Service Add-On Proposed by the Vendor - Essay Example

Phase 4 Individual Project Peter Stemson, General Manager, Rick Auto Enterprises ABC, Project Manager, New Web-based Version of Billing Legacy Services Date: 22 August, 2008 Subject: Discussion regarding service add-on proposed by the Vendor This memo is being written to you to inform you the details about the software add-on proposed by the vendor. It will basically outline how any kind of decision regarding this software add-on will affect the organization. This decision may either be accepting the vendor’s proposal or rejecting it. Planning is a very important function of management therefore we must plan each and every detail regarding the project before a final decision is made (Visitacion, 2008). If we do not plan and consider every possible factor that may affect our project, we will not be able to foresee possible problems associated with that and develop appropriate contingency plans. This memorandum will aid us in planning the project. Before we move on to deciding the affect of the decision suggested by the vendor, I would like to outline the details regarding this add-on software that was proposed to us. This software will enhance our billing service further by integrating our existing customer service system with the billing system’s customer service functions. This integration will allow work to become faster and more efficient. The information stored and retrieved from this new system would be standardized. This will allow the same information in the same format to be available for all the employees in the billing department and the customer service department. The vendor has asked us if we are interested in complete integration of the customer service system with the billing system’s customer service functions or if not completely, maybe integrating the customer database with the billing services to a certain extent. The installation cost of this add-on is estimated to be $45,000. This amount is the extra that we will have to pay in addition to the project costs without the add-on. In addition to this, if we accept this proposal, the completion of this project will take another four weeks. After all these points were put forward by the vendor, I was asked by you to critically analyze the possible effects of accepting or rejecting this proposal. I believe that this is a very sensible approach to analyze a situation like this one because this will allow us to be familiar with all sorts of influences as a result of our decision. It will also help us in developing safety measures that will protect our project from the possible negative influences This memorandum will outline all the effects one by one. There are many things that need to be considered regarding the acceptance or rejection of the software add-on proposed by the vendor besides the additional cost involved and the time that it will take to complete. These factors include the positive or negative affects of installation of the software. For instance, skills needed to operate the new add-on. This needs to be considered so that the management can know if their present employees will be able to handle the software and if any kind of training will need to be given to them. Besides this a positive point will be the efficiency that will be a result of this integration. Now we will discuss these all in detail. The first factor that must be considered before any kind of decision is made if of course the cost associated with this add-on. The initial cost of installation is often the first cost that is given consideration when it comes to evaluating software (Boire, 2008). This is a very important factor in our scenario because of many reasons. The first one is that we are given a limited budget at the moment and if we go for this proposal by the vendor, we will have to decrease the amount spent on other aspects of the projects which are equally important. Secondly, if we go for the service and the benefit that we get out of the add-on is not equal to the amount estimated, the project team’s performance ratings would go down. And lastly, if we do not accept the proposal of the vendor, we will not have to pay this cost and instead we will be able to use this part of the budget somewhere else which might give better results. If on the other hand, we accept the proposal, a large amount of the budget will get tied up in this project and there will always be the risk of the add-on not being as successful as it was predicted. However, if on the other hand, the add-on proves to benefit us more that we thought, it will advantageous for the organization. It may make the process of billing and customer service better and in future we can expect higher profitability. It will also improve the quality of the customer service which we will provide to our customers. The customer service department will become will become quicker and better which will increase customer satisfaction and this customer satisfaction will result in increased customers and hence revenue. If this happens, the portion of the budget that will be invested in this add on will become worth it. Besides the initial costs of installation, there are various other costs that need to be consideration. These are the costs that will be incurred once the add-on has been installed. These include the training costs and the cost of maintaining the system. Before implementing this system, it is absolutely necessary to consider these possible costs because then only the management can decide whether or not this add-on will be worth it in future. The next factor is certainly the extended four weeks time that will be a result of acceptance of the vendor’s proposal of the add-on. This is very important because if the actual time of the completion of the project exceeds the time that was estimated, the organization will suffer in many ways. A lot of its resources which includes the project team are tied up with the project. The longer the project continues, the longer these resources will remain tied up. Therefore, it is very important to consider this before a decision is made. Also, if the project prolongs, the attention that the management pays to the project will also increase and as a result, it would not be able to concentrate on other things that are going on within the organization. But then again, this is just one side of the scenario. If the project proves to be a success later on and the organization benefits from this add-on software, this extension in the time that it took to complete will definitely be worth it. If we consider the economic term of opportunity cost, this time wasted will also be a cost for the organization. If the proposal by the vendor is not accepted, the organization will be able to avoid the additional four months that would take for the completion of the project. It would be able to use this time for something else which might even be more constructive and beneficial for the organization. The next factor that needs to be considered before a decision can be made is the requirements that this software will bring along with it. These requirements could include hardware requirements and also the skills from the people who will be using it. It the software in order to integrate properly requires a change in the hardware of the system; this means additional cost and this therefore must be kept and mind and the vendor must be consulted regarding this. Secondly, the skills requirement is a very important factor to consider as well. The people or employees who will be using this software need to be comfortable with this software because they will ultimately affect the efficiency that this add-on software brings along with it. If the employees become confused regarding how to handle this new software, they will be de-motivated. Also, they will be needed to be trained how to efficiently use this software and make use of the benefits associated with the software. This training could also mean additional costs for the organization. Another factor that must be considered before integrating the billing system and the customer service department’s system is being aware of the possibility of a software breakdown. The organization must realize before accepting the vendors proposal that once the two systems are integrated, a breakdown in any one department’s system will slow down the operations in the other department as well. Why? The answer to this is because once they are integrated, they become interrelated and as a result, both the systems are dependent on each other. If one works smoothly, the other will work smoothly as well and vice versa. The last factor that needs to be considered is the reliability and flexibility of the software. For an ever changing organization like ours which ensures that its customers are happy at all times, we require technology or anything else for that matter which is reliable and more importantly flexible. The software add-on that the vendor has proposed must be reliable. As discussed in the earlier paragraph, this includes the chances of it breaking down should be low as breaking down of this integration would result in complete impede the usual functions of all the departments related to it. Next, by flexibility I mean the need for the software to be able to be changed and altered according to the situation requirements. It must have certain features that will allow the organization to easily update or change it according to the market characteristics or changes in business policies. If the reliability and the flexibility of the software is not given consideration, the systems of both the departments will not prove to be as successful as the vendor claims them to be. The facts regarding the project are in front of you and you as the general manager must make the final choice and decide whether or not it is worth to take the risk after you carry out a cost benefit analysis. This is a simple way of deciding whether or not to make a change and helps in decisions making (Mind Tools, 2008). Like everything else, there are two sides to this add on implementation. The positive points include increase in efficiency and effectiveness because of standardization of information and also improvement in communication between the two departments. The negative points include the additional cost, time, possibility of breakdown, the requirements of the new software in terms of hardware and skills from the employees. In my opinion we should take the risk because this software is something that none of our competitors have at the moment which means that we will have a competitive advantage over them. This competitive advantage can become our strength in future as our customer service and billing department will become more effect and efficient than our competitors. We will be able to provide better and quicker service to our customers which will increase the customer satisfaction amongst them. This satisfaction will result in increased customers and hence revenue for our organization. Besides this, the project that we are working on is a very large scale project. If we are investing so much already in order improve our billing system, I believe that we should also not hesitate in installing this software add-on because of only the cost associated with it. However, I would suggest that before the proposal by the vendor is accepted, the organization must consider every possible factor that are discussed or that may have been overlooked in more detail. For this, a consultant may be hired to analyze our situation better in detail. This consultant will be able to better evaluate the need to have this particular add-on because of his experience with similar situations. If this project is a success, we can expect to increase our efficiency greatly. The process of billing and customer services will become much faster and easier. In order to ensure that nothing is left out, you must arrange a meeting with the vendor and discuss all the issues in detail so that you have all the clear cut facts in front of you. The vendor is familiar with implementation with such projects therefore he would know the possible effects better. Next you must consult the senior level of management and the department heads of all the departments that will be affected by this decision. In addition to this, you must ask the vendor to demonstrate the software. This demonstration is called testing. While developing a plan for implementation of any kind of software of add-on, testing is very important. This testing will allow you to test every feature of the software that is claimed by the vendor. It will also allow us to enter our data and try out the software before finalizing the deal with the vendor. This testing will allow you to discover any kind of bugs in the software. There can be bugs in any software because of careless or disorganized programming. You must remember that the real software may be very different from what you expect it to be and until and unless it is not tested, you will never find out the degree of similarity between your expectation and the real thing. This will give you a better idea of how the software works and to what extent the software or the add-on is compatible with the functionality of the organization. The vendor would definitely be willing to demonstrate this add-on if he believes that this will be beneficial for the organization (Bohn, 2004). All the issues discussed in this memo and all the facts that will be retrieved from the meeting with the vendor and testing of the software must be discussed with these department heads and the senior level of management so that they also have a better idea of what their decision would result in. In addition to this, all these facts must be documented and a copy of each must be given to all the department heads and the senior management of the organization for future references. This is absolutely necessary before you come to a final conclusion because otherwise you and the project team will be held responsible. Kindly, send a reply to this memo before the last week of this month with either accepting or rejecting the proposal given by the vendor regarding the add-on software so that we can complete the planning process and begin the project. Also, if you require information on any other aspect of this add-on software, feel free to contact me. References Bohn, D. (2004) Planning and implementing an ERP system. Retrieved 05 September, 2008, from Goliath. Web site: http://goliath.ecnext.com/coms2/gi_0199-765632/Planning-and-implementing-an-ERP.html Boire, R. (2008) Considerations to Make When Evaluating Software. Retrieved 23 August, 2008, from Canadian Marketing Association. Web site: http://www.the-cma.org/?WCE=C=47%7CK=227586 Mind Tools. (2008) Cost/Benefit Analysis. Retrieved 23 August, 2008, from Mind Tools. Web site: http://www.mindtools.com/pages/article/newTED_08.htm Visitacion, M. (2008) Project Management Best Practices: Key Processes and Common Sense. Retrieved 23 August, 2008, from AMD. Web site: http://www.amd.com/us-en/assets/content_type/DownloadableAssets/Giga_-_Project_Management_Best_Practices-_Key_Processes_and_Common_Sense_(1-03).pdf Read More