Computers Risk - Computerization and Its Impacts - Lecture Slides, Slides of Applications of Computer Sciences

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Computers @ RiskTo err is humanTo blame it on the computer is even

more

…and in 1/10,000 of a second, it can compound theprogrammer’s error 87,500 times!

“There is another differencebetween software and bridgefailures - when a bridge fallsdown there is an investigationand a report written on thecause of the failure.”

Origins of Risk
^ Novelty of the product or service
^ Novelty of the technology
^ Need for speed
^ Inability to gradually phase-in the system
^ No contingency cushions
^ Inadequate user-systems staff interfacing
^ Commitment of the development team

A Record of Failures
^ More than $250 billion spent on ITapplication development each year on175,000
^ Average costs:^
^ Large-sized company project is over $2M^
^ Medium-sized company project is over$1M^
^ Small-sized company project is $450K

^ A study by the Standish Group^
^ 31% of projects are canceled beforecompletion^
^ 53% will incur cost overruns by 190%^
^ $81 billion will be spent on canceledprojects each year^
^ An additional $59 billion will be spent oncost overruns

Time Overruns Under 20%^

21%-50%^

51%-100%^

101%-200%^

201%-400%^

>400%^

Average time overrun was 130% for large-sized, 102% for medium-sized, and 139% for small-sized companies

Standish Group, 1995

Percentage of Achieved

Features Under 25%^

25%-49%^

50%-74%^

75%-99%^

100%^

Average cost overrun was 189%; 78% for large-sized, 82% for medium-sized, and 114% for small-sized companies

Standish Group, 1995

Why Projects Succeed^ User involvement

Executive management support

Clear statement of requirements

Proper planning

Realistic expectations

Smaller project milestones

Competent staff

Ownership^

Clear visions & objectives

Hardworking, focussed staff

Other^

15% Standish Group, 1995

Risk Recognition
^ Acquisition risks
^ Analysis and design risks
^ Implementation risks
^ Operation risks
^ Obsolescence risks

Analysis and Design Risks^
^ System conceptualization^
^ Requirements definition^
^ System design^
^ Hardware and software implementation^
^ Support system^
^ Analysis of system concepts and design

^ Analysis of the implementation
^ Evaluation

Pacific Gas & Electric
^ Spent “tens of millions” on a customerbilling system outsourced to IBM
^ Couldn’t handle the transaction rate andcouldn’t be adapted to the newrate/competition structure
^ Dropped and they went back to an oldersystem

Internal Revenue Service
^ Unsuccessful overhauls of the system cost$8B and lost $50B^
^ Based on possible increase collections by 3%(from 87% to 90%)^
^ Has 2,000 IRS programmers working onmodernization who are matched on a 10:1 basisby outsourcers