Chapter 2:
Project Initiation,
Project Management &
Requirements Determination
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Objectives
Understand the importance of linking
the information system to business
needs.
Be able to create a system request.
Understand how to assess technical,
economic, and organizational feasibility.
Be able to perform a feasibility analysis.
Understand how projects are selected in
some organizations.
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Successful Projects
Cost
At project completion, no more money has
been spent than was originally allocated
Schedule
The project is delivered no later than the
original delivery date
Performance
When delivered, the project has all
features and functionality that were
originally required of it
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Why Should We Care?
Would you buy a car that only had a
28% chance of driving off the lot with
no problems?
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Recent Significant IT
Failures
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PROJECT IDENTIFICATION
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Project Identification and
Initiation
Projects are driven by business needs
Identified by business people
Identified by IT people
(better yet) identified jointly by business and
IT
The project sponsor believes in the
system and wants to see it succeed
Normally this is a business person
Should have the authority to move it forward
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Business Value
Tangible Value
Can be quantified and measured easily
Example: 2 percent reduction in
operating costs
Intangible Value
Results from an intuitive belief that the
system provides important, but hard-tomeasure, benefits to the organization
Example: improved customer service
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Elements of a System
Request
Project sponsor
Primary point of contact for the project
Business need
Reason prompting the project
Business requirements
Business capabilities the system will need to have
Business value
Benefits the organization can expect from the project
Special issues
Anything else that should be considered
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FEASIBILITY ANALYSIS
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Feasibility Analysis
Guides the organization in determining
whether to proceed with a project
Identifies the projects risks that must
be addressed if the project is approved
Mayor components:
Technical feasibility
Economic feasibility
Organizational feasibility
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Technical Feasibility
Familiarity with application
Less familiarity generates more risk
Familiarity with technology
Less familiarity generates more risk
Project size
Large projects have more risk
Compatibility
Difficult integration increases the risk
Can we build it?
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Economic Feasibility
Development costs
Annual operating costs
Annual benefits (cost savings and
revenues)
Intangible costs and benefits
Should we build it?
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Cost-Benefit Analysis
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Cost-Benefit Analysis
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Break-Even Point
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Organizational Feasibility
Stakeholders
Project champion(s)
Senior management
Users
Others
Is the project strategically aligned
with the business?
If we build it, will they come?
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PROJECT SELECTION
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Project Selection
Project portfolio management
A process that optimizes project selection
and sequencing in order to best support
business goals
Business goals are expressed in terms of
Quantitative economic measures
Business strategy goals
IT strategy goals
Once selected, projects enter the project
management process
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How Not to Select a Project
First in, first out
Political clout of project inventor
Squeaky wheel getting the grease
Any other method that does not
involve a deliberate course of action
analysis
A recent analysis found that between 2%
and 15% of projects taken on by IT
departments are not strategic to the
business.
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Review
Project Initiation
Feasibility Analysis
Project Selection
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