Assessing Risks in Two Projects: A Strategic Opportunity and a Necessary Evil

Abstract

{McFarlan's} {IT} Project Risk Assessment Framework {(Applegate,} et al., 1996), identifies three main areas of {IT} project risk: project size, project structure, and technology familiarity. According to this framework, if two {IT} projects are of similar size, a project which is designed primarily around emerging technologies will entail significantly higher risks than a project which is designed primarily around traditional technologies. This paper analyzes two comparably-sized {IT} projects. One - a telemedicine initiative at {Fletcher-Allen} Health Care in Vermont -- is designed primarily around emerging technologies. The other - the year 2000 compliance program at the New York Metropolitan Transportation Authority {(MTA)} - is focused primarily on fixing and testing existing systems on traditional platforms. Our assessment identified two additional salient criteria which, when applied to the two projects revealed higher risks at the {MTA.} These criteria are time constraints (i.e., the immovable deadline of the year 2000) and system interdependence (i.e., the need for applications to share data with other applications, both within the {MTA} and with numerous external parties). When these two factors are taken into account, it becomes evident that Year 2000 initiatives represent far higher project risks than the emerging technology projects that are considered to be on the "bleeding edge."