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Outsourcing has gained recognition in the entrepreneurial world. The practice has many benefits to a business. First, outsourcing helps in reducing the operating costs, thereby increasing a firm’s profitability. Second, it helps firms to make efficient use of experiences in delivering high quality products. Therefore, from a technical point of view, outsourcing enhances a firm’s technical efficiency, which boosts the productivity. Finally, outsourcing enables a firm to complete the tasks within given period. This is because outsourcing gives business an opportunity to engage more labor to reduce the time required to complete the project. However, outsourcing of some technical activities requires careful consideration to ensure optimal results. It is because some of the activities require careful analysis and involvement of the experts at each stage of development. Therefore, outsourcing of the Account Payable (A/P) project was not a right move for Tegan as evidenced by the failure of the project. The failure resulted from communication lapses between the client and the outsourced firm. The client failed to provide all essential information required for the optimal functioning of the system (Lang, Wojtkowski, & Wojtkowski, 2009).
The objective of the requirement analysis for a project is to determine functionality of the system. However, there is a trade-off to consider during requirement analysis and when choosing an agency for doing the exercise. The trade-offs occur due to the following reasons.
First, the cost incurred in doing requirement analysis exercise is fundamental. Firms aim at minimizing costs of doing any activity while achieving highest returns. Thus, if a procedure of doing requirement analysis internally is expensive, then it will be appropriate for a company to outsource another firm to do the activity. The internal requirement analysis may be expensive if there is a requirement from the corporation to hire qualified personnel to deliver the service. It will not be economical in cases where the number of projects that need requirement analysis is small. This is because firms will be incurring a constant cost due to salaries to the requirement analysis personnel. Thus, the firm will have no option but to outsource to minimize the cost of system development (Vasilecas, 2005).
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Second, occurrence of technological constraints is another factor considered when performing requirement analysis. When outsourcing, a company should consider the technological level of the firm they are contacting. It helps to determine the technical suitability of the firm contracted in delivering the required service (Williams, 2006).
Finally, time consideration forms a basic trade-off when outsourcing a firm to perform requirement analysis of the system. The client has to consider whether the firm has a capability of completing the activity within a given time. Thus, if time is a crucial component in the project, then the firm should consider contracting only the firm capable of achieving the desired objective (Vasilecas, 2005).
There are various methods used in system development. Some of the methodologies include Waterfall Methodologies, Agile Methodology, and Joint Admission Design. Among the types of system development methodologies Hrad Technika used Joint Application Design development methodologies (Lang et al, 2009).
In the methodology, the designer keeps in touch with the client in making the decision regarding features to incorporate in the system design. It is suitable if the client is knowledgeable of all essential components to be included in the system. The client should have adequate knowledge of the requirements of the new system. The designing company includes all required features in the system during development. The features included in the new system comply with client’s instruction. Once the designer develops the system, it is then given to the client for testing. During testing, the client offers assistance in reviewing the documentation of the project and creating room for further correction of the functionality (Williams, 2006).
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Joint Application design is a methodology used by Hrad Technika called for the cooperation between the client and the designer. The methodology required that both parties posses adequate knowledge of the working of the proposed system. Accordingly, the system development may fail due to weakness of one or both parties: the client or the designer (Vasilecas, 2005).
System development methodology adopted by Hrad Technika called for proper sharing of information between the client and designer. Nonetheless, due to some communication barriers the project did not meet its requirements. Despite the performance of the requirement analysis by the firm, the project failed to meet the objectives due to the following reasons (Williams, 2006).
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First, there was a failure at the analysis stage. Hrad had relied heavily on its previous experience of the system, which they acquired when engineering the requirement document. This implies that the project failed to pass the quality analysis phase, which is a crucial stage in system development. The designing company failed in meeting the required functionality due to its shortcomings of overreliance on experience. As a result, there was a complete lack of perception by both the client and the outsourced company of the whole requirements of the A/P system (Williams, 2006).
Second, there was time wastage during processing of the Low-Level Design documents by the client. This mainly resulted from the development methodology adopted by the company. Clients did not have enough skills to review the documents provided to them. Consequently, time delay was inherent in the completion of the project. As a result, the management had to take appropriate measures to reduce project completion time. This led to making of controllable errors that later hindered the normal functioning of the system (Williams, 2006).
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Therefore, the system failure resulted from the methodology adopted. If the company used other methodological alternatives that did not give the client a central role, the system performance could have been greatly improved (Williams, 2006).
Leadership is an essential component to success of any business. Business success is possible if leaders remain committed in meeting the goals and objectives. Nevertheless, technicians are better to handle some challenges. Therefore, management has little possibility to change the situations. Therefore, I agree with the case writer’s statement. It is because IT issues need expertise in addressing the challenges involved. In this case, managers had no reason to determine how the functionality works. It was purely the work of IT experts. In my case, the possible IT management failure is due to adoption of inappropriate contractual terms and conditions due to unlimited time. There was a need to negotiate with the client for essential attributes for the proper functioning of the A/P project. It would have given the designing company a mandate for implementing all crucial system attributes for proper functioning (Lang et al, 2009).
To solve the problem Hrad should adopt Agile Development Methodology. The methodology will divide the A/P project into small components. The task aims at identifying essential features for inclusion in the system. Furthermore, the methodology avoids excessive time delay common with adoption of the Joint Application Design. However, it should go along with adoption of proper contractual practices that will allow inclusion of only essential attributes and giving room for further addition in the near future (Lang et al, 2009).
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