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A Portfolio Approach to Information Technology Development

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A Portfolio Approach to Information Technology Development. Topics. Project Risk ... High-Structure Low-Tech Projects. High-Structure High-Tech Projects ... – PowerPoint PPT presentation

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Title: A Portfolio Approach to Information Technology Development


1
A Portfolio Approach to Information Technology
Development
2
Topics
  • Project Risk
  • Elements of project implementation risk
  • Project categories and degree of risk
  • Assessing Risk of Individual Projects
  • Portfolio Risk
  • Project Management
  • Management Tools
  • Influences on Tool Selection
  • Relative Contribution of Management Tools

3
Background
  • Major Medical Firm
  • Writes off conversion to new distribution
    software and must quickly update the old software
    for Y2K
  • Manufacturing Firm
  • Losses its outsourcer and has 12 months to switch
    over
  • Manufacturer
  • Consolidates systems and finds unacceptable
    response time
  • Two Insurance Companies
  • Same S/W, 2 different installation processes, one
    very successful, other wastes 600 M

4
Background
  • Days of big IT disasters are not behind us,
    despite 40 years of experience
  • Three common themes in failure
  • Failure to assess implementation risk at time
    projects are funded
  • Failure to consider the aggregate risks of a
    portfolio of projects
  • Failure to recognize that different projects
    require different management approaches

5
Project Risk
  • Mismanagement is an important risk but not
    considered here.
  • Project feasibility studies often overlook risk
    of time slippage, cost overrun, technical
    shortfall or outright failure

6
Elements of Project Risk
  • Consequences of Risk
  • Implies exposure to
  • Failure to obtain any or all of the anticipated
    benefits
  • Much higher than expected implementation costs
  • Much lower than expected implementation time
  • Resulting systems whose technical performace is
    significantly below estimate
  • System incompatible with selected hardware and
    software
  • These risks are all interrelated

7
Elements of Project Risk
  • Project Dimensions Influencing Inherent Risk
  • Project size
  • Larger means greater risk
  • Monetary, staffing levels, time, of depts.
    affected
  • Experience with the technology
  • Less experience means higher risk
  • Project structure
  • Highly structured means less risk

8
Project Categories and Degree of Risk
9
Project Categories and Degree of Risk
10
Assessing Risk of Individual Projects
  • Use of assessment scoring
  • Trade-off analysis
  • Are the benefits great enough to offset the
    risks?
  • Can the affected parts of the organization
    survive if the project fails?
  • Have the planners considered appropriate
    alternatives?

11
Portfolio Risk
  • Developing an aggregate risk profile
  • Lack of high risk projects in portfolio is also a
    negative sign
  • If IT is strategic, this is a sign of being too
    cautious

12
Project Management
  • Management (Methods)Tools
  • External integration tools
  • Organizational and other communications devices
    that link the project teams work to users at
    both the management and lower levels
  • Internal integration devices
  • Personnel controls that help insure team cohesion
  • Formal planning tools
  • Help structure the sequence of tasks in advance
    and estimate time, money, technical resources
  • Formal results-control mechanisms
  • Help evaluate progress and spot problems
  • Clear knowledge of desired result
  • Result can be controlled
  • Measured effectively

13
Project Management
  • Influences on Tool Selection
  • High-Structure Low-Tech Projects
  • High-Structure High-Tech Projects
  • Low-Structure Low-Tech Projects
  • Low-Structure High-Tech Projects

14
Relative Contribution of Management Tools
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