Project Management - SCHMIDTCO
Project Management - SCHMIDTCO
Project Management - SCHMIDTCO
Original vendor was out of business and work carried out by a consultant
Accounting and other business units worked separately without any integration
Current work force highly reluctant to move from legacy system to ERP model
Cross functional Implementation team 5 core modules Warehousing, Inventory, Accounting, Purchasing, Sales and CRM Project contract given to Dtech- new player in US $400000 cost including installation Automation would result in reduction of staff Project to be completed in 6 months Already running late by 3 months and $50000 over estimated budget IT consultant has quit resulting in a vulnerable IT system Project quality below standard
To continue working with DTech despite project cost and time overrun:. SchmidtCo had already incurred $600,000 expenses, presently it had budget overrun and 3 months delay.
Should he continue with old system, modified and updated regularly like before? Should he change vendor? How to cut costs and reduce delays if he continues with DTech?
Change in Leadership: John was not able to devote time and he had to leave for executive program.
Should he appoint David Goldberg as the CIO? Should he appoint a new full time project manager to take over the project?
Maintenance of the old system: While the ERP implementation is taking place, the firm still works according to the old system.
Should he hire a different consultant for maintaining the system? Should he appoint a new IT manager for the report writing?
Pr
O A C T
Problem Identification
Identify pros and cons and finally select the viable alternative
High amount of investment for the implementati on backing out now would mean these were dead investments
Business risk
Change in personnel
if the ERP system is not efficient, the business would get affected
To manage the Project cost overrun and reduce execution and implementation time.
To address the issues relating to troubles in other areas of IT consequent to unexpected quitting of the IT Consultant.
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1.
Pros 1. DTech was not able to meet deadlines and project quality 2. Employees did not have adequate know how 3. It was a new player in America with only 15 installed system
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2.
Make David Goldberg the Operations Manager for the ERP Project
Pros
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David Goldberg had the required qualification for the job ( MBA from MIT) He had extensive experience in the IT industry ( Intel, IBM, Accenture) He had already worked partially on the system and from his experience had pointed out a few loopholes in the implementation John Schmidt was predominantly a technical person with no past experiences in such projects He was not able to devote time to the project
Cons
1. 2. SchmidtCo was primarily a family run business. It would mean conceding too much power to David on a very important project Increased cost of paying him full time
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Pros
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Cons
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The work would be easier to monitor and implement Transition from legacy system would be easier and gradual Risks associated with projects are reduced due to continuous monitoring Deadlines and targets are more reasonable and can be estimated with greater accuracy More critical functions like inventory and purchase control can start adding value to the operations more quickly
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More time would be required for project completion Costs would be higher due to repetition and more pilot runs
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A joint task force involving John, Implementation team and VP sales of Dtech should be formed to oversee the running of the project
Pros
1. 2. 3. Greater adherence to timelines leading to reduced costs Shared responsibility and a sense of win-win for both the parties Utilization of resources in a complimentary fashion thereby leading to more efficient use of available resources
Cons
1. Conflict of interest and power distribution in the joint committee
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Pros 1. Will reduce workload on IT Manager and will also bring in expertise required for the new system 2. Conversion of data and design of reports for ERP systems can be made faster 3. Other IT related issues like security and virus attacks can also be tackled 4. Huge expenditure being incurred since it was outsourced
Cons 1. Higher fixed cost in terms of salaries paid to the new team 2. Existing employees might feel hostile and inferior
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Continue with Dtech as the company would be willing to put in effort to make a name in the US market
Appoint David Goldberg as the operation manager for the ERP project and John should be part of the Supervisory team overseeing the project
Phased implementation of the project with the Inventory and Purchase modules being converted first from the legacy system
Formation of a permanent IT infrastructure team and provide requisite training to the current employees to make their transition from legacy systems to ERP
Stricter deadlines and project deliverables for Dtech through the supervisory team Carry out talks with other ERP vendors in case Dtech still fails to deliver
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THANKS
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