Online store project3
Risks and Contingencies16
A&D High Tech is a US medium size company that started to operate in the business of computer systems products and services in 1988. Due to fierce competition and decreasing profit margins, the company founder and CEO was seeking other growth opportunities by adopting two new strategies, namely: * Increasing sales nationally
* Utilizing modern technology to increase operational efficiency The company online store was the answer that would enable A&D High Tech to realize both growth strategies. Moreover, it would help the company gain a new competitive edge. That’s why, it was decided that it would be the company’s top priority. In this report, we address a problem the company is facing which is meeting the deadline for launching an online store before Christmas. The project will cost around 1 million USD and will be finished by the 27th of November according to the initial plan; however, as outlined later, finishing by this deadline is too risky. We are presenting two alternatives for carrying out the project in a shorter time frame, like working overtime or hiring extra resources. We have mixed the two alternatives so that the tasks that are quality sensitive/critical will be crashed by subcontracting additional resources to avoid employee fatigue that can effect the quality of the work, while the tasks that are indivisible or have a learning curve that need to be done by one resource will be crashed by overtime work. In addition we are highlighting some risks and indicating some actions to mitigate these risks. For example the contracted developers may be less skilled than the current resources. Accordingly, they may take a longer time to finish their tasks. Mitigation for this would be a preventive action where the project manager will be very careful in selecting the contractors and will do so against specified guidelines.
Online store project
After considering the build vs. buy alternatives, the company’s CIO has decided to go for the build option for different reasons. It’s worth mentioning that this project may be categorized as a Platform project since it involves creating a totally new sales channel/process. After weeks of planning, the project was scheduled to start on 26th of May 2003 Project organization
Given the project importance, and since the original bright project manager was taking a leave for urgent family reasons, the project was being handed over to one of the company’s most experienced technology project managers, Chris Johnson. Project team was also formed from the company’s best senior staff. Most of this heavyweight team is fully dedicated to the project and totally responsible of defining, designing and implementing the new system. Project purpose
The Christmas shopping season is the peak of the A&D’s business cycle. In the US, it traditionally starts with the Black Friday (the day following Thanksgiving) which is on 28th of November 2003. So the Project Objective Statement (POS) is to complete the design, development, testing and deployment of the online store by 27th of November 2003 Project cost
Online store project would cost A&D slightly below one million USD. The following table describes the project cost. Labor cost is calculated using MS project and assumes all resources works 40 hours per week with no overtime Labor cost (no overtime)| $843,360|
Capital cost (workstations & servers)| $98,500|
Using Microsoft Project and applying resource leveling, the project was estimated to finish on the 28th of November 2003 as shown in the below snapshot which is almost the desired date. However, as explained later, it’s too risky to achieve.
PERT technique is applied to...