversions are completed
• With the completion of the Phase 5 review, the
  new system goes live

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Phase 6

• Post-installation activities
• Review of the management techniques used with
  lessons learned
• Original specs and objectives are used to
  evaluate the final implementation
• Review of cost estimates and plans to improve
  estimation techniques

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The Participants

• IT managers
• They direct the process
• Owners of the application system and data
• Key client managers
• Representatives of all functions affected or
  affecting the project
• Senior executives when the applications
  significance rises to that level

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Phases for Large Projects

• The terms large and complex are in relation to
  the organization's size or skills
• The phase list may include more events
• Generally, these are included in the design and
  development phases
• Project managers must schedule additional
  checkpoints within each phase to establish finer
  control of the process

33
Managing the Review Process

• Documentation of each phase review must be clear
  and concise
• Projects scope, content, resources, and schedule
• Statement of the assumptions and dependencies
  involved in each phase and in the overall plan
• All parties must concur on the document
  management must resolve differences and
  understand their genesis

34
Resource Allocation and Control

• Different resources and skill sets are in demand
  across the project lifespan managers must track
  and control these assets as they would any other
  corporate resource
• The application development plan must describe
  resource deployment by skill type
• Deviations from the plan must be investigated and
  underlying causes sought

35
Major Causes of System Failures
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Risk Analysis

• Managers must constantly track a projects health
  and measure leading indicators to avert project
  failure
• Risk analysis is a proactive activity
• The metrics necessary to avert trouble are much
  more difficult to generate and assess than
  coincident and lagging ones
• Following coincident and lagging indicators
  allows a manager to accurately document the
  ongoing failure of a project not a value add

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Sources of Risk
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Detailed Risk Items
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Detailed Risk Items
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Risk Trends

• As the program proceeds toward implementation,
  risk declines
• Increases in risk with time is an indicator of
  potential project failure
• Risk analysis enables project managers to take
  corrective action when risk is small, before
  missing commitments

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Risk Reduction Actions

• Problem management is a major task for project
  managers
• Risk analysis is an analytical tool that warns of
  impending difficulties
• Managers can act to solve problems when they are
  small and manageable

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More on the Life-Cycle

• Disadvantages
• Tangible client results come late in the cycle
• Initial project/application requirements must
  remain stable
• The process is paper-intensive and bureaucratic
• Parallel activities are permitted, but are not
  encouraged

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Programming Process Improvements

• Stable, rigorous development environments
  encourage design and programming practices and
  techniques that reduce error injection and
  increase defect discovery and removal
• With the rapid development approach in Chapter 8,
  time to market is optimized at the cost of
  prolonged post-rollout coding and increased
  maintenance costs

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Successful Application Management

• Flows from well-designed, smoothly functioning
  management systems
• Thrives on controlled processes, yields
  predictable results, and deals effectively with
  increased complexity
• Successful application management yields
  predictable products that contribute important
  assets to the organization

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Summary

• Application development is a difficult management
  task
• Disciplined processes must supplant ad hoc
  management techniques
• Application management systems build on the
  firms established management processes
• IT application development is seen as a value add
  to the firms strategic plan