2. Session Outline
How new systems produce organizational
change.
The objectives of project management and
why is it so essential
3. Systems as Planned Organizational
Change
Four kinds of structural organizational change
enabled by IT
1. Automation
Increase efficiency, replace manual tasks
2. Rationalization
Streamline standard operating procedures
3. Business process reengineering (BPR)
Analyze, simplify, and redesign business processes
4. Paradigm shifts
Rethink nature of business, define new business model, change
nature of organization
4. Systems as Planned Organizational
Change
Business process reengineering (BPR)
Large payoffs can result from redesigning business
processes
Home mortgage industry used IT to redesign mortgage application process
BEFORE: 6- to 8-week process costing $3000
AFTER: 1-week process costing $1000
Replaced sequential tasks with “work cell” or team approach
Work flow management: Process of streamlining
business procedures so documents can be moved easily
and efficiently
5. Systems as Planned Organizational
Change
Steps in effective reengineering
Determine which business processes should be improved
Must avoid becoming good at the wrong process
Understand how improving the right processes will help
the firm execute its business strategy
Understand and measure performance of existing
processes as a baseline
Even with effective BPR, majority of reengineering
projects do not achieve breakthrough gains because
of inadequate change management
6. Systems as Planned Organizational
Change
Business process management (BPM)
Helps firms manage incremental process changes
Uses process-mapping tools to:
Identify and document existing processes
Create models of improved processes that can be
translated into software systems
Measure impact of process changes on key business
performance indicators
7. Systems as Planned Organizational
Change
Business process management (cont.)
Includes:
Work flow management
Business process modeling notation
Quality measurement and management
Change management
Tools for standardizing business processes so they can be
continually manipulated
Process monitoring and analytics
To verify process performance has improved and measure impact of
process changes on key business performance indicators
8. Systems as Planned Organizational
Change
Quality management:
Fine-tuning business processes to improve quality in
their products, services, and operations
The earlier in the business cycle a problem is
eliminated, the less it costs the company
Quality improvements raise level of product and
service quality as well as lower costs
9. Systems as Planned Organizational
Change
Total Quality Management (TQM):
Achievement of quality control is end in itself
Everyone is expected to contribute to improvement of
quality
Focuses on continuous improvements rather than dramatic
bursts of change
Six sigma:
Specific measure of quality
3.4 defects per million opportunities
Uses statistical analysis tools to detect flaws in the
execution of an existing process and make minor
adjustments
10. Systems as Planned Organizational
Change
Information systems support quality improvements
by helping firms:
Simplify products or processes
Make improvements based on customer
demands
Reduce cycle time
Improve quality and precision of design and
production
Meet benchmarking standards
Benchmarking: Setting strict standards for products, services, and
other activities, and then measuring performance against those
standards
11. Managing Projects
• Project management
• Activities include planning work, assessing risk, estimating
resources required, organizing the work, assigning tasks,
controlling project execution, reporting progress, analyzing
results
• Five major variables
• Scope
• Time
• Cost
• Quality
• Risk
12. Managing Project Risk
• Very high failure rate among enterprise
application and BPR projects (up to 70% for BPR)
• Poor implementation and change management practices
• Employee’s concerns about change
• Resistance by key managers
• Changing job functions, career paths, recruitment practices
• Mergers and acquisitions
• Similarly high failure rate of integration projects
• Merging of systems of two companies requires:
• Considerable organizational change
• Complex systems projects
13. Managing Project Risk
• Controlling risk factors
• First step in managing project risk involves identifying nature and
level of risk of project
• Each project can then be managed with tools and risk-
management approaches geared to level of risk
• Managing technical complexity
• Internal integration tools
• Project leaders with technical and administrative experience
• Highly experienced team members
• Frequent team meetings
• Securing of technical experience outside firm if necessary
14. Managing Project Risk
• Formal planning and control tools
• Document and monitor project plans
• Help identify bottlenecks and determine impact of problems on
project completion times
• Chart progress of project against budgets and target dates
• Gantt chart
• Lists project activities and corresponding start and completion dates
• Visual representation of timing of tasks and resources required
• PERT chart
• Portrays project as network diagram
• Nodes represent tasks
• Arrows depict task dependencies
19. Managing Project Risk
• Increasing user involvement and
overcoming user resistance
• External integration tools consist of ways to link work of
implementation team to users at all organizational levels
• Active involvement of users
• Implementation team’s responsiveness to users
• User resistance to organizational change
• Users may believe change is detrimental to their interests
20. Managing Project Risk
• Strategies to overcome user resistance
• User participation
• User education and training
• Management edicts and policies
• Incentives for cooperation
• Improvement of end-user interface
• Resolution of organizational problems prior to
introduction of new system
22. Managing Global Project Risk
• Strategy when building international systems
1. Understand global environment
• Business drivers pushing your industry toward global competition
• Inhibitors creating management challenges
2. Develop corporate strategy for competition
• How firm should respond to global competition
3. Develop organization structure and division of labor
• Where will production, marketing, sales, etc., be located
4. Consider management issues
• Design of business procedures, reengineering, managing change
5. Consider technology platform
23. Managing Global Project Risk
• Challenges and obstacles to global
business systems
• General cultural challenges
• Cultural particularism
• Regionalism, nationalism, language differences
• Social expectations:
• Brand-name expectations, work hours
• Political laws
• Transborder data flow
• Transborder data and privacy laws, commercial regulations
24. Managing Global Project Risk
• Challenges and obstacles to global business systems (cont.)
• Specific challenges
• Standards
• Different EDI, e-mail, telecommunication standards
• Reliability
• Phone networks not uniformly reliable
• Speed
• Different data transfer speeds.
• Personnel
• Shortages of skilled consultants
25. Managing Global Project Risk
• Global strategies and business organization
• Three main kinds of organizational structure
• Centralized: In the home country
• Decentralized/dispersed: To local foreign units
• Coordinated: All units participate as equals
• Four main global strategies
• Domestic exporter
• Multinational
• Franchisers
• Transnational
26. Managing Global Project Risk
BUSINESS
FUNCTION
DOMESTIC
EXPORTER
MULTINATIONAL FRANCHISER TRANSNATIONAL
Production Centralized Dispersed Coordinated Coordinated
Finance/
Accounting
Centralized Centralized Centralized Coordinated
Sales/
Marketing
Mixed Dispersed Coordinated Coordinated
Human
Resources
Centralized Centralized Coordinated Coordinated
Strategic
Management
Centralized Centralized Centralized Coordinated
27. Managing Project Risk
• Project management software
• Can automate many aspects of project management
• Capabilities for
• Defining, ordering, editing tasks
• Assigning resources to tasks
• Tracking progress
• Microsoft Project
• Most widely used project management software
• PERT, Gantt charts
• Critical path analysis
• Product Guide wizards
• Enterprise Project Management Solution version
