Strategic Procurement

Captiva Facts

The conglomerate has contracted for a new software on supply management operations, which is too complex for the staff who are not IT trained to use, upon testing of the spare module. The firm that developed the software is also behind schedule by 4 months. Moreover, the development and implementation of the regional and centralised inventory system is behind schedule by 10 months. The centralised and regional inventory management system shows inconsistencies in standards and its performance is substandard. Further, there are discrepancies in both the centralised and regional inventory management system specifications since all the stakeholders did not vet them thereby leading to an over-budget of 17 unpriced change orders from $1 million allocated on the contract.  

The biggest Problem

The Captiva’s management team has inadequate functional collaboration amongst its departments as well as the purchasing process, as seen in an over-budgeted, delayed and inadequate inventory management system. The internal process is weak as it has led to inadequate purchasing process lead management thus resulting into an expensive contract that netted a poor value. Moreover, the management approved a redundant product that could not be used by non-IT staff.

Available Solutions and Alternatives

The management could form an integrated product team to assist in the assessment and development of an effective statement of works with custom-made specifications meeting all the stakeholders’ needs. It could halt the existing contract and thus find a new software developer to complete the project. This solution leads to high effectiveness by ensuring that the personnel in supplies management have an effective tool to boost performance although it would be costly in terms of money and time.

Another alternative solution would be to maintain the status quo, which would necessitate doing nothing about the received system. This could be an effective solution, however, it is not what Captiva is looking for as the system has to be usable. Moreover, the company’s management could opt for S.O Software to complete the project and pay with extra fee and time. It would also be possible for Captiva to lay a legal claim against the software company for the losses incurred or it could change the terms and conditions of the contract to entail more milestones and deliverables as well as correct the current issues.

However, the best solution for the company is to redesign both systems especially the module software specifications and the centralised and regional management system. The redesigned system should be implemented, retested and run to ensure that it meets the required standards and is workable. This solution would be less costly and will save the company time as both systems are behind schedule. Additionally, the company will be able to work the semantics in case of a breakdown. However, completing the system may mean suspension of other important responsibilities to work on the system.

Best Choice

The management should thus contract another software company to work on the project albeit with a new agreement on the conditions and terms giving a clear overview of the time of completion and quality of work to be expected.

 

Implementation and Action Plan

The team’s responsibilities and roles should be adjusted to allow for sharing between the contracting office and the Captiva office. The company should set up a program management team to strategically focus on the project by measuring and monitoring its budget and timeline. The new team of administrators will execute tasks and processes that ensure that the contractors do their work as planned.

 

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