Analytical Report

17 Pages   |   4,063 Words
Table of Contents
Background.................................................................................................................................. 3
Problem Statement....................................................................................................................... 3
Root Cause................................................................................................................................... 3
Analysis........................................................................................................................................ 4
Alternatives.................................................................................................................................. 7
Meag........................................................................................................................................ 7
ProcessosCriativos.................................................................................................................... 7
SVDI......................................................................................................................................... 8
Restinfor................................................................................................................................... 8
Evaluation.................................................................................................................................... 8
Plan of Action............................................................................................................................. 10
Lessons Learned.......................................................................................................................... 11
Reflection................................................................................................................................... 12
References................................................................................................................................. 15
 
 

Background

In the year 2003, Portugal was hosting one of the most prominent events in the European region. It boosted Portuguese economy as many construction projects were started and companies were preparing themselves for exploiting the opportunity. One of these companies was Casa XXI, a renowned name in the restaurant and food industry, which was founded by a former sports player named Jose Eduardo, Fernanda Seijo, and FlorbelaBem. The company started to publicize its modernized point of sales system, which used prepaid cards for sales, before the event. A lot of people were looking forward towards this new system. For implementation of this system, the company hired Meag, an inexperienced company that was represented by Jose´ Almeida. All arrangements had to be made before the major event on August 6, 2003.
 

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Problem Statement

On August 6, 2003 the sporting event had to start along with Casa XXI’s new system. Unfortunately, the system collapsed badly as it did not perform the basic function that it was supposed to. The company had to face serious embarrassment along with significant financial losses. After the event, Almeida blamed that the problems faced on August 6 were due to poor organizational capabilities i.e. poorly trained staff. On the other hand, Eduardo blamed Almeida as the new system did not perform any of its function, and it also blocked the traditional cash-and-carry system. However, the next event was on August 23, and the company has to make sure that the system is up and running for it. Unfortunately, preliminary testing of the system failed badly, and the company had to resort to traditional point of sales system. Customers kept asking about their prepaid cards on this event as they had spent €2.5 to €20 on these cards. The company had to restore this system as promised.

Root Cause

After the event of August 23, the company and Meag had conducted a number of tests to check the root cause of problems. Meag found that out of 70 point of sales, 2 to 3 were properly functioning. So, it tagged the whole problem as an organizational problem. On the other hand, Casa XXI found via an independent consultant that there were several problems due to which the system collapsed on the day of inauguration:
• Delayed construction of the stadium.
• Unusually high temperature.
• Poorly trained personnel.
• Improper system for card activation.
• High transaction time.
Delayed construction made the company unable to test the system. High temperature caused wireless antenna on the stadium’s rooftop to stop working. Poorly trained staff did not know how to reconfigure the system to convert it to a traditional point of sales system. Improper system for card activation made it impossible for customers to purchase products from Casa XXI. Lastly, the extensiveness of the new system increased the transaction time to 45 seconds, which could have created a bottleneck. Despite all these factors, a technical audit was conducted on the software, and it was found that Meag used improper version of SQL server, which only supported 5 servers (or point of sales) at a single time. A fully licensed version of SQL server would have supported 100 point of sales.

Analysis

Huq (2000 pp. 243-250) highlighted the importance of testing in the Software Development Life Cycle. It was asserted that testing should be done after each phase of the life cycle. It not only minimizes the number of defects, but it also reduces the cost significantly. The underlying reason for low cost is attributed to distributed working hours of testing after each phase. However, in the case of Casa XXI, the system was not even tested a single time before full-loaded implementation. This analysis assumes that Meag tested each aspect in isolation before allowing the company to operate it publicly. There is a possibility that Meag tried to save its cost before final testing. In the Software Development Life Cycle, there are five steps and the last two steps, testing and implementation, are as important as the first three steps. Meag was not given a chance to test the system due to delayed completion of the stadium. Even IBM, the company responsible for ticketing and routine stadium transaction had completed its installation on the eve of August 6. Missing the second last step can be attributed to the problems faced by Casa XXI.
Tompkins & Rice (2003 pp. 218-242) and Cadle&Yeates (2008) highlighted several weaknesses of the Software Development Life Cycle. Unfortunately, Casa XXI was subject to all these weaknesses. There was a huge gap between users of the system and developers of the system. Whenever developers, Meag, were asked about the system before August 6, they used to say, “‘do not worry, do not worry. There is no problem. Everything will be fine.” Developers did not communicate information related to the system to the final users, or even their contractor, Casa XXI. Only if they had talked all aspects of the system thoroughly, there would not have been the problem of the possible bottleneck of 45 second transaction time. AnyhowMoreover, minimal transactions were conducted that day, and the possibility of bottleneck did not arrive as the system as a whole collapsed. Moreover, developers did not communicate the need of staff training as they were developing the system. This gives rise to the second weakness i.e. developers worked in isolations, without having a know-how of organizational dynamics. Casa XXI would have trained its employees in an extensive manner beforehand, which they did after the failure of August 6 event.
The third weakness is related to quality control (Cadle&Yeates, 2008). Both, Meags and Casa XXI, had to no standards to measure of control quality. Dynamics of the relationship of both companies shows that they had blind trust in each other. However, Casa XXI did show some concern when Eduardo asked about the system before the August 6 disaster. Nonetheless, there was serious lack of quality control measures from both sides. The fourth weakness is related to time limitation. This can be termed as the biggest constraint in the context of Cassa XXI problem (Sharma &Kushwaha, 2012 pp. 716-722). All problems faced by Casa XXI can be traced back to this limitation. Only if the company had sufficient time to test the system then this problem would not have risen and started a chain of problems.
Liu, Chen, & Jiang (2010 pp. 220-227) proposed a model which they tried to prove factors that lead to project’s success. Following diagram summarizes their model:
Source: Liu, Chen, & Jiang (2010 pp. 220-227)
It can be clearly seen that all three main variables that ultimately lead to high project management performance were missing. Management did not have any control over project’s small details except the deadline. Secondly, Casa XXI’s sales staff was not included in any of the phases of project management. Lastly, there were some serious concerns about task completion competency, as Meag’s developers did not know the difference between enterprise and desktop version of SQL server. The relational dynamics of Casa XXI and Meag seemed as both parties had kept “blame them” as their last resort; not knowing that the consequences and cost of such attitude could be huge.
Chang & Ishii (2013 pp. 928-936) devised a model which quality of a project can be ensured. The model is based on three factors, which can be sub-divided into smaller factors. Aspects related to quality and controls were not found in Casa XXI case, as the management was more involved into the time limit than the quality. Following diagram summarizes the Project Quality Measurement criteria:
Source: Chang & Ishii (2013 pp. 928-936)
Quality planning should have been done before letting Meag start work on the project. This should have been done at both ends. Secondly, quality assurance and control standards must have been defined before the initiation of system development. Moreover, these controls should have been monitored independently by both parties in order to ensure project success.
Dingsøyr, Nerur, &Balijepally (2012 pp. 1213-1221) brought the importance of Agile methods in the limelight. According to them these methods ensure customer satisfaction as they are made a part of software development. There are four main agile values. The first one demands software developers to give importance to interactions over processes. Meag extensively focused on processes and tools and hardly interacted with the customer (Casa XXI). Secondly, agile values demand developers to give preference to working software over extensive technical documentation. Meag was never able to provide working software to Casa XXI, even after the second chance. Thirdly, agile values force developers to focus on collaborating with customers over negotiating contracts. This enhances their relationship with the customer and enables them to provide software that exactly fulfils their needs. Lastly, developers need to act according to the changing environment, whether it’s internal or external, instead of following the plan religiously. Vlaanderen, Jansen, &Brinkkemper (2011 pp. 58-70) highlighted the importance of Scrum process and the ways which it can be used to implement agile values in a convenient manner.

Alternatives

Casa XXI has four alternatives available for getting the system running. The first option is to give Meag another chance, whereas the second option is to hire ProcessosCriativos. The third option is to hire SVDI, whereas the last option is to accept Restinfor’s offer. The details of these options are following.

Meag

Casa XXI can give Meag another chance for implementing the system as the company has only two weeks left before the next big event. It can easily solve all problems and will have sufficient time for testing the system, as well. In case Casa XXI uses other options, Meag will have the right to sue the company under contract law as it will be breached. However, legal expense might be tough in front of company’s repute and the investment made on software and hardware i.e. €16332345. Still, there is a high possibility that Meag will fail as Eduardo has lost his trust on it. It will be difficult to cope up with the lack of trust.

ProcessosCriativos

 
ProcessosCriativos was willing to use the hardware and software that was installed by Meah, but in the medium term, it wished to change it completely. The company’s proposal was based on the client’s (Casa XXI) needs. Secondly, the company had an in-depth knowledge of Wintouch, software used by Casa XXI system. It would be easy for the company to use this software. This company did the technical audit on behalf of Meag and was able to find out the SQL version was not compatible with the system. However, Casa XXI was not comfortable with the use of Microsoft Access as a database.

SVDI

SVDI’s proposal included installation of new hardware along with a new software. The company was not sure about costs involved in the installation etc. Moreover, the company was unsure that it would be able to implement the new system within the time limit of two weeks. It was experienced and competent. The major plus point of this company was that it had experience of working with optic fibber network of IBM, and it was responsible for installation of other systems in the stadium. So, it had know-how of installation in the same stadium in which the company has 70+ points of sales.

Restinfor

 
Restinfor made a proposal in which the company’s system would be run by the latest technology. Aquapad terminal would be used at the point of sales. These are battery operated small devices based on Linux OS. Special hardware would be required for it i.e. portable flash memories, which are deemed much more reliable that traditional hard drives. However, battery operated devices would need UPS in order to ensure smooth running. The database that Restinfor was offering was Oracle, which reduces the transaction time to less than five seconds. From a financial perspective, this option is the most expensive one. Most importantly, Restinfor had prior experience with Oracle Databases, but at a small scale; like Meag had experience with small scale installations.

Evaluation

Information provided in aforesaid alternative options had been summarized in the following table for the convenience of evaluating:
  Meag ProcessosCriativos SVDI Restinfor
Competency/Experience Low High High Low
Timely Delivery Unsure/Not reliable Sure Unsure Sure
Adjustment with Current System High High Low Low
Cost Low Medium High Extremely High
 
Casa XXI would face serious trust deficit with Meag as it has failed the company two times. The company clearly lacks technical competency, as it does not have any prior experience. Secondly, the company cannot ensure timely delivery as its previous record clearly shows. Timely delivery means a running system on a full load during the designated time. The company seems to be slow when it comes to attention to detail. A simple error of “printer out of paper” was not fixed in the second attempt. Thirdly, the company can easily adjust with the current system as it has developed it from scratch. It needs to fix few bugs and get the system running. Lastly, no new hardware would be needed, but SQL server with the enterprise version will be required. However, in relative terms, the cost of SQL server would not be significant. The main concern remains technical competency of the firm, which is low (Chang & Ishii, 2013 pp. 928-936). For the long run, this option is not viable as trust deficit between both companies will hinder the operational efficiency of both companies.
ProcessosCriativos has prior experience with the software. In fact, it has profound knowledge about the software being used by the system, Wintouch. It showed its competency while performing the technical audit of the system, when it found about incompatibility of SQL server version. The company was able to deliver the report about system’s defect in a timely manner, and it has strong connections with Meag. In case, any problem arises, it can easily consult the company, whereas other companies will have to face communication problems in such a scenario. Moreover, the company has assured that it would use the current hardware and software to fix the system. It will not have to convert the card database to another database, like Restinfor and SVDI. Despite high competency of a company, the risk of migrating databases can never be completely mitigated. The company has offered that it would change the hardware and software in the medium range; once all these issues with the current systems are handled.
SVDI has prior experience with IBM optical fibber network that has been laid down in the stadium. Moreover, it has implemented other systems in the stadium, as well. This ensures that the SVDI has high competency. However, the company is not sure that it would be able to deliver its services within two weeks only. The company will completely discard current hardware and software, which would make the investment made on the current point of sales system a sunk cost. Only scrap value of hardware and software would be recovered. Furthermore, employees will have to be re-trained for the new system. Apart from these factors, the company is demanding high costs based on its experience, competency, and expertise.
Restinfor does not have prior experience with large systems, like Meag. So, it cannot be fully trusted. Secondly, the company has ensured that it would deliver the state-of-the-art technological system within two weeks. The company, like SVDI, would discard the current hardware and software and develop the new system from scratch. Again, the employees will have to be trained in accordance with the new system. The amount of money that Restinfor is demanding is extremely high. Above this cost, employee training cost will also be carried by the company. The risks related to the new technology and shifting of the database to Oracle database are high, and are difficult to mitigate.

Plan of Action

It is recommended that ProcessosCriativos should be given the opportunity to fix the system. The company cannot afford to let a huge investment of €16332345 sink the drain. ProcessosCriativos would use the current system and will be able to deliver a functioning system within two weeks. So, ProcessosCriativos should be given immediate control of the system.
There are some other concerns that should be addressed along with this problem, as they will directly affect the performance of the current system. Firstly, the bargaining power of ProcessosCriativos should be kept low during the contract as low bargaining power of Casa XXI has enabled Meag to sue the company. Secondly, company’s lawyer should be alerted beforehand so that they can prepare for possible litigation by Meag. It also needs to be checked whether Meag can be counter-sued for all losses that were incurred on the inauguration date.
Thirdly, the contract between ProcessosCriativos and Casa XXI should make developers follow agile values. Specifically, Scrum process should be used, which is completely based on those values. Scrum process would ensure the user’s participation, increase management control, high competency of technical staff/developers. It should be made sure that new cards are sold at card-selling kiosks. The combined effect of this would ensure success of the project. In this way, the company can get daily briefs about the development of the system, which would lower any possible risks. Casa XXI would be able to stop the company wherever developers start to deviate from the assigned requirements. This will build trust between both parties and it will enable ProcessosCriativos to implement the medium term solution (new hardware and software) with full support of the company.
For the long run, quality planning, control, and assurance rules should be developed by Eduardo so that another “Meag” does not get the opportunity to exploit the company’s resources. These rules should be implemented and used company-wide. In this way, incomplete information provided by SVDI would not slow down the decision making process.
With the implementation of long term, medium term, and short term recommendations, the company would get itself on a smooth track, which would help it in regaining customers’ trust and its repute in the corporate world. The financial losses that the company has incurred can be recovered by investing in ProcessosCriativos’ proposal.

Lesson Learned

Every company that is not accustomed to IT projects need to make sure that strict control measures are implemented across the project and the country. Clearly, the company would have to double its effort in order to make the IT project a success. Moreover, the company should ensure that it not completely relying on the hired help as there is a high probability that it might fail in delivering its deliverables. There is also a need of strict screening process of hiring an IT team. The process should have both qualitative and quantitative factors on which the candidates can be tested. Lastly, the IT team and company members should act as one unit and regular updates should be given to end users in order to ensure high user satisfaction and system efficiency.
 

Reflection

There are a number of problems that are faced during IT projects. The nature of such problems can be technical and organizational. There are two kinds of processes that take place in an IT project. The first process is related to usual project management process (Schwalbe, 2012), whereas the second process is related to software development process. There are problems and risks of both of these processes when an IT project is pursued.
The first problem that might be faced in an IT project is a communication problem. There are two sets of people involved in it; one set from the organization and one set from developers. It is important that both parties should communicate clearly, without any noises (Ortiz-Marcos, Uruburu & Prieto, 2013 pp. 233-243). A culture of openness and freedom should be inculcated within the project team; this will help in avoiding groupthink problem.
Secondly, proper risk assessment should be conducted in each step of software development process. It can be either quantitative or qualitative. Companies can save themselves from substantial financial losses via risk assessment.

Source: Aloini, Dulmin, & Mininno (2012 pp. 183-199)
Risk assessment ultimately translates into contingency plans, which might need some financial support. However, these costs have to be borne in order to avoid a significant financial loss (Aloini, Dulmin & Mininno, 2012 pp. 183-199). Such risk assessment process should be made a part of normal project routine in order to ensure smooth operations and growth.
Thirdly, management should have significant control over the project as it the end user. Management should have substantial bargaining power in order to drive the project according to its own interests and needs. However, autonomy is necessary for creativity, which is an imperative for complex IT systems. There should be a perfect balance between the developer’s autonomy and management’s bargaining power. This can be ensured via quality control, assurance, and planning measures suggested by Chang & Ishii (2013 pp. 928-936). Each party will be responsible for assuring the quality via which a balance would be maintained.
Fourthly, management needs to fulfill its own obligations towards the project before exercising its superior bargaining power. End users of the software should be extensively trained so that they can fully exploit the opportunities provided by it.
Fifthly, it might seem obvious that developers’ competency is an imperative, but there are very limited tools to judge their competencies. Lampel (2001 pp. 471-483) reported that competency of developers should be assessed on for dimensions; entrepreneurial competency, technical competency, evaluative competency, and relational competency. Entrepreneurial competency refers to the level of creativity that the company has shown in its previous projects. Technical competency shows the level of knowledge the company has to execute its creative ideas. Evaluative competency refers to whether the company can independently evaluate its own progress and check where loopholes lie. Lastly, relational competency refers to whether developers can smoothly adjust according to organizational nature. For instance, a developer from a liberal organizational culture cannot work in autocratic organizational culture.
Sixthly, management needs to develop long term relations with developers as they would be responsible for maintaining their system. There should be no trust deficit between the management and developers. In case there is any trust deficit, it would be very difficult for both teams to cope up with each other. This does not suggest that both teams should trust each other blindly. Rules and protocols should be developed in such a manner that they ensure transparent operations.
In summary, there are two types of problems, which can be faced in an IT project. Communication problem, lack of risk assessment, poor quality control measures, untrained staff or end users, incompatible organizational culture, trust deficit, low bargaining power of management, poor tools of assessing competencies of developers, and low autonomy to developers are some of the problems that can be faced during an IT project.

References

Aloini, D, Dulmin, R &Mininno, V. (2012). Risk assessment in ERP projects.Information Systems, 3,183-199.
Cadle, J &Yeates, J. (2008).Project Management for Information Systems.  5: Pearson Education.
Chang, Y & Ishii, H. (2013). Fuzzy Multiple Criteria Decision Making Approach to Assess the Project Quality Management in Project.Procedia Computer Science, 22, 928-936.
Dingsøyr, T, Nerur, S &Balijepally, V. (2012).A decade of agile methodologies: Towards explaining agile software development.Journal of Systems and Software, 6,1213-1221.
Huq, F. (2000). Testing in the software development life-cycle: now or later.International Journal of Project Management, 4, 243-250.
Lampel, J. (2001). The core competencies of effective project execution: the challenge of diversity.International Journal of Project Management, 8, 471-483.
Liu, J, Chen, H & Jiang, J. (2010). Task completion competency and project management performance: The influence of control and user contribution.International Journal of Project Management, 3, 220-227.
Ortiz-marcos, I, Uruburu, C &Prieto, T. (2013).Strengthening Communication Skills in an Innovative Context of Engineering Project Management Learning.Procedia - Social and Behavioral Sciences, 4, 233-243.
Schwalbe, K. (2012).Information Technology Project Management.  7: Cengage Learning.
Sharma, A &Kushwaha, D. (2012). Estimation of Software Development Effort from Requirements Based Complexity.Procedia Technology, 4, 716-722.
Tompkins, F & Rice, R. (2003). Integrating security activities into the software development life cycle and the software quality assurance process. Computers & Security, 3, 218-242.
Vlaanderen, K, Jansen, S &Brinkkemper, S. (2011). The agile requirements refinery: Applying SCRUM principles to software product management. Information and Software Technology, 1, 58-70.

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