Chapter Case: Sedona Management Group and Managing Project Procurement Many companies do not have the required personnel or expertise to develop the systems that they need. Consequently, when these companies need new systems. they elect to outsource such projects to other companies that specialize in systems development. This process is known as procurement and involves the acquisition of goods or services from an outside source. The advantages associated with outsourcing include the availability of knowledge and expertise that might not be available internally, an increase in the revenue potential of the acquiring organization, and a reduction of time to market the The Seattle Seahawks' core competency is run- ning a professional sports organization, not website development. When they realized they needed a web- site for the reasons mentioned in previous chapter cases, they decided to outsource the project. To make sure that it was completed successfully, the Seahawks went through several of the processes related to Project Procurement Management, includ- ing the processes Plan Procurement Management Corr duct Procurements, and Control Procurements. The main purpose of Project Procurement Management is to manage the acquisition of resources from an final product. Ition Systems Project Management, outside source. @ Edition 2.0 382 - Chapter TO X Managing Project Procurement One of the first steps the Seattle Seahawks fol- lowed in managing procurement was to plan how to procure the website. During this process, the Seahawks focused on identifying project needs and which of those needs would be best met by using services outside the organization. The Seat- tle Seahawks wanted a reliable and secure website that conveyed accurate information and was easy to access. An initial statement of work (SOW) was developed, which allowed prospective outsourcing partners to determine whether they were capable of providing the service or the product required, as well as to determine an appropriate price for the project. Next, the focus is on identifying the evaluation cri- teria that will be used to determine which vendorwill be awarded the contract. Writing a request for pro- posal (RFP) is typically a part of the solicitation plan- ning phase. The RFP is a document that is used to solicit proposals from prospective sellers. The RFP issued by the Seattle Seahawks contained, among other features, a statement of purpose of the RFR background information on the company, the state- ment of work, and schedule constraints. Once the RFP was available, it was issued to the prospective sellers. After receiving proposals from the prospective sellers, the Seattle Seahawks went through the process of selecting sellers. where they evaluated the bidders' proposals to choose the best one. The evaluation criteria identified earlier were used to make this choice. During this stage of procurement management, the Seattle Seahawks chose Sedona Management Group (SMG) to work on their website development project. The Seahawks' key criteria were project quality and the ability of the outsourcing partner to deliver its products on time and on budget. SMG excelled in both dimensions. @ Once the Sedona team was informed that they would be working on the website development proj- ect, Mike Flood from the Seattle Seahawks met with the project team several times to further communi- cate the project needs. After the project requirements were clearly determined, the next step was to work on the contract. SMG uses a fixed price contract, which involves a fixed total price for a well-dened product or service. In such a contract, the Seattle Seahawks were exposed to a low level of risk because the risk associated with cost overruns was assumed by the developerin this case SMG. However, given SMG's well delineated project management processes, the Sedona team was confident that they could deliver the project on time and within budget. The Seahawks8M8 contract consisted of sev- eral sections. The first section laid out the assump- tions the team used to develop the contract. These assumptions included information about the tech- nology to be used to develop the system and which server would be used to host the system. as well as the contact information of the individual from SMG who would be available for immediate information during business hours throughout the development process. The second section included the scope of work, which included a detailed description of all the activities the Sedona team would perform to com- plete the project. In the next section, the terms of the contract were explained regarding project cost and the delivery date. In a section entitled \"Other Considerations,\" SMG explained that the Seattle Sea- hawks would own the final code, the database, and the website once the project was completed. The Sedona team began working on the project the next business day after both parties agreed to the clauses of the contract. Chapter 10 Project Assignment An important part of an entertainment website is An introduction and overview section, which the availability of a shopping cart for fans to buy includes some background information the products being promoted by the entertainer. The about your project, the scope of work, success of your website requires this feature, but you and the objectives of the project being realize that it is beyond your and your team members' outsourced expertise. So you decide to outsource this feature. In A requirements section for the shopping this exercise, you will work on the documents you cart feature require for the outsourcing process The list of deliverables 1. Conduct a make-or-buy analysis. This analysis Involves identifying the pros and cons of . A list of milestones developing this feature yourself or outsourcing. . Any other considerations 2. Develop a statement of work (SOW) for the 3. Develop a request for proposal (RFP) for this shopping cart development project. The outsourcing project. The RFP is a document SOW is a document prepared for the vendors that will be submitted to potential vendors, that describes thoroughly the product being asking them to propose a solution to the shop- sought. The SOW should contain ping cart problem. The RFP should contain on Systems Project Management, Edition 2.0 References . 38 A project overview 4. Determine the evaluation criteria you and your An administrative section, which contains team will use to rate the received proposals. contact information 5. Compare and contrast the different types of Technical requirements contracts that are available. Indicate which Management requirements one of these you will use for this outsourcing project. Provide justification for your answer. Suppliers' section Any appendices