ANALYSIS OF IRTC VENDER LEGACY SYSTEM ADD-ON 1 Analysis of IRTC Vender Legacy System Add-On Loren Karl Schwappach PM 610: Project Planning, Execution, and Closure Colorado Technical University
ANALYSIS OF IRTC VENDER LEGACY SYSTEM ADD-ON 2 AbstractThis paper analyses the impacts to the current project budget, schedule, and resources that wouldoccur if IRTC were to purchase the proposed vender software add-on package for the legacybilling system.
ANALYSIS OF IRTC VENDER LEGACY SYSTEM ADD-ON 3 Analysis of IRTC Vender Legacy System Add-On The vender has developed a software add-on package that the vender believes will allowintegration of IRTC’s existing customer service systems with IRTC’s legacy billing system’scustomer service functions. This add-on will not have anything to do with the web-based versionof the system but should allow the integration of the legacy billing system with current customerservice systems. There has not been any decision as to which customer service design should beutilized nor whether or not the systems will be integrated and of the extent to which they shouldbe integrated. Negations with the vender are still ongoing and the project is currentlyprogressing smoothly according to the current schedule and budget. If accepted the software-addon will add at least four weeks for installation of the package (testing, troubleshooting,maintenance, documentation and instruction are not included in this period) to the projectschedule and a cost the project budget an additional $25,000 (not including the costs associatedwith vender and IRTC human resources that will be required to perform the upgrade). The project team will need to perform a cost/benefit analysis of the vender’s proposal andspeak to the Customer Service and Billing Department about the vender’s proposal. This willinvolve a large change to the projects scope and may have several unforeseen factors that willdelay the projects schedule as well as reduce the projects budget (Gurlen, 2003). It is alsocurrently unknown whether or not this upgrade package will be an effective solution. The reason behind the IRTC billing web-based system upgrade is to reduce the operatingcosts associated with the legacy based system, improve customer satisfaction, reduce the numberof days for outstanding account receivables, and provide IRTC with a competitive edge overcompetitors. The legacy system upgrade and web-based system interface are already expected totake sixteen to twenty weeks to complete. It is currently unknown how taking the vender’s
ANALYSIS OF IRTC VENDER LEGACY SYSTEM ADD-ON 4software add-on option will affect this schedule. The decision of whether or not to go with the vender’s software add on for this projectwill need to receive approval from the projects sponsor (IRTC’s CEO) and project’s steeringcommittee due to the drastic impacts to the projects scope, budget and schedule. A cost/benefitand revised risk analysis will also need to be completed by the IRTC project team.Project Budget Concerns The current budget authorizes $100,000 for vender expenses; however, vender materialswill cost $6,500 and even though IRTC plans to maximize internal human resource use for thisproject, to increase personnel experience and training in related projects, we are still expecting tospend at least $12,220 in contracted vender human resources (see figure 1 below). In summary,the current plan leaves $73,152 ($81,210 – 10%) for unknown project risk factors. If the project schedule was adjusted to account for the vender’s software add-on addingfour weeks for installation, two additional weeks for testing, and two additional weeks foremployee training the project will require an approximate additional $28,930 ($26,300 + 10%) invender human resources (not accounting for the increased use of IRTC human resources asshown by figure 2). This pushes the true expected vender software add-on to at least $53,930.One of the plans of the web-upgrade project Chris and Jan have been working heavily on this last week is the integration of our legacy billing system with the web based system. Since the web- based system is being designed from the ground up in order to support customer service functionality the project team does not see the potential gain offered by purchasing a system upgrade that is intended for a legacy system that is intended to be phased out. However, athrough analyst weighing the pros and cons should be completed before dismissing the vender’s package. Whatever decision is made it will require adjustment to the projects budget and
ANALYSIS OF IRTC VENDER LEGACY SYSTEM ADD-ON 6Project Schedule Concerns Besides project budget impacts there are also project schedule concerns that need to beconsidered. Figure 3 displays the current human resource predictions for this project. The initialproject schedule is based upon this human resource availability and although the vender claimsthe software-add on will add an additional four weeks to the project schedule in actuality it ismore likely that the current schedule will require an additional eight or nine weeks (forinstallation, research, testing, troubleshooting, training, and documentation). This may have adrastic impact on employee performance as employees begin to feel there is no end to theproject. Projects with large durations can be extremely taxing on corporations for reasonsbeyond budgets and schedules which is why decision makers need to approach scope changesvery critically. It may be in the best interest of IRTC to continue on without the proposedsoftware add-on and look into such options (if they are still required) after the completion of thecurrent upgrade project. Figure 3: Initial Project RACI ChartOther Important Factors
ANALYSIS OF IRTC VENDER LEGACY SYSTEM ADD-ON 7 Factors to consider that don’t relate to the current projects budget and schedule includethe impacts on system performance. Will the legacy billing system continue to offer the samefunctionality and performance, will the system work with the new web-based system, etc. Otherfactors include things like, how will employee moral be affected, will the end users respond wellwith a legacy system add-on, will project members embrace the drastic changes to the project,how will employee reward systems need modified, does the change reflect corporate goals andIRTC’s strategic vision, etc.Party Involvement Project managers need to pay careful attention whenever there are changes that impact aproject’s scope. World class Project Managers realize the prime focus for the project managershould not be to deliver the agreed upon scope on budget and on time, but to seek optimizationof the benefits generated through the project (Gurlen, 2003). If that means allowing the scope tochange (such as the vender’s add-on would force) would generate improved project benefits itmay not be a bad thing to consider. However, allowing a projects scope to change usuallycreates added costs, greater risks and increased project durations so the benefits should becarefully weighed. Whatever the decision, changes like these cannot occur without modifyingseveral large aspects of the project and requires action and approval from the project sponsor andsteering committee members.Case Study [WHY] All projects should have formal change requests processes that can be effectivelyutilized by all parties affected. As an example a [WHO] European organization sub-contractedthe expansion of a major new system to a software house. Progress was slow and sides wereconcerned. [WHAT] One area of the primary concerns raised by the sub-contracting agency was
ANALYSIS OF IRTC VENDER LEGACY SYSTEM ADD-ON 8that that they were being swamped with changes and it was nearly impossible to get the clientorganization to recognize the changes and allow for them in the planning and performancecriteria of the project. The European client organization thought a change meant, in effect, aformal re-negotiation of the contract subject to the same extensive procedures as the originalprocurement contract. For the European organization it would take months to approve a changerequest. [HOW] For the software house, a change meant every occurrence where they wererequired to change any element of the work done due to some unavoidable problem withspecifications. Given the mammoth weight of the European organizations change process, it wasunrealistic for the sub-contracting agency to expect neither approval nor compensation for theirwork (Wallace, 2007).
ANALYSIS OF IRTC VENDER LEGACY SYSTEM ADD-ON 9 ReferencesWallace, S. (2007). Scope and Change Control. Retrieved September 19, 2011 from: http://www.epmbook.com/scope.htmGurlen, S. (2003). Scope Creep. Retrieved September 19, 2011 from: http://www.umsl.edu/~sauterv/analysis/6840_f03_papers/gurlen/