Reflective Summary Posting Paper Key Learning Points of Kumar:
In his posting “Information Systems Project Outsourcing” Kumar has explained in detail what costs are expected to be lowered. According to Kumar as a result of outsourcing the cost will be lowered in the areas of technology research in the IT sector, overhead cost regarding IT employees’ headcounts, training of IT employees, lower labor cost incase of outsourcing to offshore locations.
On the other hand Kumar mentioned some business processes where the cost may be higher in case of outsourcing. These include cost incurred during knowledge transition and managing and monitoring the vendor performance. Those factors, which involve greater risk in case of outsourcing, include business knowledge loss, data security, inability of the vendor to deliver quality services, challenge of measuring the performance of the vendor. Conversely the risks, which lower in case of opting outsourcing, include risk of incapability of ramping up IT team on time, schedule and budget overrun of IT projects.
In his posting “Earned Valued” Kumar has explained the difference between variant analysis and earned valued analysis. Variance analysis is helpful in controlling cost, while earned value analysis is based on variance analysis and is helpful in preventing budget and schedule overrun. Variance analysis required up to date information about tasks and expenses incurred. Earned value analysis requires the amount of budget spent so far and the amount of completed work so far. It helps to find out if the project will finish on time.
Moreover speaking about the work authorization and project control, Kumar explained how work authorization provides user control. Work authorization helps to ensure that the expenditure is done within the budget and the work is done only when authorized. Kumar strongly recommends strict use of Work Authorization. But he says that requiring each and every process for approval will block the project procedure. Therefore he recommends that the strictness should not deter the agile method activities while implementing Work Authorization.
In his posting “Project Closure” Kumar explains his experience of a failed project in which he was involved. According to Kumar his project was to deliver an upgraded version of an existing web application and the objective was to provide good quality with in approved budget and on time. According to the post mortem report of the project the major factors, which caused the failure of the project, was the scope creep factor. The late changes made in the project design led to compatibility problems with an important module. As a result many defects and integration problems arose when the customer started using it.
Though the project was delivered on time, but huge architecture problems and heated debate over the flawed design between the customer and the vendor resulted in the closure of the project. The customer decided to move to other application and the finally the project was closed. According to Kumar scope reduction, schedule prolongation and re-solutioning should have been employed in order to rescue the project, and this was what the customer did in the end.
Key Learning Points of Praveen:
In his posting “Information System Outsourcing” Praveen as given a detailed outline regarding the costs which are expected to be lower or higher. The lowering costs include investment on routine IT work, cost advantage through multi deal offering from suppliers, cost of building a technical specialist team, lowering cost because of offshoring, increase in saving percentage from the 2nd year, increase in resources because of hybrid nature of vendor’s organization, cost savings in the service level enhancements due to team collaboration between onsite and offshore teams.
On the other hand costs that would be higher include startup costs, business knowledge transition cost, cost rise due to leakage of revenue on offshore sites, billing of under utilized resources, routine service costs on the infrastructure, repeated management costs and operational costs like telephone and conferencing.
The factors involving greater risk include issues regarding supplier’s location, business continuity planning and disaster recovery, intellectual property risks, data security risks and infrastructure risks. While the factors involving in lower risk include system risks because of introduction of malicious code introduction, capacity of learning curve from contractors based on faraway locations, supplier dependency and cultural integration problems.
In his posting “Earned Value” Praveen explains the significant differences between the variance analysis and earned value analysis. VA is equal to difference between planned and actual expenditure while EVA = effort on actual project completion * cost rate. VA gives the achieved current performance results while EVA gives the information whether the achieved performance results are money’s worth. VA provides only cost variant while EVA provides clarity about the project progress. VA does not provide the opportunity to look at the performance trend for the remainder of the project while the EVA does.
Speaking about the work authorization and project control Praveen says that in order to ensure that cost and work packages approval are placed before authorizing the project teams to perform the actual work. But the strict procedure will become an obstacle against creativity, as every innovation and creative effort will require approval from the top management beforehand. But according to Praveen work authorization only ensures that the involvement of the stake holders are approved from the cost, governance and other logistics, regardless of the agile method or processes as per CMM are used.
In his posting “Project Closure” Praveen has given his experience of a failure in a project he has involved in. Because Praveen claims that he has not worked in any project that has failed, he explained a delay in the Project Startup Phase in a recent project. He quoted that delay as a project failure and also mentioned the measures taken to rectify the problems. The project objectives were to setup a data center and host business applications.
After the kickoff of the project there was a delay in the finalization of the scope of applications for PoC, which was later corrected by conducting workshops with the user teams and explaining them the PoC and the intention of the tests. There was also delay in the procurement of the system and application software for the new data center. This was corrected by coordinating through the customer’s contract team. There was also a delay in establishing communication links between new data center and customer site. It was also corrected by convincing the users to perform tests at the onsite locations.
My Key Contributions:
Outsourcing the IT project is a beneficial operation in general. The most tangible benefits are lowering of cost because of the reduction of the IT department as a result of outsourcing. Lower labor rates in the mostly outsourced locations like India and China will also result in cost reduction. The overall cost is also likely to be reduced significantly in the upcoming after the initial expenditures of outsourcing. But there are significant increase in cost in processes like initial setup, knowledge transfer etc.
Moreover the higher risk factors in case of outsourcing include risk of proprietary knowledge transfer, data security and dependency on the vendor in case of total outsourcing.
The most significant different between VA and EVA is that VA only provides the currently achieved current performance results while EVA gives the information whether the achieved performance results are money’s worth. Work Authorization is necessary to ensure that the work and cost of the project are under control and does not result in budget and schedule overrun, but may hinder the agile method procedures.
Though I do not have any experience of project failure, but I have faced many problems and hurdles during several projects. We have also taken several measures in order to cope with the situations and in most cases we have succeed. Most used methods include reconsideration of the plan, prolongation of the schedule etc.
The most helpful posting of Kumar were his first and the last posting as they give a good analysis of the outsourcing lower and higher costs while the last posting gives an insightful experience of Kumar regarding project failure.
The most helpful postings of Praveen were first and third posting specially the third posting gives a detail account of the significant differences between variance analysis and earned value analysis. He also gave a good opinion regarding the effects of using work authorization while using agile method.
