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This is an MIT Sloan Management Review article. It is estimated that of the $255 billion spent per year on information technology projects in the United States, more than a quarter is burned up in failures and cost overruns. Project professionals and management experts have attempted to respond to these failures by improving the formal systems related to program governance, project management, and project-related technologies. Though these new approaches have produced improved results, with more than two out of three projects continuing to disappoint, something is still missing. Suggests five crucial questions to ask to help prevent project failure; are we planning around facts, is the project sponsor providing support, are we faithful to the process, are we honestly assessing our progress and risk, and are team members pulling their weight? Examines the success of project managers who do engage in these conversations, and then lays out a plan for using them in the organization.

Open source software (OSS) is a dramatically disruptive force in the software industry. While businesses see OSS succeeding, many of them have trouble gleaning the lessons that can be learned from the OSS phenomenon, since OSS development appears to be far removed from traditional business practices and principles. A major observation resulting from research on OSS products is that OSS product development is not only enabling innovations by its users, but also providing a structure for them to back-propagate into OSS products, a process that enhances compatibility in OSS products and presents a low-cost solution to the more general problem of servicing highly segmented markets. Argues that this innovative management process carries important insights for both commercial software vendors and companies outside the software industry.

Examines the plans for a new knowledge management system at Katzenbach Partners LLC, a 150-employee management consultancy, from the perspective of the firm's managing partner. Covers both system functionality and plans for driving user adoption of the system.

Describes the history of clinical computing at Boston's Beth Israel Hospital and the development, since the 1996 merger to form the Beth Israel Deaconess Medical Center, of an information system designed to support the delivery of patient care. The hospitals' CIO, John Halamka, MD, has overseen the development of an information system that places physicians at its center. Describes the design and function of five major components of the system: the On-Line Medical Record, ePrescribing, Physician Order Entry, the Emergency Department "dashboard," and the Performance Manager. Provides students with an opportunity to identify key design principles for health care information systems, and to discuss the unique implementation challenges that the health care delivery setting raises for CIOs and CEOs.

In its eight quarters of operation, Google's internally developed prediction market has delivered accurate and decisive predictions about future events of interest to the company. Google must now determine how to increase participation in the market, and how to best use its predictions.

This case study discusses two related aspects that are becoming increasingly important in today's software development practice: re-engineering of a monolithic system into a component-based system (the focus of this case) and globally distributed work. Component-based (software) development (CBD) involves (i) the development of software components and (ii) the building of software systems through the integration of pre-existing software components (developed in-house or procured from the component market). For companies involved in software development, CBD offers agility in design by basing software development on methodologies that support the recombination of reusable components, being an approach that rapidly expands product variation and sustains the build-up of product families. It also promises significant improvements in software development through shorter time-to-market and reduced development costs. However, being an innovative approach to software development that emerged in the mid-1990s, the adoption of CBD requires companies to re-engineer existing software systems (products) or to develop new systems from scratch using component technologies and to deal with additional challenges associated with the management of CBD. LeCroy Corporation was one of the early adopters of CBD that decided to adopt CBD to gain competitive advantage in its markets. The case describes an actual situation at LeCroy Corporation, involving several decisions, challenges and opportunities faced by the managers of a globally distributed software development team over a period of time when they re-engineered a monolithic system into a component-based system.

Despite the boom in IT-enabled business process outsourcing (BPO), clients and vendors alike are struggling to grasp the impact of their relationship and the significance of the transfer of organizational assets between them. The limited attention to BPO risks is not surprising, since over 90% of the outsourcing projects handle IT infrastructure or business processes for what most companies regard as non-core activities, such as payroll, transaction processing, and billing. Provides an overview of the different types of risks that a BPO client is faced with, including the damaging impact to client companies in areas such as customer services, overall operations costs, information security, business continuity, and other short-term market performance metrics. In an attempt to address this issue, introduces a mechanism by which BPO clients and vendors can work together to solve outsourcing project management problems and manage the organizational and market performance risks.

Most firms struggle to adapt to discontinuous changes in their environment--witness Lego's very slow adaptation to the world of digital devices and online games. One key reason for this is that they get locked into established networks of relationships and struggle to break out of these relationships and establish new ones. Examines the approaches firms can use to build relationships with new prospective partners that are more suited to the opportunities and threats they face in new competitive environments. Identifies the key barriers that prevent firms from accessing these "networks for discontinuous innovation" and presents specific strategies that firms can adopt to overcome them. The challenge involves three steps: finding the right partners to engage with, forming relationships with them, and then building high-performing networks. By following the guidelines proposed, firms will be more likely to create high-performing networks for discontinuous innovation.

The chief of the Waterloo Regional Police Service was again faced with a crisis in the ongoing development of the CIMS project. It was early 2005 and he found himself again debating the future of this increasingly time-consuming and expensive project. Complicating matters now, however, was the fact that several of his partner organizations in CIMS wanted to go live with those portions of the software which had been delivered from the vendor. These organizations had been struggling with antiquated systems, and wanted to push forward with implementing the new system, despite the continuing presence of system problems. What should he do? Should he encourage those regions to wait and rethink the project or was it best to continue moving forward with those elements.

The chief of the Waterloo Regional Police Services (WRPS) found himself preparing for an important board meeting to discuss the fate of the CIMS project. Earlier that year he had recommended that the contract with ITG be canceled and negotiations toward this end were proceeding. Now the chief was faced with the task of recommending an alternative vendor and approach for completing this important project. WRPS needed to install a suitable computer-automated dispatch and record management system - key CIMS components - prior to December 31, 2005 as 2006 was the federally mandated deadline for implementing this functionality within police agencies. The chief knew that WRPS resources would be heavily tasked to meet the December 31, 2005 deadline, even if a vendor was chosen as soon as possible. The chief was well aware that a decision needed to be made regarding the best vendor to manage the next phase of the CIMS project as quickly as possible to allow WRPS and the vendor project team time to implement the required solution. The chief believed that the first step was to select the best vendor and then present the recommended solution to the board.

It had been four years since the chief of the Waterloo Regional Police Services (WRPS) met with the board to discuss critical next steps regarding vendor management for the Common Information Management System (CIMS) project. CIMS was an information systems project originally involving the WRPS and seven other police organizations. Since then, considerably more resources had been invested into the CIMS project by all stakeholders involved. The relationship with the current vendor, ITG, was growing less productive and the chief knew it was time to reassess the project to determine the best next steps toward successful project implementation. It was September 2005 and the chief found himself preparing for an important board meeting to discuss the fate of the CIMS project.

June 2005 was to bring online gambling out of the shadows and into the spotlight. PartyGaming, a start-up formed in 1997, launched a flotation (Initial Public Offering) on the London Stock Exchange that valued the firm at £4.64 billion giving it a larger market capitalisation than British Airways. PartyGaming had become the dominant player in the booming online poker market with its PartyPoker brand having over 50% market share. However, this float - as with Internet gambling in general - was not without controversy. While PartyGaming had an online gambling license from the tax haven of Gibraltar, nearly 90% of its revenue came from the United States, where the authorities viewed Internet gambling as illegal and threatened legal action. The complex operations of this truly global firm with bases in London, India, Gibraltar and Canada, the background of its founder Ruth Parasol in Internet pornography and the handling of its flotation also raised concerns from an ethical perspective, with some commentators questioning whether the float should have been allowed at all. These concerns were then confirmed as US legislation to curb online gambling was passed in September 2006, leading to PartyGaming's exit from the US market and an immediate fall of 58% in the share price. This case study analyses the entrepreneurs behind PartyGaming, its growth, the challenges it has faced, the ethical issues it poses and its future prospects. The case draws on theory from e-commerce, strategy and ethics.

This is an MIT Sloan Management Review article. In recent years, companies have developed much more sophisticated strategic measurement systems, based on such tools as the balanced scorecard, key performance indicators, computerized dashboards, and the like. Nonetheless, there seems to be a widespread consensus that they measure too much, too little, or the wrong things, and that in any event, they don't use their metrics effectively. Why? On the basis of discussions with hundreds of managers, noted management thinker, author, and professor Michael Hammer (Hammer and Co.) concludes that the operational metrics that companies commonly use make little or no sense. In the core article of this special report, "The 7 Deadly Sins of Performance Measurement and How to Avoid Them," Hammer identifies seven common mistakes--the deadly sins--that seriously impede the relevance and usefulness of operating measures. He also offers managers some means for redemption. In addition, four prominent managers--Carole J. Haney (Boeing Co.), Anders Wester (Tetra Pak Group), Rick Ciccone (Procter & Gamble Co.), and Paul Gaffney (Desktone Inc.)--comment on Hammer's thesis through the prism of their own experience in the field and offer insights from their own philosophy of performance measurement.

A CIO decides whether to adopt the "Capability Maturity Model" (CMM) within her IT department. The decision is proving surprisingly controversial; some of her best developers prefer adopting an "agile" methodological approach instead. Compares and contrasts the CMM and agile methodologies, such as Kent Beck's eXtreme Programming.

The chief executive officer (CEO) of epost is preparing for a meeting with his successor. Epost, a division of Canada Post, is in a transition and many decisions will need to be made by the successor. With the introduction of the Internet, people are using regular postal services less frequently. Epost was created to generate revenue and to provide customers the ease of paying bills electronically. In 2004, epost acquired its competitor, Webdoxs. Implementing epost posed many information technology (IT) challenges because financial and personal information is exchanged and stored, and, therefore, the service has to be reliable and secure. The CEO ponders several issues as he prepares for his meeting with his successor.

The commercial eProducts manager at Shell Canada has to determine how to improve the adoption and utilization of their eCommerce channel. eStore had been developed for the fuel and lubricants market as a pilot test of how Shell might communicate with its customers electronically, thus reducing costs. While eStore had been in place for a year, and many customers had signed up, utilization was low. A consulting firm has made recommendations about the technical issues that might be driving low utilization. The commercial eProducts manager has to consider whether the problems are purely technical and make a recommendation on how to proceed.

The information age has brought with it a host of new technologies--and an overabundance of choices. Managers are hard-pressed to figure out what all those innovations do, let alone which ones to adopt and how to implement them. Furthermore, many so-called advancements haven't lived up to expectations: Frustration, delays, and even outright failures tempt many executives to avoid dealing with IT altogether. But those who turn away are selling their companies short. Executives have three critical responsibilities when it comes to IT: They must help choose technologies, using an inside-out approach that keeps the true needs of the business in mind; smooth the adoption of those technologies, taking into account that they may encounter strong resistance; and encourage their exploitation by leveraging already standardized data and work flows. What's most important, though, is that they look beyond the individual IT projects they select to the broader picture of how IT is likely to affect the organization. Information technology can be classified into three types, each of which provides companies with a particular level of change. Function IT encompasses technologies--such as spreadsheet and word-processing applications--that streamline individual tasks. Network IT includes capabilities like e-mail, instant messaging, and blogs and helps people communicate with one another. Enterprise IT brings with it approaches such as customer resource management and supply chain management and lets companies re-create interactions between groups of workers or with business partners. Different types of technology bring about different types of organizational change, and managers should tailor their own roles accordingly. Categorizing IT in this manner can help leaders determine which technologies to invest in and how they can assist organizations in making the most of them.

Shinsei Bank was rebuilt from the ashes of a failed predecessor, and pioneered new levels of customer service in retail banking in Japan. The bank's information technology, however, was vestigial at best and not well suited to the new service models Shinsei was offering. The bank's charismatic CIO, experienced in technological change, developed a modular, flexible infrastructure based on simplicity and parity. Describes the formation of Shinsei's new IT system, and raises questions as to Shinsei's potential in selling the IT design further down the road.

Faced with the constant pressure from internal customers, who want answers to their problems on increasingly short order, based on the best possible expertise and at the lowest cost, Hydro-Quebec's IT Solutions Department (ITSD) decided to undertake a twofold structural change aimed at: 1) decentralizing the IT specialists to the IT business units; and 2) establishing a horizontal approach to knowledge management, which would allow the now decentralized specialists to maintain and develop their collective expertise remotely. This case study is written in three parts: (A) the issue that led ITSD to such a change; (B) the solution chosen; and (C) the implementation of this significant change.

Faced with the constant pressure from internal customers, who want answers to their problems on increasingly short order, based on the best possible expertise and at the lowest cost, Hydro-Quebec's IT Solutions Department (ITSD) decided to undertake a twofold structural change aimed at: 1) decentralizing the IT specialists to the IT business units; and 2) establishing a horizontal approach to knowledge management, which would allow the now decentralized specialists to maintain and develop their collective expertise remotely. This case study is written in three parts: (A) the issue that led ITSD to such a change; (B) the solution chosen; and (C) the implementation of this significant change.