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Sparrow Hawk Information Technology Solutions

Term Project

ISQS 5343: Operations Management and Management Science

Jeff MorrisBrian WilderDerrick Plunk

5/4/2010

Term ProjectMay 4, 2010

Table of ContentsProject Part 1...............................................................................................................................................6

Section 1.1...............................................................................................................................................6

Section 1.2...............................................................................................................................................7

Service Blueprint..................................................................................................................................7

Front-Office.........................................................................................................................................8

Back-Office...........................................................................................................................................9

Waiting Line Analysis.........................................................................................................................10

Section 1.3.............................................................................................................................................11

Idea Generation.................................................................................................................................11

Feasibility Study and Rapid Prototyping............................................................................................11

Market Analysis.............................................................................................................................11

Economic Analysis.........................................................................................................................12

Technical and Strategical Analysis.................................................................................................12

Performance Specifications...........................................................................................................13

Rapid Prototyping..........................................................................................................................13

Form and Functional Design..............................................................................................................14

Functional Design..........................................................................................................................14

Reliability.......................................................................................................................................14

Maintainability...............................................................................................................................14

Usability.........................................................................................................................................15

Final Design and Productivity............................................................................................................15

Productivity Measurements..........................................................................................................16

Resources Needed.............................................................................................................................16

Section 1.4.............................................................................................................................................17

Section 1.5.............................................................................................................................................17

Section 1.6.............................................................................................................................................17

Section 1.7.............................................................................................................................................19

Balanced Scorecard...........................................................................................................................19

Project Part 2.............................................................................................................................................20


Section 2.1.............................................................................................................................................20

Section 2.2.............................................................................................................................................21

Section 2.3.............................................................................................................................................22

Sample c-Chart..............................................................................................................................23

Sample Pareto diagram.................................................................................................................24

Section 2.4.............................................................................................................................................25

Dimensions of Quality (Services).......................................................................................................25

Time and timeliness.......................................................................................................................25

Completeness................................................................................................................................26

Consistency....................................................................................................................................26

Accuracy........................................................................................................................................27

Responsiveness..............................................................................................................................27

Section 2.5.............................................................................................................................................28

Project Part 3.............................................................................................................................................31

Section 3.1.............................................................................................................................................31

Strategy Development.......................................................................................................................31

Customer Acquisition........................................................................................................................31

New Service Development.................................................................................................................32

Performance Measures.....................................................................................................................32

Efficiency........................................................................................................................................32

Quality...........................................................................................................................................33

Timeliness......................................................................................................................................33

Section 3.2.............................................................................................................................................34

Process Map Diagram........................................................................................................................34

Overview...........................................................................................................................................35

Detailed Description..........................................................................................................................35

Section 3.3.............................................................................................................................................36

Management.....................................................................................................................................36

Section 3.4.............................................................................................................................................38

Improvement.....................................................................................................................................38

Project Part 4.............................................................................................................................................40


Section 4.1: Vertical Integration............................................................................................................40

Section 4.2: Supply Chain Strategy........................................................................................................41

Section 4.3: Outside Processes..............................................................................................................41

Section 4.4: Facility Location.................................................................................................................42

Overview...........................................................................................................................................42

Lubbock Office Details...................................................................................................................44

Abilene Office Details.....................................................................................................................45

Dallas Office Details...............................................................................................................................46

Location Factor Model...................................................................................................................47

Decision.............................................................................................................................................47

Section 4.5: Project Simulation..............................................................................................................48

Project Part 5.............................................................................................................................................50

Section 5.1.............................................................................................................................................50

Section 5.2.............................................................................................................................................50

Section 5.3.............................................................................................................................................51

Section 5.4.............................................................................................................................................52

Section 5.5.............................................................................................................................................55

Section 5.6.............................................................................................................................................56

Section 5.7.............................................................................................................................................57

Section 5.8.............................................................................................................................................59

Section 5.9.............................................................................................................................................61

Section 5.10...........................................................................................................................................62

Project Part 6.............................................................................................................................................64

Business Launch Project........................................................................................................................64

Work Breakdown Structure...............................................................................................................64

Network Diagram..............................................................................................................................65

Gantt Chart........................................................................................................................................67

Explanation........................................................................................................................................68

Sample Client Project............................................................................................................................69

Work Breakdown Structure...............................................................................................................69

Network Diagram..............................................................................................................................70


Gantt Chart........................................................................................................................................72

Graded Deliverables..................................................................................................................................73


Project Part 1

Section 1.1Our firm’s primary task will be to create and maintain custom software applications for

businesses that are primarily, but not exclusively, located on the south plains of Texas. Our core values

will consist of:

Selling the highest quality software available in the United States

Satisfying and maintaining beneficial relationships with our customers after the sale

Creating and fostering a team atmosphere among employees

Creating wealth through profits and growth

Giving back to the community we call home

Our customers will be comprised of businesses and individuals who are interested in using the

latest in computer technology to track inventory, organize information and aid in business decisions.

Our core competency will be the face to face service we provide. Our company believes that when we

work together with a company to solve their business needs, we are not just creating a system for

their use; we are creating a relationship that can prove positive over the long run.

Order qualifiers for our company are the same as they are for any other software company – we

must be able to create systems that are attractive and functional for the user. A software company

must also use software that is not outdated and have a good knowledge of existing and upcoming

technologies in order to provide customers with the products they desire. Order winners for our

company will be our willingness to have a representative sit down face to face with the customer base

and determine what ideas can feasibly be done and what ideas may need to be refined. Our company

will be able match-up very well against local software companies such as Software Etc., ICS and Business

Solutions Inc.


Section 1.2

Service Blueprint


Front-OfficeSparrow Hawk will utilize the Front-Office as any interaction with the client. Initially, since

Sparrow Hawk only has three employees, Brian Wilder will manage all aspects of the Front-Office. This

was simply a managerial decision, as Brian has many years in the customer relations department with

his work at the Eye Bank in Lubbock, Texas.

The first process is for a potential client to submit a Request for Proposal (RFP) to our company.

Simply put, they will request one of our services, which will be reviewed by the Back-Office. While the

Back-Office is processing the request, an initial contact with the client will be made, informing them of

our receipt of the RFP. The next stage will be called the “Co-Agreement”, which is essentially where the

client and Sparrow Hawk come to an agreement for the project selected. This will happen after the

Project Charter is formed and will conclude when it is signed. Next, before any development occurs, we

will ask the client to provide a 50% deposit of the total project cost. Next, after the project has been

rendered and testing completed, there will need to be an “Approval” stage, where the customer

basically states that all of the requirements have been fulfilled and they are satisfied with the work that

has been performed. Lastly, after product implementation, the final 50% payment will be made, which

concludes the project. We also plan on having a Post Mortem with the client, in addition to an internal

one performed in the Back-Office.

In our opinion, there will only be one “Customer Waiting” portion on the Front-Office side of the

business. Essentially, once the Co-Agreement stage is finished and we are waiting on the 50% deposit,

no development can occur. If Sparrow Hawk started development on the project before any deposit or

payments were made, this would put us in a risky and weak situation, which is something we want to

eliminate at all costs. Therefore, this is a very important stage which is worth waiting on the customer to

properly complete.


Back-OfficeThe Back-Office is where all the actual “services” will be rendered. As mentioned earlier,

Sparrow Hawk only has three members of the team in its current state. With Brian handling the Front-

Office operations, Jeff and Derrick will both be handling the majority of the Back-Office operations. Jeff

will handle all of the Programming, Application Development and Database Development aspects of the

service. Derrick will handle anything related to the design and appearance of the product, most

commonly referred to as the User Interface (UI). In addition, all three individuals will work on designing

the system and working with the client, as this is what their degrees are focused on, software

development.

The first stage in the service handling will be “Check Staff Available”. Simply put, we will need to

check if there is any staff available for the specific project requested. While each member of the team

will be working together on huge projects, each individual will not be required 100% of the time. For

example, Jeff might just need to do some Database Development for the client or Derrick might need to

design a sample UI mockup. All of these could be completed will a “Customer Waiting” period occurs.

Next, the Skills and Technology need to be consulted. That is, the team will need to look at the skills

required for the project and determine if it is a good match for the team to take on. Additional, the team

will need to research what other technologies need to be researched. If it is determined the project is a

good match for the team, the project will be accepted and the client will be notified, which will move

the project on to the next stage, the Project Charter.

The Project Charter is the official start of the project, which lists who all the stakeholders are

and what the expected outcome will be. After the “Co-Agreement” is completed and the 50% deposit is

paid, the actual development of the software will occur. For the purposes of this paper, this step will

simply be referred to ask the “Software Development Lifecycle” (SDLC). This usually consists of working


with the client on the specifications of the project, the actual development of the project and the testing

of the final project.

In addition to following all the steps in the SDLC, we will also perform additional internal testing,

just as a second quality control aspect. Since one of our scorecard goals is to have a zero defect rate,

having this second additional testing should help eliminate bugs seen by the customer. Next, a usability

consultant will be hired to review the software and conduct a study. After successful results at this

stage, an external testing will be conducted with the actual client. Once the testing is conducted with

the client, the Approval stage will be approached by the Front-Office. Essentially, Sparrow Hawk wants

to make sure that our clients are 100% satisfied with the services and products we provide them. Once

the “GO” is handed to our development team, we will move into the appropriate implementation of the

product. After the product is successfully implemented, the final 50% payment will be expected.

Lastly, we will conduct a final Quality Control phase. First, a Post Mortem will be conducted with

the client to discuss any issues that were encountered or recommendations they have for our team.

Finally, a Post Mortem with the team will be conducted. This will simply be the official documentation in

a wiki format of what was learned during this project. Again, this will tie back to our scorecard.

Waiting Line Analysis

Luckily, Sparrow Hawk will have a single-server waiting line system. This simply means that we

can focus our entire efforts one a handful of clients at any one time. Since software development is a

time-intensive service, there will be no physical waiting customers. In addition, with only three

developers on our team, there are only so many projects that can be taken on at any one time. While we

are not limited to one project, I would say it is reasonable to assume that we have no more than two to


three active projects at any one time. Lastly, it will be almost impossible to calculate such items as

arrival rate and serve rate, as software development time is so variable.

Section 1.3

Idea Generation

In an effort to understand our client needs more clearly and to keep an edge on our

competitors, we will be using a benchmarking strategy based on competitor’s services and industry

trends. In addition, we will consistently try to improve our services by making sure our services exceed

the benchmark tests that we set for ourselves. The majority of our ideas will most likely come from the

Post Mortem that occurs at the end of each project, as this is a chance for both Sparrow Hawk and the

client to have knowledge share.

Feasibility Study and Rapid Prototyping

Market Analysis

During our undergraduate studies, we established a need though class projects and contacts in

the community that there was a need for an Information Technology (IT) shop that was catered towards

small and medium sized businesses. The current problem with IT shops is that their services and prices

are geared towards large business and corporations who need large scale projects created, and have the

capital to back up these projects. This means that if a small or medium size business that needs a project

that is miniscule in comparison would have to pay these same outrageous consulting fees. The typical

small to medium size business just can't afford such a cost.

Our customers will be split into two different categories: small and medium sized business and

community organizations. A small to medium sized business is defined as a company with one to 500


employees. A community organization is defined as Boy Scouts of America, Lions Club International, or

churches. In addition, every year, we want to donate at least 10 to 15% of our overall time to pro-bono

projects for community organizations. Since all of our members have roots in some sort of non-profit

organizations, it only makes sense to give back when possible, especially since most non-profit

organizations are lacking in Information Technology processes.

Economic Analysis

While there is not enough time to perform a proper economic analysis, as mentioned above, it

has been determined that there is a market for information technology solutions in the south plains.

Every semester, undergraduate and graduate level courses must find “local problems they are familiar

with” and derive a solution to that problem. Taking this into consideration, if we can take some of these

problems and approach it with a cheap, efficient, and affordable IT solution; it is a win-win situation for

both the community at large and Sparrow Hawk. We estimate that it will cost a business around

$1,000.00 a development day to have access to all the skills our team offers. We will also offer our

services at a 50% discount to community organizations, up to 10 to 15% of total development time in a

given year, or 200 to 300 hours.

Technical and Strategical Analysis

The solutions built by Sparrow Hawk will be built and tested with a mix of current and new

technologies. We will continually test out new technology as it comes out and volunteer whenever time

is available to participate in corporate beta testing and pre-release software. New technology will be

tested in an isolated environment until it has passed a series of standards and tests before it is

institutionalized by the whole company.

The capital investment needed to start our company is very conservative as the initial costs to

start our company will be licensing fees, equipment, and office rental. There will be no cost to train staff


on how to use the equipment or software as the founders of the company each have a Bachelor’s

degree in Management Information Systems and each have a specialized area they excel at. The risk will

be minimal as the founders of the company can only lose what they came in with. The total initial staff

of the company will be three people which is more than enough to accomplish any small or complex

problem a client could come up with.

Sparrow Hawk will have two competitive advantages. First, we will be developing custom

solutions for every client which will constantly challenge the way we think about how to solve problems.

Also, the client will be always be able to get a hold of a human being that lives in the same city as them

not a person that lives half way across the world or an automated machine.

Performance Specifications

We will be measuring performance by two standards. Completeness of the requirements given

to us by the customer as specified in the Requirements Document. We will make our best effort to

complete all features the client has requested in a timely manner, while also avoiding scope creep. Also,

the overall satisfaction the client has with the end product will be target of heavy scrutiny. Sparrow

Hawk will accept nothing lower than 100% for customer satisfaction.

Rapid Prototyping

The primary goal of our rapid prototyping will be to reduce all solutions to perfection. All of our

solutions will follow an iterative approach in the design and testing phases. The solution will start out in

an alpha stage which will be passed around internally until all employees are satisfied. Then the solution

will move into a beta stage where usability tests and focus groups will be run. Finally, the solution will be

passed on to the client to see what changes need to be made for the final solution.


Form and Functional Design

Functional Design

When choosing the platform that we will develop the client's customized solution on we will

look at what platform the client is currently using and use their platform. The reason behind this is to

help the transition and implementation of the solution go more smoothly. Also, this will help reduce the

learning curve it will take for the client's employees to learn the new system since they will be familiar

and comfortable with the platform. For example, most business clients will utilize enterprise-grade

software such as Microsoft .NET or Oracle systems. This is generally because of the size of their business

and scalability needs. Whereas, a small, non-profit organization does not have these same needs,

therefore, they can utilize open source technologies such as MySQL or PHP.

Reliability

We will make our best efforts to ensure that our solutions have a 99.9% uptime, and if the

system fails we will respond in a 24-hour window with a fix. In addition, we strive for a zero defect rate,

which should help keep this reliability at 99.99% uptime or higher, since the number of emergency fixes

should be relatively low.

Maintainability

One of the goals of Sparrow Hawk’s development processes will be to ship software with as little

bugs as possible. Every solution's development lifecycle will have extra time built into each stage for

debugging, testing, and debugging some more. We, at Sparrow Hawk, strongly believe in building

superior, quality products the first time around instead of reworking solutions. If you have to rework a

solution, also known as an external cost, it becomes very expensive to fix in addition to causing other

expenses, such as damage to Sparrow Hawk’s reputation.


Usability

Our main philosophy behind usability is to make our solutions as easy and intuitive as possible.

In software development, the main objective is to make software solutions as simple as possible. This

makes maintainability and modifiability easier on down the road; which ties back directly to usability of

the system. If a system is simple, generally speaking, it will be very usable. We utilize several different

techniques to accomplish these tasks such as screenshot mock ups, focus groups, customer feedback,

and beta testing. In addition, it is very important to physical observe people using the system.

Something that might be easy for the developer to figure out might not be so easy for the user. These

types of issues are discovered in the usability study. Finally, Sparrow Hawk follows guidelines and

standards set by the International Organization for Standardization (ISO).

Final Design and Productivity

Final Design will occur during the Software Development Lifecycle stage of our “Service

Blueprint” diagram in Section 1.2. Essentially, software development is lucky in the fact that there is

normally no physical designs that have to be produced, as everything is digital. This dramatically speeds

up the development process, especially since we will be using the concurrent design model. This design

model specifies that multiple processes can occur at once. For example, while Jeff is designing the

database, Derrick can be designing the User Interface mockups, while Brian is processing paperwork for

the project. Overall, we feel this will be an efficient way to manage our company, especially since all

three individuals went through the management information systems program together at Texas Tech

and work well together. The biggest obstacle for our team to overcome, however, is the perfectionist

nature of all three members. While this is great for customer satisfaction, it takes a lot of precious time.


Productivity Measurements

Productivity is one of the hardest things to calculate when it comes to software development,

but is definitely one of the top priorities at Sparrow Hawk. Essentially, what happens during software

development is called “Student Syndrome”. A developer is usually given X amount of time to complete a

task. Generally, that developer believes it will not take that long to complete the task, so they wait just

before the task is due. They then realize that the task really takes X days given, and results in an

extension in the time required.

The best way to prevent this is to have developers estimate the amount of time needed to

complete the task. The project manager will then cut all task durations in half and add the remaining

time as a “buffer” to the end of each stage. This should encourage developers to be more productive,

and hopefully led to projects being completed on time. Lastly, a Gantt chart will be utilized and posted

for all developers to see. Again, this will help the development team stay on task.

Resources Needed

Sparrow Hawk needs two essential resources: good developers and good hardware. Both

requirements are essential to success, but success starts with having excellent developers. If you have

good developers who are knowledgeable and well-rounded, the second requirement is to provide them

with the tools necessary to be successful. These tools are considered good hardware to a developer.

This include a powerful desktop machine, which has at a minimum a quad-core processor, 8 GB of

memory and plenty of hard drive space. Next, each developer should be allowed to pick two monitors of

their choice. In addition, they should be allowed to pick a good set of headphones, a keyboard and

mouse. Lastly, a comfortable and preferably, ergonomic chair should be provided. With these two

requirements satisfied, we feel that Sparrow Hawk will have no impeding obstacles in our way in our


mission to providing 100% customer satisfaction. Therefore, it is imperative for developers to be

provided with the “hardware” they deem necessary and reasonable.

Section 1.4

Our company will gain a competitive advantage on other software companies on the south

plains by competing on quality and flexibility. Our superior quality will be a product of our superior staff

and our attention to detail. We anticipate that we will be able to guarantee a 99% bug-free success

rate on each of our programs. Our flexibility will be unparalleled as we display a willingness to sit down

face to face with the customer and handle problems or concerns the old fashioned way – in person.

Section 1.5

The cost and complexity of new technology creates its own barrier into the software arena.

New companies may come and go, but in order to routinely provide customers with the best quality

products and services, a software company must be able to stay current with new technologies and have

the vision to anticipate new advances that will become the new standard in months and years ahead.

Sparrow Hawk will pride itself on its ability to adapt to new ideas and technologies. The company will

provide training on new skills periodically and will maintain a pool of bright, talented employees who

are versed in all manners of programming, including ideologies that have not quite arrived yet.

Section 1.6

At Sparrow Hawk, each operations activity is important. These processes will include customer

acquisition, customer processing, product development, customer maintenance and job review. In our

customer acquisition phase, our representatives will visit with company owners, explaining what


services we provide, what ideas we have for solving their business problems, and why Sparrow hawk

would be a good fit for their business. Customer processing will be the method by which our

development team meets with the customer contingent and listens to their needs and ideas so that we

can better grasp how to help the customer. Product development will be the process by which our

developers build the programs for the customers. Customer maintenance includes service during and

after the sale – the people who purchase Sparrow Hawk technology products are not just clients, but

friends. Lastly, we will have a job review, both with customer and internally to identify things that went

well and things that did not go so well. In this way, we can evolve and become more efficient with every

product we produce.


Section 1.7

Balanced Scorecard

Dimension Objectives Key Performance Indicators 2010 Goal KPI to date Score Mean

Performance

Fina

nces Productivity To increase the amount of

development # of lines of code 20% 10% 50%100%

Growth To increase customer base yearly # of active customers 10% -5% 150%

Cust

omer

s

Quality To have zero defect levels # of reported bugs 30% 20% 33%29%

Timeliness To decrease the amount of development time

Hours spent per feature 20% 15% 25%

Proc

esse

s

Services To increase the types of services quarter # of services offered 10% 5% 50%

76%Maintenance Reduce the amount of

maintenance required# of maintenance requests 5% -5% 200%

Quality Control

Ensure customer satisfaction at 100%

% of customer happiness 15% 10% 33%

Risk To help customers understand their needs

% of successful projects 25% 20% 20%

Lear

ning

&

Grow

ing

Human Capital To retain staff Retention rate 95% 100% -5%

9%Information Capital

To increase knowledge of technology # of internal wikis 15% 10% 33%

Organizational Capital

Develop a good atmosphere for developers % of happy employees 100% 100% 0%


Project Part 2

Section 2.1To ensure a quality service, our company will employ a comprehensive system of testing that

will enable us to check our products' quality as we create them. Testing will be performed as the

programmer builds, as the programming staff completes its sprints, as the product reaches a new

milestone, and at the end of the production process. This system of testing will ensure that our

programs are ready to go at the completion of the product.

The customers we serve will be businesses and individuals who are interested in using the latest

in computer technology to track inventory, organize information and aid in business decisions. In order

to supply these customers with the products and systems they desire, the finished goods and services

must be delivered with a minimum of errors or bugs. These bugs will be part of the determining factor

when the customer is deciding whether we have delivered a quality product or not, with the other

factors being our level of customer service and whether or not the system performs the functions the

customer originally requested.

Once we have gotten off the ground, we will effect improvement by assigning a quality

improvement team to oversee each area of the business. This team will be comprised of Jeff Morris,

Derrick Plunk and Brian Wilder to start. Since these three employees have been with the company since

its inception, they should know every process utilized to manufacture a product. This team will measure

and evaluate all parts of the process, then make suggestions about how to make the process more

efficient. The team will utilize a process flow chart to help determine what processes are working as

planned and which ones can be refined to run more efficiently.

A kaizen culture will be fostered in our office, with each individual employee expected to make

some contribution toward quality improvement at every interval possible. We will expect every


employee to take producing a quality product seriously; without quality products, word of mouth, which

our company will rely on, may prove detrimental. The principles of the kaizen culture will be instilled in

each new hire and we expect that each of these employees will have the freedom to create solutions to

their own problems. At Sparrow Hawk, we realize that there is always an opportunity to improve and

we encourage each individual to find a way to make improvements, no matter how small.

The process Sparrow Hawk will use for developing and delivering virtually perfect products and

services is six sigma. This process strives to achieve a minimum in variation in all services, enabling the

firm to get as close to zero defects per product as possible. In fact, six sigma has a statistically based

numerical goal of 3.4 defects per million. At Sparrow Hawk, we believe that ratio is 3.4 defects too high,

but if we can reduce our defects to 0.0000034%, we will be satisfied.

Section 2.2

As mentioned earlier, all of our new employees will be well versed in the principles of the kaizen

culture. We believe that each individual should have the freedom to effect changes that support

improvement. That means all ideas and suggestions will be met with an open mind and an eye toward

improving quality. Each new employee will be trained to understand that their input is valuable and

that any idea that can cause improvement is a valuable one. They will be encouraged to seek ways to

improve the projects they are working on, and will also be trained to accept ideas from others on how to

improve. Team building exercises and periodic meetings to discuss ideas will help to develop this type

of culture that is completely geared toward improvement in all facets.

In our production process, greater detail will be paid to appraisal. We believe that constant

testing and solving problems as they arise are keys to creating a quality product. This will be

accomplished through the battery of tests run on each product before it gets to the customer.

Employees are asked to test constantly to identify problems before they become too great to handle.


Testing is done at the end of each weekly sprint, ensuring that all programs that have been written are

working perfectly to their current point. It is our belief that by doing this, when the product is received

by the customer, all problems will have already been solved.

We feel that this testing is important because we want to reduce the cost of poor quality. Poor

quality has many ways in which it ends up costing the company. If a product is full of bugs and the

customer decides he or she would be better off elsewhere for their technology needs, we run the risk of

facing scrap costs, meaning we trash the system. This costs us much in terms of not only labor costs

(since all work on the system is for naught), but in terms of word of reputation. Rework costs can be

kept to a minimum by the use of constant testing. Process failure costs can also be held to a minimum

by testing periodically to make sure that the system components are working properly, ensuring that

system failure is not a problem. This testing will also save us from process downtime costs and price-

downgrading costs. In short, if we make sure the product works and is what the customer asked for

ahead of time, we can save ourselves money in the present. By ensuring a quality product before the

product leaves the door, we also save ourselves the costs of travelling to the customer and solving

problems, the costs incurred if the product is returned, the costs of complying with the warranty,

litigation costs and the blow to our company's reputation.

Section 2.3

Sparrow Hawk will measure and control quality by utilizing a c-chart. Use of this chart is

necessary because of the inexact nature of creating systems and programs; it would be impossible to

compute a proportion of defects, but we will count the actual number of defects instead. There could

potentially be a number of bugs in a line of code, or there could be several bugs in one block. There may


be class after class and object after object with no bugs or defects. For these reasons, the c-chart is the

control chart of choice for our company.

We will be measuring the number of defects in the code blocks we sample. This may help us to

identify areas where our employees need more training or possibly help us to identify portions of code

that need to be rewritten. With our testing procedures at the end of each module, the total number of

defects should be held to a minimum. We will need to sample blocks and/or classes from every project

we work on to get an accurate depiction of the work being produced. Each sample will be chosen Friday

afternoon after the weekly sprint testing is done and the results should be ready for our Monday

morning meeting so that any egregious errors or trends can be highlighted and brought to employees'

attention during the meeting.

Sample c-Chart

Data

Sample

Number of Defects Sample

Number of Defects

1 18 6 152 13 7 173 12 8 84 9 9 75 16 10 9


Chart

1 2 3 4 5 6 7 8 9 100

5

10

15

20

25

Sample number

Num

ber o

f def

ects

DescriptionYou can see on this sample c-chart that 10 random code blocks were chosen and checked for

bugs. The process appears to be in control, despite the fact that all of the bugs will need to be fixed or

rewritten before the product is presented to the customer. This tells us that each programmer is being

consistent in his work and that there is no need for any employees to be retrained at this time. If the

process were to see a number of mistakes that exceeded the upper control limit, it would be time to

have a talk with the employee writing that code to see if he needs help or perhaps we should just give

the job to another programmer. If the number of bugs is below the lower control limit (or is "0", as it

were), that would be a sign that we need to review that sample to make sure it was read correctly. This

situation could also signal that we need to recalculate our control limits.

Sample Pareto diagram

Data

# Causes Defects

Cumulative%

1 Arithmetic 194 59.51%2 Logic 86 85.89%3 Syntax 37 97.24%4 Resource 8 99.69%5 Team-related 1 100.00%


Chart

0

50

100

150

200

250

0%

20%

40%

60%

80%

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[42]

DescriptionThe Pareto Diagram assesses all of the problems our service faces and then divides those

problems into categories so that we can focus on the most troublesome area first. The problem on the

left will always be the problem with the most frequency and therefore should be the first problem to be

addressed. The problem second from the left will always be the second most frequent problem and so

on. In this example, you can see that Sparrow Hawk's biggest concern should be the arithmetic problem

it faces while writing code, followed by problems with the program logic.

Section 2.4

Dimensions of Quality (Services)

Time and timelinessAll projects will be completed in a reasonable amount of time to produce a solution that meets

Sparrow Hawk's high standards and superior quality. The project cycle will be broken down into three

different milestones: requirements analysis, design, and implementation. Each of the three milestones

will have an estimated completion date with a small cushion for scope creep. A final completion date

will be given to the client. The final completion date will only be changed if there is a function

requirement causing the system to not work as intended.


Completeness

The first process in any new project is gathering requirements. This is normally completed with

one or two systems analysts and the customer. Since these requirements will be used to create the

working system, it is imperative that these requirements be correct and complete before development

starts. Once the analysis phase is completed, development will broke down into various milestones and

development will begin. Once each milestone is met, we will have a meeting with the customer to have

a review of the completed work and make sure it is meeting their expectations and is considered

"complete and correct". This process will be repeated until the project is complete, at which time an

overall customer satisfaction survey will be completed. This will be the ultimate determining factor of

whether the system is considered complete or not.

Consistency

Consistency is one of the most difficult qualities to maintain, especially when it comes to

information technology solutions. Sparrow Hawk will ensure that there is a consistent "look and feel"

between all the various iterations and systems created for a specific customer. This will be accomplished

by using similar User Interfaces (UI) between the various systems created. This will help decrease the

amount of time required for the customer to learn how to use the product and increase productivity. In

addition, we will try to maintain a similar workflow between the different systems. The same process

will be implemented in future systems created, assuming the customer wants this type of consistency.

Aside from keeping the systems from looking and feeling uniform, it will be imperative for Sparrow

Hawk to keep a consistent workflow during the whole project. For example, if it is agreed that weekly

sprints will be on Fridays, it would be out of character and inconsistent for Sparrow Hawk to change this

designated meeting time on a weekly basis. In our experience, there is nothing more frustrating to a

customer than constantly forcing them to relearn how things are processed.


Accuracy

Accuracy ties directly into the customer's perception of "correctness" in regards to this system.

To accomplish this, great care needs to be taken during the System Analysis phase of the project, which

is where all the requirements are collected. Once the requirements are collected and development is

finished, it is imperative that the customer feel as though the developed system correctly solves their

business need. If there is any indication from the client that the system does not correctly solve their

problem, Sparrow Hawk will do what it takes to make the system work properly. Lastly, it will be

Sparrow Hawk's goal to provide "correct" systems 100% of the time. By making this guarantee, we will

be honoring our promise of accuracy each and every time a customer utilizes our services.

Responsiveness

Sparrow Hawk will be available for contact 24/7/365. One of the core competencies of Sparrow

Hawk is that a customer will always be able to talk to another human being, and not a machine. Every

employee will be trained with the knowledge of how to handle basic questions and have access to the

company's knowledge base. If an employee is not able to answer a question the customer will be

immediately transferred to an employee with that expertise. In unusual situations, Sparrow Hawk will

respond to customers in a reasonable amount of time it takes to find a solution to their question.

Our firm’s primary task will be to create and maintain custom software applications for

businesses that are primarily, but not exclusively, located on the south plains of Texas.


Section 2.5


In keeping with the high quality standards we have set at Sparrow Hawk, it was decided to

create a house of quality model. A house of quality is a chart that is divided into six different sections:

customer requirements, competitive assessment, design characteristics, relationship matrix, tradeoff

matrix, and a target values section. By using this technique, we will cover all aspects of designing a great

product for our customers, including the most important aspect that is often thrown by the wayside,

translating the customer wants and needs into our product design.

In the customer requirements section, we have interviewed companies about what is most

important to them when looking for a company to handle their software needs. Then, we asked the

companies to rank those needs in order of importance. This helped Sparrow Hawk decide where to add

more focus on improving items with the highest ranks.

The next section, competitive assessment, was conducted to help Sparrow Hawk get a feel for

how we ranked against our competitors here in Lubbock. We conducted a customer survey and asked

customers to rank our product on a scale of zero to five (with five being the highest), against several

other competitors such as, Tyler Technologies, Network Lubbock, Switch, Mandalay Technologies, and

Turn Key Solutions.

Once all this information was gathered, Sparrow Hawk was then able to translate those

customer requirements into design characteristics. The next step was to examine the relationships

between the customer requirements and the design characteristics and decide if there was a strong or

weak correlation between each characteristic and requirement. This helped identify which relationship

would have the biggest impact on our product design.

The roof of the house represents the correlation between each design characteristic and shows

how they are related. Sparrow Hawk wanted to find out what type of correlation existed between the


design characteristics before making any design changes. For example, you can see that the number of

users of the system and server requirements have a strong positive correlation. This makes logical sense

as if you had 100 users; you wouldn’t want a server that could only handle a maximum of 20 users.

The final section was the target values section. In this section, we needed to make sure the

design characteristic(s) we were going to change were going to be fiscally worth it. In other words,

Sparrow Hawk needed to make sure that the estimated impact was going to exceed the estimated cost.

Similar to the customer requirements, we assigned each target a weight or importance and rank on a

scale from zero to ten (with ten being the most difficult to change).


Project Part 3

Section 3.1

Strategy DevelopmentStrategy Development at Sparrow Hawk will be the foundation of everything we do. We will

start by determining market requirements – what will customers need in order for our service to be

labeled a success? Market requirements will include many things standard in the industry: we must be

on the cutting edge of technology, we must have a staff that is receptive to questions and suggestions

and we must be able to provide a superior product. Other requirements that might exceed the industry

standards would include a personalized touch to our service, our commitment to quality and the

customer’s satisfaction, and our willingness to go beyond what is expected of a software company.

Because of these realizations, we can easily conclude that our customers will not only consist of

companies that want to use technology and business intelligence to make a positive impact on their

bottom line, but also companies that expect to get the best return for their dollar.

Customer AcquisitionNew customers will be the lifeblood of Sparrow Hawk. Most of our clients will be one-time

projects that will require maintenance and troubleshooting, but these recurring tasks will not be enough

to sustain the company. We will put a significant amount of resources into marketing Sparrow Hawk to

the Lubbock community. There will be a mix of conventional and unconventional marketing techniques

to create and build a positive reputation for Sparrow Hawk. Some of the conventional techniques will

include billboards, newspaper ads and radio spots. Additionally, we will offer potential clients discounts

or special rates on our services. These deals could consist of 15% off initial requirements meeting, free

cabling (up to 5 cable drops), or 3 months free tech support.


New Service Development

New service development is taken very seriously at Sparrow Hawk. The culture created at

Sparrow Hawk will be based off kaizen principles. We will encourage and expect all of our employees to

develop new ideas or improve upon existing solutions that will assist them in solving problems for our

clients. Employees will have the freedom to accomplish the projects they are assigned to in any way

possible as long as the project is completed in a complete and timely manner. If an employee's idea is

successful in improving a process it will be put through intensive testing before being released on a

company-wide basis, and will become the new standard.

Performance Measures

Performance Measures are one of the most important aspects of Total Quality Management and

is used to reduce or eliminate overall variation in the process setup by our software company. Sparrow

Hawk will use three measures to keep track of progress on process improvement: Efficiency, Quality and

Timeliness.

Efficiency

Efficiency is very important and will be improved by utilizing code reuse. By reusing existing code

from prior projects, it should be fairly easy to speed up the development time associated with projects.

Furthermore, it will be measured by calculating how long it takes to complete certain parts of a project

from similar projects. For example, user authentication is a common component in software projects, so

after the first implementation, that code will be recycled and used in future projects. Additionally, the

time of projects will be measured. Our hope is that the time taken to implement future projects will be

less than the prior project.


Quality

Quality will be measured by the number of defects reported to Sparrow Hawk and those found

during the testing process. Defects generally increases the amount of time required

to develop software. This is because it is impossible to know how many bugs will occur and how long it

will take to fix each individual bug. Therefore, if you can decrease defects, you will increase productivity.

Timeliness

Timeliness has to do with total development time taken for each new project. The first two

measures, efficiency and quality, should decrease the overall development time of the project.

Therefore, if the first two measures have improvements over prior projects, the timeliness measure

should automatically be improved. It is the overall goal of Sparrow Hawk to increase the number of

projects completed per year, which is why this measure is extremely important.


Section 3.2

Process Map Diagram


OverviewSparrow Hawk's process map has three business entities: the Client, the Front Office and the

Back Office. The Client entity represents any interactions that will occur between Sparrow Hawk and the

Client. Next, the Front Office represents such actions as paperwork and contacting the Client. The Front

Office is essentially the middleman between the Client and the Back Office. Lastly, the Back Office entity

is where all the physical development of the product occurs.

Detailed Description

The first action is when a potential Client submits a Request for Proposal (RFP) to Sparrow Hawk.

Once the RFP is received, the Front Office will begin to process the application. If it is determined that

there are enough resources to accept the project, Sparrow Hawk will then do a detailed staff availability

check. In either case, the client will be notified if the project is accepted or denied.

Once the project is accepted, the Front Office will start the process of creating the Project

Charter, which involves actually meeting the Client and working out administrative details of the

product. Once the Client and the Front Office come to a Co-Agreement on what will take place in

regards to the project, a 50% payment will be required before any further work is started. After

receiving the 50% payment, the Back Office will begin the Software Development Lifecycle (SDLC).

The SDLC has many steps, but primarily, there is the Analysis phase, and the Design phase. The

Analysis phase is where all the requirements are collected from the Client and a set of deliverables and

Milestones will be completed. Next, the Design phase is started, which is basically where all the

development occurs. Iterations will be completed to give the Client an idea of what the system will look

like and then it will be physically programmed. Next, a series of testing will occur, which insures quality

is met.

Testing will happen in two phases, internal and external. Internal testing involves the software

developers and will be done at each milestone and at the end of each sprint. Once the program passes


this battery of tests, it will be delivered to the customer for testing. If the program is not found to be

acceptable, it is passed back to the company for more development and more testing. If it is found to be

satisfactory, implementation is started.

Upon implementation, our team will be available to perform quality control for the customer.

The customer will be trained and instructed on the various features of the system and the customer will

be expected to remit the remainder of the agreed upon price.

Following the analysis, design, testing and implementation, an exit interview will be scheduled

and completed whereby Sparrow Hawk can ascertain the customer's level of satisfaction with the

service. A series of questions will be asked and the customer will be free to voice what he or she liked

and what he or she wished Sparrow Hawk had done differently.

Section 3.3

Management

At Sparrow Hawk, we believe that lean operations are necessary to stimulate growth and enable

development. For this reason, there will be no process or operation that does not add value for the

customer or ourselves. In order to ensure that Sparrow Hawk is not wasting resources on processes that

do not add value to the finished product, we will utilize process flowcharts to look at the delivery of our

service from a broad perspective. These flowcharts will be concerned with the time and distance from

one process to another. In reviewing these charts, if there are nonproductive activities, they will be

identified and discarded. Productive activities will be reviewed as well to make sure that they are being

performed as efficiently as possible. The flowcharts will be reviewed by the process improvement team.


In every company, some issues must be taken into consideration. In creating and implementing

a process strategy for our company, we will pay special attention to capital intensity, process flexibility,

vertical integration and customer involvement.

Capital intensity should be reasonable. Beyond start-up costs, capital will be necessary to

upgrade systems from time to time and will also be necessary to acquire new software and licenses

when new programs are released. Capital will also be necessary to provide employees opportunities to

attend workshops and courses devoted to teaching these new materials. Lastly, Sparrow Hawk must

have adequate labor on hand to create each product. Capital will be set aside for equipment and

upgrades, but labor resources will be equally as vital to Sparrow Hawk's success.

Process flexibility is of chief importance at Sparrow Hawk. Resources should be able to be

applied from one project to another seamlessly in the event it is needed. This means that if a project

falls behind, labor can be relocated to help any areas or processes that need help. In order to achieve

this, Sparrow Hawk will require each employee to have at least a working familiarity with every

programming language it uses, every program it runs, and every development environment it employs.

Sparrow Hawk will be vertically integrated for the most part. We will purchase software

products and licenses, but beyond that, products will be developed, tested and implemented by

Sparrow Hawk personnel and the customers requesting the products. There will be no outside

dependence - we don't anticipate any work being outsourced. Sparrow Hawk employees only will be

privy to proprietary knowledge regarding the programs we build and implement. It is our hope that

these ideas will help to keep costs low.

Customer involvement is one of the most important aspects of Sparrow Hawk's service. The

customer will be consulted prior to starting the project, will assist with the testing of the product and

will be consulted prior to and following implementation. While the customer will be the ultimate judge

of whether or not the project is a success, it is important to also let the customer know that excessive


scope creep can destroy the project and cause it to be late and over budget. While the customer is

always right, it is important for the customer to note that their role is to make sure the requirements

document is being met to their standards, not to make new demands.

Section 3.4

Improvement

As stated in an earlier deliverable, continuous improvement is one of the most important

aspects of Sparrow Hawk's service. In order to achieve continuous improvement, Sparrow Hawk will

continuously analyze and suggest improvements for each of its processes. In terms of breakthroughs,

Sparrow Hawk strongly encourages process innovation as a means to achieve results beyond what the

company would normally see. This involves sitting down with a clean slate and getting down to the very

base of a process, then rethinking it from the ground up. Perhaps some aspects of the process could be

combined or performed simultaneously to affect the length of time a process would normally take, or

perhaps some aspect of the process is now obsolete and its exclusion could save the company a vast

sum of money. These ideas will be welcomed and possibly even rewarded.

Our core processes that are critical to the success of our firm will receive most of our attention

in terms of process innovation. Strategy development requires our company to look at the market

requirements in our industry and determine the markets to be served and the products that we will

create to service those markets. In constantly trying to effect improvement, we will start by continually

analyzing and reassessing the industry. Are there new technologies and products that are on the market

or on the horizon? Are there new businesses that might be interested in our service? Are there new

competitors that we should be wary of? These and other probing questions must be answered


periodically to make sure that we are staying ahead of the competition and making the best decisions

possible to benefit our business.

Customer acquisition is one of the most important of our core processes. In determining how

we can improve our pitch to potential customers, information from current and former customers will

be vital. We must determine what we did well to gain their business. What did we do that they liked

and appreciated? What could we have done or what information could we have provided in order to

make their choice to hire Sparrow Hawk easier? Were there any aspects of our service they felt could

have been improved? These questions will be raised in each closing interview. The answers will be

recorded and analyzed in order to continuously improve our customer relations.

New service development is another area where the success of our firm is at stake, so any

improvement we can stimulate can only serve to strengthen our company. The result of our strategy

development is used to affect inputs in our programs and service. With our focus on improvement, this

means that we are continually improving our processes, our skills and our products. In doing so, we are

effectively improving future products as well since each finished product will be a learning experience,

enabling the team to use its experiences on the improved product on its next endeavor. Periodically, we

will take a team and ask it to sit down and review its work, looking for areas where it could produce its

product more efficiently. At Sparrow Hawk, improvements are not only expected, but are actively

sought after.


Project Part 4

Section 4.1: Vertical Integration

Sparrow Hawk will be completely vertically integrated. The only resources coming into our

offices from the outside will be the software (and occasionally hardware) we use to create applications

for our customers. The rest of our products and services will be supplied directly from the hard work of

Sparrow Hawk employees. This will keep our costs low as we will maintain independence, promote

competency building and will acquire and utilize proprietary knowledge. When a customer orders a

Sparrow Hawk product, they can be assured that they are being provided a product that Sparrow Hawk

designed and programmed in the Sparrow Hawk offices. In the rare event that there is a problem with

the application, the customer will enjoy full confidence that the problem can be solved since he or she

can speak directly to the person that created the application.

Our operations will follow along the lines of Dell more than Exxon in that products will not be

produced until they are ordered. However, our service will be unique in that our lead time will decrease

with every product produced since our object-oriented programming will enable us to enjoy a certain

level of reusability. Our employees will become more and more efficient at building applications with

every job we complete.

Vertically integrated firms and service firms both have supply chains, although these supply

chains are a bit different and are not as easily defined as supply chains pertaining to manufacturing

companies. Supply chains of vertically integrated companies begin within the company and follow a

product or service as it evolves into a product a customer is purchasing. Supply chains for service

companies do not focus as intensely on the flow of physical items, but rather focuses on human


resources and support systems necessary to provide a service. The supply chain in a service company is

generally smaller and more compact than that of the supply chain of a manufacturing company.

Section 4.2: Supply Chain StrategySparrow Hawk's supply chain strategy will include absolutely no outsourcing. Our employees will

be competent when hired and trained periodically on the latest technological advances. By constructing

our company in such a manner, we will ensure that we know each application we release inside and out.

Because of this, our location needs simply to be centrally located as to provide a visible presence to

potential customers. The size and layout of the location is a larger concern since we must have plenty of

room to work, but at the same time we must have employees close enough to be convenient when

working in teams. The location should also have space to be used as a front office that the customer will

see and a back office that will be invisible to customers and will utilize a loop or freeflow layout.

Just In Time is a concept that will be fully utilized at Sparrow Hawk. Each of our products and

services will be created and maintained after a requirements document is obtained and the specifics of

the agreement are agreed upon. There will be no inventory to speak of and therefore no carrying costs.

The only costs we will incur during the process will be the fixed costs of hardware and the periodic

variable cost of software used to create the applications.

Section 4.3: Outside Processes

It will be imperative that Sparrow Hawk stay ahead of the curve in terms of technological

advances. Our employees and staff will be encouraged to offer suggestions about new frameworks and

languages becoming available to use for our applications. It is understood that the landscape of

technology is constantly evolving and that Sparrow Hawk must be open to change and able to adapt

quickly if we are to excel in this competitive environment. We will define success by our being able to


effectively use these programs quickly and by being able to answer customer questions regarding

different types of software they may or may not want used to create their programs. We will improve

these processes by continually training our employees and offering them the opportunity to achieve any

available certifications for the software we utilize.

Another external process we will utilize is word of mouth. We expect many of our customers to

have been referred to us by customers who were very pleased with our products and our services. This

will be critical because bad word of mouth can kill a company. Our measure of success for this external

process will be whether or not a specified percentage of our new customer business comes from

referrals by satisfied clients. We will monitor and improve this process by using our exit interviews to

make sure our clients are pleased with both the product and service they received.

Section 4.4: Facility Location

Overview

When deciding on a location for Sparrow Hawk to start its operations, many factors were taken

into account. The founders identified potential locations in Lubbock, Dallas and Abilene to compare

when searching for the proper place to get this business off the ground. We then decided which factors

were going to be most important to us and which factors were important, but secondary. The most

important factors ended up being building size and layout, rent costs and labor rates. Other factors

taken into account include community environment, proximity to customers and potential investors.

Building size and layout is most important because it will be impossible to perform this type of

service if our business does not have room to expand and grow. Our plan calls for a front office and back

office, so that fact increases the importance of this factor. Rent costs are also very important to our

company because we feel it is important to make sure we don't go bankrupt trying to stay above water.


Labor cost is a similar concern; our business requires workers who will excel, but can work for a

satisfactory wage. Community environment was a consideration as well, since we want to make sure we

are in a good part of town so that customers will not be afraid to swing by the office. Proximity to

customers, while important, is not as great a concern since most of the work for our customers will take

place in our back office. Lastly, the potential to lure investors was a consideration as well.


Lubbock Office Details

Attribute ValueProperty Type: Office BuildingStatus: Lease PendingContiguous Space: 2,250 SFTotal Available: 2,250 SFRental Rate: $10 PSF (Annual)Monthly Rent: 2250Lease Types: Modified GrossProperty Status: ExistingClass of Space: Class BLast Updated: 40249Status: Lease PendingMinimum Divisible: 2,250 SFMax Contiguous: 2,250 SFDate Available: 40174Lease Term: 60 MonthsSpace Type: ReletConference Rooms:

1

Offices 4Kitchen Yes


Parking Spaces 11

Abilene Office Details

The Enterprise Tower - 500 Chestnut St., Abilene, TX 79602

Attribute ValueTotal Space Available:

21,497 SF

Rental Rate: $12 - $14.40 /SF/YearMin. Divisible: 117 SFMax. Contiguous: 3,132 SFProperty Type: OfficeProperty Sub-type: Office BuildingBuilding Size: 220,651 SFBuilding Class: AYear Built: 1984


Dallas Office Details

E Lamar Blvd, Arlington, Texas

Attribute ValueProperty Type: Office BuildingStatus: Lease PendingContiguous Space: 18,000 SFTotal Available: 7,550 SFRental Rate: $16 PSF (Annual)Monthly Rent: variesLease Types: Modified GrossProperty Status: ExistingClass of Space: Class ALast Updated: 40255Status: Lease PendingMinimum Divisible: 175 SFMax Contiguous: 7,550 SFDate Available: 40246Lease Term: 120 MonthsSpace Type: ReletConference Rooms: 18Offices 16Kitchen YesParking Spaces 320


Location Factor Model

Inputs Scores (0 to 100)Location Factors Weight Lubbock Dallas AbileneCommunity Environment 0.10 85 90 90Proximity to Customers 0.10 80 85 85Labor Costs 0.20 85 60 70Rent Costs 0.25 90 55 75Potential Investors 0.05 70 90 85Building Size/Layout 0.30 85 95 95Total Weight 1.00

OutputsLubbock Dallas Abilene

Total Location Score: 85 76.25 83

DecisionBased on the location factor model above, Sparrow Hawk has decided to setup shop in Lubbock,

TX. You can see that Lubbock has the highest overall score of 85, and is the highest in two of the three

most important factors, as discussed in greater detail earlier.


Section 4.5: Project SimulationWe decided that we would start Sparrow Hawk with a total of three employees. We set up a

chart with a random amount of work to be done each month. We plan to charge customers $1,000 per

day for our services. The random number in the chart represents the probability that an employee will

have to put out 100% effort to complete tasks over the course of a month. This number multiplied by

three gives us the total percentage effort required of all of our employees.

In the bulk of our simulations, we start needing a new employee between month twelve and

eighteen, so we have entered a fourth employee starting in month thirteen. The fixed cost include rent,

supplies, etc., while the labor costs involve each person in the company making $40,000/year and

earning extra if the percentage effort exceeds 100%, in which case each person is paid time and a half in

anticipation of overtime.


MONTH Random Number

Monthly Employee

Need

CAP

Excess Manpower Available

WIP Fixed Costs Labor Monthly

Net Total Net

1 0.100902 0.402705639

3 2.597294361 $20,000.00 $5,000.00 $9,999.99 $5,000.01 $5,000.01

2 0.210371 0.831112077

3 2.168887923 $20,000.00 $5,000.00 $9,999.99 $5,000.01 $10,000.02

3 0.702792 2.408377001

3 0.591622999 $20,000.00 $5,000.00 $9,999.99 $5,000.01 $15,000.03

4 0.820148 2.860445447

3 0.139554553 $20,000.00 $5,000.00 $9,999.99 $5,000.01 $20,000.04

5 0.103208 0.809625135

3 2.190374865 $20,000.00 $5,000.00 $9,999.99 $5,000.01 $25,000.05

6 0.329088 1.587265053

3 1.412734947 $20,000.00 $5,000.00 $9,999.99 $5,000.01 $30,000.06

7 0.483587 2.150761827

3 0.849238173 $20,000.00 $5,000.00 $9,999.99 $5,000.01 $35,000.07

8 0.965182 3.695544793

3 0 $20,000.00 $5,000.00 $13,477.71 $1,522.29 $36,522.36

9 0.866787 3.500361385

3 0 $20,000.00 $5,000.00 $12,501.79 $2,498.21 $39,020.57

10 0.128577 1.385730129

3 1.614269871 $20,000.00 $5,000.00 $9,999.99 $5,000.01 $44,020.58

11 0.802747 3.508240155

3 0 $20,000.00 $5,000.00 $12,541.19 $2,458.81 $46,479.39

12 0.377824 2.333471987

3 0.666528013 $20,000.00 $5,000.00 $9,999.99 $5,000.01 $51,479.40

13 0.181019 1.843058118

4 2.156941882 $26,600.00 $6,500.00 $13,333.32 $6,766.68 $58,246.08

14 0.163638 1.890912718

4 2.109087282 $26,600.00 $6,500.00 $13,333.32 $6,766.68 $65,012.76

15 0.669387 3.508159879

4 0.491840121 $26,600.00 $6,500.00 $13,333.32 $6,766.68 $71,779.44


16 0.143350 2.030048773

4 1.969951227 $26,600.00 $6,500.00 $13,333.32 $6,766.68 $78,546.12

17 0.388927 2.866780883

4 1.133219117 $26,600.00 $6,500.00 $13,333.32 $6,766.68 $85,312.80

18 0.914521 4.543562878

4 0 $26,600.00 $6,500.00 $16,051.13 $4,048.87 $89,361.67

19 0.942725 4.728175573

4 0 $26,600.00 $6,500.00 $16,974.19 $3,125.81 $92,487.47

20 0.229088 2.687262825

4 1.312737175 $26,600.00 $6,500.00 $13,333.32 $6,766.68 $99,254.15

21 0.849380 4.648140094

4 0 $26,600.00 $6,500.00 $16,574.02 $3,525.98 $102,780.13

22 0.700882 4.3026447 4 0 $26,600.00 $6,500.00 $14,846.54 $5,253.46 $108,033.59

23 0.132514 2.697541592

4 1.302458408 $26,600.00 $6,500.00 $13,333.32 $6,766.68 $114,800.27

24 0.871840 5.015520085

4 0 $26,600.00 $6,500.00 $18,410.92 $1,689.08 $116,489.36


Project Part 5

Section 5.1At Sparrow Hawk Information Technology Solutions, we will not have the same kind of inventory

that a manufacturing type of business would have. Our inventory will involve projects, classes, and

objects that have been created for customers. This inventory will be created on our hardware and will

be backed up onto removable storage. In this respect, we will require very little space for inventory, with

the exception of space in memory to store templates for the objects we create.

Our projects will be dependent on the completion of necessary classes and objects needed for

the finished products. These parts of the finished product will be compiled to create one end product.

While the project may or may not be able to run without certain parts, the completed product that

meets all specifications will involve all of the objects and these objects will be created in a timely fashion

according to our Gantt Chart.

Section 5.2In our facility, muda (or “waste”) will be minimized because we will have only the equipment

and programs that we need to adequately service our customers. There will be no wasted production

since we will make each program as it is ordered. There will be no wasted time because our employees

will work on individual project parts and then the first one to finish will help the other employee to

finish the rest of his share. There will be no wasted transportation because the project can be moved

back and forth between computers seamlessly through use of the internet. There will be no steps in our

process that are not value-added. Our testing points at the end of each milestone will also ensure that

our company does not waste time by having to go back to the beginning and debug problems that

should have been solved in the first week of production.


Sparrow Hawk will utilize flexible resources by employing multifunctional workers and providing

common tools at each workspace. This will allow our front office person to come to the development

pod and initiate or assist on the creation of a project at any work station within the pod. This will

require no additional training and no additional rotation schedules since there will be enough

workstations for each employee and every workstation contains the same capabilities.

Some lean concepts, such as kanbans and cellular layouts won't apply to Sparrow Hawk since

there are no physical parts to order or movements for employees to make. However, the concept of a

pull system will come into play since employees will be creating products as they are ordered. Each

project will have signatures from the ordering company and a c corresponding requirements document

for our employees to reference. This pull system will ensure that we are not creating and housing

unnecessary components, programs or objects on our hardware.

Quality at the source will be another JIT concept that Sparrow Hawk will employ. Sparrow Hawk

employs will be expected to debug their programs and test the project at each milestone. This enables

us to solve problems while they are still relatively small and easy to fix. The iterative nature of our

systems development lifecycle allows for this as opposed to development lifecycles such as the waterfall

method, which does not check for quality until the end product is completed, causing large headaches

for programmers trying to solve a small problem amongst 20,000 lines of code.

Section 5.3

The Sparrow Hawk team will be composed of three members to start. While each will have a

separate specialty, every employee will have a working knowledge of basic Sparrow Hawk tasks. Each

employee will be empowered to suggest changes that could result in improvement and it is our hope

that this will keep employee involvement at a maximum. Teams will start out being long term until


more employees are hired, at which point employees may be split into two teams that work on separate

projects.

These teams will be self-directed, meaning that team members can make changes for the

betterment of the project without having to get authorization from an authority figure. There are many

benefits to this type of team approach - problems can be identified and solved faster, it makes

employees feel more satisfied with their jobs and it encourages a sense of pride in one's work. It also

stimulates positive peer pressure.

The front office person will be the face of Sparrow Hawk and will gather requirements, rub

elbows with clients and kiss babies. Once he/she has obtained a client's business and has firmly

established a requirements document (complete with client signatures), the front office manager takes

the requirements to the development pod where the development team begins work on the project.

The development team tests the project at each milestone and allows the front office manager and

client to test the product as well. Once the project is completed, it is loaded onto a portable storage

device and given to the front office manager, who delivers the finished item to the client and assists in

employee training. Then, the three person team meets with the client representatives in the

consultation room for an exit interview concerning what the client did and did not like about Sparrow

Hawk's service. Then the cycle repeats.

Section 5.4

Since Sparrow Hawk is a start-up company which will be developing software for all industries, it

made sense to forecast the projected number of projects per year. By estimating the projects per year,

Sparrow Hawk can project how many new programmers need to be hired and trained before a given

year. Since projecting Information Technology projects is rather difficult, we decided to model our


forecasts after a well-known software company, FI. FI started as a small three person operation back in

2003 and has now grown into a thirty person operation with two offices in two different countries. Since

we are a three person company, we figured this would be a perfect starting point.

It was decided that a Time Series would be the most appropriate forecasting model, as it takes

into account historical data, in this case, the data from the software company FI. Since there was enough

historical data, we created five different models to utilize and project how many projects we would have

in years one through five. First, we created a three-year moving average. However, after calculating the

MAD and the MAPD, we decided that the error was too high to be used as the appropriate model. Next,

we created a weighted moving average, which actually had the lowest error rates of the five models. In

addition, an exponential smoothing forecast was created and also the adjusted exponential forecast.

These two models also had a very high rate of error, so were not utilized. Lastly, a linear trend line was

created. While normally the linear model is the most accurate, it still had one of the highest error rates

for MAD and MAPD. For this reason, we decided to use the weighted moving average as the forecast to

base our business model on.

Based on the weighted moving average model, we will have four projects the first year, 12

projects the second year, and 14 projects the third year. This makes sense, as we planned on hiring a

fourth individual at the beginning of the second year. The first year will have quite a steep learning

curve, as we will be new to the business, but by year two, we will have additional help and resources to

train new employees. This should help adequately handle the increased number of projects in years two

and three.

As mentioned earlier, we checked accuracy rates for each of the forecast models by calculating

MAD and MAPD. MAD, or mean absolute deviation, is a measure of forecasting error. It is the average


difference between the forecast and actual demand. The smaller the value of MAD, the more accurate

the forecast is. However, when using MAD, there is always the issue of magnitude; while a small number

like 3.65 for the linear trend line error may not seem like a bad valuation, but if the magnitude of the

data value is in billions, 3.65 may not be good at all. The method we use to combat this type of error is

MAPD. MAPD, or mean absolute percentage deviation, measures the absolute error as a percentage of

demand rather than per period. In effect, it solves the problem of interpreting the measure of accuracy

relative to the magnitude of the demand and forecast values. Therefore, we decided to pick the

weighted moving average, as it had both the lowest MAD and MAPD values.

Our forecast did not adjust or use seasonality in the calculations, since it does not make sense to

do so. Companies will not wait until certain parts of the year to have an information technology project

started. Generally speaking, when a company decides they need to use information technology, it is

usually for immediate purposes. Therefore, regardless of the season, the companies will most likely

approach us to begin work on a project when the need is there. We did however take into account a

trend component for our adjusted exponential forecast model. This was taken into account because

trends are a possibility in the information technology world, as technologies boom and take off all the

time.

Additionally, a breakeven point was calculated based on our forecast above and the Project

Simulation we completed in project part 4. The initial cost to startup the business was around $30,000

plus salary and other fixed costs which will reoccur every month. Taking these factors into account, we

project that Sparrow Hawk should be able to regain its initial investment within the first six months of

business, as we plan on earning around $1,000 per day of development.


Section 5.5

Three Year MA Weighted MA Exponential Smoothing

Adjusted Exponential Forecast

Linear Trend Line Linear Forecast

Period FI Demand Forecast Error Forecast Error Forecast Error Trend Forecast Error XY X2 Forecast Error

1 1 1 12 1 1.00 0.00 1.00 0.00 2 13 1 1.00 0.00 0.00 1.00 0.00 3 14 4 1.00 3.00 1.60 2.40 0.18 1.78 2.22 16 16 6.43 -2.435 5 2.00 3.00 3.99 1.01 2.28 2.72 0.33 2.61 2.39 25 25 6.56 -1.566 20 3.33 16.67 12.33 7.67 5.82 14.18 1.29 7.12 12.88 120 400 6.70 13.307 13 9.67 3.33 13.95 -0.95 7.26 5.74 1.34 8.60 4.40 91 169 6.83 6.17

12.67 5.90 -5.9028 45 258 613

MAD 9.83 3.21 4.17 3.65 5.87MAPD 57.78% 21.40% 55.64% 48.66% 65.25%

Linear Trend Line:

x-bar 4

y-bar6.42857

1

b0.13333

3

a5.89523

8


Section 5.6Since Sparrow Hawk is a start-up company which will be developing software for all industries, it

makes it very difficult to determine the necessary production facility of our facility, as projects have

different time, resource and money constraints. However, with a forecast in our hands and a general

knowledge about information technology, there are several assumptions that can be made when

determine our “production capacity”.

First and foremost, every programmer has different skills and knowledge levels. This in itself

makes it very difficult to calculate how productive your average programmer will be on a given day.

Therefore, we will assume that each project requires a minimum of two programmers per project.

Taking this into account and the fact that new programmers will have a steep learning curve on their

first project or two, our hiring projections should be adequate. The first year, all three employees will be

assigned to the same project. This will allow team members to specialize in certain areas, making code

reuse an effective and efficient process. After the first year, we will hire another employee to help with

the additional work load. While the first couple of months will yield less productivity for the whole team,

our hopes is that the fourth employee will allow Sparrow Hawk to effectively have two different

programming teams.

Furthermore, the capacity of our facility depends completely on the duration of each of the

projects Sparrow Hawk decides to work on. There are two scenarios that can exist. First, you could have

one huge project, which employees the whole team for the whole year. While it looks like you have only

completed one project, you have still maintained status as a full-time firm. The second option is a bunch

of smaller projects, which have a shorter duration. This type of scenario would work best if we hired


individuals who enjoyed working on smaller teams. Because these two scenarios exist, it will be very

difficult to estimate how many projects our team can take on in a given year.

Section 5.7

One of the most important aspects of service layouts is allocation of space to departments. At

Sparrow Hawk, our backroom will be divided into two separate pods: Software Development and

Testing.

Software Development will take place in a pod with individual computers for each employee.

This is where the majority of work done for clients takes place. These computers will be on a shared

network where we can pass completed classes and objects between workstations seamlessly. Projects

will not proceed to testing until the milestone is reached.

Testing occurs frequently on each project at the completion of each milestone. Initially, the

internal testing is done by Sparrow Hawk employees during the alpha stage of the software


development life cycle. Then, the customer is brought in when the project reaches the beta stage for

external testing. Both stages of testing occur in the Sparrow Hawk testing pod.

Another important aspect of service layouts is protection from pilferage by separating the front

portion of the office from the back portion of the office. The casual customer who happens into the

front portion cannot see the work in progress (WIP) happening in the back portion of the office. This

protects Sparrow Hawk propriety knowledge and insures that our work cannot be duplicated.

Line balancing is the act of equalizing the amount of work at each workstation. At the beginning

of each project, the requirements document will reveal a basic set of objects to be created for a system.

These objects will be marked off a to-do list as each object is created at a particular workstation. Each

employee will document his/her work on each object to avoid work overlap this will ensure line

balancing will occur on every project.


Section 5.8

This is the overall layout of the Sparrow Hawk facility. Customers enter though the front door

and are greeted by a tranquil and professional environment followed by a greeting from the secretary.

Paying customers who have questions or inquires are welcome to meet with us in the consultation

room. Additionally, this room doubles as a conference room for weekly SCRUMS. The area with four

workstations is the Software Development pod this is where the bulk of coding and creating databases

will take place. The area with two workstations is the testing pod and will be utilized by Sparrow Hawk

employees as well as clients. Clients will be invited to test their program when it reaches the beta phase.


This is a detailed view of a workstation in the Software Development pod. This is a station where

the critical business functions and processes of Sparrow Hawk happen such as programming, database

management, and website design. There is an average of 500 lines of code written per day at each

workstation.

This is a detailed view of a workstation in the Testing pod. This is a station where the internal

and external testing will occur. The testing pod is crucial to the software development lifecycle.

According to Sparrow Hawk quality regulations, a project is not allowed to move on to the next stage

until it has passed the internal and external testing phases. The output in this station varies depending


on how long it takes during each testing phase, and whether the iteration has to go back to

development or not.

Section 5.9Sparrow Hawk will apply several practical lean production concepts that will not only give us a

competitive edge in industry, but also provide us the following benefits:

Improved Quality

Lower Costs

Increased Productivity

Better use of Human Resources

More Product Variety

The foundation of Sparrow Hawk's quality control regulations are to create a superior product with

as little flaws and defects as possible, so that minimal time and resources will be spent debugging the

product. Additionally, by following such strict quality regulations and practicing lean production

concepts, our external costs will be reduced, allowing employees to move on to higher priority projects.

Sparrow Hawk promotes a frugal work environment and atmosphere to minimize distractions and

increase productivity. First, the back office of Sparrow Hawk will be decorated very conservatively, but

at the same time, will be functional and fun environment to work in. Second, an employee's desk will

consist of a computer, monitor, keyboard, mouse, speakers, and phone. Finally, an employee's

computer will only consist of the necessary programs and applications required to complete his/her

individual work tasks.


Product variety is a very common occurrence at Sparrow Hawk. Every customer has different

needs and wants to solve their problem. Sparrow Hawk will handle this task with ease by having generic

projects that can be customized to fit each and every customer's problem.

Section 5.10

The concept of the pull system will be heavily utilized at Sparrow Hawk. An employee will only

began working when a project is pulled down from a customer request. Before a project can begin the

customer and a Sparrow Hawk employee must sign off on the requirements documents. This will

prevent "waste" from happening by not expending human resources on a software design or testing will

add no value to a product.

Quick setups is another concept that will save time and increase efficiency at Sparrow Hawk.

Once the requirements document is compiled, the preceding task will be to compare the requirements

document to a repository of existing applications and templates. Next, the project will be created using

a generic version of existing application or template. This step alone will reduce the internal setup of a

new project by 30% to 50% because an employee will not have to spend the time setting up a new

development environment, parameters, or variables. Additionally, Sparrow Hawk reduces its external

costs by having a dedicated testing environment that is setup to handle any type of testing a project

might require.

Sparrow Hawk is a firm believer of the quality at the source concept. That is why every

employee is required to debug and test their product at every milestone before being allowed to

advance to the next milestone. When problems are identified early, the chance the problem has become

so large that an entire project must be scrapped and restarted is very small. By following this


philosophy, waste is eliminated, internal and external costs are reduced, and employee morale is

increased by not having to debug a very complex application.

Since, Sparrow Hawk will be creating software for all industries of business. Flexible resources

are a concept that will help us adapt to any industry that we decide to work in. An employee of Sparrow

Hawk will have multiple functions, such as programming, designing databases, creating user interfaces,

and troubleshooting. Additionally, we realize that projects will take varying amounts of time and

resources to complete. Initially, when estimating the project budget and timeline, the total amount of

capital and time to complete the project will be taken and an additional 15% will be added on to find the

final amount and time. This will be done until Sparrow Hawk has a better grasp on how long it takes to

do projects of varying levels of complexity.


Project Part 6

Business Launch Project

Work Breakdown Structure


Network Diagram


Gantt Chart


ExplanationAfter careful analysis, we decided that there were three main activities to starting a software company: Find Office Space, Purchase

Inventory and have an Advertising Campaign. Once the main activities were identified, we further broke down each task into several sub tasks.

For example, finding the appropriate office space has four subtasks. First, the team needed to decide what exactly our requirements were for an

office space. This includes items such as the budget, how much space and where it should be located. From there, we would then need to search

for an office space based on the requirements determined in the prior step. After we picked about five offices, it would then be time to

physically tour the office spaces. Lastly, our team would actually need to make a deal with the owner of the office space.

Deciding the cost of each task was fairly straight forward. First, we had to add all of our resources to the Resource Sheet, which are the

three business partners: Brian Wilder, Derrick Plunk and Jeff Morris. Additionally, we assigned a standard rate and overtime rate to each

business partner of $50.00 and $75.00 per hour, respectively. Lastly, we assigned resources to appropriate tasks. You can see that all of the

business partners were assigned to the “Find Office Space” and “Advertising Campaign” task. Lastly, we assigned each business partner a specific

subtask to handle in the “Purchase Inventory” major task.

After the tasks were created and resources assigned, Microsoft Project was able to calculate an estimated project duration and project

cost. We determined that it would cost around $37,200 to complete the launching process and take roughly 31 days to complete, or one month.

To Sparrow Hawk, this cost is not too terrible, considering we are all contributing around 1/3 of the total cost to get the company started. This


means that it will cost each business partner roughly $12,400, which is no different than a semester of school at Texas Tech University. This is an

opportunity cost we are willing to take to make a successful and profitable business.


Sample Client ProjectIn addition to creating a Microsoft Project to help plan our Company Launch, we thought it would be helpful to show a sample MS project we

will use for a client.

Work Breakdown Structure


Network Diagram


Gantt Chart


Graded Deliverables

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