This is a true story. The name of the
company has been changed.
Background
The Acme Corporation is a large North
American retail company, with thousands of stores across the continent. The
procurement function was centralized, with purchases made and paid at the head
office.
The process for stores to make a
requisition was extremely outdated, relying on phone calls, emails, and faxes
to make requests and with no insight into the process once it was initiated.
Acme decide to replace their procurement system with a web-based system that
allowed on-line requisitioning, and the ability for store staff to see at any
time the status of their requisitions.
How much money?
During the planning stage, the project
manager had the project technical lead do an assessment of what infrastructure was
needed to support the new system. When the technical lead assessed the network
between the stores and head office, she determined that the new application
would run too slowly.
The project manager talked to the
Network Services department and discovered that the group had no budget to
upgrade the network. They told the project manager that if his project needed
the upgrade, it would have to come out of the procurement project budget, at a
cost of over $100 million.
The estimated cost of the procurement
project was $2 million, so this additional cost would be the end of the
project. It wouldn’t be possible to make a business case for the procurement
project if the cost was increased fifty fold.
Action taken
The project manager asked the technical
lead to do some further analysis, which determined that with the current
network, the response time for users would be more than two minutes, which was
definitely unacceptable. Without the network upgrade, the project was not
viable.
In addition, the project manager asked
the Network Services group for a review of the cost estimate, and the Network
Services group responded that the cost estimate was accurate.
The project manager was not satisfied,
and asked Network Services for another re-work of the cost estimate, with more
details, so that it could be included in a report to the project steering
committee. This time, the Network Services group found a large calculation
error, and revised the cost estimate to $8 million. Although a dramatic
reduction, this could still not be accommodated in the budget for the project.
The project manager advised the
steering committee that the project was not viable without the network upgrade,
but that the cost of the upgrade could not be accommodated in the project
budget.
The steering committee realized there
was never going to be a single project that could absorb the network upgrade
cost and still produce a return on the investment. In addition, the steering
committee also felt that the speed of the network would be a recurring theme,
as demand for faster processes and instant access to information increased.
The steering committee recommended to
Acme management that the network upgrade be approved as a separate project, and
Acme management agreed.
Epilogue
The store managers were pleased with
the new procurement functions and the timeliness of the information available
to them. In addition, store managers who ran multiple stores could see the
additional stores more easily than before.
Conclusions
Discovery of the slow network demonstrates
the project manager’s thoroughness in the planning stage, taking into account
factors other than the application functions themselves. His disciplined
approach was also in evidence when he requested additional backup, ensuring his
estimates were correct, before reporting to the steering committee.
The steering committee comprised
several Acme executives, which was valuable in getting the attention of Acme
management when they needed to remove the financial obstacle to upgrading the
network.
Copyright
2015 Debbie Gallagher
