ch11

Principles of Information Systems,
Thirteenth Edition
Chapter 11
Strategic Planning and Project
Management
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain 1
product or service or otherwise on a password-protected website for classroom use.
Objectives
After completing this chapter, you will be able to:
State the benefits of creating a strategic plan
Identify and briefly describe the phases of a goals-based strategic
planning process
Explain what SWOT analysis is and how it is used
Identify and briefly describe the components of a strategic plan
State the purpose of the IS strategic plan
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service
or otherwise on a password-protected website for classroom use.
Objectives
After completing this chapter, you will be able to (cont’d):
Identify four drivers that set information system organizational
strategy and determine information system investments
Identify three ways the IS organization can be perceived by the
rest of the organization and discuss how that influences the IS
strategy
Discuss why project management is considered to be a core
competency for many organizations
Objectives
After completing this chapter, you will be able to (cont’d):
Identify and briefly discuss the five highly interrelated parameters
that define a project
Identify and briefly discuss the nine knowledge areas associated
with the science of project management
Strategic Planning
• Strategic planning
• A process that helps managers identify desired outcomes and formulate feasible plans
to achieve their objectives by using available resources and capabilities
• Plan must take into account that the organization and everything around it is changing
- Consumers’ likes and dislikes change
- Old competitors leave and new ones enter the marketplace
- The costs and availability of raw materials and labor fluctuate
- The degree of industry and government regulation changes
© 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service 5
Strategic Planning
• Benefits of strategic planning

• Provides a framework and a clearly defined direction to guide decision making at all
levels throughout the organization
• Ensures the most effective use is made of the organization’s resources by focusing
those resources on agreed-on key priorities
• Enables the organization to be proactive and take advantage of opportunities and
trends, rather than passively reacting to them
• Enables all organizational units to participate and work together toward
accomplishing a common set of goals
• Provides a set of measures for judging organizational and personnel performance
• Improves communication among management and the board of directors,
shareholders, and other interested parties
Strategic Planning
• Issues-based strategic planning

• Begins by identifying and analyzing key issues that face the organization, settings
strategies to address those issues, and identifying projects and initiatives that are
consistent with those strategies
• Organic strategic planning
• Defines the organization’s vision and values and then identifies projects and initiatives
to achieve the vision while adhering to the values
• Goals-based strategic planning
• The major phases in goals-based strategic planning are:
- Analyze situation
- Set direction
- Define strategies
- Deploy plan
Strategic Planning
Analyze Situation
• Most frequently used model for assessing the nature of industry competition is
Michael Porter’s Five Forces Model
Analyze Situation
• Strengths, Weaknesses, Opportunities, Threats (SWOT) matrix

• Used to analyze an organization’s internal assessment and study of its external
environment
Set Direction
• Direction-setting phase of strategic planning

• Involves defining the mission, vision, values, objectives, and goals of the organization
Set Direction
• Vision and Mission

• Senior management must create a vision/mission statement that communicates an
organization’s overarching aspirations
• Mission statement concisely defines the organization’s fundamental purpose for
existing
• Vision is a concise state of what the organization intends to achieve in the future and
should:
- Motivate and inspire
- Be easy to communicate, simple to understand, and memorable
- Be challenging and yet achievable
• Core value is a widely accepted principle that guides how people behave and make
decisions in the organization
Set Direction
Set Direction
• Objectives
• A statement of a compelling business need that an organization must meet to achieve
its vision and mission
Set Direction
• Goals
• A specific result that must be achieved to reach an objective
• Use of SMART goals have been advocated by management consultants:
- Specific
- Measurable
- Achievable
- Relevant
- Time constrained
• Example of a SMART goal:
- Reduce customer complaints about mispriced merchandise from 9 per day to less than 3 per
day by June 30
Define Strategies
• Managers draw on results of the SWOT analysis and consider the following
questions:
• How can we best capitalize on our strengths and use them to their full potential?
• How do we reduce or eliminate the negative impact of our weaknesses?
• Which opportunities represent the best opportunities for our organization?
• How can we exploit these opportunities?
• Will our strengths enable us to make the most of this opportunity?
• Will our weaknesses undermine our ability to capitalize on this opportunity?
• How can we defend against threats to achieve our vision/mission, objectives, and
goals?
• Can we turn this threat into an opportunity?
Deploy Plan
• Managers of various organizational units develop more detailed plans for

initiatives, programs, and projects that align with the firm’s objectives, goals,
and strategies
• Alignment ensures that the efforts will:
• Draw on the strengths of the organization
• Capitalize on new opportunities
• Fix organizational weaknesses
• Minimize the impact of potential threats
• The amount of effort, the process used, and the level of creativity that goes into
the creation of a business unit strategic plan can vary greatly across an
organization
Setting the Information System Organizational Strategy
• The strategic plan of the IS organization must identify technologies, vendors,

competencies, people, systems, and projects in which the organization will
invest to support the corporate and business unit objectives, goals, and
strategies
Setting the Information System Organizational Strategy
Identifying IS Projects and Initiatives
• Most organizations find it useful to classify various potential projects by type
Prioritizing IS Projects and Initiatives
• An iterative process of setting priorities and determining the resulting budget,

staffing, and timing is needed to define which projects will be initiated and
when they will be executed
Project Management
• Core competency
• Something that a firm can do well and that provides customer benefits, is hard for
competitors to imitate, and can be leveraged widely to many products and markets
• Many organizations recognize project management as one of their core
competencies
• Also see their ability to manage projects better as a way to achieve an edge over
competitors and deliver greater value to shareholders and customers
Project Variables
• Five parameters define a project:

• Scope
• Cost
• Time
• Quality
• User expectations
Project Variables
• Scope
• Project scope is a definition of which tasks are included and which tasks are not
included in a project
• A key determinant of the other project factors and must carefully be defined to
ensure that a project meets its essential objectives
• The larger the scope of the project, the more difficult it is to meet cost, schedule,
quality, and stakeholder expectations
• Cost
• Includes all capital, expenses, and internal cross-charges associated with the project’s
buildings, operation, maintenance, and support
Project Variables
Project Variables
• Time
• The timing of a project is frequently a critical constraint
• Often, projects must be completed by a certain date to meet an important business
goal or a government mandate
• Quality
• The quality of a project can be defined as the degree to which the project meets the
needs of its users
• The quality of a project that delivers an IS-related system may be defined in terms of
the system’s:
- Functionality
- Features
- System outputs
- Performance
- Reliability
- Maintainability
Project Variables
• User Expectations
• It is critical to a project’s success to identify expectations of key stakeholders and team
members
• Differences must be resolved to avoid future problems and misunderstandings
What is Project Management?
• Project management
• The application of knowledge, skills, and techniques to project activities to meet
project requirements
• Project stakeholders
• The people involved in the project or those affected by its outcome
• Project managers must apply intuitive skills that vary from project to project
• May involves salesmanship and psychology in convincing other of the need to change
• Project management uses time-proven, repeatable processes and techniques to
achieve project goals
Project Management Knowledge Areas
• According to Project Management Institute (PMI), project managers must

coordinate nine areas of expertise:
• Scope
• Time
• Cost
• Quality
• Human resources
• Communications
• Risk
• Procurement
• Integration
Scope Management
• Scope Management
• Includes defining the work that must be done as part of the project and then
controlling the work to stay within the agreed-upon scope
• Key activities include:
• Initiation
• Scope planning
• Scope definition
• Scope verification
• Scope change control
• Functional decomposition
• A frequently used technique to define the scope of an information system by
identifying the business processes it will affect
Scope Management
Time Management
• Time management includes:

• Defining an achievable completion data that is acceptable to the project stakeholders
• Developing a workable project schedule
• Ensuring the timely completion of the project
• Successful time management requires:
• Identifying specific tasks that project team members and/or other resources must
complete
• Sequencing these tasks, taking into account any task dependencies or hard deadlines
• Estimating the amount of resources required to complete each task, including people,
material, and equipment
• Estimating the elapsed time to complete each task
• Analyzing all data to create a project schedule
• Controlling and managing changes to the project schedule
Time Management
• Program Evaluation and Review Technique (PERT)

• A formal approach for estimating project duration based on three time estimates:
- The most optimistic time where everything goes right (TO )
- The most likely time given normal problems and opportunities (TM)
- The most pessimistic case where everything goes wrong (TP)
• A formula can then be applied to determine the expected time to complete a task (TE)
• Gantt chart
• A graphical tool used for planning, monitoring, and coordinating projects
• Essentially a grid lists activities and deadlines
• Work breakdown structure (WBS)
• An outline of the work to be done to complete the project
Time Management
Time Management
Time Management
Cost Management
• Cost management
• Includes developing and managing the project budget
• Involves
• Resource planning
• Cost estimating
• Cost budgeting
• Cost control
• One approach to cost estimating uses the WBS to estimate all costs associated
with the completion of each task
Cost Management
Quality Management
• Quality Management
• A set of activities designed to ensure that a project will meet the needs for which it
was undertaken
• Involves:
• Quality planning: determining which quality standards are relevant to the project
• Quality assurance: evaluating the progress of the project on an ongoing basis to
ensure that it meets the identified quality standards
• Quality control: checking project results to ensure that they meet identified quality
standards
Human Resource Management
• Human resource management

• Activities designed to make the most effective use of the people involved with a
project
• Includes:
• Organizational planning
• Staff acquisition
• Team development
• Forming-storming-norming-performing-adjourning model
• A useful model to describe how teams develop and evolve
• Project steering team

• Made up of senior managers representing the business and IS organizations
• Three key members of the steering team:
• Project champion: a well-respected manager with a passion to see the project
succeed and who removes barriers to the success of the project
• Project sponsor: a senior manager from the business unit most affected by the project
and who ensures the project will meet the needs of his/her organization
• IS manager: ensures proper IS staffing for the project and ensures the project uses
approved technology and vendors
• Subject matter expert
• Provides knowledge and expertise in a particular aspect important to the project
• Technical resource
• A subject matter expert in an IS topic of value to the project
Communications Management
• Communications management
• Involves the generation, collection, dissemination, and storage of project information
in a timely and effective manner
• Includes:
• Communications planning
• Information distribution
• Performance reporting
• Managing communications to meet the needs of the project shareholders
• Key stakeholders include:
• Project steering team, the team itself, end users, and others who may be affected by
the project
Communications Management
Risk Management
• Project risk
• An uncertain event or condition that, if occurs, has a positive or a negative effect on a
project objective
• Risk management
• A deliberate and systematic process of risk management to identify, analyze, and
manage project risks
Risk Management
• Risk owner
• Responsible for developing a risk management strategy and monitoring the project to
determine if the risk is about to occur or has occurred
Risk Management
Procurement Management
• Procurement management
• Activities related to the acquisition of goods and/or services for a project from sources
outside the performing organization
• Procurement management is divided into the following processes:
• Plan purchase and acquisition
• Plan contracting
• Request seller responses
• Select seller
• Contract administration
• Contract closure
Procurement Management
• Make-or-buy decision
• Involves comparing the pros and cons of in-house production versus outsourcing of a
given product or service
• Contract
• A legally binding agreement that defines the terms and conditions of the buyer-
provider relationship
• Contract types:
• Fixed-price contract
• Cost-reimbursable contract
• Time and material contract
Project Integration Management
• Project integration management

• Requires the coordination of all appropriate people, resources, plans, and efforts to
complete a project successfully
• Comprises seven project management processes:
• Developing the project charter
• Developing a preliminary project scope statement to define work to be done
• Developing the project management plan that describes the overall scope, schedule,
and budget for the project
• Directing and managing project execution by following the project management plan
• Monitoring and controlling the project work to meet performance objectives
• Performing integrated change control by managing changes that affect scope,
schedule, and/or cost
• Closing the project successfully by gaining stakeholder and customer acceptance
Summary
• Organizations that are more advanced in their planning processes develop

multiple-year strategic plans
• The strategic planning process for the IS organization and the factors that
influence it depend on how the organization is perceived by the rest of the
organization
• Organizations must always make a clear connection among business objectives,
goals, and projects
• Projects must be consistent with business strategies

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Principles of Information Systems,

• Benefits of strategic planning

• Issues-based strategic planning

• Strengths, Weaknesses, Opportunities, Threats (SWOT) matrix

• Direction-setting phase of strategic planning

• Vision and Mission

• Managers of various organizational units develop more detailed plans for

• The strategic plan of the IS organization must identify technologies, vendors,

• Most organizations find it useful to classify various potential projects by type

• An iterative process of setting priorities and determining the resulting budget,

• Five parameters define a project:

• According to Project Management Institute (PMI), project managers must

• Time management includes:

• Program Evaluation and Review Technique (PERT)

• Human resource management

• Project steering team

• Project integration management

• Organizations that are more advanced in their planning processes develop

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