Tegan and Hrad Technika - Assignment Example

Tegan/Hrad Case Study Question No Was outsourcing the A/P project the right move for Tegan given the other possible alternatives? Answer: Outsourcing has become the most desired choice for businesses around the world. Kremic, Tukel and Rom conducted a study to review the existing literature on outsourcing, its nature and scope, for categorization purposes (467). They found that in the last two decades, a large number of studies have been conducted to explore the concept of outsourcing and their implications on various business models in practice. Kremic, Tukel and Rom found that outsourcing provides various benefits. Not-for-profit and government sector organizations have also opted for this potential opportunity apart from the private sector businesses (468). The authors postulated that business managers having no past experience of using outsourcing option find the related decision making highly complicated. The managers have to choose the right outsourcing partner from a myriad of choices (469). In the case of Tegan, it was the first time for managers to use an outsourcing option. However, the decision for outsourcing was achieved after considering the large number of benefits of using outsourcing. For instance, Tegan had little time and human resources to fix accounts payable project. It lacked a flexible budget and scope to handle another complicated issue on its own, when Tegan’s main focus was to expand globally. Thus, the only viable solution was to outsource the project to a third party having all the necessary expertise and resources to complete it in time. The next issue was of the small budget allocated for the completion of the project. The outsourcing was finalized based on the lowest bid available and not on the qualities and expertise of the IT firm. Question No. 2: What are the trade-offs involved in having the requirement analysis for a project performed by one of the firms that would ultimately bid on the project? Answer: Djavanshir studied the impact of IT outsourcing and argued that there is high complexity and risk factor involved in the completion of IT outsourcing projects (32). Therefore, the businesses have to keep into consideration the possibility that the outsourcing firm may withdraw from the deal at the eleventh hour or default. In both scenarios, the business losses all its investments in the project as well as the time. Tegan’s management considered this aspect and undertook an activity of analyzing the requirements with the same firm that was likely to bid for the project. The primary trade-off of undertaking this activity was the assessment and assurance that the firm will undertake the project within the desired time frame. Hrad Technika’s team was well aware of the requirements of the project as they had developed the entire document for the bidding process. They understood the underlying problem and therefore, required less time and resources to finalize the project. This way the risk of firm’s default in performing the task was also substantially minimized. Question No. 3: Given our journeys through the world of system development methods in recent lectures, discuss the choice of development methodology employed by Hrad Technika. Answer: Hrad Technika used the Waterfall model for the system development. In the first phase, the requirements of developing a system are laid down. The next phase outlined the design. Hrad team began to develop the design, however, it required verification of the low level design documents (LLDs) from Tegan’s management before the implementation of the code. At this point, the problems began to surmount at Tegan. There was lack of skilled human resources at the workplace. Question No. 4: Why did Hrad Technika, the firm that performed the requirements analysis, have scope and requirements problems once the project commenced? Answer: Lee while studying the impact of outsourcing, sharing and the relevant organizational capability highlighted that organizations fail to successfully outsource their projects due to the lack of harmony and balance between sharing of information and organizational capability (323). There is fundamental gap between the amount of information that has to be communicated to the outsourcing partner as well as the verification of each document to ensure smooth working and achievement of the project objectives. In the case of Tegan accounts payable project, similar situation arose where the agreement stipulated that Hrad Technika would develop the design code for each module and send it back to Tegan for the verification. Tegan’s team may give a green signal for implementation within a period of four (4) days only. At this point, a huge complication arose in two aspects. Firstly, there was only one expert available in Tegan to check the accounts payable project codes. Hrad Technika continued to send module codes or LLDs for verification and a backlog began to build around the sole expert. Secondly, the reason for the backlog and the delay in meeting the four-days deadline was due to the problem with the LLDs themselves. Each LLD was extremely complicated and most importantly, lacked the full description. As a result, it took greater effort and additional days to complete a single LLD and to send it to Hrad Technika for further processing. Hrad Technika had developed the initial requirements document. Nevertheless, they did not receive the required level of response and complete documents from Tegan’s project team to finish the project on time. However, Tegan’s project team argued that they had informed Hrad Technika about the related issues and they were in full knowledge and control of the situation at hand. Hrad Technika, on the contrary, argued that they did not know that these aspects were included in their agreement. Question No. 5: The case writers state: "Sadly, Smith knew that “Leadership” and “Commitment”, the paucity of which was blamed for untold IT failures were not the problems here." Critique- do you agree? What do you see as the most important IT management failures here? Answer: Yes, I do agree with Smith that Tegan’s IT management failure is not due to lack of leadership and commitment shown by Hrad Technika. The primary reason for this failure is the lack of communication and planning defect. There was a communication gap between the two outsourcing partners. Both teams did not coordinate the problems at hand and tried to find similar ground to resolve the issues. Instead, both teams continued the blame game which let the critical time lapse. Planning is the critical and driving force of all IT management projects. In this particular case, Tegan did not undertake special consideration to plan all the unforeseen problems and situations and to devise a fool proof plan to overcome them. It did not analyze the LLDs before sending them over to Hrad Technika for working. Question No. 6: Which of the options for moving forward that Tegan identified would you recommend? Answer: Lee, Huynh, Kwok, and Pi argued that IT outsourcing has a past, present and a future that makes it the most potential option for all businesses. They postulated that the IT businesses will substantially benefit from the outsourcing option as it offers wide benefits and opportunities for businesses to grow and expand globally. However, they highlighted that they have to understand the process of outsourcing and the possible ways to avoid any failures. Therefore, I would recommend Tegan to continue working with Hrad Technika considering that the primary problem was with the Tegan itself. References Djavanshir, G.R., "Surveying the risks and benefits of IT outsourcing", (2005). IT Professional, Vol. 7, Iss. 6, Pp. 32-37. Web 12 November 2011. Link: http://ieeexplore.ieee.org/xpl/freeabs_all.jsp?arnumber=1573656 Lee, Jae-Nam, "The impact of knowledge sharing, organizational capability and partnership quality on IS outsourcing success", (2001). Information & Management, Vol. 38, Iss. 5, pp. 323-335. Web 12 November 2011. Link: http://www.sciencedirect.com/science/article/pii/S0378720600000744 Lee, Jae-Nam, Huynh, Minh Q., Kwok, Ron Chi-Wai, Pi, Shih-Ming, "IT outsourcing evolution-- pas, present and future", (2003). Communications of the ACM-Wireless networking security, Vol. 46, Iss. 5. Web 12 November, 2011. Link: http://dl.acm.org/citation.cfm?id=769807 Kremic, Tibor, Tukel, Oya Icmeli & Rom, Walter O., "Outsourcing decision support: a survey of benefits, risks, and decision factors", (2006). Supply Chain Management: An International Journal, Vol. 11 Iss: 6, pp.467 - 482. Web 12 November 2011. Link: http://www.emeraldinsight.com/journals.htm?articleid=1576291&show=abstract Read More