Kellogg students Derek Yung and Alex Gershbeyn prepared this case under the supervision of Professor Mark Jeffery as the basis of class discussion rather than to illustrate either effective or ineffective project management. Some facts within the case have been altered for confidentiality reasons. A&D High Tech Case B: Managing Scope Change OVERVIEW Having successfully planned and organized the on-line store project, Chris Johnson was reassigned to begin learning his role as the new V.P. of eBusiness. Eric Robertson returned from his leave and assumed the position he had left as the project manager for the on-line store project. Three months later, Johnson heard whispers from his colleagues that the project was in trouble. On August 20th, the CIO Matt Webb frantically approach Johnson in his office. He had just fired the project manager and wanted Johnson to serve as the interim project manager. For over 3 months, Robertson had told Webb that the project was on track but suddenly change course and told him that he “guessed” it will be at least one month late and costs would overrun by over 20%. This was hardly acceptable since the project was to be completed in time for the Christmas shopping season. The project had strategic importance, and was integral to how the company had planned on marketing holiday promotions. Webb explained to Johnson that there was an additional challenge: the VP of marketing wanted to create promotional bundles for the holiday season. Promotional bundles are a collection of items sold, or bundled, together at a lower cost compared to if the items were purchase individually. Trial promotions at some of the retailers had shown an increase of 10% in sales. The promotional bundles would be rolled out nationally. Thus, to have all sales channels consistent, they should be available in the on-line store as well. Once again, Johnson was asked to quickly troubleshoot the project. He needed to analyze the true state of the project and gather his projections for cost and schedule. Johnson also needed to assess the possible impact of adding promotional bundles. Although deterred from his transition into his new job, Johnson was nonetheless excited to once again put his project management expertise to use. Copyright 2002  by Professor Mark Jeffery. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise — without the permission of Mark Jeffery. Kellogg School of Management PROMOTIONAL BUNDLES The promotional bundles did not necessarily present a technical design challenge for the project. The product catalog from MS Site Server had the flexibility to handle complex rules in dealing with different pricing schemes. However, since MS Site Server needed to be configured and tested, this did present a new set of tasks that was not originally planned or estimated. technical lead had experience working with these consultants and imagined that it would take no more than 2-3 days for a consultant to do the configuration work and to train another developer to maintain the rules in the system. The MS consultants charged a rate of $500 per hour and require a minimum of 2 weeks to arrange for the visit. That is, this MS consultant could be hired for 2-3 days work, but required 2 weeks lead time to schedule. REVIEW MEETING Sales planning called for a total of 12 promotional bundles. The technical lead on the team estimated that after 2-3 days of training per person, it should take between 10-12 “man-days” for his team to configure the pricing rules in the system. The testing lead estimated it would take 20-25 man-days to test the new features and to regression test the existing products in conjunction with the promotion bundles. The technical lead, Marc Sanders, was a bit worried about the size of his development team since he was barely keeping up with his managerial duties. PROJECT SCOPE Besides the promotional bundles, there was no functional or scope change in the project. Therefore no new work, or new tasks had been introduced thus far. Currently, A&D charged shipping as a flat percentage depending on the size of the order. The on-line store, however, was to be built to handle percentages and to specify shipping charges on a per item basis. The baseline estimate of the Submit Order tasks for design and build included the work for the extra shipping functionality. The technical lead estimated that he could shave work off the Submit Order tasks by 50% if he did not have to built the per item shipping charge feature. PROJECT STAFFING As far as Johnson knew, the IT staff was running at full capacity, which meant that any additional resources for the project would have to be contractors. The market rate for a contract developer had risen to $175 per hour, and 150% of this rate for any overtime. Johnson’s best guess was that it would take l week for a new developer to get acclimated and trained on the procedures of the project. A&D had traditionally not used contractors for testing. Microsoft had consultants who were fully trained with the expertise to configure the pricing engine to accommodate the promotional bundles. The After the review meeting with Webb, Johnson quickly gathered all the leads of the project to get their input on the state of the project. He learned that there had been no measurement and hence no evaluation of project management metrics. This came as a surprise to Johnson since Robertson had been known to be meticulous in measuring projects quantitatively in the past. After working with the leads for over a week, Johnson painstakingly pieced together the historical data and got the actual time spent working for all relevant tasks as of 8/28. See Exhibit 1 for the project “actuals”. The project was originally scheduled to be implemented by mid-November before the Thanksgiving weekend. The VP of Marketing and Webb agreed that it was possible to delay implementation until December 3rd and still reap some of the benefits of the holiday season. Johnson realized that this was far from the ideal scenario since they would miss the Thanksgiving shopping weekend. However, he needed to provide Webb an accurate assessment on how and when the project could be completed. Johnson realized that as a first step he needed to update the original Microsoft Project document. He was not sure what, if any, problems existed within the original project. He was also not sure exactly how to incorporate the promotional bundles in the project plan. His experience told him however, that for sure something would need fixing, and the last minute scope change was going to cost the company. ANALYSIS What should Johnson recommend? Analyze the project impacts and make the appropriate forecasts. The following questions may help your analysis: • As of 8/28, what is the projected cost and schedule? What are the trends? What is the critical path(s)? 2 Kellogg School of Management • • Given the dimensions of project management and critical paths of a project, what can be done to bring the project back on track? Is it possible to implement the changes to incorporate the promotional bundles and to complete the project by 12/3? What are the • necessary changes to the plan? Are there any additional risks involved in the revised plan? What’s the estimated cost variance for the project? 3 Exhibit 1 – Project Actuals Task Name Overall Project Baseline (days) Variance Actual Remaining Resource Name 127 -2 90 35 Chris Johnson (Project Manager) Gather Business Requirements 8 -1 7 0 Ryan Neff (Functional Lead),Stacy Lyle (Functional Analyst) Design Business Process Flows 4 0 4 0 Ryan Neff (Functional Lead),Stacy Lyle (Functional Analyst) Finalize Technical Requirements 6 -1 5 0 Rick Burke (Infrastructure Lead) Create Operational Requirements 15 0 15 0 Ryan Neff (Functional Lead),Stacy Lyle (Functional Analyst),Rick Burke (Infrastructure Lead) Identify Technical Infrastructure Needs 2 -1 1 0 Rick Burke (Infrastructure Lead) Capture Customer Profile 4 0 4 0 Ryan Neff (Functional Lead) View and Search Product Catalog 6 0 6 0 Ryan Neff (Functional Lead) Updating and Calculating Shopping Cart 3 1 4 0 Ryan Neff (Functional Lead) Taking Payments 6 -1 5 0 Stacy Lyle (Functional Analyst) Submit Order 4 0 4 0 Ryan Neff (Functional Lead) Check Order History & Order Status 3 0 3 0 Ryan Neff (Functional Lead) Create Data Requirements 3 0 3 0 Stacy Lyle (Functional Analyst) Create ERP Interface Requirements 7 8 10 5 Stacy Lyle (Functional Analyst) Create User Interface Requirements 4 0 4 0 Stacy Lyle (Functional Analyst) Design Capture Customer Profile Pages & Components 13.5 0.5 14 0 Marc Sanders (Development Lead),Ryan Neff (Functional Lead)[50%] Design View and Search Product Catalog Pages & Components 13.5 0.5 14 0 Developer 1 (TBD),Ryan Neff (Functional Lead)[50%] Design Updating and Calculating Shopping Cart 6 0 6 0 Developer 1 (TBD),Ryan Neff (Functional Lead) Project Management Manage Project System Requirements 0 Software Requirements Create Functional Requirements Detailed Design 4 Design Taking Payments Pages & Components 6 0 6 0 Marc Sanders (Development Lead),Stacy Lyle (Functional Analyst) Design Submit Order Pages & Components 16 0 16 0 Marc Sanders (Development Lead),Ryan Neff (Functional Lead) Design Check Order History & Order Status Pages & 4 Components 1 5 0 Marc Sanders (Development Lead),Ryan Neff (Functional Lead) Design Logical & Physical Data Model 18 -6 12 0 Sanjay Vohra (DBA),Stacy Lyle (Functional Analyst) Design ERP Interface 20 10 20 10 Developer 1 (TBD),Stacy Lyle (Functional Analyst) Test Planning Gather Testing Requirements 14 0 14 0 Kara Siposki (Test Lead),Todd Eliason (Tester) Create System Test Plan & Test Cases 20 0 20 0 Kara Siposki (Test Lead),Todd Eliason (Tester) Write System Test Scripts 22 0 20 2 Kara Siposki (Test Lead),Todd Eliason (Tester) Create Development Environment 20 0 20 0 Rick Burke (Infrastructure Lead) Create Testing Environment 34.2 -4.2 10 20 Rick Burke (Infrastructure Lead)[90%] Technical Infrastructure Support Development Environment 3.8 -0.2 1.2 2.4 Rick Burke (Infrastructure Lead)[10%] Support Testing Environment & Deployment 46 0 0 46 Rick Burke (Infrastructure Lead) Support Database 4.6 0 0.1 4.5 Sanjay Vohra (DBA)[10%] 13 1 14 0 Developer 2 (TBD) 12 2 14 0 Developer 3 (TBD) 7 4 6 5 Developer 3 (TBD) Development & Unit Test Build Capture Customer Profile Pages & Components Build View and Search Product Catalog Pages & Components Build Updating and Calculating Shopping Cart Build Taking Payments Pages & Components 6 1 7 0 Developer 2 (TBD) Build Submit Order Pages & Components 24 0 0 24 Developer 2 (TBD),Developer 3 (TBD) Build Check Order History & Order Status Pages & Components Build Logical & Physical Data Model 6 0 6 0 Marc Sanders (Development Lead) 15.5 0 10 5.5 Sanjay Vohra (DBA)[50%] Build ERP Interface 18 14 2 30 Developer 1 (TBD) Support Development & Assembly Test 46 0 2 44 Ryan Neff (Functional Lead),Stacy Lyle (Functional Analyst) 5 Testing Perform Assembly Testing 32 Perform Phase 1 Testing 12 Marc Sanders (Development Lead) Perform Phase 2 Testing 20 Marc Sanders (Development Lead),Developer 1 (TBD),Developer 2 (TBD),Developer 3 (TBD) Perform System Testing 160 Kara Siposki (Test Lead),Todd Eliason (Tester),Marc Sanders (Development Lead),Developer 1 (TBD),Developer 2 (TBD),Developer 3 (TBD),Ryan Neff (Functional Lead),Stacy Lyle (Functional Analyst) Perform Validation Testing 80 Kara Siposki (Test Lead),Todd Eliason (Tester),Marc Sanders (Development Lead),Developer 1 (TBD),Developer 2 (TBD),Developer 3 (TBD),Ryan Neff (Functional Lead),Stacy Lyle (Functional Analyst) Implement System 80 Kara Siposki (Test Lead),Todd Eliason (Tester),Marc Sanders (Development Lead),Developer 1 (TBD),Developer 2 (TBD),Developer 3 (TBD),Ryan Neff (Functional Lead),Stacy Lyle (Functional Analyst) Deploy To Production 8 Kara Siposki (Test Lead),Todd Eliason (Tester),Marc Sanders (Development Lead),Developer 1 (TBD),Developer 2 (TBD),Developer 3 (TBD),Ryan Neff (Functional Lead),Stacy Lyle (Functional Analyst) Project Wrap-Up 90 Kara Siposki (Test Lead),Todd Eliason (Tester),Marc Sanders (Development Lead),Developer 1 (TBD),Developer 2 (TBD),Developer 3 (TBD),Ryan Neff (Functional Lead),Stacy Lyle (Functional Analyst),Rick Burke (Infrastructure Lead) Deployment 6

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