CRISIS IT In May 2007, Frontier Airlines Holdings hired Gerry Coady as chief information officer (CIO). Nearly a year later the airline filed for bankruptcy under Chapter 11. In an interview, Coady describes how he managed IT projects during the bankruptcy and recession crisis of 20082009. Fundamentally, Coady faced a situation of too many projects and too few resources. Coady used a strategy of focusing on reducing the number of projects in the portfolio. He put together a steering committee of senior management that reviewed several hundred projects. The end result was a reduction to less than 30 projects remaining in the portfolio. How Can You Get to a Backlog of over 100 Projects? There are never enough resources to get everything done. Backlogs build over time. Sacred cow projects get included in the selection system. Projects proposed from people who have left the airline still reside in the project portfolio. Non-value-added projects somehow make their way into the project portfolio. Soon the queue gets longer. With everyone in IT working on too many projects concurrently, project completion and productivity are slow. Which Projects Remain? To cut the number of projects, the steering committee used a weighting scheme that reflected the airlines priorities, which were: fly safe, generate revenue, reduce costs, and customer service. The weighting scheme easily weeded out the fluff. Coady noted that by the time you get to the 20s the margin of differentiation gets narrower and narrower. Of the remaining projects, project sponsors had to have solid justification why their project is important. Reduction of the number of projects places emphasis on high value projects. What Advice Does Coady Have for Crisis Management? In times of crisis, it is easier to take bold steps to make changes. But you need to have a clear vision of what you should be focusing on with the resources available. Coady suggests, It comes back to really having a good idea of what the initial business case for a project is and what resources it is consuming, both people and otherwise. Source: Worthen, B., Crisis IT, The Wall Street Journal, April 20, 2009, p. 6.

Question 2

2.1.To cut the number of projects, the steering committee used a weighting scheme that reflected the airlines priorities, which were: fly safe, generate revenue, reduce costs, and customer service. The weighting scheme easily weeded out the fluff. Use a weighted scoring model to help the committee choose between two projects: Booking System Upgrade and Cabin Crew Retraining. The relative weights for each criterion and the assessment of each project for these criteria are shown in the following table. Which project would you choose and why?

2.2.Briefly present to the senior management the limitations of using the weighted scoring model (weighting scheme).

2.3.Due to the limitations of the weighted scoring model (weighting scheme), briefly discuss how Coady can use the following financial models for project selection. 1. Net Present Value

2. Payback Analysis

(Assume 10 represents the preferred score and 1 represents the undesired score.) - Use the template provided (Please note template is available in the online answer booklet) (Assume 10 represents the preferred score and 1 represents the undesired score.) - Use the template provided (Please note template is available in the online answer booklet)