Building Information SystemsCIS 2200

Kannan Mohan

Department of CIS

Zicklin School of Business, Baruch College

Copyright © 2009 John Wiley & Sons, Inc. Copyright © 2009 Kannan Mohan

Learning Objectives

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• Articulate the reasons for IT project failure

• Describe different software development methodologies that are commonly used

• Identify the criteria used to select an appropriate development methodology

Software Woes…• 1983: F16 autopilot flipped plane upside

down whenever it crossed the equator

• 1985: Arthritis-therapy microwave set patient’s heart pacemaker to 214, resulting in fatal coronary

• 1987: NORAD defense radar system mistook the Moon for a hostile incoming missile

Software Woes…• 1988: Bank of America

• Spent $ 23 Million on MasterNet• A computerized accounting and reporting system

• Spent another $ 60 million to make it work and finally gave up

• Lost billions of dollars of customer accounts

Software Woes…• 1990: Vancouver Stock exchange index

rose 50% when 2 years of round-off errors in the program were corrected

• 1992: “Compatible” teller machines of 2 British banks handled leap years differently, withholding cash and confiscating cards during New Year Holiday

Recent Significant IT FailuresCompany Year Outcome

Hudson Bay (Canada)

2005 Inventory system problems lead to $33.3 million loss.

UK Inland Revenue 2004/5

$3.45 billion tax-credit overpayment caused by software errors.

Avis Europe PLC (UK)

2004 Enterprise resource planning (ERP) system cancelled after $54.5 million spent.

Ford Motor Co. 2004 Purchasing system abandoned after deployment costing approximately $400 M

Hewlett-Packard Co. 2004 ERP system problems contribute to $160 million loss.

AT&T Wireless 2004 Customer relations management system upgrade problems lead to $100M loss

Reasons?• Inaccurate understanding of end-user needs

• Inability to deal with changing requirements

• Software that is hard to maintain

• Late discovery of serious flaws

• Lack of focus on quality

Why Should We Care?

(Dennis et al, 2007) 8

Time

Comparing Software Development Methodologies

XP - Extreme Programming (Beck, 1999)

Software Development Life Cycle Costs

Requirements

Design

Implementation

Maintenance

10

Cost of Fixing Problems

0

100

200

300

400

500

600

700

800

900

Requirements Design Code DevelopmentTest

AcceptanceTest

Operation

Co

st

to f

ix

11

Software Faults

Requirements Design Construction Operation0

10

20

30

40

50

60

Errors Introduced

Errors Observed% of all faults

12

Selecting the Right MethodologyUsefulness for

Waterfall Prototyping

Throwaway Prototyping

Extreme Programming

Unclear user requirements

Poor Excellent Excellent Excellent

Unfamiliar technology

Poor Poor Excellent Poor

Complex systems

Good Poor Excellent Poor

Reliable systems

Good Poor Excellent Good

Short time schedule

Poor Excellent Good Excellent

Schedule visibility

Poor Excellent Good Good

(Dennis et al, 2007)

Project Risks

(Tiwana and Keil, 2004)

(Tiwana & Keil, 2004)

Process Maturity• SEI (Software Engineering Institute) CMMI

(Capability Maturity Model Integration)

• Maturity levels

Level Maturity

1 Initial

2 Managed

3 Defined

4 Quantitatively Managed

5 Optimizing15

Offshoring and Outsourcing

In-house Outsourced

Onshore Traditional model

Subcontractor/ third party in the same locale

Offshore

Foreign branch of the same company (captive center)

Subcontractor/third party in a foreign locale

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OffshoringDrivers

Challenges

Japanese Model of Offshoring

• Tap the stone bridge before crossing

• Expertise vs. cost

• Modularize

• Control by design

• Bridge software engineers

18

Cultural Differences

• Organizational culture• Centralized vs. decentralized decision making

• Organic vs. mechanistic

• National culture

• Power distance• Long term

orientation• Individualism/

collectivism• Uncertainty

avoidance

• Guanxi• Jugaad• Mianzi (Face)• Doctrine of Mean

Reporting Bad News

• Who do you rely on to get project status information?• Trust but verify

• When does misreporting happen?• Consider individual traits – risk propensity, work climate,

cultural differences

• Auditing to seek accurate project status? • Dysfunctional cycle of distrust, trust in supervisor

• Connection between project sponsor and propensity to report• Reducing power distance in reporting relationships

• Deaf and mum effect (Keil et al, 2014)

Summary

• What are the different software development methodologies that are commonly used?

• Why do IT projects fail?

• How do you select an appropriate methodology based on project characteristics?

• Articulate the drivers and challenges of offshoring and any variations in offshoring practices.

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