Costs, Benefits and Value Distribution – Ingredients for Successful Cross-Organizational ES Business Cases

This paper introduces my PhD research project on developing guidelines for creating successful business cases for Enterprise System implementations in network settings. Three important aspects that were found to be important in such business cases are: the costs, benefits and the value distribution within a network. Each of the three aspects is addressed in this paper and the relationships between them are pointed out. A research model is presented showing how all three aspects contribute to the main goal of defining successful business case guidelines

Data-driven through-life costing to support product lifecycle management solutions in innovative product development

Innovative product usually refers to product that comprises of creativity and new ideas. In the development of such a new product, there is often a lack of historical knowledge and data available to be used to perform cost estimation accurately. This is due to the fact that traditional cost estimation methods are used to predict costs only after a product model has been built, and not at an early design stage when there is little data and information available. In light of this, original equipment manufacturers are also facing critical challenges of becoming globally competitive and increasing demands from customer for continuous innovation. To alleviate these situations this research has identified a new approach to cost modelling with the inclusion of product lifecycle management solutions to address innovative product development.The aim of this paper, therefore, is to discuss methods of developing an extended-enterprise data-driven through-life cost estimating method for innovative product development

A systematic review of software development cost estimation studies

This paper aims to provide a basis for the improvement of software estimation research through a systematic review of previous work. The review identifies 304 software cost estimation papers in 76 journals and classifies the papers according to research topic, estimation approach, research approach, study context and data set. A web-based library of these cost estimation papers is provided to ease the identification of relevant estimation research results. The review results combined with other knowledge provide support for recommendations for future software cost estimation research, including: 1) Increase the breadth of the search for relevant studies, 2) Search manually for relevant papers within a carefully selected set of journals when completeness is essential, 3) Conduct more studies on estimation methods commonly used by the software industry, and, 4) Increase the awareness of how properties of the data sets impact the results when evaluating estimation methods

New product development resource forecasting

Forecasting resource requirements for new product development (NPD) projects is essential for both strategic and tactical planning. Sophisticated, elegant planning tools to present data and inform decision-making do exist. However, in NPD, such tools run on unreliable, estimation-based resource information derived through undefined processes. This paper establishes that existing methods do not provide transparent, consistent, timely or accurate resource planning information, highlighting the need for a new approach to resource forecasting, specifically in the field of NPD. The gap between the practical issues and available methods highlights the possibility of developing a novel design of experiments approach to create resource forecasting models

Double Whammy - How ICT Projects are Fooled by Randomness and Screwed by Political Intent

The cost-benefit analysis formulates the holy trinity of objectives of project management - cost, schedule, and benefits. As our previous research has shown, ICT projects deviate from their initial cost estimate by more than 10% in 8 out of 10 cases. Academic research has argued that Optimism Bias and Black Swan Blindness cause forecasts to fall short of actual costs. Firstly, optimism bias has been linked to effects of deception and delusion, which is caused by taking the inside-view and ignoring distributional information when making decisions. Secondly, we argued before that Black Swan Blindness makes decision-makers ignore outlying events even if decisions and judgements are based on the outside view. Using a sample of 1,471 ICT projects with a total value of USD 241 billion - we answer the question: Can we show the different effects of Normal Performance, Delusion, and Deception? We calculated the cumulative distribution function (CDF) of (actual-forecast)/forecast. Our results show that the CDF changes at two tipping points - the first one transforms an exponential function into a Gaussian bell curve. The second tipping point transforms the bell curve into a power law distribution with the power of 2. We argue that these results show that project performance up to the first tipping point is politically motivated and project performance above the second tipping point indicates that project managers and decision-makers are fooled by random outliers, because they are blind to thick tails. We then show that Black Swan ICT projects are a significant source of uncertainty to an organisation and that management needs to be aware of

Applying Real Options Thinking to Information Security in Networked Organizations

An information security strategy of an organization participating in a networked business sets out the plans for designing a variety of actions that ensure confidentiality, availability, and integrity of company’s key information assets. The actions are concerned with authentication and nonrepudiation of authorized users of these assets. We assume that the primary objective of security efforts in a company is improving and sustaining resiliency, which means security contributes to the ability of an organization to withstand discontinuities and disruptive events, to get back to its normal operating state, and to adapt to ever changing risk environments. When companies collaborating in a value web view security as a business issue, risk assessment and cost-benefit analysis techniques are necessary and explicit part of their process of resource allocation and budgeting, no matter if security spendings are treated as capital investment or operating expenditures. This paper contributes to the application of quantitative approaches to assessing risks, costs, and benefits associated with the various components making up the security strategy of a company participating in value networks. We take a risk-based approach to determining what types of security a strategy should include and how much of each type is enough. We adopt a real-options-based perspective of security and make a proposal to value the extent to which alternative components in a security strategy contribute to organizational resiliency and protect key information assets from being impeded, disrupted, or destroyed

Goals/questions/metrics method and SAP implementation projects

During the last years some researchers have studied the critical success factors (CSFs) in ERP implementations. However, until now, no one has studied how these CSFs should be put in practice to help organizations achieve success in ERP implementations. This technical research report attempts to define the usage of Goals/Questions/Metrics (GQM) approach in the definition of a measurement system for ERP implementation projects. GQM approach is a mechanism for defining and interpreting operational, measurable goals. Lately, because of its intuitive nature the approach has gained widespread appeal. We present a metrics overview and a description of GQM approach. Then we provide an example of GQM application for monitoring sustained management support in ERP implementations. Sustained management support is the most cited critical success factor in ERP implementation projects.Postprint (published version

Complementing Measurements and Real Options Concepts to Support Inter-iteration Decision-Making in Agile Projects

Agile software projects are characterized by iterative and incremental development, accommodation of changes and active customer participation. The process is driven by creating business value for the client, assuming that the client (i) is aware of it, and (ii) is capable to estimate the business value, associated with the separate features of the system to be implemented. This paper is focused on the complementary use of measurement techniques and concepts of real-option-analysis to assist clients in assessing and comparing alternative sets of requirements. Our overall objective is to provide systematic support to clients for the decision-making process on what to implement in each iteration. The design of our approach is justified by using empirical data, published earlier by other authors

Enterprise Systems Adoption and Firm Performance in Europe: The Role of Innovation

Despite the ubiquitous proliferation and importance of Enterprise Systems (ES), little research exists on their post-implementation impact on firm performance, especially in Europe. This paper provides representative, large-sample evidence on the differential effects of different ES types on performance of European enterprises. It also highlights the mediating role of innovation in the process of value creation from ES investments. Empirical data on the adoption of Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Customer Relationship Management (CRM), Knowledge Management System (KMS), and Document Management System (DMS) is used to investigate the effects on product and process innovation, revenue, productivity and market share growth, and profitability. The data covers 29 sectors in 29 countries over a 5-year period. The results show that all ES categories significantly increase the likelihood of product and process innovation. Most of ES categories affect revenue, productivity and market share growth positively. Particularly, more domainspecific and simpler system types lead to stronger positive effects. ERP systems decrease the profitability likelihood of the firm, whereas other ES categories do not show any significant effect. The findings also imply that innovation acts as a full or partial mediator in the process of value creation of ES implementations. The direct effect of enterprise software on firm performance disappears or significantly diminishes when the indirect effects through product and process innovation are explicitly accounted for. The paper highlights future areas of research.Enterprise Systems; ERP; SCM; CRM; KMS; DMS; IT Adoption; Post-implementation Phase; IT Business Value; Innovation; Firm Performance; Europe