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  2. CHAPTER TWELVE OVERVIEW • SECTION 12.1 – PROJECT MANAGEMENT • Project Management • Project Management Fundamentals • Change Management Fundamentals • Risk Management Fundamentals • SECTION 12.2 – OUTSOURCING • Outsourcing • The Outsourcing Phenomenon • Outsourcing Options • Offshore Outsourcing • The Challenges of Outsourcing • Future Outsourcing Trends


  4. LEARNING OUTCOMES • Describe the three primary activities performed by a project manager • Describe the three common techniques an organization can use to select good projects • List and describe the characteristics of a well-defined project plan

  5. LEARNING OUTCOMES • Explain change management and how an organization can prepare for change • Explain risk management and how an organization can mitigate risk • Summarize the different strategies a project manager can use to ensure a successful project

  6. PROJECT MANAGEMENT • Project management – the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project • Project management software – supports the long-term and day-to-day management and execution of the steps in a project

  7. PROJECT MANAGEMENT • Project management interdependent variables

  8. PROJECT MANAGEMENT • Common reasons why IT projects fall behind schedule or fail

  9. PROJECT MANAGEMENT • Expected growth for project management software

  10. PROJECT MANAGEMENT FUNDAMENTALS • Project – a temporary endeavor undertaken to create a unique product or service • Project management – the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations

  11. PROJECT MANAGEMENT FUNDAMENTALS • Projectdeliverable – any measurable, tangible, verifiable outcome, result, or item that is produced to complete a project or part of a project • Project milestone – represents key dates when a certain group of activities must be performed • Project manager – an individual who is an expert in project planning and management, defines and develops the project plan, and tracks the plan to ensure all key project milestones are completed on time

  12. PROJECT MANAGEMENT FUNDAMENTALS • Project management role

  13. Choosing Strategic Projects • Organizations must determine which projects to pursue • Three common techniques for selecting projects • Focus on organizational goals • Categorize projects • Perform a financial analysis

  14. Choosing Strategic Projects • Techniques for choosing strategic projects • Focus on organizational goals • Categorize projects • Perform a financial analysis

  15. Setting The Project Scope • Project scope – defines the work that must be completed to deliver a product with the specified features and functions, and typically includes: • Project product • Project objectives • Project deliverables • Project exclusions

  16. Setting The Project Scope • SMART criteria are useful reminders on how to ensure that the project has created understandable and measurable objectives

  17. Managing Resources and Maintaining the Project Plan • Project plan – a formal, approved document that manages and controls project execution • A well-defined project plan should be: • Easy to understand and read • Communicated to all key participants • Appropriate to the project’s size, complexity, and criticality • Prepared by the team, rather than by the individual project manager

  18. Managing Resources and Maintaining the Project Plan • Two primary diagrams used in project planning include PERT and Gantt charts • PERT (Program Evaluation and Review Technique) chart – is a graphical network model that depicts a project’s tasks and the relationships between those tasks (Dependencies and Critical paths are found in PERT charts) • Gantt chart – a simple bar chart that depicts project tasks against a calendar

  19. Managing Resources and Maintaining the Project Plan

  20. Managing Resources and Maintaining the Project Plan • PERT Chart EXPERT – PERT Chart Example

  21. Managing Resources and Maintaining the Project Plan • MS Project – Gantt Chart Example

  22. CHANGE MANAGEMENT FUNDAMENTALS • Good project managers understand the fundamentals of project management and how to effectively deal with change management and risk management

  23. CHANGE MANAGEMENT FUNDAMENTALS • Change management – a set of techniques that aid in evolution, composition, and policy management of the design and implementation of a system • Change management system – a collection of procedures to document a change request and define the steps necessary to consider the change based on the expected impact of the change • Change control board (CCB) – responsible for approving or rejecting all change requests


  25. Preparing for Change • Three important guidelines fore effectively dealing with change management • Institute change management polices • Anticipate change • Seek change

  26. RISK MANAGEMENT FUNDAMENTALS • Project risk – an uncertain event or condition that, if it occurs, has a positive or negative effect on a project objective • Risk management – the process of proactive and ongoing identification, analysis, and response to risk factors



  29. Mitigating Risk • Actions to improve risk management capabilities • Promote project leadership skills • Learn from previous experience • Share knowledge • Create a project management culture

  30. Successful Project Management Strategies • Top five successful project management strategies • Define project success criteria • Develop a solid project plan • Divide and conquer • Plan for change • Manage project risk

  31. OPENING CASE QUESTIONSChange at Toyota • What would be the impact on Toyota’s business if it failed to implement a project management solution and managed its projects using a myriad of spreadsheets and Word documents? • Why would Opportunity, Resources, and Time & Expense Manager applications be of value to a company like Toyota? • Why would Toyota find it important to focus on implementing good project management techniques? • Why are project management, change management, and risk management critical to a global company such as Toyota?

  32. OPENING CASE QUESTIONSChange at Toyota • Why would Toyota find it important to focus on implementing solid risk management techniques? • Why would Toyota find it important to focus on implementing solid change management techniques? • Describe the ramifications to Toyota’s business if it failed to anticipate change • Explain the potential issues facing Toyota if it failed to analyze risk


  34. LEARNING OUTCOMES • Identify the three primary outsourcing options • Explain the business benefits of outsourcing • Identify the leading offshore outsourcing countries • Identify the up-and-coming offshore outsourcing countries

  35. LEARNING OUTCOMES • Identify the rookie offshore outsourcing countries • Assess the reasons for developing strategic outsourcing partnerships

  36. OUTSOURCING • Outsourcing – an arrangement by which one organization provides a service or services for another organization that chooses not to perform them in-house • This section focuses on businesses’ need to undertake every effort to re-think and re-adopt new processes

  37. OUTSOURCING • Insourcing (in-house-development) – a common approach using the professional expertise within an organization to develop and maintain the organization's information technology systems


  39. OUTSOURCING • Reasons companies outsource

  40. OUTSOURCING • Factors driving outsourcing growth include: • Core competencies • Financial savings • Rapid growth • Industry changes • The Internet • Globalization

  41. THE OUTSOURCING PHENOMENON • According to research firm IDC, the worldwide IT outsourcing market will reach $230 billion by 2009 • According to PricewaterhouseCoopers “Businesses that outsource are growing faster, larger, and more profitable than those that do not”

  42. THE OUTSOURCING PHENOMENON • Most organizations outsource their noncore business functions, such as payroll and IT

  43. THE OUTSOURCING PHENOMENON • Outsourcing growth drivers • Globalization • The Internet • Growing economy and low unemployment rate • Technology • Deregulation

  44. Outsourcing Benefits • Outsourcing benefits include: • Increased quality and efficiency • Reduced operating expenses • Outsourcing non-core processes allows focus on core competencies • Reduced exposure to risk • Service providers economies of scale, expertise, and best practices • Access to advanced technologies • Increased flexibility • Avoid costly outlay of capital funds • Reduced headcount and associated overhead expense • Reduced frustrations and expense related to hiring/retaining employees • Reduced time to market for products or services

  45. OUTSOURCING OPTIONS • Onshore outsourcing –engaging another company within the same country for services • Nearshore outsourcing – contracting an outsourcing arrangement with a company in a nearby country • Offshore outsourcing –using organizations from developing countries to write code and develop systems

  46. OUTSOURCING OPTIONS • Big selling point for offshore outsourcing “inexpensive good work”

  47. OFFSHORE OUTSOURCING • Three categories of outsourcing countries: leaders, up-and-comers, rookies

  48. The Leaders • Canada • India • Ireland • Israel • Philippines

  49. The Leaders • Canada

  50. The Leaders • India