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INFORMATION TECHNOLOGY PROJECT MANAGEMENT

FOURTH EDITION

INFORMATION TECHNOLOGY PROJECT MANAGEMENT

FOURTH EDITION

Providing Measurable Organizational Value

Jack T. Marchewka

John Wiley & Sons, Inc.

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Library of Congress Cataloging-in-Publication Data

Marchewka, Jack T. Information technology project management : providing measurable organizational value / Jack T. Marchewka. –4th ed.

p. cm. Includes bibliographical references and index.

ISBN 978-1-118-05763-6 (pbk. : acid-free paper) 1. Project management. 2. Information technology–Management. 3. Microsoft Project. 4. Project management–Computer programs. I. Title. HD69.P75M367 2012 004.068’4–dc23

2011041419

Printed in the United States of America

10 9 8 7 6 5 4 3 2 1

The fourth edition is dedicated to Beth and Alma.

BRIEF CONTENTS

CHAPTER 1 The Nature of Information Technology Projects 1

CHAPTER 2 Conceptualizing and Initializing the IT Project 30

CHAPTER 3 The Project Infrastructure 76

CHAPTER 4 The Human Side of Project Management 103

CHAPTER 5 Defining and Managing Project and Product Scope 135

CHAPTER 6 The Work Breakdown Structure and Project Estimation 156

CHAPTER 7 The Project Schedule and Budget 198

CHAPTER 8 Managing Project Risk 246

CHAPTER 9 Project Communication, Tracking, and Reporting 280

CHAPTER 10 IT Project Quality Management 318

CHAPTER 11 Managing Organizational Change, Resistance, and Conflict 354

CHAPTER 12 Project Procurement Management and Outsourcing 380

CHAPTER 13 Leadership and Ethics 397

CHAPTER 14 Project Implementation, Closure, and Evaluation 420

APPENDIX: An Introduction to Function Point Analysis 441

INDEX 453

vii

CONTENTS

PREFACE xxi

ABOUT THE AUTHOR xxvii

CHAPTER 1 The Nature of Information Technology Projects 1

Introduction 1 The Purpose of This Book 4

The State of IT Project Management 5 Why IT Projects Fail 8 Improving the Likelihood of Success 9 A Value-Driven Approach 9 A Socio-Technical Approach 10 A Project-Management Approach 11 A Knowledge-Management Approach 12

The Context of Project Management 13 What Is a Project? 13

Extreme Project Management 15 The Project Management Body of Knowledge (PMBOK R©) 17

Project Management Knowledge Areas 17 Chapter Summary 19 Review Questions 19 Extend Your Knowledge 20 Global Technology Solutions 20 Husky Air—Pilot Angels 21 Husky Air Assignment 21 The Martial Arts Academy—School Management System 22 Case Studies 25 Bibliography 29

CHAPTER 2 Conceptualizing and Initializing the IT Project 30

Introduction 30 The Project Life Cycle and IT Development 31

Define Project Goal 32 Plan Project 32 Execute Project Plan 32

ix

x CONTENTS

Close Project 33 Evaluate Project 33 The Systems Development Life Cycle (SDLC) 33 The PLC and The SDLC 35

An Information Technology Project Methodology (ITPM) 35 Phase 1: Conceptualize and Initialize 37 Phase 2: Develop the Project Charter and Detailed Project Plan 38 Phase 3: Execute and Control The Project 39 Phase 4: Close Project 39 Phase 5: Evaluate Project Success 40 IT Project Management Foundation 40 Project Management Process Group 40 Tools 41 Infrastructure 41 Project Management Knowledge Areas 41

The Business Case 42 What Is a Business Case? 42 Developing the Business Case 42 Step 1: Select the Core Team 43 Step 2. Define Measurable Organizational Value (MOV) 44 Step 3: Identify Alternatives 50 Step 4: Define Feasibility and Assess Risk 50 Step 5: Define Total Cost of Ownership 51 Step 6: Define Total Benefits of Ownership 52 Step 7: Analyze Alternatives 52 Step 8: Propose and Support the Recommendation 57

Project Selection and Approval 57 The IT Project Selection Process 58 The Project Selection Decision 58

Chapter Summary 62 Review Questions 62 Extend Your Knowledge 63 Global Technology Solutions 64 Husky Air Assignment—Pilot Angels 64 The Martial Arts Academy (MAA)—School Management

System 66 Case Studies 68 Bibliography 74

CHAPTER 3 The Project Infrastructure 76

Introduction 76 Project Integration Management 77

CONTENTS xi

Project Management Processes 80 Project Management Process Groups 81 Initiating 81 Planning 81 Executing 82 Monitoring and Controlling 82 Closing 82

Product-Oriented Processes 82 Implementing the SDLC 83 Structured Approach to Systems Development 83 Iterative Systems Development 84

The Project Charter 85 What Should Be in a Project Charter? 87 Project Identification 87 Project Stakeholders 87 Project Description 87 Measurable Organizational Value (MOV) 87 Project Scope 87 Project Schedule 88 Project Budget 88 Quality Standards 88 Resources 88 Assumptions and Risks 88 Project Administration 89 Acceptance and Approval 89 References 89 Terminology 90

Project Planning Framework 91 The MOV 91 Define the Project’s Scope 91 Subdivide the Project into Phases 92 Tasks—Sequence, Resources, and Time Estimates 92 Sequence 93 Resources 93 Time 93 Schedule and Budget—The Baseline Plan 93

The Kick-Off Meeting 94 Chapter Summary 94 Review Questions 95 Extend Your Knowledge 95 Global Technology Solutions 96 Husky Air Assignment—Pilot Angels 97

xii CONTENTS

The Martial Arts Academy (MAA)—School Management System 97

Case Studies 98 Bibliography 102

CHAPTER 4 The Human Side of Project Management 103

Introduction 103 Organization and Project Planning 104

The Formal Organization 105 The Functional Organization 105

The Matrix Organization 109 The Informal Organization 111 Stakeholders 112

Stakeholder Analysis 112 The Project Team 113

The Roles of the Project Manager 114 Team Selection and Acquisition 115 Team Performance 115 Work Groups 115

Real Teams 116 Project Teams and Knowledge Management 118 Learning Cycles and Lessons Learned 119

The Project Environment 123 Chapter Summary 123 Review Questions 126 Extend Your Knowledge 126 Global Technology Solutions 127 Husky Air Assignment—Pilot Angels 128 The Martial Arts Academy (MAA)—School Management

System 129 Case Studies 130 Case Studies 133 Bibliography 134

CHAPTER 5 Defining and Managing Project and Product Scope 135

Introduction 135 Scope Management Processes 135

Scope Planning 136 Scope Boundary 137 The Statement of Work (SOW) 138 The Scope Statement 138

CONTENTS xiii

Scope Statement 138 Out of Scope for This Project 139

Project Scope Definition 139 Project-Oriented Scope 139 Project-Oriented Scope Definition Tools 139 Product-Oriented Scope 141 Product-Oriented Scope Definition Tools 142

Project Scope Verification 145 Scope Change Control 145

Scope Change Control Procedures 146 Benefits of Scope Control 148

Chapter Summary 148 Review Questions 149 Extend Your Knowledge 149 Global Technology Solutions 150 Husky Air Assignment—Pilot Angels 150 The Martial Arts Academy (MAA)—School Management

System 151 Case Studies 152 Bibliography 155

CHAPTER 6 The Work Breakdown Structure and Project Estimation 156

Introduction 156 The Work Breakdown Structure (WBS) 157

Work Packages 158 Deliverables and Milestones 158 Developing the WBS 159 The WBS Should Be Deliverable Oriented 161 The WBS Should Support the Project’s MOV 161 The Level of Detail Should Support Planning and Control 161 Developing the WBS Should Involve the People Who Will Be Doing the

Work 161 Learning Cycles and Lessons Learned Can Support the Development of a

WBS 161 Project Estimation 162

Guesstimating 162 Delphi Technique 162 Time Boxing 163 Top-Down Estimating 163 Bottom-Up Estimating 164

Software Engineering Metrics and Approaches 165 Lines of Code (LOC) 165 Function Points 166

xiv CONTENTS

COCOMO 169 Heuristics 171 Automated Estimating Tools 172

What is the Best Way to Estimate IT Projects? 172 Chapter Summary 173 Web Sites to Visit 174 Review Questions 175 Extend Your Knowledge 175 Global Technology Solutions 176 Husky Air Assignment—Pilot Angels 177 The Martial Arts Academy (MAA)—School Management

System 178 Case Studies 178 Microsoft Project Tutorial 1—Creating the Work Breakdown

Structure (WBS) 181 Bibliography 197

CHAPTER 7 The Project Schedule and Budget 198

Introduction 198 Developing the Project Schedule 199

Gantt Charts 200 Project Network Diagrams 201 Activity on the Node (AON) 201

Critical Path Analysis 203

PERT 204

Precedence Diagramming Method 205 Critical Chain Project Management (CCPM) 206

Project Management Software Tools 208 Developing the Project Budget 210

Cost Estimation 210 Other Costs 212 Resource Allocation 214

Finalizing the Project Schedule and Budget 215 Chapter Summary 216 Review Questions 216 Extend Your Knowledge 217 Global Technology Solutions 217 Husky Air Assignment—Pilot Angels 218 The Martial Arts Academy (MAA)—School Management

System 218 Case Studies 219 Microsoft Project Tutorial 2—The Baseline Project Plan 222 Bibliography 245

CONTENTS xv

CHAPTER 8 Managing Project Risk 246

Introduction 246 IT Project Risk Management Planning Process 248

Risk Planning 249 Risk Identification 250 Risk Assessment 251 Risk Strategies 251 Risk Monitoring and Control 251 Risk Response 251 Risk Evaluation 252

Identifying IT Project Risks 252 An IT Project Risk Identification Framework 252 Applying the IT Project Risk Identification Framework 254 Other Tools and Techniques 255

Risk Analysis and Assessment 257 Qualitative Approaches 258 Expected Value 258 Decision Trees 259 Risk Impact Table 259 Quantitative Approaches 261 Discrete Probability Distributions 261 Continuous Probability Distributions 261 PERT Distribution 263 Triangular Distribution 263 Simulations 264

Risk Strategies 268 Risk Monitoring and Control 270 Risk Response and Evaluation 270 Chapter Summary 271 Web Sites to Visit 272 Review Questions 272 Extend Your Knowledge 273 Global Technology Solutions 273 Husky Air Assignment—Pilot Angels 274 The Martial Arts Academy (MAA)—School Management

System 275 Case Studies 276 Bibliography 279

CHAPTER 9 Project Communication, Tracking, and Reporting 280

Introduction 280 Monitoring and Controlling the Project 282

xvi CONTENTS

The Project Communications Plan 283 Project Metrics 285

Earned Value 287 Reporting Performance and Progress 292 Burn Down Chart 294 Information Distribution 295 Chapter Summary 297 Review Questions 297 Extend Your Knowledge 298 Global Technology Solutions 298 Husky Air Assignment—Pilot Angels 299 The Martial Arts Academy (MAA)—School Management

System 300 Case Studies 301 Microsoft Project Tutorial 3—Tracking and Reporting 304 Bibliography 317

CHAPTER 10 IT Project Quality Management 318

Introduction 318 Quality Tools and Philosophies 321

Scientific Management 321 Control Charts 323 The Total Quality Movement 324 Quality Planning, Improvement, and Control 326 Cause and Effect of Diagrams, Pareto Charts, and Flow Charts 326

Quality Systems 328 International Organization for Standardization (ISO) 328 Six Sigma (6σ ) 330 The Capability Maturity Model Integration (CMMI) 331 Level 1: Initial 334 Level 2: Repeatable 334 Level 3: Defined 334 Level 4: Managed 335 Level 5: Optimizing 335

The IT Project Quality Plan 337 Quality Philosophies and Principles 337 Focus on Customer Satisfaction 338 Prevention, Not Inspection 338 Improve the Process to Improve the Product 338 Quality Is Everyone’s Responsibility 338 Fact-Based Management 339 Quality Standards and Metrics 339

CONTENTS xvii

Verification and Validation 340 Change Control and Configuration Management 342 Monitor and Control 343 Learn, Mature, and Improve 345

Chapter Summary 345 Review Questions 346 Extend Your Knowledge 347 Global Technology Solutions 348 Husky Air Assignment—Pilot Angels 349 The Martial Arts Academy (MAA)—School Management

System 349 Case Studies 350 Bibliography 353

CHAPTER 11 Managing Organizational Change, Resistance, and Conflict 354

Introduction 354 The Nature of Change 356

Change Has an Impact 356 Change Is a Process 358 Change Can Be Emotional 359

The Change Management Plan 360 Assess Willingness, Readiness, and Ability to Change 360 Sponsor 360 Change Agents 361 Targets 361 Develop or Adopt a Strategy for Change 362 Rational-Empirical Approach 362 Normative-Reeducation Approach 363 Power-Coercive Approach 363 Environmental-Adaptive Approach 364 Implement the Change Management Plan and Track Progress 364 Evaluate Experience and Develop Lessons Learned 365

Dealing with Resistance and Conflict 365 Resistance 365 Conflict 366

Chapter Summary 369 Review Questions 370 Extend Your Knowledge 371 Global Technology Solutions 371 Husky Air Assignment—Pilot Angels 372 The Martial Arts Academy (MAA)—School Management

System 373

xviii CONTENTS

Case Studies 374 Bibliography 379

CHAPTER 12 Project Procurement Management and Outsourcing 380

Introduction 380 Project Procurement Management 381

The Project Procurement Management Processes 381 Plan Procurements 382 Conduct Procurements 383 Contracts between Sellers and Buyers 383 Administer Procurements 385 Close Procurements 385

Outsourcing 386 The Beginning of the Outsourcing Phenomenon 386 Types of Outsourcing Relationships 387 The Realities of Outsourcing 387 Managing the Outsourcing Relationship 388

Chapter Summary 390 Review Questions 390 Extend Your Knowledge 391 Global Technology Solutions 391 Husky Air Assignment—Pilot Angels 392 The Martial Arts Academy (MAA)—School Management

System 392 Case Studies 393 Bibliography 396

CHAPTER 13 Leadership and Ethics 397

Introduction 397 Project Leadership 398

Some Modern Approaches to Leadership 399 Leadership Styles 400 Emotional Intelligence 402

Ethics in Projects 404 Ethical Leadership 405 Common Ethical Dilemmas 406 Making Sound Ethical Decisions 407 Codes of Ethics and Professional Practices 409

Multicultural Projects 410 The Challenges of International Projects 410 Understanding and Managing Diversity 412

Chapter Summary 413

CONTENTS xix

Review Questions 414 Extend Your Knowledge 414 Global Technology Solutions 415 Husky Air Assignment—Pilot Angels 416 The Martial Arts Academy (MAA)—School Management

System 416 Case Studies 416 Bibliography 419

CHAPTER 14 Project Implementation, Closure, and Evaluation 420

Introduction 420 Project Implementation 421

Direct Cutover 421 Parallel 422 Phased 422

Administrative Closure 423 Project Sponsor Acceptance 426 The Final Project Report 427 The Final Meeting and Presentation 427 Closing the Project 428

Project Evaluation 428 Individual Performance Review 429 Postmortem Review 429 Project Audit 430 Evaluating Project Success—The MOV 431

Chapter Summary 432 Review Questions 433 Extend Your Knowledge 434 Global Technology Solutions 434 Husky Air Assignment—Pilot Angels 435 The Martial Arts Academy (MAA)—School Management

System 436 Case Studies 436 Bibliography 440

APPENDIX: An Introduction to Function Point Analysis 441

INDEX 453

PREFACE

Welcome to Information Technology Project Management—Providing Measurable Organiza- tional Value (4th Edition). This book was written to help you learn the processes, tools, tech- niques, and areas of knowledge needed to successfully manage information technology (IT) projects.

The idea of project management has been around for a long time. In fact, it was around before the great pyramids of Egypt were created. Today, project management has emerged as its own field, supported by a body of knowledge and research. Although still relatively new, the fields of management information systems (MIS) and software engineering have their own bodies of knowledge that include various tools, techniques, and methods supported by a continually growing base of research.

Unfortunately, the track record for IT projects has not been as successful as one might expect, although the situation appears to be improving. One reason for this improvement has been a greater focus on a project management approach to support the activities required to develop and deliver a product, service, or information system. Just as building a system is more than sit- ting down in front of a computer and writing code, project management is more than just creating fancy charts or diagrams using one of the more popular project management software packages.

We can, however, build a system that is a technical success but an organizational failure. Information systems—the products of IT projects—are planned organizational change. Informa- tion technology is an enabler for new products, services, and processes that can change existing relationships between an organization and its customers or suppliers, as well as among the people within the organization.

This change can represent a threat to many groups. Therefore, people may not always be receptive to a new IT solution regardless of how well it was built or whether cutting edge technology, tools, and techniques are used. On the other hand, people in an organization may rightfully resist an information system that does not function properly or meet their envisioned needs. Therefore, we must take an approach that does not consider the technical side over the organizational side or vice versa. Attention to both the technical and organizational sides of IT projects must be balanced in order to deliver a successful project.

APPROACH

In writing this book, I have tried to create a balance between concept and application. Many project management books tend to cover a broad set of topics with little practical application. Others tend to focus on the tools and techniques, but fall short in showing how everything ties together.

This book was written with the student in mind. Many years ago—more than I would care to admit—when I was a student, one of my instructors said that the problem with many textbooks was that they were written by professors for other professors. That statement stuck with me over the years. When I first began writing this text, I wanted to be sure that it was written with the student in mind.

Learning and understanding how to apply new concepts, tools, and techniques can be chal- lenging enough without being made more complex by obscure writing. As you will find out,

xxi

xxii PREFACE

learning concepts is relatively easy when compared to putting them into good practice. This book is intended for both undergraduate and graduate students. While it has no specific prereq- uisites, you should have at least an introductory class in information systems or programming under your belt. You should find that the concepts of IT project management will complement courses in systems analysis and design.

Those of you who are undergraduates will not be thrust into the role of a project manager immediately after graduation. My goal is to help prepare you for the next several progressions of your career. For example, your first assignment may be to work on a project as a programmer or analyst. The knowledge that you will gain from this text will give you a good idea of how your work fits into the big picture so that you can be a more valuable project team member. More challenging and interesting assignments and opportunities for advancement will follow as you continue to gain more knowledge and experience. Eventually, this may lead to a leadership role where your knowledge and experience will be put to the optimal test.

On the other hand, you may have already acquired some experience and now find yourself in the role of a project manager. This text will provide you not only with the big picture, but also with a foundation for applying directly the tools, processes, and methods to support the management and delivery of a successful IT project.

This book follows a generic information technology project methodology (ITPM). Most students who read this book will never have been on a real IT project. I have written this book based on a flexible methodology that attempts to bridge the questions: How do I get started?, What do I do next?, How do we know when we’re finished? This methodology provides a structure for understanding how projects are initiated, conceptualized, planned, carried out, terminated, and evaluated. This methodology will take you through the different phases of the project life cycle and introduce the concepts and tools that are appropriate for each specific phase or stage of the project. In addition, you will find the methodology and central theme of this text is that IT projects should provide measurable value to organizations.

The text provides an integrated approach to IT project management. It incorporates the nine areas outlined in the Project Management Institute’s Project Management Body of Knowledge (PMBOK®). The concepts associated with information systems management and software engi- neering when integrated with PMBOK® provide an important base of knowledge that builds a foundation for IT project management. This integration helps to distinguish IT projects from other types of projects such as construction or engineering.

The text also integrates a knowledge management approach. The area of knowledge man- agement is an area of growing interest and development. Knowledge management is a systematic process for acquiring, creating, synthesizing, sharing, and using information, insights, and expe- riences to create business value. Here, the concept of learning cycles provides a unique approach for defining and creating new knowledge in terms of lessons learned. These lessons learned can be stored in a repository and made available throughout the organization. Best practices can be developed from the lessons learned and integrated or made a part of an organization’s IT project methodology. Over time, the generic ITPM introduced in this text can evolve and become a valuable asset to an organization as it becomes aligned with the organization’s culture and busi- ness. In turn, this evolving process will provide the organization with increased capability and maturity that hopefully will increase the likelihood of successful projects.

CHAPTER OVERVIEWS

The material in each chapter provides a logical flow in terms of the phases and processes required to plan and manage an IT project. The text begins with a call for a better way to manage IT

PREFACE xxiii

projects and then focuses on the deliverables and processes required to initiate a project. Once a decision to approve and fund an IT project is made, the project must be planned at a detailed level to determine the schedule and budget. The planning and subsequent execution of the project’s plan are supported by the project management and information technology bodies of knowledge.

■ Chapter 1: The Nature of Information Technology Projects includes defining what a project is and the discipline of project management. The concepts of the project life cycle and systems development life cycle are also introduced, as well as IT project governance and the project selection process.

■ Chapter 2: Conceptualizing and Initializing the IT Project introduces an information technology project management methodology (ITPM) and the concept of measurable organizational value (MOV), which will provide a foundation for this text. In addition, the first phase of this methodology, conceptualizing and initializing the project, and the first deliverable of this methodology, the business case, are described and discussed.

■ Chapter 3: The Project Infrastructure introduces a knowledge area called project inte- gration management. A project planning framework is also described to support the development of the project plan.

■ Chapter 4: The Human Side of Project Management describes the formal and informal organization so that the project manager and team can conduct a stakeholder analysis to better understand the organizational landscape. Project team selection and the roles of the project manager are discussed, as is the concept of learning cycles to support a knowledge management approach to IT project management.

■ Chapter 5: Defining and Managing Project and Product Scope introduces and describes the project management knowledge area called project scope management. The project’s scope defines what the team will and will not deliver to the sponsor or client. Scope management processes also ensure that the scope is properly defined and that controls are in place in order to manage scope throughout the project.

■ Chapter 6: The Work Breakdown Structure and Project Estimation describes the project management tool called the work breakdown structure (WBS), which breaks up the project’s scope into work packages that include specific deliverables and milestones. Several traditional project estimation approaches are introduced, as well as several soft- ware engineering techniques and metrics for software estimation.

■ Chapter 7: The Project Schedule and Budget introduces several project management tools, including Gantt charts, activity on the node (AON), critical path analysis, program evaluation and review technique (PERT), and precedence diagramming, that aid in the development of the project schedule. A budget can then be developed based upon the activities defined in the WBS, the schedule, and the cost of the resources assigned or required.

■ Chapter 8: Managing Project Risk describes the concept of risk management and intro- duces a framework for defining and understanding the integrative nature of risks asso- ciated with an IT project. Several qualitative and quantitative approaches and tools are introduced for analyzing and assessing risks so that appropriate risk strategies can be formulated.

■ Chapter 9: Project Communication, Tracking, and Reporting focuses on developing a communication plan for reporting the project’s progress to various project stakeholders. This chapter includes an introduction to the concept of earned value and several common project metrics to monitor and control the project.

xxiv PREFACE

■ Chapter 10: IT Project Quality Management provides a brief history of the quality movement, the people involved, and their philosophies and teachings as an underpinning to support the project quality objective. Several quality systems to support IT project quality are also discussed. These include the International Standards Organization (ISO), Six Sigma, and the capability maturity model (CMM). Together, the concepts, teachings, philosophies, and quality system approaches provide a basis for developing the IT project quality plan.

■ Chapter 11: Managing Organizational Change, Resistance, and Conflict describes the nature and impact of change associated with the delivery of an information system on the people within an organization. Several organizational change theories are introduced so that a change management plan can be formulated and executed in order to ease the transition from the current system to the system that will be implemented.

■ Chapter 12: Project Procurement Management and Outsourcing introduces several project procurement management processes. This PMBOK® knowledge area focuses on con- tract management and the processes needed to administer relationships with outside suppliers and vendors as well as clients or customers. In addition, outsourcing of orga- nizational and project components has received a great deal of attention. This chapter describes the various types of outsourcing relationships as well as how an outsourcing relationship should be managed.

■ Chapter 13: Leadership and Ethics describes some modern approaches to leadership and the relationship with ethics. Some common ethical dilemmas that may be encountered on projects are introduced along with a process for making sound ethical decisions. Moreover, several challenges and issues associated with managing multicultural projects are discussed as more organizations attempt to diversify their workforce or conduct business across the globe.

■ Chapter 14: Project Implementation, Closure, and Evaluation describes the tactical approaches for installing and delivering the project’s product—the information sys- tem. In addition, the processes for bringing closure to the project and evaluating the project team and the project’s MOV are discussed.

■ Appendix: An Introduction to Function Point Analysis provides a more detailed discus- sion on counting function points than is provided in Chapter 6.

WHAT’S NEW IN THE FOURTH EDITION

■ The Project Management Body of Knowledge areas have been updated to reflect the latest edition of the PMBOK Guide®.

■ Several Quick Thinking exercises have been replaced or updated. These short cases provide a useful pedagogical tool for in-class discussions to increase a student’s level of learning.

■ A new integrated case called the Martial Arts Academy has been added at the end of each chapter. Along with the Husky Air cases, these cases provide students with an opportunity to work as a project team and apply the concepts presented in each chapter.

■ A third and new case has been added to the end of each chapter. These cases provide an opportunity for higher-level analysis and discussion. Many of the new cases also provide in depth material on some of the more recent developments in project management and information systems development techniques, processes, concepts, and best practices used in many organizations today.

PREFACE xxv

■ Three Microsoft Project® tutorials have been added to the 4th edition. These tutorials provide a foundation for learning, using, and applying the concepts of the text to the integrated case assignments.

ORGANIZATION AND SUPPORT

An instructor’s manual, test bank, and presentation slides are available through the Wiley website.

A 60-day trial edition of Microsoft Project is packaged with every new textbook. Note that Microsoft has designed the trial version to be installed only once. If you have purchased a used book and a prior user has installed the software, you will not be able to install it. Also, please be aware that Microsoft has changed their policy and no longer offers the 120-day trial available with previous editions of this textbook.

Another option now available to education institutions adopting this Wiley textbook is a free 3-year membership to the MSDN Academic Alliance. The MSDN AA is designed to provide the easiest and most inexpensive way for academic departments to make the latest Microsoft software available in labs, classrooms, and on student and instructor PCs.

Microsoft Project 2007 software is available through this Wiley and Microsoft publishing partnership, free of charge with the adoption of any qualified Wiley textbook. Each copy of Microsoft Project is the full version of the software, with no time limitations, and can be used indefinitely for educational purposes. Contact your Wiley sales representative for details. For more information about the MSDN AA program, go to http://msdn.microsoft.com/academic/.

ACKNOWLEDGMENTS

I would like to thank my editor Beth Lang Golub, as well as Elizabeth Mills and Rachael Leblond for all their help in writing this 4th edition. Also, I would like to thank the following reviewers for their valuable insight, comments, and suggestions.

John Taz Lake Georgia State University

Dushan Gasich San Jose State University

John Towns College of Notre Dame of Maryland

James Fogal Notre Dame De Namur University

Mark Huber University of Georgia

David Riske Western Nevada College

Paul Licker Oakland University

Eric Ackerman Nova Southeastern University

Alan Sixsmith University of Technology, Sydney

Anthony Scime The College at Brockport

Phyllis Chasser Nova Southeastern University

Howard Woodard Georgia College & State University

David Riske Western Nevada College

Siti Arshad-Snyder Clarkson College

Gene Akers Auburn University Montgomery

David Firth The University of Montana

xxvi PREFACE

Barry Flachsbart Missouri University of Science & Technology

Richard Will University of South Florida

Richard Lomax Bellevue University

Valarie Griep University of Minnesota

Toru Sakaguchi Northern Kentucky University

Charles Collins Bellevue University

ABOUT THE AUTHOR

Jack T. Marchewka is a professor of Management Information Systems at Northern IllinoisUniversity. He received his Ph.D. from Georgia State University’s department of ComputerInformation Systems and was a former faculty member at Kennesaw State University. Prior to entering academia, Dr. Marchewka was a vice president of MIS for a healthcare company in Atlanta, Georgia.

Dr. Marchewka has taught a number of courses at both the undergraduate and graduate levels and has been a guest lecturer at the Rotterdam School of Management at Erasmus Uni- versity in the Netherlands and the University of Bordeaux in France. His current research primarily focuses on IT project management, and his articles have appeared in such journals as Information Resources Management Journal, Information Technology and People, Journal of International Technology and Information Management, Communications of the IIMA, and Information Management.

He is currently a board member and fellow of the International Information Manage- ment Association, where he has served as program chair, conference chair, and past president. Dr. Marchewka was also editor of the Communications of IIMA.

Jack Marchewka is also a black belt in Kajukenbo and an instrument-rated commercial pilot who enjoys his family, karate, fishing, playing guitar, good BBQ, riding his motorcycle, and a good laugh.

xxvii

C H A P T E R

1 The Nature of Information

Technology Projects

CHAPTER OBJECTIVES

Chapter 1 provides an overview of information technology project management (ITPM). After studying this chapter, you should understand and be able to:

■ Describe the dominant eras of information systems called the electronic data processing (EDP) era, the micro era, the network era, and the globalization era, and understand how managing IT projects has evolved during these eras.

■ Understand the current state of IT project management and how successfully managing IT projects remains a challenge for most organizations.

■ Explain the value-driven, socio-technical, project management, and knowledge management approaches that support ITPM.

■ Define what a project is and describe its attributes. ■ Define the discipline called project management. ■ Describe the role and impact IT projects have on an organization. ■ Identify the different roles and interests of project stakeholders. ■ Describe eXtreme project management. ■ Identify the Project Management Body of Knowledge (PMBOK®) core knowledge areas.

INTRODUCTION

Information technology (IT) projects are organizational investments. When an organization builds or implements an IT solution, it often commits considerable time, money, and resources to the project with an expectation of receiving something of value in return. To improve the chances of success, you will be introduced to a relatively new discipline called information technology project management (ITPM). Some may argue that managing an IT project is like managing any other project, so all we need to do is apply the processes, tools, and techniques of traditional project management. This may be true to some degree, but a one-size-fits-all approach has not served us all that well in the past. Moreover, building an information system is different from building a house, a bridge, or a rocket for space travel. Although many of the project processes are similar, an entirely different approach to engineering each of these examples is needed. By combining the body of knowledge of modern-day project management with the body of knowledge of management information systems (in particular, software engineering

1

2 CHAPTER 1 / THE NATURE OF INFORMATION TECHNOLOGY PROJECTS

and systems analysis and design), we can craft a better philosophy and method for planning and managing IT projects. This will provide a foundation for a logical and repeatable approach that improves the likelihood of IT project success.

Modern-day project management is often credited to the U.S. Navy, with its initiation of the Polaris missile project as a way to deter potential Soviet nuclear aggression in the early 1950s. The Polaris project was complex and risky, but the Navy used a project management approach to take the project from concept to deployment. This approach was viewed as a great success, and other organizations in various industries began to adopt project management as a way to define, manage, and execute work to achieve a specific objective.

Today, project management is viewed as an effective approach that addresses a wide variety of organizational opportunities and challenges. Project management focuses on reducing costs and product cycle times and provides an important link between an organization’s strategy and the deployment of that strategy. In turn, this will have a direct impact on an organization’s bottom line and competitiveness.

The field of information systems also evolved in parallel with the field of modern project management. According to Richard Nolan, a consultant and Harvard business professor, the use of the business computer has gone through a series of three dominant eras: the electronic data processing (EDP) era, the micro era, and the network era. However, some people believe that we are entering into a new era called globalization. We can look at each of the first three eras to understand how technology supported organizations and the approaches used to manage these projects. As we enter a new era of globalization, many projects can benefit from a foundation built upon past experience and knowledge, but new ways will be needed to overcome many of the challenges and issues that will be encountered.

The EDP era began in the early 1960s and is characterized by the purchase of the first centralized mainframe or a minicomputer by large organizations. The IT projects during this era focused generally on automating various organizational transactions such as general account- ing tasks, inventory management, and production scheduling. The manager of this technology resource was often called the data processing (DP) manager and usually reported to the head accounting or financial manager. The goal of using technology was to improve efficiency and reduce costs by automating many of the manual or clerical tasks performed by people. As Richard Nolan (2001) points out, software programmers applied computer technology similar to the ways that farmers or engineers applied steam engine technology to mechanize agriculture. The process remained relatively unchanged, while the means for realizing the process became more efficient. Subsequently, IT projects during this era were generally structured, and there- fore a structured approach for managing these projects could be used. Since the requirements or business processes were fairly stable, changing requirements were not a major issue and large, multiyear projects were common. Unfortunately, in many cases these legacy systems created information silos, as projects supported specific business functions that often employed different technology platforms, programming languages, and standards for data.

In the early 1980s, the IBM personal computer (PC) and its subsequent clones signaled the beginning of the micro era. However, the transition or integration from a centralized computer to the PC did not happen immediately or without conflict. The often uncontrolled proliferation of the PC in many organizations challenged the centralized control

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