IT Project Planning based on Business Value Generation

IT Project Planning based on Business Value Generation

Otavio Prospero Sanchez (Sao Paulo Methodist University and Fundacao Getulio Vargas FGV/EAESP, Brazil) and Alberto Luiz Albertin (Fundacao Getulio Vargas FGV/EAESP, Brazil)
DOI: 10.4018/978-1-60566-400-2.ch011
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Abstract

In this chapter the authors investigate the management of service innovation projects; can ICT based service innovation be facilitated by traditional project management thinking? Or should the initiators strive for more interaction with users and other stakeholders, thus organizing the initiatives much looser than what the traditional project work method allows for? Building on a large survey, the authors found that ICT based service innovation was not associated with a tightly run project – focused on cost, time and quality; nor with the presence of a professional project manager. Rather, successful service innovation was found in projects where the service providing organization and the users of the forthcoming services were well integrated in the project. They discuss three alternatives to the traditional project work form model, called Integrated Classic Structure, Mutual Adaptation and TQM, and assess their potential strengths and weaknesses in service innovation, as an agenda for further experimentation and empirical research.
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Introduction

Achieving effectiveness in Information Technology (IT) projects is becoming increasingly important for organizations as market competition changes and poses threats to value creation at the firm level (Kohli & Devaraj, 2003). Recent literature has emphasized how IT deployment can improve firms’ strategic positions based on the difficulty of imitation of the combination of IT and organizational resources (Wade & Hulland, 2004); it has also underscored how rare IT resources can allow a firm to reach a sustainable position of competitive advantage (Melville, Kraemer, & Gurbaxani, 2004).

Many works have shown that the amount invested in IT has reached over 50% of the total of firms’ investments. In addition, the proportion of IT investments to net income has increased as business complexity has increased. While it is argued that the use of IT is becoming more expensive to firms as businesses’ environmental conditions increase in complexity, other streams of research have argued that it is difficult to evaluate the firm-level benefits of IT uses given the intangibility of many of those benefits.

These intangible benefits are usually associated with the business side of the firm, mainly related to market aspects, geographical presence, and customer satisfaction, among other things. In this sense, IT investment decision prioritization skills tends to become part of the job description of business executives rather than that of IT executives (Bassellier, Benbasat, & Reich, 2003; Tallon, Kraemer, & Gurbaxani, 2000).

Nevertheless, decisions about IT investment have been seen as complex and risky. In an attempt to cope with this complexity and risk, a myriad of interdisciplinary financial and non-financial techniques and methods have been used to support the prioritization processes. These include ROI, Payback, EVA, BSC, cost/benefit, transaction costs, gap analysis, etc. (Schniederjans, Hamaker, & Schniederjans, 2004). In practice, however, organizations usually deal with a number of simultaneous IT projects in a situation in which the costs tend to be more easily identified than the benefits.

Consequently, the ability of executives to identify the benefits of any specific future IT deployment is an important determinant of better investments prioritization, which constrains the possibility of delivering value and business performance. Therefore, shared knowledge between business managers and IT professionals is an important enabler of the alignment of business and IT objectives (Reich & Benbasat, 2000). Based on the above, we have observed two tendencies:

  • a.

    Business executives are required to be more involved in IT decisions because they are in a better position to evaluate an intangible, business-related parcel of benefits and,

  • b.

    IT executives are demanded to be more involved in business aspects, lowering the emphasis on exclusively technical issues (Bassellier et al., 2003).

However, executives’ perceptions of the business value generated by IT deployment is limited (Simon, 1978) because both business and IT executives lack the personal skills necessary to produce an appropriate analysis that encompasses two such diverse domains, with very different rationales (Bassellier et al., 2003; Tallon et al., 2000). Additionally, the success or failure of a firm using IT in business is only partially dependent on how deeply the executives understand the aspects involved. There are some emblematic cases of failure or even unexpectedly sound success in using IT that still require explanation. Some inconsistencies remain unexplained when the best practices are applied, but even so, there has been no IT investment effectiveness observed (Santhanam & Hartono, 2003).

Key Terms in this Chapter

IT Payoff: The extent in which a specific project generates benefits comparison to the amount invested.

Business value: Value generated and captured by the firm based on its operations.

IT Project Effectiveness: The relationship between actual value generated by the implementation and the ex-ante potential value.

EEIH (Ex-Ante Economic Inefficiency Hipotesys): The pre-existent condition for the business value generation of the IT implementation.

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Editorial Advisory Board
Table of Contents
Foreword
Robert K. Hiltbrand
Preface
Terry T. Kidd
Acknowledgment
Terry T. Kidd
Chapter 1
James W. Price Jr., Pamila Dembla
As exploratory research, the chapter’s aim is to assess if Sun-Tzu’s application of Taoist principles are applicable to the problem domain of... Sample PDF
The Tao To Understanding Enterprise It Project Complexity: Sun-Tzu's Five Factors Revisited
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Chapter 2
A. J. Gilbert Silvius
This chapter describes a study into the expected development of the competences of the project manager in the year 2027. The study was performed... Sample PDF
Project Management 2027: The Future of Project Management
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Chapter 3
Gregory J. Skulmoski, Francis T. Hartman
The purpose of this research was to investigate the soft competencies by project phase that IT project managers, hybrid and technical team members... Sample PDF
The Progression Towards Project Management Competence
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Chapter 4
Ralf Müller
This chapter addresses project managers’ leadership styles, mainly from the perspective of technology projects. It starts by defining and outlining... Sample PDF
Leadership in Technology Project Management
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Chapter 5
Melanie S. Karas, Mahesh S. Raisinghani, Kerry S. Webb
A project manager’s role on any project goes far beyond task-related deliverables. Although the project manager must be able to effectively manage... Sample PDF
The Importance of Leadership in Project Management
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Chapter 6
Jaby Mohammed
This chapter introduces the concept of technology management by objectives. Technology is one of the fastest moving elements in the 21st Century... Sample PDF
Technology Management by Objectives (TMO)
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Chapter 7
Gary Pan
The goal of any product is to be used. In a very real sense, people judge the success or failure of any product by the extent to which it is used by... Sample PDF
Examining Stakeholders' Roles in Influencing IT Project Cancellation Decisions
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Chapter 8
Daniel W. Surry
This chapter will discuss more than 20 system development life cycles (SDLC) found in the Information Technology project management arena, whereby... Sample PDF
Bringing the User into the Project Development Process
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Chapter 9
Evon M. O. Abu-Taieh, Asim A. El Sheikh, Jeihan M. Abu-Tayeh, Maha T. El-Mahied
This chapter uses the Diffusion of Innovations (DOI) theory and examines a business case, highlighting certain gaps in the theory. First, confusion... Sample PDF
Information Technology Projects System Development Life Cycles: Comparative Study
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Chapter 10
Francisco Chia Cua, Tony C. Garrett
This chapter introduces the Firm-Level Value Creation Model as a means of planning Information Systems projects based on their potential for... Sample PDF
Analyzing Diffusion and Value Creation Dimensions of a Business Case of Replacing Enterprise Systems
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Chapter 11
Otavio Prospero Sanchez, Alberto Luiz Albertin
In this chapter the authors investigate the management of service innovation projects; can ICT based service innovation be facilitated by... Sample PDF
IT Project Planning based on Business Value Generation
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Chapter 12
Bendik Bygstad, Gjermund Lanestedt
This chapter provides a framework for technology project implementation in systems where the human is an integral element of the completed project.... Sample PDF
Managing ICT Based Service Innovation
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Chapter 13
Katy E. Ellis
Project management is a carefully planned, organized effort to manage the resources in order to successfully accomplish specific project goals and... Sample PDF
Employee Preparation, Participation, and Performance
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Chapter 14
Jaby Mohammed, Ali Alavizadeh
This chapter provides a fundamental yet comprehensive coverage of quality management. Bringing managers and engineers the most up-to-date quality... Sample PDF
Quality Assurance in Project Management
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Chapter 15
Sohail Anwar
Project management is a carefully planned, organized effort to manage the resources in order to successfully accomplish specific project goals and... Sample PDF
Quality Management and Control
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Chapter 16
Dawn M. Owens, Deepak Khazanchi
Successful implementation of IT (information technology) projects is a critical strategic and competitive necessity for firms in all industrial... Sample PDF
Software Quality Assurance
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Chapter 17
Fayez Ahmad Albadri
An overwhelming number of Information Technology (IT) projects experience persistent problems and failures. This chapter reflects on some of the... Sample PDF
IPRM: The Integrated Project Risk Model
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Chapter 18
Technical Risk Management  (pages 283-294)
Pete Hylton
In today’s highly competitive industrial environment, many high-tech businesses are using Technical Risk Management (TRM) in their engineering... Sample PDF
Technical Risk Management
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Chapter 19
Lauren Fancher
IT projects across all sectors are relying on more iterative methodologies that can employ early and frequent assessment and evaluation processes in... Sample PDF
Early, Often, and Repeat: Assessment and Evaluation Methodology for Ensuring Stakeholder Satisfaction with Information Technology Projects
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Chapter 20
Chad J. Cray
Considering the high failure rate of information technology (IT) projects over the last 40 years, project managers should use all the tools at their... Sample PDF
A Needle in a Haystack: Choosing the Right Development Methodology for IT Projects
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Chapter 21
Mysore Narayanan
In this chapter, the author describes how one can implement and incorporate creative techniques to design, develop, document and disseminate a... Sample PDF
Project Management Assessment Methods
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Chapter 22
Mario Vanhoucke
It is well-known that well managed and controlled projects are more likely to be delivered on time and within budget. The construction of a... Sample PDF
Static and Dynamic Determinants of Earned Value Based Time Forecast Accuracy
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Chapter 23
Michele De Lorenzi
This chapter presents a technology exploration process designed to support service innovation for information and communication technologies in a... Sample PDF
Technology Exploration Process: From Technology to New Services
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Chapter 24
Henryk R. Marcinkiewicz
Three models structure the planning for technology integration into instruction. Institutional needs are assessed for three dimensions suggested in... Sample PDF
Planning for Integrating Technology
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Chapter 25
Michael Crow
Kansas State University has ensured greatly increased academic involvement in the implementation of its new student information system through the... Sample PDF
University Task Force Deepens Academic Involvement in ERP System
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Chapter 26
Joni A. Amorim, Carlos Machado, Rosana G.S. Miskulin, Mauro S. Miskulin
The production of quality educational multimedia content involves both its publication and its use, considering aspects ranging from metadata... Sample PDF
Production, Publication, and Use of Educational Multimedia Content in Brazil: Challenges and Opportunities in Real World Technology Projects
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Chapter 27
Hasan Tinmaz
Technology planning is an indispensable activity for all higher education institutions nowadays. The major purpose of the technology planning is to... Sample PDF
Instructional Technology Plans for Higher Education Institutions
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Chapter 28
Patricia McGee, Veronica Diaz
The rapid proliferation of e-learning tools that offer low or no cost investment and are not housed on institutional servers, has made it very... Sample PDF
Shifting from Classroom to Online Delivery
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Chapter 29
Bimal P. Nepal, Leslie Monplaisir
Original equipment manufacturers (OEMs) in automotive industry are faced with the conflicting goals of creating vehicles with higher reliability... Sample PDF
Lean and Global Product Development in Auto Industry
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Chapter 30
Debra D. Orosbullard
The business world is running at a faster pace than ever before. Globalization has partnered the world and new ways of doing business to meet... Sample PDF
Future Trends: Global Projects & Virtual Teaming
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Chapter 31
Geoffrey Corb, Stephen Hellen
Social networking technologies—such as Wikis, blogs and instant messaging—are increasingly being employed in business settings to support... Sample PDF
Wiki-enabled Technology Management
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Chapter 32
Owen G. McGrath
Higher education IT project managers have always relied on user activity data as logged in one form or another. Summarized counts of users and... Sample PDF
Mining User Activity Data In Higher Education Open Systems: Trends, Challenges, and Possibilities
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