Finding Problems Homework

Century Auto, Inc., is a major manufacturer of industrial tools and machines. It is in Newark, New Jersey. David is the assistant A/R manager. Sherri is a systems analyst for the Information Systems department. Sherri and David have just sat down to discuss their current project – improving the recently implemented Accounts Receivable (A/R) information system. As they start to discuss the project, they are interrupted by Merri Oloffson, the executive vice president of Finance, and Billy Burnett, the A/R manager. David suddenly looks very nervous. And for good reason — he had suggested the new system, and it has not turned out as promised. Billy's support had been lukewarm, at best. Mr. Oloffson initiates the conversation.“We've got big problems,” said Merri. “This new A/R system is a disaster. It has cost the company more than $625,000, not to mention lost customer goodwill and pending legal costs. I cannot afford this when the board of directors is complaining about declining return on investment. I want some answers. What happened?”Billy responds, “I was never really in favor of this project. Why did we need this new computer system?”

David gets defensive. “Look, we were experiencing cash flow problems on our accounts. The existing system was too slow to identify delinquencies and incapable of efficiently following up on those accounts. I was told to solve the problem. A manual system would be inefficient and error prone. Therefore, I suggested an improved computer-based system.”

Billy replies, “I am not against the computer. I approved the original computer-based system. And I realized that a new system might be needed. It is just that you and Sherri decided to redesign the system without considering alternatives — just like that! You should always analyze options. And let us suppose that a new computerized system was our best option. Why did we have to build the system from scratch? There are good A/R software packages available for purchase. I …”

Sensing a confrontation, Merri interrupts, Billy has a point, David. Still, the system you proposed was defended as feasible. And yet it failed! Sherri, as lead analyst, you proposed the new system, correct?”

Nervously, Sherri responds, “Yes, with David's help.”

Merri continues. “And you wrote this feasibility report early in the project. Let us see. You proposed replacing the current batch A/R system with an on-line system using a database management package.”

Sherri replies, “the database management package was not needed. We could have used the existing VSAM files.”

With a troubling look, Merri says, “The report says you needed it. I paid $15,000 to get you that package!”

Sherri answers, “Bill, our database administrator, made that recommendation. The A/R system was to be the pilot database project.”

Merri continues. “You also proposed using a network of microcomputers as a front end to the mainframe computer?”

“Yes,” answers Sherri. “David felt a mainframe-based system would take too long to design and implement. With microcomputers, we could just start writing the necessary transaction programs and then transfer the data to the database on the mainframe computer.”

Merri looked puzzled. “I am a former engineer. It seems to me that some sort of design work should have been done no matter what size computer you used . . . [brief pause] In any case, the bottom line in this report is that your projected benefits outweighed the lifetime costs. You projected a 22 percent annual return on investment. Where did you get that number?”

Sherri answers, “I met with David four times –about six hours total, I'd say — and David explained the problems, described the requirements, made suggestions, and then projected the costs, benefits, and rate of return.”

Merri replies, “But that return hasn't been realized, has it? Why not?” After a long, silent pause,

Merri continues, “Sherri, what happened after this proposal was approved?“We spent the next nine months building the system.”

Merri responds, “And what did you have to do with that, David?”

“Not a lot, sir. Sherri occasionally popped into my office to clarify requirements. She showed me sample reports, files, and screens. Obviously, she was making progress, and I had no reason to believe that the project was off schedule.”Merri continues his investigation. “Were you on schedule, Sherri?”

“I do not believe so, Mr. Oloffson. My team and I were having some problems with certain business aspects of the system. David was unfamiliar with those aspects, and he had to go to the account clerks and the accountants for answers.”

Visibly irritated, Merri asks, “I do not get it! Why didn't you go to the clerks and accountants?”Although the question was directed to Sherri, Billy replies, “I can answer that. I designated David as Sherri's contact. I did not want her team wasting my people's time — they have jobs to do!”

Merri is silent for a moment, but then he responds, “Something about that bothers me, Billy. In any case, when this project got seriously behind, David, why didn't you consider canceling it, or at least reassessing the feasibility?”

“We did!” answers David. “Billy expressed concern about progress about seven months into the project. We called a meeting with Sherri. At that meeting, we learned that the new database system was not working properly. We also found that we needed more memory and storage on the microcomputers. And to top it off, Sherri and her staff seemed to have little understanding of the business nature of our problems and needs.”

This time, Sherri gets defensive. “As I already pointed out, I was not permitted contact with the users during the first seven months. Besides, we were asked by David to start programming as quickly as possible so that we would be able to show evidence of progress.”

Looking at David, Merri asks, “David, I'm no computer professional; however, my gut instinct suggests that some design or prototyping should have been done first.

Sherri responds for David, “Yes, but that would have required end-user participation, which David and Billy would not permit.”

David interrupts. “As I was saying, we considered canceling the project. But I pointed out that $150,000 had already been spent. It would be stupid to cancel a project at that point. I did reassess the feasibility and concluded that the project could be completed in four more months for another $50,000.”

Merri responds, “Nobody asked me if I wanted to spend that extra money.”

David answers, “We realize that the system has not worked out as well as we had hoped. We are trying to redesign . . .”

Merri interrupts, “As well as you hoped? That is an understatement! Let me read you some excerpts from Billy's last monthly report. Customer accounts have mysteriously disappeared, deleted without explanation. Later, we discovered that data-entry clerks did not know that the F2 key deletes a record. Also, customers have been legally credited for payments that were never made! Customers have been double billed in some cases! Reports Billy rated by the system is late, inaccurate, and inadequate. Cash flow has been decreased by 40 percent! My sales manager claims that some customers are taking their business elsewhere. And the Legal Department says we may be sued by two customers and that it will be impossible to collect on those accounts where customers received credit for non-payment. You tell me, what would you do if you were in my shoes?”

a. Evaluate this project against the eight principles of systems development.

b. What would you do if you were in Mr. Olufsen’s s shoes? How would you react to David's performance? Sherri's? Billy's?

c. What did David or Billy do wrong? Can either be held responsible for the failure of a computer project when they have limited computer literacy or experience?

d. What was wrong with the feasibility report? Did Sherri and David meet often enough? Was the input to that report sufficient? Did the team commit to a solution too early? Did programming begin too soon? Why or why not?

e. Why were Sherri and her staff uncomfortable with the business problem and needs?

f. Should the project have been canceled? What about the $150,000 investment that had already been made?

g. If you were Sherri or David, what would you have done differently?