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Schmidt CoA Case AnalysisImage source: http://www.crosslandconstruction.com/projects/oreilly-kc/1Introduction

Case Facts$ 40 millionAnnual turnover10,000SKUs of different items distributed18 year Old Unreliable & Obsolete inventory management systemA new information system replacement project over shot budget by$50,0004 monthOld Project

3 monthsBehind ScheduleDTechA well-known and widely used system in Europe was selectedSchmidt co is automobile parts distribution company in the process of converting its manual based inventory management system into automated one.Q1. Why is the decision facing John Schmidt is a difficult one?#1The company has already invested $600,000 in the software development#2The HR support from D-tech and in Schmidt both has been below par and has affected the companys conversion process#3The company had no backup plan ready in case of original plan fails. Further delay and failure may jeopardize its business operations#4The company has come very far in conversion and doesnt know what to do next in terms of decision making?#5Despite his fathers caution and internal employees resistance this was by far the biggest CAPEX company has ever madeQ2. What aspects of PrOACT+ framework presented inSmart Choicesare most relevant for Johns decision problem? How should he go about making his decision?For John the most relevant aspects of PrOACT would be to evaluate Alternatives and arrive at Trade-offs that he needs to make between time, cost and scope to finish the project on time. But while making trade-offs he should not lose sight of the Objective of replacing Inventory management system and consider the Consequences of his decisions. The decision process should first set the clear goals followed by evaluating different alternatives and their consequences and then by choosing from the alternatives. Whatever decision he takes, he should also be ready with back up plan in case thing dont go as planned.

Currently the activities are not time bound. Reallocation of resources, reducing the scope and setting the strict timelines will help the project to gain momentum. Hiring a new dedicated Project manager, though will add to cost but will help in streamlining the development process Q3. What is Johns decision problem? #1Managing Cost as conversion project has already exceeded time and money budget by 3 months and $50,000 respectively#2Stopping the conversion project or dump DTech and turn to runner up vendor#3Whom he should handover the project before he leaves for executive program at Harvard Business School#4How to deal with employee trainings and gaining expertise in using the new system#5Dealing with virus threat over the network and setting up new hardware on network was getting expensiveProblemOACTQ4. What should be his objective?#1Make a tradeoff by making quality as constrain, time as enhancer and cost is acceptable#2Focus on finishing the implementation of new system as soon as possible#3He should work on reducing the distractions or delays in terms of network related issues to prevent any blockers #4Focus on improving in-house IT expertise and motivate employees to work harder to finish the project#5Overcome the limitations of old Inventory management system and improve operational efficiencyProblemObjectiveACTQ5. What are his alternatives?

#1Go for runner up Vendor#2Hire a new project Manager and IT consultant to work in tandem with DTech consultants#3Continue with Dtech but in more stricter & agile mode with more number but smaller duration of iterations and modularized team#4Make David Goldberg as CIO and give him the authority to manage and handle the project as he is extensively experienced #5Implement the project in two phases and prioritizing the important features to be finished in phase 1ProblemObjectiveAlternativeCTQ6. What are the consequences of each alternative?

#1Further delayIncreased CostsIncreased RiskBusiness Loss

Go for runner up Vendor

#2Increased CostBetter managementQuick DecisionsExpedition

Hire a new project Manager and IT consultant to work in tandem with DTech consultants#3Reduce/Maintain CostReduce time overrunCompromise on QualityWin-Win for bothContinue with DTech but in more stricter & agile mode with more number but smaller duration of iterations and modularized team#4Additional CostImproved expertise and professionalismJohn can focus on other strategic initiatives

Make David Goldberg as CIO and give him the authority to manage and handle the project as he is extensively experienced #5Better decisionsRelatively better qualityWLB for employees

Implement the project in two phases and prioritizing the important features to be finished in phase 1ProblemObjectiveAlternativeConsequencesTQ7. What should he decide? Why?#1The company has already paid $200,000 as down payment going with any other alternative will add to costs#2Following the agile methodology will help in quick implementation of new system and reduce costs#3Small modularized team will help in better project management and task assignments. This will also help developing the expertise in respective module over long run#4More number of iterations will enable the team to test application frequently and resulting in more stable application #5Following agile the team will also provide daily updates on the progress which will help in close monitoring of the progressProblemObjectiveAlternativeConsequencesTrade-offsJohn should go with combination of 2nd & 3rd alternative i.e. Hire a new project Manager and IT consultant to work in tandem with DTech consultants &Continue with Dtech but in more stricter & agile mode with more number but smaller duration of iterations and modularized teams