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Class 8 – Preliminary Investigation: Steps 2 - 4, Risk, and ROI: 

Class 8 – Preliminary Investigation: Steps 2 - 4, Risk, and ROI Preliminary Investigation Steps – overview (Fig. 4.6, p. 238) Risk Evaluation (technique for PI, Ch 4) ROI (technique for PI, Tech Module F) Exercise 7 – Risk Evaluation for Latinitas

Client Project web pages: 

Client Project web pages Print & read Delivery 1 spec after Group Project 2 ends. How to schedule UT meeting rooms & tips for selecting a host.

Slide3: 

Preliminary Investigation Figure 4.6, p. 238

Risk Management Techniques: 

Risk Management Techniques Sources of risk for IS projects The Organization The proposed system Developer expertise User characteristics Risk analysis Risk reduction strategies

Another Question:: 

Another Question: Do you like surprises?

Risk Analysis Steps: 

Risk Analysis Steps Identify tasks and deliveries that are risky. Determine risk reduction strategies to lower the likelihood of each risk.

Risk Assessment Factors (p.251-253): 

Risk Assessment Factors (p.251-253) Organization A. Clear, stable objectives? B. Has a strategic Plan for Info Resources (SPIR)? C. System fits into objectives? Information System A. Clear requirements ? B. Structured business process ? C. Install at only one site? cross functional? D. Completed in less than three months ? E. Stable, proven technology ? Or technology too old? F. Install at one site? Developers Experienced with chosen development methodology? Skilled at determining functional requirements? Familiar with information architecture ? Users Experienced with proposed application area processes ? Familiar with systems development process ? Users and management committed to success ?

Risk Evaluation form (examples p. 70 & 252): 

Risk Evaluation form (examples p. 70 & 252)

Risk Evaluation form (examples, p. 70, 252): 

Risk Evaluation form (examples, p. 70, 252) 1st Factor (3 items)

Risk Evaluation form (examples, p. 70, 252): 

Risk Evaluation form (examples, p. 70, 252) 2nd Factor (6 items)

EMS Scheduling Project: 

EMS Scheduling Project This was a project to automate scheduling of drivers and medical staff for the City of Austin’s Emergency Medical Services.

Objectives: 

Objectives Automate scheduling Alert managers to scheduling conflicts Staffing reports Create an electronic scheduling form

Slide13: 

Monthly Schedule Overtime Trades Leave Reports Daily Schedule Payroll Procedure

No Problem.: 

No Problem. We can do that. Now the rest of the story . . .

Slide15: 

Trades Leave Reports Daily Schedule Payroll Procedure Leave Data Reassignments Callbacks City Certification State Certification Continuing Education Mandatory OT list Holdovers Sick Time Payroll Vacation Unfilled Positions Leave Accrual Overtime Per Shift Training Workload Rule OJI Leave Cap Monthly Schedule Overtime

Risk Evaluation form: 

Risk Evaluation form Goal of DFDs was to illustrate problems with lack of model requirements or routine, structured procedure. EMS realized they needed a SPIR & hired consultants.

Risk Evaluation form: 

Risk Evaluation form Items 2 c, d, e focus on size & complexity

Slide18: 

ASTA example (p.21) Managers in 3 departments received reports. The real story: Comments on p. 7 by Yolanda were not made at the 1st real meeting. The team figured out the problems later.

Slide19: 

Item 2f is related to both 2c & 2e.

Slide20: 

Users now likely to all use web browser entry. Production servers may be at single site.

Slide21: 

standardization invention-experimentation early adopters general adoption consolidation maturation obsolescence time/barriers to entry Source: Andersen Consulting, Spring 1997 (now Accenture) Item 2e: Will proposed system use stable, proven technology?

Slide22: 

standardization invention-experimentation early adopters general adoption consolidation maturation obsolescence time/barriers to entry Source: Andersen Consulting, Spring 1997 (now Accenture)

Slide23: 

standardization invention-experimentation early adopters general adoption consolidation maturation obsolescence time/barriers to entry Source of curve: Andersen Consulting, Spring 1997 (now Accenture) Source of tools in red: comments for discussion SAP ? PeopleSoft ? Oracle ERP? Visual Studio ? Oracle db? Microsoft CRM ? Siebel CRM ?

“Managing Business Risk of IT”: 

“Managing Business Risk of IT” “I think we need to prepare ourselves to be surprised, and surprised again and again.” --Tech Services manager, manufacturing company

Risk Evaluation form (figure 1,page 58): 

Risk Evaluation form (figure 1,page 58) 3rd risk factor (3 items)

Questions for your project team: 

Questions for your project team Think about your client and your team Q1: What is the answer to item 3a: Are [the developers] experienced in chosen methodology? Q2: What is the answer to item 3b: Are they skilled at determining functional requirements?

Slide27: 

Risk item 3c. Are the developers familiar with technology and information architecture [of proposed] system?

The Fashion Genie Solution: 

The Fashion Genie Solution Fitting Room Monitor Displays complementary items Consumer selects items Scan customer card and bar code Wireless handheld device receives item information Sales staff brings item in appropriate size The Magic of the Fashion Genie Increases Sales per Customer Improves Customer Experience Gathers Data on Consumer Buying Patterns An integrated system of standardized hardware and proprietary software that emphasizes functionality and usability.

Conceptual Architecture: 

Conceptual Architecture Scan Item Select Item(s) findMatches checkInventory idTargets Runner Application Product DB Inventory DB FG Data Warehouse Presentation Layer Application Layer External Application Layer Data Layer viewMatches displayStatus Scan Customer Card getCustProfile Customer Profile DB viewProfile

Risk Evaluation form (figure 1,page 58): 

Risk Evaluation form (figure 1,page 58) Reminder: this includes the “developer” who will maintain (aka enhance) the system, even if that “developer” is mainly a system user.

Risk Evaluation form (figure 1,page 58): 

Risk Evaluation form (figure 1,page 58)

Risk Evaluation for a Quoting Website and Sales Database System for Torres Insurance (Fig. 4.13, p. 252): 

Risk Evaluation for a Quoting Website and Sales Database System for Torres Insurance (Fig. 4.13, p. 252) Characteristics of the internal user (Gail Torres)

Risk Analysis Steps: 

Risk Analysis Steps Identify tasks and deliveries that are risky. Determine risk reduction strategies to lower the likelihood of each risk.

Risk Reduction Strategies for Torres Insurance (Fig. 4.14, p. 253): 

Risk Reduction Strategies for Torres Insurance (Fig. 4.14, p. 253)

Possible Risk Reduction Strategies, Fig. 4.2, p. 254 : 

Possible Risk Reduction Strategies, Fig. 4.2, p. 254

Risk Summary: 

Risk Summary All projects have risk You may not meet the criteria expected – cost/benefit, number of resources, time, etc You may not achieve established goals – functionality or scalability or commitment Risk occurs in proportion to the scope of the project The key is to identify and manage the risks.

Preliminary Investigation Step 3: 

Preliminary Investigation Step 3 Step 3. Evaluate feasibility and obtain approval to proceed Techniques 1. Goal Analysis 2. Cost/Benefit Analysis--ROI

5 Categories of Feasibility: 

5 Categories of Feasibility Organizational and Cultural Technological Schedule Resource Economic Cost/benefit analysis and ROI Sources of funds (cash flow, long-term capital) p. 253 - 256

Organizational and Cultural Feasibility: 

Organizational and Cultural Feasibility Each company has own culture New system must fit into culture Evaluate related issues for potential risks Low level of computer competency Computer phobia Perceived loss of control Shift in power Fear of job change or employment loss Reversal of established work procedures

Technological Feasibility: 

Technological Feasibility Does system stretch state-of-the-art technology? Does in-house expertise presently exist for development? Does an outside vendor need to be involved? Solutions include: Training or hiring more experienced employees Hiring consultants Changing scope and project approach

Schedule Feasibility: 

Schedule Feasibility Estimates needed without complete information Management deadlines may not be realistic Project managers: Drive to realistic assumptions and estimates Recommend completion date flexibility Assign interim milestones to periodically reassess completion dates Involve experienced personnel Manage proper allocation of resources

Resource Feasibility: 

Resource Feasibility Team member availability Conflict matrix Team skill levels Computers, equipment, and supplies Support staff time and availability Physical facilities

Economic Feasibility: 

Economic Feasibility Cost/benefit analysis (CBA) Estimate project development costs Estimate operational costs after project Estimate financial benefits based on annual savings and increased revenues Calculate CBA using complete list of costs and benefits CBA uses net present value (NPV), payback period, return on investment (ROI) techniques

Intangibles in Economic Feasibility: 

Intangibles in Economic Feasibility Intangible benefits cannot be measured in dollars Increased levels of service Customer satisfaction Survival Need to develop in-house expertise Intangible costs cannot be measured in dollars Reduced employee morale Lost productivity Lost customers or sales

Steps to Conduct Economic Feasibility: 

Steps to Conduct Economic Feasibility Identify Costs and Benefits Assign Values to Costs and Benefits Determine Cash Flow Determine Net Present Value Determine Return on Investment Return on investment = (Benefit – Cost)/Cost * 100%

Example Costs and Benefits : 

Example Costs and Benefits

Step 2. Assign Values to Costs and Benefits: 

Step 2. Assign Values to Costs and Benefits

Calculate those values over time: 

Calculate those values over time

Non-Profit ROI Example: 

Non-Profit ROI Example Assumptions for Non-Profit Client IT team (MIS 374) work donated per semester Our team consists of 5 members working 1 hour per day over a period of 90 days (the duration of our project according to our project plan) 5 team members * 90 days * 1 hour/day * $15/hour = $6750 Each team member could earn at least $15/hour at an undergraduate IT consulting internship One future team will also donate time in updating the CRM system in 2007 Donation amounts will increase by 30% yearly, while number of donation transactions will increase by 50% yearly: Year Number of donators Donation amount 2006 5 $500 2007 8 $650 2008 11 $845 2009 17 $1098.50 Cost Calculations Website registration at $10 flat fee yearly Additional server space required at $150 yearly PayPal charges $0.30 + 2.9% fee per transaction

Slide51: 

Topaz ROI

Preliminary Investigation – Review & Final step: 

Preliminary Investigation – Review & Final step Perform enterprise analysis Determine system objectives, project constraints, scope and goals Evaluate feasibility and obtain approval to proceed Conduct JAD session(s) to confirm preliminary findings

Conduct JAD session(s) to Confirm Preliminary Findings: 

Conduct JAD session(s) to Confirm Preliminary Findings Joint Application Design - Developers and Users meet Executive sponsor End user and management External users (sometimes) Development team members & management

Joint Application Design Facilities: 

Joint Application Design Facilities Conducted in special room Limit interruptions May be off-site Resources Overhead projector, white board, flip charts, work material Electronic support (Laptops) CASE tools, meeting facilitation tools

A JAD Facility: 

A JAD Facility

Joint Application Design Participants: 

Joint Application Design Participants Session leader trained in group dynamics and JAD group facilitation Knowledgeable business and system users Policy making managers Technical staff representatives to handle: Computer and network configurations Operating environments Security issues Project team members

Exercise 7 – Risk Evaluation for Latinitas Open Source Project: 

Exercise 7 – Risk Evaluation for Latinitas Open Source Project

Slide58: 

Latinitas Donation “System” – As Is

Slide59: 

Latinitas Donation System - Proposed + Volunteer & Intern Tables CRM with freeware