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Portfolio and
Project Management Collection
Timothy Kloppenborg, Editor

Information
Systems
Project
Management

David Olson
 Information Systems
Project Management

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 Information Systems
Project Management

David L. Olson
University of Nebraska—Lincoln

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Information Systems Project Management
Copyright © Business Expert Press, LLC, 2015.

All rights reserved. No part of this publication may be reproduced,

stored in a retrieval system, or transmitted in any form or by any
means—electronic, mechanical, photocopy, recording, or any other
except for brief quotations, not to exceed 400 words, without the prior
permission of the publisher.

First published in 2015 by

Business Expert Press, LLC
222 East 46th Street, New York, NY 10017
www.businessexpertpress.com

ISBN-13: 978-1-63157-122-0 (paperback)

ISBN-13: 978-1-63157-123-7 (e-book)

Business Expert Press Consumer Behavior Collection

Collection ISSN: 2156-8189 (print)

Collection ISSN: 2156-8200 (electronic)

Cover and interior design by S4Carlisle Publishing Services

Private Ltd., Chennai, India

First edition: 2015

10 9 8 7 6 5 4 3 2 1

Printed in the United States of America.

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 Table of Contents
Chapter 1 Introduction to Project Management...........................1
PART I The Human Element..................................................... 15
Chapter 2 Human Factors in Information
Systems Project Management...........................................17
Chapter 3 Project Organization........................................................31
PART II Project Adoption and Planning..................................... 41
Chapter 4 Project Selection and Approval.........................................43
Chapter 5 System Development.......................................................65
PART III Tools............................................................................. 91
Chapter 6 Estimation.......................................................................93
Chapter 7 Quantitative Project Scheduling Methods......................117
PART IV Project Completion................................................... 149
Chapter 8 Project Control and Assessment.....................................151
Chapter 9 Project Implementation..................................................169
References............................................................................................179
Index..................................................................................................181

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 Preface
This book addresses project management in the context of information
systems. It deals with general project management principles, with focus
on the special characteristics of information systems. It is based on an
earlier text,1 but shortened to focus on essential project management
elements.
An introductory chapter discusses project features in general. The ­systems
perspective provides a useful framework for project analysis. The systems view
is a concept useful for better understanding project purposes. Systems theory
is important in project management because of the unintended c­ onsequences
often encountered in projects due to complex interrelationships of system
components. By viewing projects as systems, some of these unintended con-
sequences may be anticipated, and prepared for.
Part I of the book focuses attention on the important human element
in information systems projects. Chapter 2 is new, concerning human
factors in information systems projects. Getting people to work toward
the same ends is key to the success of any group activity. Even though
information systems projects involve many technical matters, the human
element continues to be critical. Chapter 3 discusses project organiza-
tional structure. Alternative forms of organization are discussed, focusing
on those that have been successfully applied to project management. The
abilities of various alternative organizational forms to deal with project
uncertainty are discussed.
Part II discusses two processes involved in the initial project definition
stage. Chapter 4 discusses issues concerning the adoption of proposed
projects. A number of quantitative methods are demonstrated, includ-
ing multiple objective analysis. Chapter 5 discusses systems development
options.
Part III involves planning. The planning stage involves specific identi-
fication of how projects are going to be accomplished. Chapter 6 reviews
project estimation practice. Some of the quantitative methods used are
demonstrated. Chapter 7 presents and demonstrates deterministic critical
path methods, and discusses resource leveling and constraining.

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viii PREFACE

Part V deals with project implementation. Chapter 8 discusses proj-

ect control features, and means of assessing project success. Techniques
to deal with a variety of risks involved in software project development
are reviewed. Project implementation issues are examined in Chapter 9,
including detailed discussion of critical success factors.
A feature of the book is an effort to tie content to that of the Project
Management Body of Knowledge (PMBOK).2 Each chapter includes ref-
erence to how each chapter relates to the PMBOK structure.

References
1 D.L. Olson. 2004. Introduction to Information Systems Project Management
(Englewood Cliffs, NJ: McGraw-Hill/Irwin).
2 Project Management Institute. 2013. Guide to the Project Management Body of
Knowledge (PMBOK Guide) (Newtown Square, PA: PMI).

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 CHAPTER 1

Introduction to Project
Management

Almost every organization gets involved in many projects. A major

­reason projects are so important is the fast pace of change, and the
more specialized nature of modern business. Many of these projects
­involve information systems, a distinctive type of project. Firms have
to keep at least close to the cutting edge for harnessing the power of
computers in almost every aspect of business. Large accounting firms
have enlarged their information system consulting operations, and
­almost all of this type of consulting involves an information systems
project. This means that there are more and more unique activities
drawing people together from diverse locations and diverse organiza-
tions with diverse, specialized skills.
Project management has long been associated with operations
management, and is an important topic in operations management’s
curriculum. There has been an explosion of projects in the field of in-
formation systems. Information systems project management involves
some characteristics different from those found in operations manage-
ment, but many of the same tools can be applied. This is due primar-
ily to the volume of new projects to implement computer technology
that organizations have adopted. There are many useful things that
information technology can do for organizations. The information
­
technology environment involves high turnover of personnel, turbulent
work ­environments, and rapidly changing technology. This results in
high levels of uncertainty with respect to time and cost. Despite this
more volatile environment, project management principles applicable
to o­ perations management can often be transferred to the information
system environment.

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2 INFORMATION SYSTEMS PROJECT MANAGEMENT

What Is a Project?
A project involves getting a new, complex activity accomplished. Many
activities qualify as projects. Building the Golden Gate Bridge, transport-
ing the Statue of Liberty across the Atlantic, and the attempt to elect Mitt
Romney President were all major projects. So were the development of
the atomic bomb and sending men to the moon.
Each political campaign is a marketing project, just like other market-
ing projects to sell new products. You have each written a paper, which
was assigned as a “project.” These projects involved researching some
topic, and organizing ideas into a cohesive, rational whole. In football,
developing a promising young quarterback prospect is often a multiyear
project, including intensive coaching to learn the team’s offense, to learn
the style of teammates, development of leadership skills, passing tech-
nique, and building endurance and strength. What television viewers
might view as natural talent may have involved the closely planned and
coordinated activities of quite a large number of people.
Projects:

• Involve a definable purpose

• Cut across organizational lines
• Are unique activities.

Projects are purposeful, in that they are designed to accomplish some-

thing for the organization undertaking them. Projects usually cut across
organizational lines, drawing people from a variety of functional special-
ties. Constructing automobiles on an assembly line is no longer a project
once the assembly line is developed, because it becomes a closed, repeti-
tive activity that continues as long as anyone can foresee. Making a series
of sales calls is not a project, because it is not a unique activity. However,
just like the first assembly line, the first round of sales calls is a project,
until a desired level of competence is attained. Projects include:

• Constructing something
• a road, a dam, a building, an information system
• Organizing something
• a meeting, an election campaign, a symphony, a movie

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 INTRODUCTION TO PROJECT MANAGEMENT 3

• Doing anything the first time is a project

• Accomplishing a new, complex activity.

Project Characteristics

Because projects involve new activities, they typically involve high levels
of uncertainty and risk. One of the reasons assembly line operations are
efficient is that everyone does the same thing over and over, hour after
hour, day after day, year after year. This repetitiveness allows high degrees
of specialization, which in turn enables greater productivity. The activities
of many different people and machines can be balanced for maximum
­efficiency in an assembly line operation. Projects involve lower degrees
of efficiency than are obtained in assembly line operations.
Because of this higher degree of uncertainty, it is much more difficult
to estimate the level of resources required to accomplish a project than
it is for other forms of productive organizations. It is also more diffi-
cult to estimate the time required (which amounts to another resource).
Many projects are late, but not all projects take longer than estimated.
The Russian atomic bomb project was completed ahead of schedule, and
about the same time, the U.S. U-2 airplane project was finished in about
one-tenth of the estimated time. Yet, projects finished ahead of schedule
are still rare. Projects are collections of activities. If one activity is late,
other activities often have to wait for it to finish. If an activity is ahead
of schedule, those doing the work tend to be more careful, or slow down
for other reasons. Following activities often cannot start early anyway,
as the people and materials for following activities may not be available
until the originally scheduled starting time. For these and other reasons,
it is far more common for projects to be late than to be finished early.
Because of their temporary nature, projects inevitably involve gather-
ing together a diverse group of specialists to accomplish a variety of tasks.
Project team members often will not know each other very well, at least in
the beginning of the project. They will tend to be quite different people,
with different skill sets and interests. The primary feature of a project is that
it is a set of temporary activities conducted by ad hoc organizations.
Information systems projects have many similarities to generic projects.
They consist of activities, each with durations, predecessor relationships,

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4 INFORMATION SYSTEMS PROJECT MANAGEMENT

and resource requirements. They involve high levels of uncertainty and

often suffer from time and cost overruns, while rarely experiencing time
and cost underruns. However, information systems projects are different
from generic projects in some aspects. While each project is unique, there
are usually many, many replications of information system project types.
Most are served by a standard methodology, with the need to identify user
requirements, followed by design of a system, production of the system,
testing of the system, training and implementation, and ultimately main-
tenance of the system. These steps are not always serial, with many loops
back to prior stages. They involve the need for specialists in different areas
of the information system field, but these specialties are not as distinctly dif-
ferent as carpentry and electrical work. Systems analysts usually know how
to program, and testers know all of the other functions involved in a proj-
ect. Project team members from the development side usually understand
each other well. Information systems projects of course involve computers,
which is a distinct characteristic that has more impact than initially might
be apparent.

Information Systems Projects

Projects in the engineering world tend to involve a lot of uncertainty

­(especially with respect to how long they will take). But information sys-
tems projects have added levels of uncertainty. To demonstrate these dif-
ferences, let us consider four types of projects: engineering (construction),
political, movies, and information systems.
First, engineering projects involve more physical activities, while the
other three types of projects involve people creating something. It can be
argued that engineering projects are thus much easier to manage, because
scheduling is a matter of calculating physical quantities and using past
production rates to determine how long activities should take.
Second, information systems projects require specialists in differ-
ent skill sets to work together to create a software product. Movies are
similar in this respect. There may be some variety in skills needed in
political projects, but for the most part it is public relations—working
with the press to put your candidate in the best light, and get maximum

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 INTRODUCTION TO PROJECT MANAGEMENT 5

positive exposure. (Some specialists may be needed to cover up negative

­exposures.) Information systems and movies involve lots of different spe-
cialties. Movies need actors, a staff to make actors happy, camera people,
directors, grips, and lots of other things. Information systems projects
need system analysts, programmers and/or software developers, testers,
system installers, trainers, and other specialty skills.
Third, projects involving humans creating things are much more dif-
ficult to estimate, because it is more difficult to estimate how long a cre-
ative activity (like writing a bug-free code) will take. Actually, political
campaigns are more predictable because there is an end point—voting
day. Effectiveness might be hard to estimate, but duration is pretty much
given. Movies also have planned schedules, but directors may feel that
artistic creativity was lacking in scheduled shots, and insist on redoing
them. Information systems clearly involve less certainty as to duration
than the other three kinds of projects considered here.

Dimensions of Complexity

Projects can differ on a number of aspects. These include the number of

people involved, and the diversity of skills involved. Some projects are
individual efforts to accomplish something. Others, like a major military
campaign, can involve hundreds of thousands of people. The more people
that are involved, the greater the need to organize into subunits, requiring
a higher proportion of managers and thus a lower proportion of produc-
tive people. In general, the more complex the project, the more time and
resources that are required.
Group size dimensions can vary over extremes. A few examples of
projects for different sized groups, ranging from individual effort through
three general group levels, are given for comparison.
Projects can also differ on the dimensions of uncertainty. It is much
more difficult to predict how much time is going to be required the first
time you do something. Since projects are usually things done for the
first time, they usually take longer than expected when they were esti-
mated. Information systems currently are in very high demand, outstrip-
ping their supply. Another possible bias is introduced by the practice of

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6 INFORMATION SYSTEMS PROJECT MANAGEMENT

Project Size by Size of Group

Individual: A term paper is often an individual effort.
Making an oil painting of a landscape is an individual project.
Group: Organizing a wedding can be a major project for a small group
Implementing a computer system may involve a small group project
Each audit is a project conducted by auditing specialists.
Organization: Construction organizations are created to develop efficient skills
at building structures of one type or another. As each project is
completed, there is often a great deal of change in personnel,
although the organization will retain some of its people for the next
project.
Information systems consulting organizations follow a similar pattern.
Multiorganization: The space shuttle involves coordinated activities of many people.
Probably the most involved projects known to mankind are also
the most wasteful. World War II involved the radical reorganization
of entire countries, relocation of entire industries in the Soviet
Union, long marches in China, the rebuilding of entire industries in
Germany and England, and development of entire new industries in
the United States.

making initial estimates intentionally low to get work. This bias improves
the probability of getting work, which is often negotiated on a cost-plus
basis. This practice is not at all recommended, as it leads to a bad rep-
utation when initial promises are not kept. Furthermore, it has ethical
ramifications with respect to truth in advertising. An additional factor in
project lateness is that large government projects are the most commonly
reported. These projects tend to be very complex, and often run over in
time and budget. How many times have you read about a government
project of significant magnitude taking less time than estimated? Since
there is a strong correlation between time and money, late projects almost
always cost more than expected. When was the last time you heard of a
government project having a cost underrun?
General project management is a field that has developed primarily
since World War II. With more complex undertakings, many project
management principles have developed. They typically involve a cost/
time/quality tradeoff, found in almost any project. Specifically in the
­information systems field, this tradeoff can be stated as follows:

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 INTRODUCTION TO PROJECT MANAGEMENT 7

In the field of information systems, there is an old adage that you can
have any two of three things in a project. You can get it done on time,
you can get it done within budgeted cost, or you can get it done well.
If you are willing to wait, you can get the job done right within cost.
If you are willing to spend the money, you can get a good job done
quickly. Or, you can get the job done on time and within budget, with
the only reservation being that it will not perform as specified.

This adage is not presented as a recommended way to treat all

­projects. We all like to think that we can do better than anyone else, and
accomplish all three tasks. But over and over, in the fields of construc-
tion, ­government projects, and in information systems, problems in com-
pleting projects on time, within budget, and meeting specifications have
been encountered. Project management cannot be blamed for all of these
reported failures. The point is that we should understand the difficulties
involved in a project environment, seeking to understand the project as
a system so that we keep it on target with respect to accomplishing what
it is intended to do, in the most timely and efficient manner possible.
Bringing in a project on time, within budget, and meeting specifications
is tough. Project managers need to expect difficult challenges.

Modern Business

Business has grown much more complex, with interrelated currencies and
stock markets. The pace of business is at the speed of light, as stock trading
is conducted electronically, oftentimes by artificial intelligence systems.
Information technology markets are less predictable. The outputs of many
companies are tied together through just-in-time systems with dedicated
suppliers. At the output end of production, producers and retailers are
often connected through electronic data interchange. The international
aspect of business is typified by new arrangements such as GATT, NAFTA,
and the European Economic Community. The rapid pace of change has
resulted in the disappearance of many companies, age-old organizations
like the Southwest Conference, and entire countries like the Soviet Union.

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8 INFORMATION SYSTEMS PROJECT MANAGEMENT

In the rapidly changing world of business today, there is a growing

need to manage projects intelligently. Project management advanced a
great deal in the defense, aerospace, and construction industries. Tech-
niques developed for controlling the interrelated activities of many
­different ­organizations and crews can be applied to the field of informa-
tion systems, which includes many projects to install new applications, or
to tie old applications together.

Viewing Projects as Systems

Systems are collections of interrelated parts working together to accom-
plish one or more objectives. There are many systems of interacting parts
where viewing the whole tells us more than simply looking at the system’s
components. In systems, output is not simply the sum of component parts.
Components are affected by other parts of the system. System components
are affected by being in the system, and the sum of the system output is
greater than what the sum of individual outputs would have been without
being in the system. Systems are purposeful, meant to do something.

Project Management Systems

Information projects are systems. Subsystems found in project management

systems include a technical core, a control subsystem, and a project infor-
mation subsystem. The technical core includes the technical expertise and
equipment that gives the system the ability to accomplish what it needs to
do. Expertise can include systems analysis, program development, testing,
installation, and user training skills. Equipment in a broad sense can include
software, such as CASE tools and subroutines that improve productivity.
The control subsystem is the means management has to control operations.
Within an organization, this control subsystem coordinates the technical
core with the outside environment. In an institution, an example of a con-
trol subsystem is the board of directors, which approves goals and strategies
for the organization (which are usually generated by top management). In a
project management system, control includes procedures specified for spe-
cific tasks, milestones to mark completion of project phases, and the expertise
available within the project team to solve problems when they are encoun-
tered. The project information subsystem gives management measures of

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 INTRODUCTION TO PROJECT MANAGEMENT 9

how the system is accomplishing its ­objectives. Project i­nformation systems

need to record the current status of activities, list responsibilities, planned
and actual durations of activities, and cost expenditures.
The value of viewing information systems projects as systems is that
the total view of the project in light of its intended purpose is clearer.
Projects consist of many interrelated tasks, done by different people with
different skills. If each task was accomplished in isolation, many subop-
timalities would occur. Possibly specific tasks would be done faster or at
less expense if the rest of the project was disregarded, but the focus of
each member of the project team should be to accomplish project objec-
tives, and not to optimize production of specific tasks. If tradeoffs exist
between task accomplishment and project accomplishment, the systems
view makes it clear that overall project considerations come first.
Systems provide a useful framework within which to view projects. To
make projects work, project managers need to be able to anticipate the con-
sequences of planned actions. They need to develop a system organization,
through hiring and training appropriate, qualified people, within budget. They
need to be able to know who they have to deal with outside of the system, for
supplies, materials, regulation compliance, etc. They need to understand how
to measure how the project is going, and what controls are available if the
project is not going as planned. Understanding the concept of systems makes
it much easier to see the impact of the principles of project management.

Project Entities

A number of people are needed to make projects work. We have stated

that user involvement is important. One reason is that they are the c­ lient
(­stakeholders). The client paying for or controlling the project is the sponsor
(sometimes appearing in the form of a project board), causing the project to
be undertaken. Related to the sponsor is the project ­champion (sometimes
another synonym for sponsor). A project champion may not have authority,
but has influence at the budgetary authorizing level, and often serves as a
cheerleader in keeping top management support for the project high.
The project manager coordinates the efforts of people coming from
a variety of functional areas. Project managers also need to integrate plan-
ning and control costs, by assigning tasks and schedules to the members
of the project team.

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10 INFORMATION SYSTEMS PROJECT MANAGEMENT

The project team is a group of people with the required skills to

­accomplish the project. They will often come from different places
with radically different skills and backgrounds. Oftentimes these proj-
ect team members will enter the project (and leave) at different times,
making for an even greater degree of turbulence. People who work on
projects need to be very flexible, and to learn to work with a variety of
other people.
The project management system is the organizational structure used
by the project manager to get things done. The project management sys-
tem includes the information system to provide project team members
with necessary information, as coordination between groups is critical
to integrate activities. Organizational structure involves procedures to
­ensure accurate communication and completeness of activities.

The Information System Project Environment

Successful implementation has been found to require mastery of the techni-
cal aspects of systems along with understanding of key organizational and
behavioral dynamics. There has been a great deal of study of information
system project failure. Failure can arise due to failing to meet design objec-
tives. Projects also can fail with respect to time and budget constraints. Seem-
ingly successful projects may fail because their intended users do not use
them. And finally, systems may not meet the expectations of stakeholders.
Most information systems projects have been reported to be much less
successful, reflecting in part a very turbulent environment where many
changes are needed.1 Quite often, management gives up and changes
­direction. This is not always possible to do.
A great deal of study has been given to factors that lead to project suc-
cess. These factors include planning, user involvement, good communica-
tion, and sound monitoring of projects. Additional factors that repeatedly
are reported as important in information system project success include
top management support and clear statement of project objectives.
Three factors have consistently appeared as success factors in informa-
tion systems project failure. These factors, also found in general kinds of
projects, are:

DESIGN SERVICES OF
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Publishing Services
 INTRODUCTION TO PROJECT MANAGEMENT 11

Client involvement
Top management support
Clear statement of project objectives

Summary
Project management has many features different from those of repetitive
operations. These include:

• Lower degrees of efficiency

• Operating in a much less predictable market with more
rapidly changing technology
• The need to coordinate more parties and organizations
• A highly dynamic environment involving temporary tasks.

Information systems project management has its own unique features.

The market for information systems products is growing very rapidly, but
is also extremely volatile. Each year sees radical new opportunities to har-
ness computer technology to do our jobs better, and for business to be
conducted in better ways. But this means that we must constantly expect
change, and we need to keep mastering new skills.
Projects are systems consisting of interrelated parts working together
to accomplish project objectives. There are a number of important roles
within information systems projects. Project managers have to balance
technical understanding with the ability to motivate diverse groups
of people (the project team) brought together on a temporary basis.
­Managing this team requires organizing in a way that groups can coordi-
nate their diverse activities. Project champions play an important role in
obtaining organizational commitment to projects.
While there are many valuable information systems projects that have
been completed, the development environment is very difficult. Rarely do
information systems projects finish on time, within budget, and fulfill spec-
ifications simultaneously. Top management support to projects has repeat-
edly been found to be critical to information systems project success. User
groups need to be consulted to find out just what systems will be required

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Title: The Basics of Foreign Exchange Markets Short / Normal S4CARLISLE
Publishing Services
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