A&D HIGH TECH (A) MANAGING
PROJECTS FOR SUCCESS
Case Study #1
October 9, 2018
Submitted by: Habin Haridas & Chrissy Rossiter
Table of Contents
Executive Summary 2
Problem Identification 3
A&D Case Background 3
Literature Review 4
Analysis of Facts 5
Findings from the Project Management Plan 5
Schedule 5
Cost 6
Risk Management 6
Solution Development 7
Findings and Managerial Recommendations 7
Conclusion 8
References 8
Appendices 10
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Executive Summary
A&D High Tech is in the computer products, accessories, and services business. Their
predominant sales channel is retail outlets in shopping malls and phone orders. A&D requires an
online sales channel as their products are reaching commodity status and to remain competitive
they need to reduce costs in SG&A expenses.
A&D decided to build the online store in-house, which will provide them customization,
a competitive edge, and control over the system. The online store requirements include new
orders, add-on orders, order amends, order status, and lead capture with additional capabilities.
Chris Johnson, Technology Project Manager at A&D High Tech, was been selected by the CEO
of A&D, Ted Walter, among other executives at the company to takeover a high priority project
with a fixed deadline as the current project manager had to step away from the lead role. Johnson
needs to provide a recommendation to the steering committee for the direction of the project
containing strong facts and problems identified.
Using Microsoft Project, we created a project management plan, visualize the project’s
resource usage, and created a project schedule. This revealed the project duration to be 127 days,
finishing on November 19 prior to the Christmas deadline.
Creation of a risk management plan revealed the project to be high risk and outlined the
major issues that could prevent the project from being completed in time. These include the
timely and complex infrastructure setup and the heavy reliance on subcontractors. We
determined that those issues could be reduced through increasing internal staff for the
infrastructure and better scope planning and communication documents for the subcontractors.
Recommendations for the steering committee are as followed: Adding more experienced
infrastructure support resource to reduce the risk and time required, creating an internal
communications plan to reduce risk of underperforming or under-utilised resources, using
multiple suppliers to reduce the risk of supplier not meeting expectations and using customer
feedback on the prototype to reduce the risk of incorrect scope and changes in scope.
By reducing/removing the risks associated with quality and schedule A&D is doing all
that they can to respond to the external threat of competitors maintain their position in the
market.
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Problem Identification
A&D High Tech is experiencing tough competition and decreasing margins, losing
market share to competitors as they operate at higher SG&A costs. Their products are becoming
commoditized and maintaining the position as a market leader requires the business to reduce
their costs and increase their sales. This problem is significant to the entire organization and is
being addressed by the CEO, CIO, VP of E-Business, VP of Sales, among others.
For A&D to regain their competitive advantage it needs to start selling online and adapt
to the external technological changes while maintaining their position as the friendly and
customer-focused offering. And A&D need to have the online store ready before the holiday
season. Johnson is responsible for taking the information gathered during the initiation phase and
determining how to best undergo the project.
Data Collection
To evaluate the quantitative data provided in the case, Microsoft Project was used to
create a project management plan, visualize the project’s resource usage, and create a project
schedule. This enabled the analysis of the project completion timeline, its feasibility, risks &
mitigations, and accommodating for scope changes. Furthermore, secondary research from the
case and obtained from outside sources aided in solution development and recommendations for
the project.
A&D Case Background
Founded in 1988 by Ted Walter, A&D High Tech sells computer products, accessories,
and services to consumers and businesses (Jeffery, Yung, & Gershbeyn, 2017). In the early days,
the company embodied friendly customer service and innovative product distribution, bringing
them substantial revenues for a decade. Prior to 1999 A&D sales orders were manually recorded
at a call centre using erroneous processes. The company recognized the disparity between their
customer call-backs and their competitors and responded by implementing an enterprise resource
planning system. This integration was a success and A&D attained the leading callback rate in
the industry, seeing benefits in reduced costs and ROI in the supply chain and data warehousing
projects (Jeffery, Yung, & Gershbeyn, 2017).
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In 2002 following the decision to build an online store the company was faced with the
decision to build or buy the application (Jeffery, Yung, & Gershbeyn, 2017). Purchasing a
commercial application would be lower in cost if requiring minimal modifications, however it is
unlikely that the program would work to A&D’s specifications. A custom-build would ensure
they had exactly what they needed but could take longer to build and be expensive. The key
determinants of the final decision to build were the unknown risks and costs of a commercial
software application as well as the potential edge and benefits a custom solution could provide
the firm (Jeffery, Yung, & Gershbeyn, 2017).
Information on planning tasks for the project was attained by the six-person cross-
functional team for building the website. Senior management required a minimum set of business
requirements for the online store including new orders, add-on orders, order amends, order
status, and lead capture with its own set of specifications (Jeffery, Yung, & Gershbeyn, 2017). It
was determined by the team that the online store would have no impact on existing activities as
the application serves as its front. What will be required is support for system errors in the IT
support procedures. The team noted that all software licenses are in-house, therefore no costs
were incurred procuring software for the online store’s technical architecture. The physical
infrastructure, however, would entail the purchasing of twelve Windows 2000 workstations (at
$3,000 each) and five Windows 2000 servers (at $12,500 each) (Jeffery, Yung, & Gershbeyn,
2017). Furthermore, the team created a user interface and application flow prototype which was
approved as a mock-up for building the online store by A&D’s VP’s of sales and marketing. The
project WBS, task estimates, project resources and scheduling were prepared by Robertson’s
team. It was determined that there were no developers available internally for the project
therefore a contracting company, Geneva, was selected to staff these positions.
Literature Review
The IT industry has an abundance of risk factors threatening the success of project
implementation. In 2004 it was estimated that only 28% of software development projects were
successful and 51% of projects completed were over-budget, behind schedule, or containing
fewer functions than originally specified (Tesch, Kloppenborg, & Frolick, 2007).
The success of any software development project is within effective project management,
including the need for formal assessment of risks, benefits, and viability of projects prior to
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contractual agreement (Tesch, Kloppenborg, & Frolick, 2007). The PMBOK Guide defines
Project Risk Management as "the processes concerned with conducting risk management
planning, identification, analysis, responses, and monitoring and control on a project" (PMBOK
Guide, 2013). Some of the top-rated risks in a project include scheduling, scope, and
personnel/staffing (Tesch, Kloppenborg, & Frolick, 2007). PMBOK describes risk avoidance and
mitigation techniques to respond to risks identified in planning. For scheduling, artificial
deadlines and having a user lead the project create risks for the project’s success (Tesch,
Kloppenborg, & Frolick, 2007).
To mitigate these risks it is suggested by Tesch et al. that a phased approach to planning is
used, clearly communicate schedule risks while re-evaluating plans on an on-going basis, and
finally getting the customer to commit to limiting the project. They mention that a lack of people
with the right skills available can be mitigated by reducing the scope if you cannot add sufficient
staff, obtain temporary resources, and reassign people. When the project is not based on a
business case or objectives are unclear it is likely for the scope and requirements to creep (Tesch,
Kloppenborg, & Frolick, 2007). Tesch et al. claims that the business case, piloting prior to full
rollouts, and seeking alternative approaches can reduce the scope risk factors. Risk management
activities are beneficial in better estimating the required resources for performing a task
(Ropponen and Lyytinen, 1997)
Analysis of Facts
Findings from the Project Management Plan
Using the WBS, case information, and secondary research analysis of the project
management plan was conducted, uncovering facts and issues within it.
Schedule
With a project start date of May 26 2003 the completion date is expected to be November
19 2003, a duration of 127 days (See Appendix C). The task sheet created in the project
management plan (See Appendix C) revealed the technical infrastructure as 104 days in duration,
the longest in the project. This is a complex set up being built from scratch mostly by a single
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resource, Rick Burke Infrastructure Lead. Noted in the case is that the project deadline is a fixed
constraint.
Cost
When considering the resource schedules and their associated costs the estimated total
project cost is over $940,000 (See Appendix B). Total labour costs are estimated at an
approximate $476,000 which doesn’t include associated overhead expenses (See Appendix B).
The materials will cost $98,500 and the subcontractors approximately $367,000 (See Appendix
B). The management at A&D made clear that the project is high priority and that budget is not a
constraint.
Risk Management
The roles and responsibilities of the risk management plan pertain to the steering
committee, Chris Johnson, and the project team (See Appendix A). The project risks were
identified using a risk breakdown structure (See Appendix A). High risks in the project include
the following:
● The subcontractor Geneva was still identifying the actual resources needed. Risk of
underskilled or unmotivated resources and risk of delay in identifying and onboarding
resources.
● Dependency on external contractor since there are no internal resources available to
complete the project.
● Requirements -- Incomplete business requirements and scope creep.
● Complex technical architecture for the fixed deadline.
● Too many critical paths in the project. Slippage on any would affect the project
completion date.
● Communicating -- Project resources not understanding the objectives of the project and
their role.
By addressing the high project risks it can be determined if the project is worth pursuing
and how to best pursue it.
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Solution Development
Recalling from the literature review, success from any project is all the ability to manage
the project. Planning for issues to occur, communicating schedule risks and continually re-
evaluating plans are all key aspects in project management success.
A&D has undergone the initiation phase of the project and are at a pivotal moment in
company history. Going through the project management plan it is revealed that the project can
move forward in attempting to make the Christmas deadline, however there is little room for
change in the deadline or quality. It is therefore imperative for the project’s success that the
issues related to quality and schedule are mitigated. The two issues in the project mentioned in
the previous section are the timely infrastructure setup and the heavy reliance on contractors.
The infrastructure setup takes the longest as it is complex and understaffed. Involving
internal infrastructure support staff with experience would help mitigate this risk. Rick Burke
was assigned to this but adding an additional resource would help reduce risk drastically. Adding
more expert resources to critical tasks and accelerating longer tasks earlier on can help mitigate
this risk.
Dependency on an external contractor due to a lack of internal resources has numerous
associated risks such as underskilled resources or a lack of communication delaying the project.
An option is to manage the supplier relationship actively by properly documenting and
communicating the scope, as well as getting involved in the screening and selection process.
Using multiple-suppliers would drastically reduce this risk. As a high priority project with buy-in
from management seeking internal resources from other departments or project teams would help
mitigate this risk. Setting up a good internal communication plan would help with
communication issues.
Findings and Managerial Recommendations
The significantly prioritized nature of the proposed project at A&D is high risk but a
necessary response by the company to external forces on the business. With the current project
plan the project is expected to be completed by 19th November. Which is well before the
Holiday season. Hence the plan meets the main objective mandated by the project sponsors.
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However, this possible under the understanding that there are no scope creeps, or
technical issues stalling the development. And to ensure that the following are recommended.
Using customer feedback on the prototype would help reduce the risk of incorrect scope and any
changes in scope. The use of a contractor is one of the key risks the project faces, and the fact
they still have not identified the key resources who are going to work on a major chunk of the
software development of the project is extremely risky. Using multiple suppliers would help
reduce the risk of supplier not meeting expectations. Also analysing the project plan has revealed
that only a single internal resource was assigned to work on the infrastructure setup for the
project. This is very risky and inefficient. Finding an additional resource through other channels
for this would help reduce the time taken and reduce the risk of losing the sole resource of other
reasons. Creating an internal communications plan would help reduce risk of underperforming or
un-utilised resources. This plan will outline the procedures for maintaining on-going
communication throughout the project cycle.
Conclusion
As discussed in the literature reviews, IT projects have numerous risks that are
challenging to address and mitigate. Despite being a high risk project it is in the best interest of
A&D High Tech to undergo the project. The risk of consequences they will face by not
responding to the changing market is evidently high as the project is the highest priority and
ideally should not carry a baseline budget.
The project deadline is fixed and crucial to its success, therefore planning and
strategizing to reduce task durations and mitigate schedule and quality risks is Chris Johnson’s
next move forward.
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References
Jeffery, M., Yung, D., & Gershbeyn, A. (2017). A&D High Tech (A): Managing Projects for
Success. Kellogg School of Management Cases, 1(1), 1-20.
doi:10.1108/case.kellogg.2016.000008
Project Management Institute. (2013). A Guide to the Project Management Body of
Knowledge (Fifth Edition)
Ropponen, J., & Lyytinen, K. (1997). Can software risk management improve system
development: An exploratory study. European Journal of Information Systems, 6(1), 41-
50. doi:10.1038/sj.ejis.3000253
Tesch, D., Kloppenborg, T. J., & Frolick, M. N. (2007). IT PROJECT RISK FACTORS: THE
PROJECT MANAGEMENT PROFESSIONALS PERSPECTIVE. The Journal of Computer
Information Systems, 47(4), 61-69. Retrieved from https://search-proquest-com.qe2a-
proxy.mun.ca/docview/232575798?accountid=12378
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Appendices
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Appendix A: Risk Management Plan
Risk Management Plan
1) Roles and responsibilities
a) Steering Committee (Ted Walter, CEO; Matt Webb, CIO; Jeff White, VP Sales):
Oversee risk management activity for the project
i) Approve risk management plan
ii) Ensure risk register is established with details of the mitigation actions
taken
iii) Review risk management reports and take decisions on recommendations
b) Project Manager (Chris Johnson): Execute effective risk management practices
for the project
i) Create and implement risk management plan
ii) Review and identify key risks throughout the project duration
iii) Develop strategies to manage identified risks
iv) Monitor risks identified throughout the project lifecycle
v) Create regular reports for management
c) Project Team:
i) Assist project manager in the risk management process.
2) Risk Identification
a) We could use the risk breakdown structure to identify potential project risks as
below:
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1.1 Requirements -- Incomplete business requirements and scope creep
1.2 Technology
1.2.1 Integration with JD Edwards -- The project could get stalled if integration with JD Edwards
is faced with technical challenges
1.2.2 Inaccurate system design could make the website crash with high traffic
1.2.3 Impact on current processes
1.3 Complexity and interfaces
1.3.1 Prototype designed with no user input. User friendliness could be an issue
1.3.2 Complex technical architecture for the fixed deadline
2.1 Subcontractors and suppliers
2.1.1 The subcontractor Geneva, was still identifying the actual resources needed. Risk of
underskilled or unmotivated resources
2.1.2 The subcontractor Geneva was still identifying the actual resources. Risk of delay in
identifying and onboarding resources
2.2 Customer -- No market research on online buyer preference conducted. Risk from inaccurate
business requirements
3.1 Resources
3.1.1 Dependency on external contractor since there are no internal resources available to
complete the project.
4.1 Planning
4.1.1 Too many critical paths in the project. Slippage on any would affect the project completion
date
4.2 Controlling
4.2.1 Changes in WBS if there are changes in scope if the prototype requirement is not accurate
4.3 Communicating -- Project resources not understanding the objectives of the project and their
role
3) Qualitative Risk Assessment
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Probability
Low Med High
Consequences High 1.2.1, 4.2.1 1.1, 1.3.2, 2.1.1, 2.1.2,
MED 4.1.1, 4.3 3.1.1 HIGH
HIGH
Med 1.2.2, 1.2.3 1.3.1, 2.2,
LOW MED
Low
4) Quantitative Risk Assessment
Probability of Failure Consequences of Failure
Maturity 0.5 Cost 0.1
Complexity 0.7 Schedule 0.9
Dependency 0.5 Performance 0.7
Programmer 0.5 Reliability 0.5
Skill
❑❑ Pf = (0.5+0.7+0.5+0.5)/4 = 0.55
C f = (0.1+0.9+0.7+0.5)/4 = 0.55
Risk Factor: 0.55+0.55 - (0.55*0.55)
:0.80 (high risk)
Risk Mitigation Strategies
High Risk Mitigation Strategy
2.1.1 The subcontractor Geneva, was still 2.1.1 Manage supplier relationship actively,
identifying the actual resources needed. Risk by properly communicating the scope and
of underskilled or unmotivated resources. getting involved in the screening and selection
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2.1.2 The subcontractor Geneva was still process.
identifying the actual resources. Risk of delay 2.1.2 Manage supplier relationship actively,
in identifying and onboarding resources. by properly communicating the scope and
getting involved in the screening and selection
3.1.1 Dependency on external contractor since
process. Using multiple-suppliers would
there are no internal resources available to drastically reduce this risk.
complete the project. 3.1.1 Considering that this is a high priority
1.1 Requirements -- Incomplete business project with buy-in from management.
requirements and scope creep. Seeking internal resources from other
1.3.2 Complex technical architecture for the departments or project teams would help
fixed deadline. mitigate this risk.
1.1 Refine scope by involving all stakeholders
4.1.1 Too many critical paths in the project.
including customers. Use change control
Slippage on any would affect the project methodologies and prevent changes to scope.
completion date. 1.3.2 Involving internal infrastructure support
4.3 Communicating -- Project resources not staff with experience would help mitigate this
understanding the objectives of the project risk. Rick Burke was assigned to this but
and their role. adding an additional resources would help
reduce risk drastically.
4.1.1 Adding more expert resources to critical
tasks and accelerating longer tasks earlier on
can help mitigate this risk.
4.3 Setting up a good internal communication
plan would help mitigate this risk
Moderate Risk
1.2.1 Integration with JD Edwards -- The 1.2.1 Utilizing slack time to do some
project could get stalled if integration with JD preliminary testing before actual deployment
Edwards is faced with technical challenges would help mitigate this risk.
4.2.1 Refine scope by involving all
4.2.1 Changes in WBS if there are changes in
stakeholders including customers. Use change
scope if the prototype requirement is not control methodologies and prevent changes to
accurate scope.
1.3.1 Prototype designed with no user input.
User friendliness could be an issue 1.3.1 Use customer input to refine the
2.2 Customer -- No market research on online prototype design
buyer preference conducted. Risk from 2.2 Use customer input to refine requirements
and scope
inaccurate business requirements
Low Risk
1.2.2 Inaccurate system design could make the 1.2.2 More extensive testing would help
website crash with high traffic reduce this risk
1.2.3 Impact on current processes 1.2.3 Plan for adequate testing with room for
process improvements if required
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Appendix B: Project Cost Estimates
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Appendix C: Project Plan
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