Information Technology Project

Management
Week 2 reading and assignment
Week 2 Overview
Let's begin this week by exploring the Initiate and Research a Project section. In this section, you will understand how to get started
and what type of questions you should be asking during your research.
The Project Selection Criteria and Methods section, discusses ways to choose an IT project when an organization has more projects
waiting to be done than available resources and time.
The Project Charter section, discusses what a project charter is and what should be included in the document.
The Project Kick-off section, defines and discusses the project kick-off.

Initiate and Research a Project

Initiating the Project
Project initiation is the official start or launch of a project. Business needs identified should justify why the risk, financial expense,
and resources are necessary for the project to exist. There must be a clear business need with a financial reason, in order to initiate
a project. The business need should be linked to the goals and strategies of the organization.
Some examples of business needs are to develop projects that help to improve efficiency, increase productivity, respond to a
customer request, comply with regulations, or to update software that is no longer being supported.
The project manager must clearly understand:

How the business needs relate to the organization.

How delivering the project to the stakeholders will meet that need.

Researching the Project

The project manager needs to establish the project requirements with the stakeholders before starting any work on the project.
Stakeholders are any individuals or groups that have a vested interest in the project. Involving the stakeholders early while
researching the project and defining the project requirements is important for the success of the project.
In order to make clear what the requirements and boundaries of the project are, you can interview the stakeholders. The project
manager needs to determine how long the project will take and the steps required to reach the end result.

While researching the project and interviewing the stakeholders, some important questions are:

What is the exact result?

o

Are there any organization, industry, or government standards and regulations to consider?
o

The project sponsor must be able to allocate resources and make decisions for the success of the project.

Are there financial resources for the project?

o

Consider all aspects of the projects, including resource scheduling for an appropriate deadline.

Does the project sponsor have the necessary authority to make decisions?
o

Regulations must be followed. These can have an impact on the schedule or the end result. Standards should also
be considered along with the project requirements.

Is there a reasonable deadline for the project?

o

A project must have a clearly defined objective. Project managers should work with the stakeholders to define the
result, which stems from the objective. They should also understand what to include and what to exclude from the
project.

If there is no financial commitment in place for a project, the project cannot take place.

Is there a similar project that might overlap?

o

The project manager should check all ongoing or proposed projects to ensure that a solution is not already being
worked on.

Project Selection Criteria and Methods

Project Selection Criteria
It is important to link the project goals to corporate objectives. Not every proposed project can be undertaken, because companies
do not have unlimited funds. Most companies have an IT steering committee that reviews all proposed projects, prioritizes them, and
approves those that will best serve the company objectives and needs. Low priority projects may be deferred until another date. The
company may find some other method to solve low priority projects, or the company may simply decide the project is not worth the
investment. Following are some of the common criteria the IT steering committee uses for project selection:
Financial Return
This is usually the most important criterion for project selection. You proceed with a project only if the financial returns of your
company exceed the cost that you will incur or if the project is mandated by regulatory agencies. The return on investment (ROI) is
an important indicator to determine if you should complete the project. This will be discussed below under the Project Selection
Methods section.

Project Risk
Every project involves some degree of risk. A risk analysis should be performed on all projects, including simple and small projects.
During the life cycle of a project, unforeseen risks may arise. As the project progresses, you must assess each risk and determine
its impact on the project. Some risks you may be able to mitigate and others may be so remote that they are not likely to materialize.
In general, it is usually best to take the course of action to minimize the more serious risks. Where taking the risk is likely to result in
higher returns, corporate management must decide whether the expected higher returns are worth the risk. Project managers may
make recommendations, but they seldom make such decisions themselves.
A good example is whether to build a software tool that you need in-house or to purchase a readily available component at a more
attractive price. Because the commercial component is in use in many other organizations, it involves less risk to choose the
commercial-off-the-shelf (COTS) product. Let's discuss a few more criteria for selecting a project.
Risk Matrix
Click here to know more about risk matrix with a well stated example.
Resource Availability
Another factor in choosing how to complete a project involves, whether it will be more cost effective or timely to use your in-house IT
staff versus hiring a consulting firm.

Cost-Benefit Analysis
As its name implies, a cost-benefit analysis estimates the cost of completing a project and compares those costs to the estimated
benefits of having the proposed project in operation. Project managers must develop an expertise in estimating project costs. As
with any skill, this takes time and experience. Benefits may include input from project managers, but executive management often
completes them, because they are the experts at determining the benefits of a new or revised system
This is where the net present value theory applies. Suppose you invest $1,000 in bonds today and expect
to receive a return of 5 percent in a year. The value of $1,000 will be $1,050 after a year. This is known as
future value. This means the present value of $1,050 is $1,000.
Business by an organization always involves a cost of capital. You can calculate the present value of
future cash inflow or outflow by discounting the future value at the rate equivalent to the cost of capital for
the organization. Let's use the net present value theory to analyze the options A and B in the previous
example. If we assume that the cost of capital for the organization is 5 percent, the present value of the
outflow is $118,406.11 in option A and $116,812.22 in option B. This comparison shows that although you
spend the same amount of money in both cases, option A is more expensive, when you consider the
value of money at another point of time.
The basis of the net present value theory must be clear to you. This method is useful in complicated
projects with cash inflow and outflow at various points in time. In these cases, you use the net present
value theory to subtract the present value of all outflows from the present value of all inflow, and arrive at
the net present value of the project. The project with a higher net present value is definitely preferred.
The two methods you just reviewed may not be appropriate for every project. The strengths, weaknesses,
opportunities, and threats (SWOT) analysis is a third method that is sometimes used. A SWOT analysis is
a technique used in many fields of business management. This technique can also be used to analyze

projects to select projects whose merit is being adopted. Click here to review more information on SWOT
analysis.
Strengths are the inherent positive attributes or strong aspects of a project. For example, the use of
pretested technology and skilled and experienced team members to complete a project to develop an
information system is one of the strengths of the project. Weaknesses are the inherent negative attributes
or weak aspects of a project. Suppose a project uses a database that cannot store more than 10 GB data.
This is a weakness, because you might need a database with larger capacity.
Opportunities are the external positive factors of a project. For example, you plan to launch a special
online information service for cellular phone users to provide them with the latest information in real time.
Launching this service in a virgin market is an opportunity, because you gain significantly over your
competitors by offering this unique service. Threats are the external negative factors of a project.
Suppose, you plan to launch a software solution in a new geographical territory where several players
already operate. The existing players have a competitive edge due to their presence and familiarity
among consumers. You are likely to face threats in terms of fierce competition and strategies to oust you
from the market.
While selecting projects, you can list their SWOT and then analyze them. Select the project with relatively
more strengths and opportunities, than weaknesses and threats.

Project Charter
What Is a Project Charter?
Most projects evolve from objectives that the project sponsor defines. As the project proceeds, its objectives may gradually be
refined and modified. While this may work well for simple projects, it becomes more complicated with large, more complex projects
that have outcomes that will affect many stakeholders. In such cases, a written document describing all aspects of the project is a
necessity. This document is known as a project charter.
Elements of a Project Charter
The project charter can include a number of elements, depending on the nature of the project and organizational policies. However,
most project charters include the following elements:

Project description

Project objectives

Project's authority and project manager's authority

Project deliverables

Project Description
The project description provides a high-level description describing the reason(s) the project should be undertaken, the project

scope, the anticipated project outcomes, and the way the project will benefit the company.
Project Objectives
Project objectives are slightly more detailed to clarify the anticipated benefits of completing the project.
Project's Authority and Project Manager's Authority
Most project charters include the name of the project sponsor, the assigned project manager, and the person who authorized the
project expenditures. It is important to establish the strategic implications of a project and to establish the project manager's
authority within the organization. For example, the project charter may mention that the project manager is authorized to define
policies for safe computing practices, security from viruses, and other malicious software. This policy may supersede the existing
policies of the organization with respect to network security.
Project Deliverables
Most project charters also list broad-level project deliverables or results. For example, continuing with the example discussed earlier,
you may define the deliverables as:

An organizational policy document for safe computing practices

An antivirus software system implemented in the enterprise

Maintenance of all systems on the network

Estimated Timeline
A project charter should specify the estimated timeline for the project. You should define the duration and the start and end dates for
the project. The deadline defined for a project will help you plan a detailed project schedule, keeping in mind the requirements of the
project. For example, you authorize a one week project to implement an antivirus system on all computers in your organization.
Estimated Budget
The project charter must include the estimated budget for the project. The budget is estimated after considering the requirements,
personnel, or other resources available for the project. Estimates about the expenses during a project help you cut costs and ensure
profitability. Budget estimates must be communicated to all involved in a project. For example, you may specify that the organization
has set aside a maximum of $10,000 for implementing the antivirus software.
Project Approach and Assumptions
You may need to include a statement of the basic approach and assumptions that you will use to implement a project. For example,
you might specify that, apart from known viruses, the antivirus software must provide an update mechanism to protect the network
from new viruses and other malicious software.

Project Kick-off
What Is a Project Kick-off?
A project kick-off is a meeting or event to introduce the project and the project team. This is generally the first meeting between the

project team and the stakeholders.

Before an agreement takes place, following are the important components that are discussed in the meeting:

Project requirements

Project scope

Risks involved in the project

In this meeting:

Project stakeholders can hear the plans and project requirements and confirm that everything is correct. If the stakeholders
approve the plan, the project is approved.

The meeting helps to introduce every team member and their respective roles. The role of each stakeholder is also
addressed and expectations are made clear. At the end of the meeting, the project development team gets final
confirmation.

Who Should Attend the Project Kick-off?

Project sponsor
o

The project sponsor can start the meeting by introducing the project, discussing the project scope, and reinforcing
the value of the project.

The project sponsor can then introduce the project manager, who lets everyone know, who is in charge of the
project.

Project manager
o

Management
o

All of the managers involved in the decision should be a part of this meeting. This helps in showing their
commitment to the project and to the other team members.

Project team
o

The project manager will discuss the project, including his or her role as project manager, the goal of the project, the
objective of the project, set the tone of the project, and again discuss the value and impact, the project has for the
company.

All of the members of the project team who have already been assigned roles should attend the meeting.

Vendor
o

If it is already known who the vendor will be for the project, someone from that company can be invited.

Assignment 2: Dropbox Assignment due on Tuesday October 25, 2016

Project Charter: Developing a Corporate Website
This assignment is in continuation to the project discussed in the Dropbox assignment in Week 1.
In a 2- to 3-page Microsoft Word document, create a project charter for the project for developing a
corporate Website. The project charter should consist of detailed description of different aspects in all the
different phases of the project.
It should include the following details:

Project objective

Manager's authority

Project deliverables

Approach of the project

Support your responses with examples.

Cite any sources in APA format.
Submission Details
Name your document SU_ITS4011_W2_A2_LastName_FirstInitial.doc.
Submit your document to the W2 Assignment 2 Dropbox by Tuesday, October 25, 2016.