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System Conversion: Project Management Issues

It is common knowledge that technology has become a driving focus of business success in the past few decades. Evolving technology forces businesses to choose and consistently adapt to developing better and more efficient business systems.

Let’s take a look at an example of an investment bank and its operations around reconciling institutional client funds’ cash and positions. When the bank emerged into the market, the reconciliation function was a manual. Evolving technology pushed the bank to examine the choice to automate the process, especially given increased volumes. The bank chose an existing automated reconciliation tool that was available in the market at the time. Now, in 2011, the company wants to examine ways to even further automate the increasingly complex process. One solution is to use a workflow tool that encompasses reconciliations and thus requires a conversion from the originally chosen system to the new system. The company will need to inspect two important aspects of system conversion prior to and during pursuit of the project. First, the company needs to ensure that they utilize budgeting as a decision-making and monitoring tool for the conversion. Along with budgeting, important and common project management issues must be considered and plans should be implemented to attempt to avoid the common issues that could occur.

Budgeting, or forecasting future expected financial occurrences, should be used in the system conversion as it has proven to be an effective tool for decision-making and control. Preparing and analyzing budgets around project management allows the project managers to assign decision rights while also assisting the managers in controlling behaviors on the project. Managers creating and using budgets for system conversion should incorporate support from the vendor, salaries of contractors, overtime pay for employees that will have to work longer hours on top of their daily work, costs associated with the system, additional facilities needed and any other conversion-related costs. System conversion budgeting should occur in the form of bottom-up budgeting where the hands on employees who posses knowledge create the budget and present it to upper management for approval or alteration. During the system conversion, budgeting should be regularly reviewed as system conversions are highly susceptible to changes in the project plan from internal and external events. Budgeting can also prove to be a helpful tool useful in battling the common issues that can occur during a project’s life.

There are four main categories of events that can affect a project during its life cycle; the events affect the outcome and overall success of the project. One of the most noticeable factors that can negatively affect a project’s success is the schedule. It is important to properly identify a reasonable schedule for project steps and completion based on the budget and the input of knowledge experts. During a system conversion it is specifically important to meticulously outline the schedule around movement of data from the old system to the new one. The lack of a diligently prepared schedule can cause even further delays in project completion when issues which could have been identified via input of knowledge experts end up being identified too late in the project to prevent impact on the schedule. A second factor is resources; needs should be identified by working hand in hand with the set budget. If the appropriate resources are not allocated to a project then there can be a downstream effect to timing and quality of completion. It is specifically important to outline the need for additional employee resources during system conversions if employee capacity is already met with normal business as usual duties. It is vital to identify additional resources that are required prior to the start of the project because these resources can be included in the budget. Additionally, waiting too late to add resources is counterproductive because adding new perspectives complicates the project’s original course and training adds cost to the project.

Another factor that should be taken into consideration when planning a system conversion is design quality. For example, the operational team managing the project may outline certain business needs or requirements that the technology team may not be able to provide. It is very crucial to take the design quality issue into consideration when planning a system conversion and a work around should be built. One way to decrease the possibility of design quality issues occurring is by delegating the knowledgeable employees to thoroughly outline requirements, communicate with the technology team and following up with testing. The final major factor that can affect a project’s success is process quality. During a system conversion the testing time may get shortened if earlier parts of the project are delayed. One way to ensure that a breakdown in process quality does not affect the overall project is to outline the steps of the project that are most crucial for achieving a desired outcome and then to build slack time into those steps in order to prepare for potential delays in earlier processes.

In addition to the proposed preventive measures listed above to avert the occurrence of common project management issues, budgeting is a helpful aid in ensuring project achievement. Utilizing the budget to assign decision rights assists in creating appropriate delegation to project tasks. Improved delegation will decrease the susceptibility of the project to design quality flaws because the knowledge will be driven based on the facts provided during the budgeting process. The budget will also decrease the possibility of the project falling behind in schedule and will increase the relationship between all design parties and processes by setting performance measurements around the budget. While budgeting will be helpful during system conversion, it is important to note that employing the budget for performance management may reduce quality so there should be a control built to ensure certain business needs are not forfeited to meet the financial goals. In conclusion industrious planning, including budgeting, is essential for avoiding events that prove detrimental to the system conversion project’s success.

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