Alternative Solutions And Their Analysis

Published Date: 02 Nov 2017

Case Study

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Contents

Background:

Big valley is a city located in the central part of California, comprising of 500,000 residents; with residents earning average income of around $15000 per year. Figure of 26.2 percent of people living below poverty line depicts that the city cannot afford costly solutions, city management has to be cost efficient in providing services to the residents.

Although, case study only deals with the information system department of the city and it seems that the department is in some trouble making crucial decision about implementation of enterprise resource planning software. Currently, city has been running on PeopleSoft which is now acquired by Oracle. Other software are also used by the IS department for some functions, these software include HTE utilities and permitting code enforcement, Kronos time and activity tracking and a separate management system for their airport. These system software complement’s PeopleSoft, as PeopleSoft mainly provided financial and human resource solutions.

Oracle taking PeopleSoft over; is creating problems in financial as well as implementation and usage of the system under changed scope. Bob Henderson, the head of Information system department in big valley is very much concerned about the acquisition, as the new management is thinking of a possible upgrade which will require Henderson to increase the maintenance budget (already a significant amount of $3.3 million). Besides, chief information officer (Bob Henderson) has recently spent a significant amount of $2 million on the upgrading of PeopleSoft.

Another major issue faced by the department was related to support systems; oracle was trying to influence the city to switch to Oracle fusion (a new offering/upgrade, combination of PeopleSoft services and other support services; a complete enterprise suite), this added to the misery of department as it will not only have cost implications, but the new system will require training and support to get along. Fusion is likely perform in a different manner from PeopleSoft, and will require re-engineering to get in line with the practices of fusion. This also will incur a significant cost. (Roman, 2009)

As for now, Bob Henderson is trying to figure out a possible solution regarding ERP software maintenance, for the city and information system department. For which he has developed few alternatives to be considered. Evaluation of these alternatives heavily depends upon the 3 E’s i.e. Economy, Efficiency, and Effectiveness, to be in the best interest of the residents. Considering the well being of the city, Henderson has developed following 3 alternatives:

Oracle has committed itself to develop next generation products, one of which is Oracle Fusion. Besides all the issues that the department may face in implementation of the new system, Henderson is considering to implement the system, but after re-negotiation of the maintenance contract for keeping the cost down.

Big valley’s IS department is also considering the option to utilize alternate support providers for the PeopleSoft application. Henderson has assigned this job to Kent Yamoto. Yamoto for this purpose has prepared a list of providers, which includes large vendors like Accenture and two others naming Tomorrow Now and Legacy Mode. Yamoto has provided with an analysis of pros and cons that the city and its residents might face.

The last alterative that Henderson has listed, is switching to a all new ERP provider( A tier II ERP provider), main reason to consider this option was; tier I providers such as SAP and Oracle are large companies. Tier I providers has an assumption that one size fits all and has universal standardized products mostly developed for large corporations. While tier II providers are small providers. This give big valley to reduce its cost of ownership as well as that of maintenance, also this will provide them the opportunity to own tailor made software, dedicated to their functions. Few ERP providers that has been provided for analysis in the case are; SunGard Bi-Tech and Government E-management Solutions, Inc. (GEMS).

Case has covered problems faced by the Big Valley as well as their causes; it also covers the possible solutions applying different approaches as well as case provided with an analysis of the possible solutions.

Problems & their causes:

The major issue Henderson and his department is facing is related to cost incurred by the city in the implementation/maintenance of ERP and other support system, as well as that of drafting the future strategy and plan regarding the information system of the city. Acquisition of PeopleSoft has urged big valley to look into several matters.

The new owners of PeopleSoft are looking into the matter to provide their users with a new upgrade. Although this new upgrade will give them support services as well under one name; the cost company will incur is significant. Company has to pay the license fee over the period of 5 years time, but the company is not quite certain about the amount to stay fix; besides, oracle has announced that the amount might increase in future.

Company is also facing some trust issues, big valley has been operating with PeopleSoft since a long period of time, and the performance has always been satisfactory. As the owners have changed it is most likely that the scope and vision of PeopleSoft would also have changed. Department is currently not confident whether the fusion products will provide the desired level of services.

IS department is also not able to be certain about the amount of effort and money, that will be required to implement the new system.

Alternative Solutions and Their Analysis:

Bob Henderson, chief information officer acted on the situation and has developed a list of possible actions that can be done so as to pull big valley’s information system out of trouble.

The case here provides with the information about the current situation of the system as well as it also provided with details of all the alternatives, in terms of their benefits, functions and cost impact of the alternatives. Information available also provides with the analysis of these alternatives for purpose of choosing the best one. Three possible actions have been discussed in the case; with different alternate choices available for implementing the action.

The alternate vendors and software’s mentioned in the case can be analyzed using various techniques or criteria. They can be analyzed in the context of SWOT analysis of the city before and after the implementation of the alternative or an analysis of five forces; value chain analysis can be of benefit as well.

Although, evaluation on the basis of any one particular technique might result in a wrong decision; decision should be based on a mix of techniques and criteria. Whereas a suitable software and vendor can be evaluated on the basis of following factors:

Software

Does the software meet the requirement?

Costs

Interface

Controls

Updates

User manual

Compatibility

Support and Maintenance

Vendor/supplier:

Time in business

Financial stability

Third party references

Availability of demos

Alternatives actions mentioned in the case and their analysis is:

First of the alternative Henderson was considering was to stay with the current vendor Oracle, and commit to upcoming Oracle fusion by negotiating a long term contract. Oracle is large market player this may act as a benefit as large vendors are less likely to default and go out of the business. This is important factor in software industry, in-case of a vendor going out of business; the existing system has to be replaced as there will be no support and maintenance as well as updates of the existing software available.

Although, one of the disadvantage for big valley is that oracle develop software’s keeping in consideration large businesses, this has dual impact on the city as it will have pay extra for some of the unnecessary features besides that the software will not be customized as per the requirement of the city.

The Fusion upgrade also provides cost advantage to the IS department, all the other alternatives provides cost saving opportunity as compared to Oracle fusion. Another threat is of compatibility as department is not sure about how the new upgrade will work, the information provided depicts that the upgrade will be more complex as it will merge a range of services provided by the company. While Oracle has announced the policy to provide assistance to its customer for getting along with new upgrade, whereas there is no significant information that what it will cost to the customers. As for the support and maintenance city might face difficulties as there are long detailed procedures for assistance in large organization like Oracle. (Rosso, 2013)

Another alternate option that Henderson is considering is to move onto third party support providers, for this he has assigned Kent Yamoto to analyze the suppliers; one of the threats is that of integration of the new support software with base application. This is big issue as there is no certainty about how well the new support work. Yamoto has listed down three of the support providers; listed below:

Accenture Consulting:

Accenture is reputable large IT service provider, it is more likely that the service provided will be reliable and of better quality. The probability of integration issue will also be low as it is likely that the company will have more expertise; whereas, company might have pay a premium price to use the high value service which does add a negative point in the evaluation of Accenture. (Customer Success Symantec Implementation)

TommorowNow:

While, tomorrow now does not seem to be a very large company, it’s owned by well known company SAP. Tomorrow NOW gives advantage to the city in terms of support and maintenance as well as it also provides a cost saving of 50%. One positive factor is a dedicated support staff which will solve any problem in a short span of time, this might help big valley reduce their cost as they will require less employee for the support purpose. As Tomorrow Now has history of dealing with PeopleSoft products this might come over the integration threat; whereas, Tomorrow Now is under the management of SAP, which itself is an application provider, might push the city towards SAP applications.

Legacy Mode:

Not much information is provided in the case about Legacy Mode. While it is provided in the case that company provides big valley similar advantage as Tomorrow Now does; and are slightly lower on cost. In case of Legacy Mode company does not face the threat that it faced in the case of Tomorrow Now due to the ownership of SAP.

The last alternative that Henderson was considering was to move Tier II ERP vendor. This option is the most risky one and requires huge effort and design change. It will have some benefits to; one of them is the cost benefit, tier II providers are a low cost option. This alternative will allow the city to get a system tailored to their needs. These tier II suppliers are not large companies; therefore, there is always a "question mark" on their financial stability.

Following low cost vendors were considered by the Chief Information Officer:

SunGard Bi-Tech:

This vendor appears to be a decent one; information depicts that organization has been working on similar solutions (as required by Big Valley) in the past. This shows that solution provided is very much probable to fulfill the requirement of the city. Besides that data shows that company is in good condition. Support and maintenance will also not be an issue, as vendor provides full assistance in installation as well as in maintenance. Implementation would be easier as technical training is offered by the vendor. Vendor also reduces the cost of maintenance by 37%. City may also reduce the cost it is incurring in catering the problems incurred, as they will have a dedicated person provided to them by the vendor. In addition to all these factors vendor also offers many other services which can be of great benefit to the city.

SunGard has attributes in its application which were not offered by PeopleSoft, whereas SunGard also provides with choice of numerous actions that can be performed in the area application covers.

Government E-Management Solutions, Inc.(GEMS):

GEMS appear to be a quite beneficial vendor to Big Valley as its prime focus is on the government applications and has developed applications for significant number of customer. Gems have served many customers in the public sector, from public schools to city. Gems system appears to be a much safe and reliable one as it allows one time entry, which reduces the chances of manipulation and fraud while making entries

GEMS applications are fully compliant with laws and regulations, as its primary purpose is to serve the public sector. Applications provides all the necessary services that city management may require, it even provides services that were not previously offered by PeopleSoft and some by SunGard.

GEMS applications are not complex like others; they have a user friendly interface and design, this will benefit the department as less training will be required. User friendly controls are also a plus point of the applications. In addition to that GEMS provides Property, fleet and equipment management system, which is not yet provided by any other vendor. GEMS also provide the department with cost advantage.

Recommendation:

Keeping in view all the factors and their impact on the city, best of the alternatives under consideration is to switch to a new tier II ERP provider. It will provide organization with benefit in many ways. First of all it will reduce the cost of maintenance and ownership for the city. City will be able to get a tailor made application, with a simple usage and with only services which are required by the city. In addition vendor will provide a quicker support as compared to the old provider. (Wolf, 2011)

Among the two tier II providers under consideration, GEMS appears to be the best one. GEMS have dealt with many synonymous sector/organization and are likely to provide a simple easy to use application. Vendor is more likely to fulfill the requirement of city because of it has primary interest in the public sector. It will also help the IS department reduce the cost incurred by the city.

Generic case questions:

Who is the protagonist?

Protagonist is a Greek word, is mostly referred to the characters in a drama, movie or a narrative. Protagonist is central part of the whole thing. A story or a narrative involves around a protagonist. Protagonist is the main attraction; success depends on how good/well crafted protagonist is. Protagonist has to create the momentum and carry the things from the start to the end; he/she has to set up the tone of the whole act.

What are his/her objectives (implicit or explicit)?

Protagonist is expected to carry everyone around him/her from start to the end. Although he may have heroic or villainous objectives, whereas protagonist is mostly considered to be as a positive character. Protagonist has to lead the people and persuade them to follow his thoughts. Protagonist has to motivate people around him/her.

What decisions (implicit or explicit) must I make?

I as a protagonist should always try to choose the right path, if only one on that path is me. Decisions should be based on pure facts and analysis related to the situation. Protagonist must also consider interest of those affected by the decision directly or indirectly.

What problems, opportunities and risks do me, as the protagonist, face?

Expectation from a protagonist is very high; this might act as an opportunity or as a problem. High expectations sets high level of desired results and consequence to achieve those goals is disgrace. People have expectations from those whom they desire follow and obey, it becomes easier to convey one’s message and persuade people accordingly. Protagonist is prominent person it is most likely that unhealthy competition will be attracted due to this attribute.

What evidence do I have to help make the decisions? Is the evidence reliable and unbiased? Can I improve it?

There is detailed information about the options available to me; the information is good enough to analyze the effect of alternatives on the subject. Information is about the services provided and its possible cost impacts. Evidence is assumed to be reliable and unbiased; while there is always room for improvement and more information will result in a better analysis.

What alternative courses of action are available?

Alternatives available are to stick to the current service provider, change the support service provider or switch to a tier II ERP provider.

What criteria should I use to judge the alternatives?

I should evaluate on the basis of factors such as cost, inter face, compatibility etc. and current position of the city should be identified and it should be ascertained what the implementation of alternative will change.

What action should I take?

Separation of the positive and negative factors as well as identification of the faulty areas. Identification of SWOT may also be done.

How should I convince others in the case and in the classroom that my approach is best?

Well justified answer is the one with the facts and detail analysis. Anyone will only be convinced if the facts and figures for persuasion are available.

What did I learn from this case?

Case has provided with a great insight of cost and benefit analysis; it was of great help in generating the ability to analyze different courses of action as well as it developed the information extraction ability.

How does it relate to past cases and my own "live" experiences?

A. The case is good example to identify the problems anyone could face in the selection of range of software’s. This type of problem is often faced while performing a cost and benefit analysis of the antivirus packages.