Strategic Planning and project Selection a The first step in initiating projects is to look at the big picture or strategic plan of an organization Strategic planning involves determining long-term business objectives IT projects should support strategic and financial business objectives 2021/2/21 IP
2021/2/21 11 Strategic Planning and Project Selection ◼ The first step in initiating projects is to look at the big picture or strategic plan of an organization ◼ Strategic planning involves determining long-term business objectives ◼ IT projects should support strategic and financial business objectives
Why Firms Invest in IT Reason for Investing in IT Projects Rank Based on Overall Value of Projects Supports explicit business objectives 1 Has good Internal Rate of Return (irr) Supports implicit business objectives Has good Net Present Value(NPV) Has reasonable payback period Used in response to competitive systems Supports management decision making 2345678 Meets budgetary constraints High probability of achieving benefits Good accounting rate of return 10 High probability of completing project Meets technical/system requirements Supports legal/government requirement Good profitability index 12345 Introduces new technology 2021/2/21 IP
2021/2/21 12 Why Firms Invest in IT Reason for Investing in IT Projects Rank Based on Overall Value of Projects Supports explicit business objectives 1 Has good Internal Rate of Return (IRR) 2 Supports implicit business objectives 3 Has good Net Present Value (NPV) 4 Has reasonable payback period 5 Used in response to competitive systems 6 Supports management decision making 7 Meets budgetary constraints 8 High probability of achieving benefits 9 Good accounting rate of return 10 High probability of completing project 11 Meets technical/system requirements 12 Supports legal/government requirement 13 Good profitability index 14 Introduces new technology 15
4.2. 1 Identifying potential Projects Many organizations follow a plant process for selecting I project hing First develop an I strategic plan based on the organizations overall strategic plan a Then perform a business area analysis .Then define potential projects . Then select IT projects and assign resources 2021/2/21 IP
2021/2/21 13 4.2.1 Identifying Potential Projects ◼ Many organizations follow a planning process for selecting IT projects ◼First develop an IT strategic plan based on the organization’s overall strategic plan ◼Then perform a business area analysis ◼Then define potential projects ◼Then select IT projects and assign resources
IT Planning process Information Technology Results Produced Planning Stages Tie information technology strategy Information to mission and vision of organization. Technolog Identify key business areas Strategy Planning Document key business Business Area Analysis processes that could benefit from information technology. Define potential projects Project Planning Define project scope, benefits, and constraints Resource Allocation Select information technology projects Assign resources 2021/2/21 IP
2021/2/21 14 IT Planning Process
4.2.2 Methods for Selecting Projects There are usually more projects than available time and resources to implement them It is important to follow a logical process for selecting projects to work on Methods include focusing on broad needs categorizing projects financial methods weighted scoring models 2021/2/21 IP
2021/2/21 15 4.2.2 Methods for Selecting Projects ◼ There are usually more projects than available time and resources to implement them ◼ It is important to follow a logical process for selecting projects to work on ◼ Methods include ◼ focusing on broad needs ◼ categorizing projects ◼ financial methods, ◼ weighted scoring models