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Chapter 14 Managing Projects 567

FIGURE 14.3 A SYSTEM PORTFOLIO

Companies should examine their portfolio of projects in terms of potential benefits and likely risks.
Certain kinds of projects should be avoided altogether and others developed rapidly. There is no ideal
mix. Companies in different industries have different profiles.

assets, better alignment of IT investments with business objectives, and better
organization-wide coordination of IT investments (Jeffrey and Leliveld, 2004).

SCORING MODELS

A scoring model is useful for selecting projects where many criteria must
be considered. It assigns weights to various features of a system and then
calculates the weighted totals. Using Table 14.2, the firm must decide among
two alternative enterprise resource planning (ERP) systems. The first column
lists the criteria that decision makers will use to evaluate the systems. These
criteria are usually the result of lengthy discussions among the decision- making
group. Often the most important outcome of a scoring model is not the score
but agreement on the criteria used to judge a system.
Table 14.2 shows that this particular company attaches the most importance
to capabilities for sales order processing, inventory management, and ware-
housing. The second column in Table 14.2 lists the weights that decision
makers attached to the decision criteria. Columns 3 and 5 show the percent-
age of requirements for each function that each alternative ERP system can
provide. Each vendor’s score can be calculated by multiplying the percentage
of requirements met for each function by the weight attached to that function.
ERP System B has the highest total score.
As with all “objective” techniques, there are many qualitative judgments
involved in using the scoring model. This model requires experts who
understand the issues and the technology. It is appropriate to cycle through
the scoring model several times, changing the criteria and weights, to see how
sensitive the outcome is to reasonable changes in criteria. Scoring models are
used most commonly to confirm, to rationalize, and to support decisions, rather
than as the final arbiters of system selection.

14.3 ESTABLISHING THE BUSINESS VALUE OF
INFORMATION SYSTEMS

Even if a system project supports a firm’s strategic goals and meets user
information requirements, it needs to be a good investment for the firm. The

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