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Managing Scope Change EssayAfter successfully planning and organizing the AD High Tech online store project, project director Chris Johnson was promoted to vice chairman of e-business. Eric Robertson returned from his leave and assumed the position he had left as the project manager for the online store. In late summer 2003, Johnson began hearing whispers from his colleagues that the project was in trouble. On August 20, CIO Matt Webb frantically approached Johnson in his office. He had just fired Robertson and cute Johnson to serve as the interim project manager. For more than three months, Robertson had told Webb that the project was on track, but suddenly he changed course and told Webb that he guessed it would be at least one month late and that exists would overrun by more than 20 percent.This was hardly acceptable, since it was imperative that the project be completed in time for the holiday shopping season. The project had strategic importance to the comp each and was integral to its holiday promotion strategy. Webb explained to Johnson that there was an additional challenge the vice president of marketing wanted to create promotional bundles for the holiday season. Promotional bundles are a collection of items bundled to expressher and sold at a lower cost than if the items were purchased individually. ADs trial promotions with some retailers had shown an increase of 10 percent in sales with the addition of these promotional bundles, and the marketing plan called for them to be turn out nationally. Thus, in order to maintain consistency in all sales channels, the bundles also needed to be available in the online store.Once again, Johnson was asked to quickly troubleshoot the project. He needed to analyze the true state of the project and gather his projections for cost and schedule. Johnson also needed to assess the possible impact of adding promotional bundles. Although deterred from his rebirth into his new jobas vice president, Johnson wa s nonetheless excited to once again put his project management expertise to use.Promotional BundlesThe promotional bundles and the tasks associated with implementing them be the only functional or scope change for the online store as Johnson tog out to troubleshoot the project.2006 by the Kellogg School of Management, Northwestern University. This case was prepared by Derek Yung 03 and Alex Gershbeyn 03 under the supervision of Professor Mark Jeffery in the Center for Research on Technology and Innovation. Cases are developed solely as the basis for kinsperson discussion. Some facts within the case have been altered for confidentiality reasons. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or useless management.To order copies or request permission to reproduce materials, call 800-545-7685 (or 617-783-7600 outside the United States or Canada) or e-mail emailprotected No part of this publication whitethorn be reproduced, st ored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any meanselectronic, mechanical, photocopying, recording, or otherwisewithout the permission of the Kellogg School of Management.This document is authorized for use only by Vivekanandan Thangamani in IDS 507 innovative Systems Analysis and Design jump taught by Dr. Matthew Liotine from September 2012 to March 2013.The promotional bundles did not necessarily present a technical design challenge for the project. The product catalog from Microsoft Site boniface had the flexibility to handle complex rules in dealing with different pricing schemes. However, since MS Site Server had to be con innovationd andtested, a new set of tasks not originally planned or estimated needed to be factored into the project plan.Sales planning called for a total of twelve promotional bundles. The technical locomote on the team, Marc Sanders, estimated that after twain to three days of training per person, ten to twelv e person-days would be needed for his team to configure the pricing rules in the system. The testing lead estimated twenty to twenty-five person-days would be needed to test the new features and to regression-test the existing products in conjunction with the promotional bundles. Sanders was a bit worried rough the size of his development team, since he was barely keeping up with his duties managing the existing tasks on the project.AD was currently charging merchant marine as a flat lot depending on order size. The online store, however, was to be built to handle percentages and to specify shipping charges on a per-item basis. In the project outline, the baseline estimate of the Submit dress tasks for design and build included the work for the extra shipping functionality. Sanders estimated that he could reduce 50 percent of the work on the Submit Order tasks if the per-item shipping charge feature was removed. Doing so would likely free up a developer who could potentially wo rk on the ERP interface.Project StaffingAs far as Johnson knew, the IT provide was running at full capacity, which meant that any additional resources for the project would have to be contractors. AD did not traditionally use contractors for testing. The market rate for a contract developer had risen to $175 per min, with an overtime rate of 150 percent. Johnsons best guess was that it would take one week for a new developer to get acclimated and trained on the procedures of the project. Microsoft could provide consultants who were fully trained with the expertise to configure the pricing engine to accommodate the promotional bundles.Sanders had experience working with these consultants, and he estimated that they could do the configuration work and train another developer to maintain the rules in the system in no more than two to three days. The Microsoft consultants charged $500 per hour and required a minimumof two weeks to arrange for the visit. Thus, for planning purposes, Mi crosoft consultants could be hired for two to three days work but required two weeks lead time to schedule.Review MeetingAfter reviewing his new assignment with Webb, Johnson quickly gathered all the online store project leads to get their input on the state of the project. He learned that there had been no mea realmentand hence no evaluationof project management metrics. This came as a surprise to Johnson, since Robertson had been cognize to be meticulous in measuring projects quantitatively in the past.KELLOGG SCHOOL OF centeringThis document is authorized for use only by Vivekanandan Thangamani in IDS 507 Advanced Systems Analysis and Design Project taught by Dr. Matthew Liotine from September 2012 to March 2013.For the exclusive use of V. THANGAMANIKEL158AD HIGH TECH (B)After working with the leads for more than a week, Johnson painstakingly pieced together the historical data and got the actual time spent working for all relevant tasks as of August 26. See Exhibit 1 for the p roject actuals. He also had the earned value template from a previous assignment that could be used to analyze the project plan, if he could figure out how the earned value data could be extracted from the project software. See Exhibit 2. The project was originally scheduled to be implemented by mid-November, ahead the Thanksgiving weekend.The vice president of marketing and Webb agreed that it was possible to delay implementation until December 1 and still reap some of the benefits of the holiday season. Johnson accomplished that this was far from the ideal scenario, since theproject would miss the Thanksgiving shopping weekend. However, he needed to provide Webb with an accurate assessment on how and when the project could be completed.Johnson recognise that he first needed to update the original Microsoft Project document. He was not sure what, if any, problems existed within the original project. In addition, he was not sure exactly how to incorporate the promotional bundles into the project plan. Johnsons experience told him that something would need to be fixed, and that the last-minute scope change was going to cost the company.KELLOGG SCHOOL OF MANAGEMENTThis document is authorized for use only by Vivekanandan Thangamani in IDS 507 Advanced Systems Analysis and Design Project taught by Dr. Matthew Liotine from September 2012 to March 2013.