A&D HIGH TECH (A) MANAGING PROJECTS FOR SUCCESS Case Study #1 Report

downloaded from

Scholarfriends

https://scholarfriends.com Downloaded by: writerforacademic@gmail.com | https://scholarfriends.com/singlePaper/315199/ad-high-tech-a-managing-projects-forsuccess-case-study-1-report Distribution of this document is illegal.

A&D HIGH TECH (A) MANAGING PROJECTS FOR SUCCESS Case Study #1 October 9, 2018

Submitted by: Habin Haridas & Chrissy Rossiter

Table of Contents Executive Summary

2

Problem Identification A&D Case Background Literature Review

3 3 4

Analysis of Facts Findings from the Project Management Plan Schedule Cost Risk Management

5 5 5 6 6

Solution Development

7

Findings and Managerial Recommendations

7

Conclusion

8

References

8

Appendices

10

1

Executive Summary A&D High Tech is in the computer products, accessories, and services business. Their predominant sales channel is retail outlets in shopping malls and phone orders. A&D requires an online sales channel as their products are reaching commodity status and to remain competitive they need to reduce costs in SG&A expenses.

A&D decided to build the online store in-house, which will provide them customization, a competitive edge, and control over the system. The online store requirements include new orders, add-on orders, order amends, order status, and lead capture with additional capabilities.

Chris Johnson, Technology Project Manager at A&D High Tech, was been selected by the CEO of A&D, Ted Walter, among other executives at the company to takeover a high priority project with a fixed deadline as the current project manager had to step away from the lead role. Johnson needs to provide a recommendation to the steering committee for the direction of the project containing strong facts and problems identified.

Using Microsoft Project, we created a project management plan, visualize the project’s resource usage, and created a project schedule. This revealed the project duration to be 127 days, finishing on November 19 prior to the Christmas deadline.

Creation of a risk management plan revealed the project to be high risk and outlined the major issues that could prevent the project from being completed in time. These include the timely and complex infrastructure setup and the heavy reliance on subcontractors. We determined that those issues could be reduced through increasing internal staff for the infrastructure and better scope planning and communication documents for the subcontractors.

Recommendations for the steering committee are as followed: Adding more experienced infrastructure support resource to reduce the risk and time required, creating an internal communications plan to reduce risk of underperforming or under-utilised resources, using multiple suppliers to reduce the risk of supplier not meeting expectations and using customer feedback on the prototype to reduce the risk of incorrect scope and changes in scope.

By reducing/removing the risks associated with quality and schedule A&D is doing all that they can to respond to the external threat of competitors maintain their position in the market.

2

Problem Identification A&D High Tech is experiencing tough competition and decreasing margins, losing market share to competitors as they operate at higher SG&A costs. Their products are becoming commoditized and maintaining the position as a market leader requires the business to reduce their costs and increase their sales. This problem is significant to the entire organization and is being addressed by the CEO, CIO, VP of E-Business, VP of Sales, among others.

For A&D to regain their competitive advantage it needs to start selling online and adapt to the external technological changes while maintaining their position as the friendly and customer-focused offering. And A&D need to have the online store ready before the holiday season. Johnson is responsible for taking the information gathered during the initiation phase and determining how to best undergo the project.

Data Collection To evaluate the quantitative data provided in the case, Microsoft Project was used to create a project management plan, visualize the project’s resource usage, and create a project schedule. This enabled the analysis of the project completion timeline, its feasibility, risks & mitigations, and accommodating for scope changes. Furthermore, secondary research from the case and obtained from outside sources aided in solution development and recommendations for the project.

A&D Case Background Founded in 1988 by Ted Walter, A&D High Tech sells computer products, accessories, and services to consumers and businesses (Jeffery, Yung, & Gershbeyn, 2017). In the early days, the company embodied friendly customer service and innovative product distribution, bringing them substantial revenues for a decade. Prior to 1999 A&D sales orders were manually recorded at a call centre using erroneous processes. The company recognized the disparity between their customer call-backs and their competitors and responded by implementing an enterprise resource planning system. This integration was a success and A&D attained the leading callback rate in the industry, seeing benefits in reduced costs and ROI in the supply chain and data warehousing projects (Jeffery, Yung, & Gershbeyn, 2017).

3

In 2002 following the decision to build an online store the company was faced with the decision to build or buy the application (Jeffery, Yung, & Gershbeyn, 2017). Purchasing a commercial application would be lower in cost if requiring minimal modifications, however it is unlikely that the program would work to A&D’s specifications. A custom-build would ensure they had exactly what they needed but could take longer to build and be expensive. The key determinants of the final decision to build were the unknown risks and costs of a commercial software application as well as the potential edge and benefits a custom solution could provide the firm (Jeffery, Yung, & Gershbeyn, 2017).

Information on planning tasks for the project was attained by the six-person crossfunctional team for building the website. Senior management required a minimum set of business requirements for the online store including new orders, add-on orders, order amends, order status, and lead capture with its own set of specifications (Jeffery, Yung, & Gershbeyn, 2017). It was determined by the team that the online store would have no impact on existing activities as the application serves as its front. What will be required is support for system errors in the IT support procedures. The team noted that all software licenses are in-house, therefore no costs were incurred procuring software for the online store’s technical architecture. The physical infrastructure, however, would entail the purchasing of twelve Windows 2000 workstations (at $3,000 each) and five Windows 2000 servers (at $12,500 each) (Jeffery, Yung, & Gershbeyn, 2017). Furthermore, the team created a user interface and application flow prototype which was approved as a mock-up for building the online store by A&D’s VP’s of sales and marketing. The project WBS, task estimates, project resources and scheduling were prepared by Robertson’s team. It was determined that there were no developers available internally for the project therefore a contracting company, Geneva, was selected to staff these positions.

Literature Review The IT industry has an abundance of risk factors threatening the success of project implementation. In 2004 it was estimated that only 28% of software development projects were successful and 51% of projects completed were over-budget, behind schedule, or containing fewer functions than originally specified (Tesch, Kloppenborg, & Frolick, 2007).

The success of any software development project is within effective project management, including the need for formal assessment of risks, benefits, and viability of projects prior to

4

contractual agreement (Tesch, Kloppenborg, & Frolick, 2007). The PMBOK Guide defines Project Risk Management as "the processes concerned with conducting risk management planning, identification, analysis, responses, and monitoring and control on a project" (PMBOK Guide, 2013). Some of the top-rated risks in a project include scheduling, scope, and personnel/staffing (Tesch, Kloppenborg, & Frolick, 2007). PMBOK describes risk avoidance and mitigation techniques to respond to risks identified in planning. For scheduling, artificial deadlines and having a user lead the project create risks for the project’s success (Tesch, Kloppenborg, & Frolick, 2007).

To mitigate these risks it is suggested by Tesch et al. that a phased approach to planning is used, clearly communicate schedule risks while re-evaluating plans on an on-going basis, and finally getting the customer to commit to limiting the project. They mention that a lack of people with the right skills available can be mitigated by reducing the scope if you cannot add sufficient staff, obtain temporary resources, and reassign people. When the project is not based on a business case or objectives are unclear it is likely for the scope and requirements to creep (Tesch, Kloppenborg, & Frolick, 2007). Tesch et al. claims that the business case, piloting prior to full rollouts, and seeking alternative approaches can reduce the scope risk factors. Risk management activities are beneficial in better estimating the required resources for performing a task (Ropponen and Lyytinen, 1997)

Analysis of Facts Findings from the Project Management Plan Using the WBS, case information, and secondary research analysis of the project management plan was conducted, uncovering facts and issues within it.

Schedule With a project start date of May 26 2003 the completion date is expected to be November 19 2003, a duration of 127 days (See Appendix C). The task sheet created in the project management plan (See Appendix C) revealed the technical infrastructure as 104 days in duration, the longest in the project. This is a complex set up being built from scratch mostly by a single

5

resource, Rick Burke Infrastructure Lead. Noted in the case is that the project deadline is a fixed constraint.

Cost When considering the resource schedules and their associated costs the estimated total project cost is over $940,000 (See Appendix B). Total labour costs are estimated at an approximate $476,000 which doesn’t include associated overhead expenses (See Appendix B).

The materials will cost $98,500 and the subcontractors approximately $367,000 (See Appendix B). The management at A&D made clear that the project is high priority and that budget is not a constraint.

Risk Management The roles and responsibilities of the risk management plan pertain to the steering committee, Chris Johnson, and the project team (See Appendix A). The project risks were identified using a risk breakdown structure (See Appendix A). High risks in the project include the following: ● The subcontractor Geneva was still identifying the actual resources needed. Risk of underskilled or unmotivated resources and risk of delay in identifying and onboarding resources. ● Dependency on external contractor since there are no internal resources available to complete the project. ● Requirements -- Incomplete business requirements and scope creep. ● Complex technical architecture for the fixed deadline. ● Too many critical paths in the project. Slippage on any would affect the project completion date. ● Communicating -- Project resources not understanding the objectives of the project and their role.

By addressing the high project risks it can be determined if the project is worth pursuing and how to best pursue it.

6

Solution Development Recalling from the literature review, success from any project is all the ability to manage the project. Planning for issues to occur, communicating schedule risks and continually reevaluating plans are all key aspects in project management success.

A&D has undergone the initiation phase of the project and are at a pivotal moment in company history. Going through the project management plan it is revealed that the project can move forward in attempting to make the Christmas deadline, however there is little room for change in the deadline or quality. It is therefore imperative for the project’s success that the issues related to quality and schedule are mitigated. The two issues in the project mentioned in the previous section are the timely infrastructure setup and the heavy reliance on contractors.

The infrastructure setup takes the longest as it is complex and understaffed. Involving internal infrastructure support staff with experience would help mitigate this risk. Rick Burke was assigned to this but adding an additional resource would help reduce risk drastically. Adding more expert resources to critical tasks and accelerating longer tasks earlier on can help mitigate this risk.

Dependency on an external contractor due to a lack of internal resources has numerous associated risks such as underskilled resources or a lack of communication delaying the project.

An option is to manage the supplier relationship actively by properly documenting and communicating the scope, as well as getting involved in the screening and selection process.

Using multiple-suppliers would drastically reduce this risk. As a high priority project with buy-in from management seeking internal resources from other departments or project teams would help mitigate this risk. Setting up a good internal communication plan would help with communication issues.

Findings and Managerial Recommendations The significantly prioritized nature of the proposed project at A&D is high risk but a necessary response by the company to external forces on the business. With the current project plan the project is expected to be completed by 19th November. Which is well before the Holiday season. Hence the plan meets the main objective mandated by the project sponsors.

7

However, this possible under the understanding that there are no scope creeps, or technical issues stalling the development. And to ensure that the following are recommended.

Using customer feedback on the prototype would help reduce the risk of incorrect scope and any changes in scope. The use of a contractor is one of the key risks the project faces, and the fact they still have not identified the key resources who are going to work on a major chunk of the software development of the project is extremely risky. Using multiple suppliers would help reduce the risk of supplier not meeting expectations. Also analysing the project plan has revealed that only a single internal resource was assigned to work on the infrastructure setup for the project. This is very risky and inefficient. Finding an additional resource through other channels for this would help reduce the time taken and reduce the risk of losing the sole resource of other reasons. Creating an internal communications plan would help reduce risk of underperforming or un-utilised resources. This plan will outline the procedures for maintaining on-going communication throughout the project cycle.

Conclusion As discussed in the literature reviews, IT projects have numerous risks that are challenging to address and mitigate. Despite being a high risk project it is in the best interest of A&D High Tech to undergo the project. The risk of consequences they will face by not responding to the changing market is evidently high as the project is the highest priority and ideally should not carry a baseline budget.

The project deadline is fixed and crucial to its success, therefore planning and strategizing to reduce task durations and mitigate schedule and quality risks is Chris Johnson’s next move forward.

8

References Jeffery, M., Yung, D., & Gershbeyn, A. (2017). A&D High Tech (A): Managing Projects for Success. Kellogg School of Management Cases, 1(1), 1-20. doi:10.1108/case.kellogg.2016.000008

Project Management Institute. (2013). A Guide to the Project Management Body of Knowledge (Fifth Edition)

Ropponen, J., & Lyytinen, K. (1997). Can software risk management improve system development: An exploratory study. European Journal of Information Systems, 6(1), 4150. doi:10.1038/sj.ejis.3000253

Tesch, D., Kloppenborg, T. J., & Frolick, M. N. (2007). IT PROJECT RISK FACTORS: THE PROJECT MANAGEMENT PROFESSIONALS PERSPECTIVE. The Journal of Computer Information Systems, 47(4), 61-69. Retrieved from https://search-proquest-com.qe2aproxy.mun.ca/docview/232575798?accountid=12378

9

Appendices

10

Appendix A: Risk Management Plan Risk Management Plan 1) Roles and responsibilities a) Steering Committee (Ted Walter, CEO; Matt Webb, CIO; Jeff White, VP Sales): Oversee risk management activity for the project i) Approve risk management plan ii) Ensure risk register is established with details of the mitigation actions taken iii) Review risk management reports and take decisions on recommendations b) Project Manager (Chris Johnson): Execute effective risk management practices for the project i) Create and implement risk management plan ii) Review and identify key risks throughout the project duration iii) Develop strategies to manage identified risks iv) Monitor risks identified throughout the project lifecycle v) Create regular reports for management c) Project Team: i) Assist project manager in the risk management process.

2) Risk Identification a) We could use the risk breakdown structure to identify potential project risks as below:

11

1.1 Requirements -- Incomplete business requirements and scope creep 1.2 Technology 1.2.1 Integration with JD Edwards -- The project could get stalled if integration with JD Edwards is faced with technical challenges 1.2.2 Inaccurate system design could make the website crash with high traffic 1.2.3 Impact on current processes 1.3 Complexity and interfaces 1.3.1 Prototype designed with no user input. User friendliness could be an issue 1.3.2 Complex technical architecture for the fixed deadline 2.1 Subcontractors and suppliers 2.1.1 The subcontractor Geneva, was still identifying the actual resources needed. Risk of underskilled or unmotivated resources 2.1.2 The subcontractor Geneva was still identifying the actual resources. Risk of delay in identifying and onboarding resources 2.2 Customer -- No market research on online buyer preference conducted. Risk from inaccurate business requirements 3.1 Resources 3.1.1 Dependency on external contractor since there are no internal resources available to complete the project.

4.1 Planning 4.1.1 Too many critical paths in the project. Slippage on any would affect the project completion date 4.2 Controlling 4.2.1 Changes in WBS if there are changes in scope if the prototype requirement is not accurate 4.3 Communicating -- Project resources not understanding the objectives of the project and their role 3) Qualitative Risk Assessment

12

Probability

Consequences

Low

Med

High

High

1.2.1, 4.2.1 MED

1.1, 1.3.2, 4.1.1, 4.3 HIGH

2.1.1, 2.1.2, 3.1.1 HIGH

Med

1.2.2, 1.2.3 LOW

1.3.1, 2.2, MED

Low

4) Quantitative Risk Assessment

Probability of Failure

Consequences of Failure

Maturity

0.5

Cost

0.1

Complexity

0.7

Schedule

0.9

Dependency

0.5

Performance

0.7

Programmer Skill

0.5

Reliability

0.5

❑❑

Pf = (0.5+0.7+0.5+0.5)/4 = 0.55

C f = (0.1+0.9+0.7+0.5)/4 = 0.55

Risk Factor: 0.55+0.55 - (0.55*0.55) :0.80 (high risk)

Risk Mitigation Strategies High Risk

Mitigation Strategy

2.1.1 The subcontractor Geneva, was still identifying the actual resources needed. Risk of underskilled or unmotivated resources.

2.1.1 Manage supplier relationship actively, by properly communicating the scope and getting involved in the screening and selection

13

2.1.2 The subcontractor Geneva was still identifying the actual resources. Risk of delay in identifying and onboarding resources.

3.1.1 Dependency on external contractor since there are no internal resources available to complete the project.

1.1 Requirements -- Incomplete business requirements and scope creep.

1.3.2 Complex technical architecture for the fixed deadline.

4.1.1 Too many critical paths in the project.

Slippage on any would affect the project completion date.

4.3 Communicating -- Project resources not understanding the objectives of the project and their role.

process.

2.1.2 Manage supplier relationship actively, by properly communicating the scope and getting involved in the screening and selection process. Using multiple-suppliers would drastically reduce this risk.

3.1.1 Considering that this is a high priority project with buy-in from management.

Seeking internal resources from other departments or project teams would help mitigate this risk.

1.1 Refine scope by involving all stakeholders including customers. Use change control methodologies and prevent changes to scope.

1.3.2 Involving internal infrastructure support staff with experience would help mitigate this risk. Rick Burke was assigned to this but adding an additional resources would help reduce risk drastically.

4.1.1 Adding more expert resources to critical tasks and accelerating longer tasks earlier on can help mitigate this risk.

4.3 Setting up a good internal communication plan would help mitigate this risk

Moderate Risk 1.2.1 Integration with JD Edwards -- The project could get stalled if integration with JD Edwards is faced with technical challenges 4.2.1 Changes in WBS if there are changes in scope if the prototype requirement is not accurate 1.3.1 Prototype designed with no user input.

User friendliness could be an issue 2.2 Customer -- No market research on online buyer preference conducted. Risk from inaccurate business requirements

1.2.1 Utilizing slack time to do some preliminary testing before actual deployment would help mitigate this risk.

4.2.1 Refine scope by involving all stakeholders including customers. Use change control methodologies and prevent changes to scope.

1.3.1 Use customer input to refine the prototype design 2.2 Use customer input to refine requirements and scope

Low Risk 1.2.2 Inaccurate system design could make the 1.2.2 More extensive testing would help reduce this risk website crash with high traffic 1.2.3 Plan for adequate testing with room for 1.2.3 Impact on current processes process improvements if required

14

Appendix B: Project Cost Estimates

15

Appendix C: Project Plan

16

17