What are the objectives of project management, and why is it so essential in developing information systems?

There is a very high failure rate among information systems projects. In nearly every organization, information systems projects take much more time and money to implement than originally anticipated, or the completed system does not work properly. When an information system does not meet expectations or costs too much to develop, companies may not realize any benefit from their information system investment, and the system may not be able to solve the problems for which it was intended. The development of a new system must be carefully managed and orchestrated, and the way a project is executed is likely to be the most important factor influencing its outcome. That’s why it’s essen­tial to have some knowledge about managing information systems projects and the reasons why they succeed or fail.

1. Runaway Projects and System Failure

How badly are projects managed? On average, private sector projects are under­estimated by half in terms of budget and time required to deliver the complete system promised in the system plan. Many projects are delivered with missing functionality (promised for delivery in later versions). A joint study by McKinsey and Oxford University found that large software projects on average run 66 percent over budget and 33 percent over schedule. Over 50 percent of businesses recently surveyed by cloud project portfolio management provider Innotas had experi­enced IT project failure within the previous twelve months (Florentine, 2016).

As illustrated in Figure 14.1, a systems development project without proper management will most likely suffer these consequences:

• Costs that vastly exceed budgets
• Unexpected time slippage
• Technical performance that is less than expected
• Failure to obtain anticipated benefits

The systems produced by failed information projects are often not used in the way they were intended or are not used at all. Users often have to develop par­allel manual systems to make these systems work.

The actual design of the system may fail to capture essential business re­quirements or improve organizational performance. Information may not be provided quickly enough to be helpful, it may be in a format that is impossible to digest and use, or it may represent the wrong pieces of data.

The way in which nontechnical business users must interact with the system may be excessively complicated and discouraging. A system may be designed with a poor user interface. The user interface is the part of the system with which end users interact. For example, an online input form or data entry screen may be so poorly arranged that no one wants to submit data or request information. System outputs may be displayed in a format that is too difficult to comprehend.

Websites may discourage visitors from exploring further if the web pages are cluttered and poorly arranged, if users cannot easily find the information they are seeking, or if it takes too long to access and display the web page on the user’s computer.

Additionally, the data in the system may have a high level of inaccuracy or in­consistency. The information in certain fields may be erroneous or ambiguous, or it may not be organized properly for business purposes. Information required for a specific business function may be inaccessible because the data are incomplete.

2. Project Management Objectives

A project is a planned series of related activities for achieving a specific busi­ness objective. Information systems projects include the development of new information systems, enhancement of existing systems, or upgrade or replace­ment of the firm’s information technology (IT) infrastructure.

Project management refers to the application of knowledge, skills, tools, and techniques to achieve specific targets within specified budget and time constraints. Project management activities include planning the work, assess­ing risk, estimating resources required to accomplish the work, organizing the work, acquiring human and material resources, assigning tasks, directing activities, controlling project execution, reporting progress, and analyzing the results. As in other areas of business, project management for information sys­tems must deal with five major variables: scope, time, cost, quality, and risk.

Scope defines what work is or is not included in a project. For example, the scope of a project for a new order processing system might be to include new modules for inputting orders and transmitting them to production and account­ing but not any changes to related accounts receivable, manufacturing, distribu­tion, or inventory control systems. Project management defines all the work required to complete a project successfully and should ensure that the scope of a project does not expand beyond what was originally intended.

Time is the amount of time required to complete the project. Project man­agement typically establishes the amount of time required to complete major components of a project. Each of these components is further broken down into activities and tasks. Project management tries to determine the time required to complete each task and establish a schedule for completing the work.

Cost is based on the time to complete a project multiplied by the cost of human resources required to complete the project. Information systems project costs also include the cost of hardware, software, and work space. Project manage­ment develops a budget for the project and monitors ongoing project expenses.

Quality is an indicator of how well the end result of a project satisfies the objectives specified by management. The quality of information systems proj­ects usually boils down to improved organizational performance and decision making. Quality also considers the accuracy and timeliness of information pro­duced by the new system and ease of use.

Risk refers to potential problems that would threaten the success of a project. These potential problems might prevent a project from achieving its objectives by increasing time and cost, lowering the quality of project outputs, or pre­venting the project from being completed altogether. Section 14.4 describes the most important risk factors for information systems.

Source: Laudon Kenneth C., Laudon Jane Price (2020), Management Information Systems: Managing the Digital Firm, Pearson; 16^th edition.