Information Systems Project Management Decision Making: The Influence of Experience and Risk Propensity

Abstract

Managing information systems (IS) projects is a notoriously difficult task. The project manager is a crucial player in a successful IS development project. This research examines how a project manager's prior experience and risk propensity influence his or her decision making. An experiment was conducted that showed that both experience and risk propensity have significant influence on the decisions made.

Project managers’ overconfidence: how is risk reflected in anticipated project success?

“…A high percentage of projects fail to comply with project objectives (Huff and Prybutok 2008;Shepherd and Cardon 2009;Whittaker 1999). Such deviations from the project management plan are predominantly caused by risks, i.e., uncertain events or conditions that, if they occur, have a positive or negative effect on a project's objectives (Bryde and Volm 2009;PMI 2008).…”

“…Most experienced project managers are likely to have first hand experience with failed projects or missed targets, due to the occurrence of risks which impact project outcomes (Jugdev and Müller 2005;Raz et al 2002). Nevertheless, when starting projects with the goal to, for instance, optimize internal processes or create competitive advantage through innovative product development, risk taking is an inevitable prerequisite for achieving company goals (Brockman et al 2012), as there is no such thing as a risk free project (Huff and Prybutok 2008). It is widely acknowledged in project management literature that risks may have positive or negative effects on a project's objectives (Bryde and Volm 2009;Maguire and Hardy 2013;PMI 2008) and therefore may not only be a threat to project success, but also create opportunities (Teller et al 2014).…”

“…Failed projects are a major topic in academia (Shepherd et al 2011) as well as in project management magazines, blogs, and mass media (Huff and Prybutok 2008). Most experienced project managers are likely to have first hand experience with failed projects or missed targets, due to the occurrence of risks which impact project outcomes (Jugdev and Müller 2005;Raz et al 2002).…”

“…Unfortunately, this project is no isolated incident. When it comes to project management, countless examples demonstrate the human tendency to set overly optimistic plans (Buehler et al 1994;Pich et al 2002;Raz et al 2002), both in the public and private sector (Huff and Prybutok 2008;Shepherd and Cardon 2009;Whittaker 1999). However, due to the complexity inherent to many projects, it often remains difficult to determine the reasons for even obvious cases of overly optimistic project planning.…”

“…Risks are inherent in every project (Huff and Prybutok 2008) and defined as uncertain events that exert positive or negative effects on a project's objectives (Bryde and Volm 2009;PMI 2008), making risks a likely reason for deviations from the project management plan. Various studies have found that project risk management measures, including assessing the impacts of risks and the probability of them occurring, are key contributors to project success (Oehmen et al 2014;Raz et al 2002;Salomo et al 2007;Teller et al 2014).…”