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DISCUSSION 1
Discussion questions:
- Discuss the Diffusion of Innovation theory. What is the difference between an innovator and a laggard?
- Why do managers follow the holistic approach to ensure that information technology innovations pay off?
- Distinguish between the objective and goal of an organization in strategic planning.
- Describe the various strategic planning approaches.
- List and describe three benefits of strategic planning.
Tasks
- Select any two (2) questions above; discuss and answer the selected questions.
- Save your answers in a Word document
Information Technology for Managers
IT & Strategy
1
Learning Objectives
What is an effective strategic planning process, who needs to participate in it, and what are the deliverables of such a process?
How is IT planning tied to overall strategic planning, so that business objectives and IT activities are well aligned?
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Need for Managers to Understand the Relationship Between Strategic Planning and IT
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Understanding the Relationship Between Strategic Planning and IT
Improves alignment between business and IT
Alignment – IT organization and its resources are focused on actions that support the key objectives defined in the strategic plan of the business
Implies that the IT and business managers have a shared vision
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Understanding the Relationship Between Strategic Planning and IT (continued 1)
Shared vision helps an IT organization in:
Hiring the right people with the right skills and capabilities
Choosing the right technologies and vendors to explore and develop
Installing the right systems
Focusing on those projects that facilitate the organization to move toward achieving its vision and mission
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Strategic Planning
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Strategic Planning
Helps managers to:
Identify desired outcomes and formulate feasible plans
Achieve their objectives by using available resources and capabilities
Annual process
Approaches
Issues-based
Organic
Goals-based
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Figure 2.1 – Goals-Based Strategic Planning Process
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Analyze Situation
Assessing strengths and weaknesses across all the levels and business units of a firm
Preparing a historical perspective
Gathering data about internal processes and operations
Analyzing the collected data
Examining the industry in which the organization competes
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Analyze Situation (continued 1)
Collecting and analyzing facts about its key customers, competitors, and suppliers
Aiming to:
Identify strategically important issues that the organization must address
Reveal the firm’s competitive position against its rivals
Michael Porter’s Five Forces Model: Used for assessing the nature of industry competition
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Figure 2.2 – Porter’s Five Forces Model
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Analyze Situation (continued 2)
Competitive financial analysis helps in determining how key financial parameters match up against the competitors
Strengths, Weaknesses, Opportunities, Threats (SWOT) matrix
Illustrates that an effective strategy derives from:
Maximizing a firm’s strengths and opportunities
Minimizing its weaknesses and threats
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Set Direction
Vision/mission statement
Communicates an organization’s overarching aspirations
Guides organization through changing objectives, goals, and strategies
Components
Mission statement
Vision of a desirable future
Set of core values
Inspires and requires employees to stretch to reach its goals
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Set Direction (continued 1)
Objectives: Statement of a compelling business need that an organization must meet to achieve its vision and mission
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Set Direction (continued 2)
Goal: Specific result that must be achieved to reach an objective
Associated with a single objective
Tracks progress in meeting an organization’s objective
Big Hairy Audacious Goals (BHAGs)
Need to be SMART (specific, measurable, achievable, relevant, time constrained)
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Strategies
Allow an organization to achieve its vision, mission, objectives, and goals
Require managers to consider:
Long-term impact of each strategy on revenue and profit
Degree of risk involved
Amount and types of resources that will be required
Potential competitive reaction
Results of the SWOT analysis
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Deploy Plan
Defines objectives, establishes SMART goals, and sets strategies
Objectives, goals, and strategies are communicated to business units and functional units
Depends on the autonomy granted at lower levels
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Figure 2.3 – Strategic Planning Pyramid
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Setting the IT Organizational Strategy
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Strategic Plan of an IT Organization
Required to identify technologies, vendors, competencies, people, systems, and projects
Needed to aid in investments that support the objectives, goals, and strategies
Depends on the way the rest of the organization perceives it
Perception can be as a cost center/service provider, a business partner/ business peer, or as a game changer
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Figure 2.4 – Drivers that Set IT Organizational Strategy and Determine IT Investments
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Identifying IT Projects and Initiatives
Require interacting with various business managers and observing other IT organizations and competitors
Need to support corporate objectives and goals
Classify various potential projects by type
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Table 2.5 – Project Classification Example
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Prioritizing IT Projects and Initiatives
Process of setting priorities and determining the resulting budget, staffing, and timing needs
Defines which projects will be initiated and when they will be executed
Involves reviewing and evaluating from different perspectives
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Figure 2.5 – Projects Must Relate to Goals and Objectives
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Effective Strategic Planning: Chevron
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Effective Strategic Planning: Chevron
Outline of a goals-based strategic planning process developed for Chevron
Involves:
Situational analysis
Set direction
Define strategies
Deploy plan
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Situation Analysis
Strengths
Financial strength
Presence in all phases of the energy industry
Broad geographic presence
High reserves ratio
Leading position in the United States
Weaknesses
Entanglement in environmental disaster in Ecuador
Strain on sales of refined products
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Situation Analysis (continued 1)
Opportunities
Planned investments for future development
Strategic acquisitions and agreements
Threats
Rising production costs and capital expenditures
Regulation of greenhouse gas emissions
Changing economic, regulatory, and political environments
Commodity prices risks
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Set Direction
Objectives
Increase revenue and profits
Estimate investments for future to increase production and revenue, to support objectives
Goals
Reduce time lag between initial exploration and start of production
Execute project start-ups with more than $1 billion Chevron investment
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Set Direction (continued 1)
Add to portfolio through exploration and targeted acquisitions
Maintain or improve the success rate of exploration wells
Sustain to be a leader in personal safety, measured by injuries requiring time away from work
Goal of zero-incidents
Achieving world-class performance in all measures of safety
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Define Strategies
Create shareholder value and achieve sustained financial returns from operations
Invest in people to strengthen organization capability and develop a talented global workforce
Execute with excellence through application of operational excellence and capital stewardship systems and disciplined cost management
Grow profitably by using competitive advantages
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Define Strategies
Attain world-class performance in operational excellence with a goal of zero safety and operating incidents
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Chevron Strategic Plan
Communicated to all business units worldwide
Each unit is encouraged to perform its own strategic planning process that can lead to accomplishment of corporate goals
Focuses on technologies that aids in finding, developing, and producing crude oil and natural gas
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Chevron Strategic Plan (continued 1)
Identifying projects and initiatives
Loulie Ehrlich was appointed CIO and President of the Chevron Information Technology Company
Focus on accelerating insights, automating operations, and connecting people
Hire IT professionals with bachelor’s or master’s degree in various fields
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Chevron Strategic Plan (continued 2)
Information Technology Company supports businesses by developing and supporting information technologies
Uses distributed sensors, high-speed communications, and data analysis techniques to monitor and fine-tune remote drilling operations
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Chevron Strategic Plan (continued 3)
Prioritizing projects and initiatives
To identify new oil deposits, the company uses sound waves to create images of the earth, deep below the ocean floor
Collaborates with oil service companies and top IT companies to obtain state-of-the-art solutions
Established eight global “mission control” centers to improve the performance of forty of the company’s biggest energy projects
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Chevron Strategic Plan (continued 4)
Focus on leak detection by using modeling technology in most of the company’s pipeline
IT operates through a network that connects more than 50,000 desktops around the world
Enables collaboration and communication
Digital imaging helps better manage an oil field once it is producing oil
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Chevron Strategic Plan (continued 5)
IT organization is responsible for:
Network operations and security
Purchasing and deploying hardware
Setting global technology standards and strategy
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Summary
Strategic planning
Helps managers identify desired outcomes and formulate feasible plans to achieve objectives
Requires analysis of internal and external environment
Set direction involves defining the mission, vision, values, objectives, and goals of the organization
Define strategies involves describing the way an organization will achieve its mission, vision, objectives, and goals
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Summary (continued 1)
Organization’s objectives, goals, strategies, and measures (OGSM)
Must be deployed to its various business units and functional units so that everyone knows what is expected and how to achieve it
IT strategy will set direction for the technologies, vendors, competencies, people, systems, and projects
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Information Technology for Managers
Project Management and IT
Dr. Peng Liu
peliu@fullerton.edu
1
Describe the systems view of project management and how it applies to information technology (IT) projects
Understand organizations, including the four frames, organizational structures, and organizational culture
Explain why stakeholder management and top management commitment are critical for a project’s success
Learning Objectives
2
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Understand the concept of a project phase and the project life cycle, and distinguish between project development and product development
Discuss the unique attributes and diverse nature of IT projects
Describe recent trends affecting IT project management, including globalization, outsourcing, virtual teams, and agile project management
Learning Objectives
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Projects must operate in a broad organizational environment
Project managers need to use systems thinking:
taking a holistic view of carrying out projects within the context of the organization
Senior managers must make sure projects continue to support current business needs
Projects Cannot Be Run
In Isolation
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A systems approach emerged in the 1950s to describe a more analytical approach to management and problem solving
Three parts include:
Systems philosophy: an overall model for thinking about things as systems
Systems analysis: problem-solving approach
Systems management: address business, technological, and organizational issues before making changes to systems
A Systems View of Project Management
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Figure 2-1. Three Sphere Model for Systems Management
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Figure 2-2. Perspectives on Organizations
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What Went Wrong?
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In a paper titled “A Study in Project Failure,” two researchers examined the success and failure of 214 IT projects over an eight-year period in several European countries.
The researchers found that only one in eight (12.5 percent) were considered successful in terms of meeting scope, time, and cost goals.
The authors said that the culture within many organizations is often to blame
Among other things, people often do not discuss important leadership, stakeholder, and risk management issues
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3 basic organization structures
Functional: functional managers report to the CEO
Project: program managers report to the CEO
Matrix: middle ground between functional and project structures; personnel often report to two or more bosses; structure can be weak, balanced, or strong matrix
Organizational Structures
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Figure 2-3. Functional, Project, and Matrix Organizational Structures
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Table 2-1. Organizational Structure Influences on Projects
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Organizational culture is a set of shared assumptions, values, and behaviors that characterize the functioning of an organization
Many experts believe the underlying causes of many companies’ problems are not the structure or staff, but the culture
Organizational Culture
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Member identity*
Group emphasis*
People focus
Unit integration*
Control
Ten Characteristics of Organizational Culture
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Risk tolerance*
Reward criteria*
Conflict tolerance*
Means-ends orientation
Open-systems focus*
*Project work is most successful in an organizational culture where these items are strong/high and other items are balanced.
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Project managers must take time to identify, understand, and manage relationships with all project stakeholders
Using the four frames of organizations can help meet stakeholder needs and expectations
Senior executives/top management are very important stakeholders
See Chapter 13, Project Stakeholder Management, for more information
Stakeholder Management
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The media have often reported on mismanaged IT projects, including the disastrous launch of the website healthcare.gov in October 2013
Forbes ran an article on called “Healthcare.gov: Diagnosis: The Government Broke Every Rule of Project Management”
President Obama formed the “Obama Trauma Team” of star performers from several organizations to help fix the site
Media Snapshot
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People in top management positions are key stakeholders in projects
A very important factor in helping project managers successfully lead projects is the level of commitment and support they receive from top management
Without top management commitment, many projects will fail.
Some projects have a senior manager called a champion who acts as a key proponent for a project.
The Importance of Top Management Commitment
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Providing adequate resources
Approving unique project needs in a timely manner
Getting cooperation from other parts of the organization
Mentoring and coaching on leadership issues
How Top Management Can Help Project Managers
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IT governance addresses the authority and control for key IT activities in organizations, including IT infrastructure, IT use, and project management
A lack of IT governance can be dangerous, as evidenced by three well-publicized IT project failures in Australia (Sydney Water’s customer relationship management system, the Royal Melbourne Institute of Technology’s academic management system, and One.Tel’s billing system)
Best Practice
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If the organization has a negative attitude toward IT, it will be difficult for an IT project to succeed
Having a Chief Information Officer (CIO) at a high level in the organization helps IT projects
Assigning non-IT people to IT projects also encourage more commitment
Need for Organizational Commitment to Information Technology (IT)
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Standards and guidelines help project managers be more effective
Senior management can encourage
the use of standard forms and software for project management
the development and use of guidelines for writing project plans or providing status information
the creation of a project management office or center of excellence
Need for Organizational Standards
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A project life cycle is a collection of project phases that defines
what work will be performed in each phase
what deliverables will be produced and when
who is involved in each phase, and
how management will control and approve work produced in each phase
A deliverable is a product or service produced or provided as part of a project
Project Phases and the Project Life Cycle
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In early phases of a project life cycle
resource needs are usually lowest
the level of uncertainty (risk) is highest
project stakeholders have the greatest opportunity to influence the project
In middle phases of a project life cycle
the certainty of completing a project improves
more resources are needed
The final phase of a project life cycle focuses on
ensuring that project requirements were met
the sponsor approves completion of the project
More on Project Phases
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Figure 2-4. Phases of the Traditional Project Life Cycle
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Products also have life cycles
The Systems Development Life Cycle (SDLC) is a framework for describing the phases involved in developing and maintaining information systems
Systems development projects can follow
Predictive life cycle: the scope of the project can be clearly articulated and the schedule and cost can be predicted
Adaptive Software Development (ASD) life cycle: requirements cannot be clearly expressed, projects are mission driven and component based, using time-based cycles to meet target dates
Product Life Cycles
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Waterfall model: has well-defined, linear stages of systems development and support
Spiral model: shows that software is developed using an iterative or spiral approach rather than a linear approach
Incremental build model: provides for progressive development of operational software
Prototyping model: used for developing prototypes to clarify user requirements
Rapid Application Development (RAD) model: used to produce systems quickly without sacrificing quality
Predictive Life Cycle Models
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Figure 2-5. Waterfall and Spiral Life Cycle Models
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Agile software development has become popular to describe new approaches that focus on close collaboration between programming teams and business experts
See the last section of this chapter and Chapter 3 for more information on agile
Agile Software Development
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A project should successfully pass through each of the project phases in order to continue on to the next
Management reviews, also called phase exits or kill points, should occur after each phase to evaluate the project’s progress, likely success, and continued compatibility with organizational goals
The Importance of Project Phases and Management Reviews
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What Went Right?
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“The real improvement that I saw was in our ability toin the words of Thomas Edisonknow when to stop beating a dead horse.…Edison’s key to success was that he failed fairly often; but as he said, he could recognize a dead horse before it started to smell…In information technology we ride dead horsesfailing projectsa long time before we give up. But what we are seeing now is that we are able to get off them; able to reduce cost overrun and time overrun. That’s where the major impact came on the success rate.”*
Many organizations, like Huntington Bancshares, Inc., use an executive steering committee to help keep projects on track.
Some projects still go on a long time before being killed, like Blizzard’s Titan game project.
*Cabanis, Jeannette, “‘A Major Impact’: The Standish Group’s Jim Johnson On Project Management and IT Project Success,” PM Network, PMI, Sep.1998, p. 7
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IT projects can be very diverse in terms of size, complexity, products produced, application area, and resource requirements
IT project team members often have diverse backgrounds and skill sets
IT projects use diverse technologies that change rapidly. Even within one technology area, people must be highly specialized
The Context of IT Projects
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Globalization
Outsourcing: Outsourcing is when an organization acquires goods and/or sources from an outside source. Offshoring is sometimes used to describe outsourcing from another country
Virtual teams: A virtual team is a group of individuals who work across time and space using communication technologies
Agile project management
Recent Trends Affecting IT Project Management
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Issues
Communications
Trust
Common work practices
Tools
Suggestions
Employ greater project discipline
Think global but act local
Keep project momentum going
Use newer tools and technology
Important Issues and Suggestions Related to Globalization
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Organizations remain competitive by using outsourcing to their advantage, such as finding ways to reduce costs
Their next challenge is to make strategic IT investments with outsourcing by improving their enterprise architecture to ensure that IT infrastructure and business processes are integrated and standardized (See Suggested Readings)
Project managers should become more familiar with negotiating contracts and other outsourcing issues
Outsourcing
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Outsourcing also has disadvantages. For example, Apple benefits from manufacturing products in China, but it had big problems there after its iPhone 4S launch in January 2012 caused fighting between migrant workers who were hired by scalpers to stand in line to buy the phones.
When Apple said it would not open its store in Beijing, riots resulted and people attacked security guards. The Beijing Apple Store has had problems before. In May 2011, four people were injured when a crowd waiting to buy the iPad 2 turned ugly.
Global Issues
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Increasing competiveness and responsiveness by having a team of workers available 24/7
Lowering costs because many virtual workers do not require office space or support beyond their home offices.
Providing more expertise and flexibility by having team members from across the globe working any time of day or night
Increasing the work/life balance for team members by eliminating fixed office hours and the need to travel to work.
Virtual Teams Advantages
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Isolating team members
Increasing the potential for communications problems
Reducing the ability for team members to network and transfer information informally
Increasing the dependence on technology to accomplish work
See text for a list of factors that help virtual teams succeed, including team processes, trust/relationships, leadership style, and team member selection
Virtual Team Disadvantages
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Agile means being able to move quickly and easily, but some people feel that project management, as they have seen it used, does not allow people to work quickly or easily.
Early software development projects often used a waterfall approach, as defined earlier in this chapter. As technology and businesses became more complex, the approach was often difficult to use because requirements were unknown or continuously changing.
Agile today means using a method based on iterative and incremental development, in which requirements and solutions evolve through collaboration.
See the Resources tab from www.pmtexts.com for more info
Agile Project Management
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Many seasoned experts in project management warn people not to fall for the hype associated with Agile.
For example, J. Leroy Ward, Executive Vice President at ESI International, said that “Agile will be seen for what it is … and isn’t….Project management organizations embracing Agile software and product development approaches will continue to grow while being faced with the challenge of demonstrating ROI through Agile adoption.”*
Agile Makes Sense for Some Projects, But Not All
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*J. Leroy Ward, “The Top Ten Project Management Trends for 2011,” projecttimes.com
(January 24, 2011).
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In February 2001, a group of 17 people that called itself the Agile Alliance developed and agreed on the Manifesto for Agile Software Development, as follows:
“We are uncovering better ways of developing software by doing it and helping others do it. Through this work we have come to value:
Individuals and interactions over processes and tools
Working software over comprehensive documentation
Customer collaboration over contract negotiation
Responding to change over following a plan”*
Manifesto for Agile Software Development
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*Agile Manifesto, www.agilemanifesto.org.
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According to the Scrum Alliance, Scrum is the leading agile development method for completing projects with a complex, innovative scope of work.
The term was coined in 1986 in a Harvard Business Review study that compared high-performing, cross-functional teams to the scrum formation used by rugby teams.
Scrum
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Figure 2-6. Scrum Framework
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Technique that can be used in conjunction with scrum
Developed in Japan by Toyota Motor Corporation
Uses visual cues to guide workflow
Kanban cards show new work, work in progress, and work completed
Kanban
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The PMBOK® Guide describes best practices for what should be done to manage projects.
Agile is a methodology that describes how to manage projects.
The Project Management Institute (PMI) recognized the increased interest in Agile, and introduced a new certification in 2011 called Agile Certified Practitioner (ACP).
Seasoned project managers understand that they have always had the option of customizing how they run projects, but that project management is not easy, even when using Agile.
Agile, the PMBOK® Guide, and a New Certification
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Project managers need to take a systems approach when working on projects
Organizations have four different frames: structural, human resources, political, and symbolic
The structure and culture of an organization have strong implications for project managers
Projects should successfully pass through each phase of the project life cycle
Project managers need to consider several factors due to the unique context of information technology projects
Recent trends affecting IT project management include globalization, outsourcing, virtual teams, and Agile
Chapter Summary
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