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IT
Acquisitions Management
Part A – Essay Questions
Question 1. IT acquisition planning employs a life cycle
perspective. As illustrated by the Template 7 economic analysis worksheet,
costs, benefits, and risks are estimated over the system’s useful life. The
system life cycle includes all phases of a system’s life. In Template 10, the
system life cycle had to be described as a part of the Acquisition Strategy
Statement that is presented to executive decision makers. The phases of the system
life cycle are usually clear when an organization acquires and implements its
own in-house IT systems. However, increasingly organizations are moving toward
cloud computing, in which the organization does not acquire the hardware or
software itself but proposes to use the hardware and software of one or more
cloud computing hosts to achieve a system solution.
Your Question:Integrated Project Teams (IPTs)
are being required to use economic analysis to compare a proposed in-house
hardware-software solution with a solution that uses cloud services. What
decisions, if any, must the IPT make about the life cycles of the two proposed
solutions so that a comparison can be made using economic analysis? In your
answer, give the reason for any decision you state must be made.
Question 2. Successful organizations use performance
measures to monitor their performance at the corporate level as well as at
lower levels. At the highest levels, the performance measures are called key
performance indicators (KPIs). The performance measures generate information
that alerts the organization to areas of performance that need improvement. In
the following case, the manager of human resources is with an organization that
relies on performance measures.
The Case:The manager of the human resources (HR)
department at the corporate headquarters of a large oil company found that many
employees in its USA and Canada refineries receive training that duplicates
training they have already had, that many do not receive the training they need
at the right time, and that many fail to ever receive some training they need.
There are 30,000 employees at the seven North American refineries. The HR
manager’s analysis shows that eliminating duplicative training and unneeded
training and providing training that is needed on a timely basis will save the
organization millions of dollars annually and improve employee productivity.
The HR manager plans to acquire a software system that will track the training
an employee has had and the training the employee should receive next (to
improve job performance, to prepare for job advancement or transfer, to further
career goals, etc.). The system will need to prevent duplicative training and
unneeded training, and identify the next training course or courses planned for
the employee.
The HR manager’s proposal for the new system must be approved by
the organization’s headquarters executive committee. A basic requirement of the
committee is that every IT proposal must specify the performance measures that
will be used to measure the success of the implemented system in terms of its
contributions to the organization’s strategic goals. (The company’s strategic
goals are: Maintain the leadership position; Be the most efficient competitor;
Capture quality investment opportunities; Develop and employ the best
technology; Ensure safe, environmentally sound operations; Continually improve
the workforce; and Maintain a strong financial position.)
Your Question: How can the human resources
manager meet the requirement that the training information system he proposes
will include performance measures that can demonstrate the system’s
contributions to the organization’s strategic goals? In your answer, describe
the principal performances that should be measured, who should be involved in
establishing or agreeing to the performance measures that are implemented, and
where the performance measures should be used. Document any assumptions you
believe are necessary.
Question 3Performance-based contracts are used widely
in the private sector and are increasingly being used in federal government
contracting. Such contracts rely on performance-based work statements. In the
federal government, they are subject to federal regulations and there is a
requirement that performance-based contracts be used to the maximum extent
possible. The extent of their use by federal agencies is much less than
expected. A prominent organization of former federal government acquisition
officials argues that a performance-based work statement (PBWS) works well with
short-term, relatively simple service contracts, but “it is unrealistic to
ask agencies to specify services at time of contract award in clear, specific,
objective, and measurable terms when future needs are not fully known or understood,
requirements and priorities are expected to change during performance, and the
circumstances and conditions of performance are not reliably foreseeable.”
Your Question: To what extent does the
statement by these acquisition officials make a good case for using
performance-based work statements only for short-term, relatively simple
service contracts and not in other cases as described in the group’s statement?
If you agree with the group’s position, explain why you agree. Similarly, if
you disagree with the group’s position, explain why you disagree.
Question 4. The use of fixed-price contracts is common
in both the private and public sector organizations. Fixed-price IT contracts
are especially attractive to buyer organizations because buyers believe these
contracts shift almost all of the risk to the contractor. The federal
government is striving to use fixed-price contracts as much as possible for IT
acquisition contracts as a method to control the cost of IT projects.
Your Question: It is generally recognized that
fixed-price contracts offer obvious advantages to buyer organizations because
they transfer almost all of the risk to the contractor. Some observers argue
that buyers cannot become complacent when using fixed price contracts because they
still retain some risk. What risks, if any, may the buyer organizations be
assuming when they rely on fixed-price contracts?
Question 5. Session 7 (Business Case and Acquisition
Strategy) contains this statement: “It is considered a poor practice to prepare
a Gantt chart first and then generate the WBS from the Gantt chart (Microsoft
Project has the ability to generate a WBS from the data entered for the Gantt
chart). The risks in using this poor practice are substantial.”
Your Question: Describe the risks associated
with generating the WBS from the Gantt chart rather than preparing the WBS
first.
Question 6. Both parties, the buyer and the contractor,
can agree on the words in the contract but not realize that they have different
understandings of the meanings of the words until after the contract has been
signed and the project is underway.
Your Question: Briefly describe two methods for
reducing or minimizing conflicts in understanding contract requirements.
Question 7. One of the requirements of an Acquisition
Strategy Statement is that the acquisition strategy be viewed as realistic by
the executive decision makers.
Your Question: An integrated project team is
preparing an Acquisition Strategy Statement that will propose an innovative solution
to a performance problem. Because it is innovative and expected to produce very
substantial benefits, the IPT is concerned that the executive decision makers
will consider it unrealistic. The IPT is looking for ways, which it will
document in its Acquisition Strategy Statement, to convince the executives that
this is a realistic solution. What would you recommend that the IPT do or say
to help convince the executives that it is a realistic solution?
Part B. True-False Questions
Q8. One of the arguments against using a performance-based work
statement is that it is likely to limit competition because more firms will not
be qualified to compete.
Q9. A performance-based work statement generally contains the same
information that is contained in a traditional statement of work.
Q10. A performance-based work statement generally requires less
monitoring by the buyer/acquirer organization.
Q11. An advantage of best value source selections is that they allow
for tradeoffs in evaluation factors.
Q12. The primary reason why assumptions are documented is because they
place limits on executive decision making.
Q13. In preparing a WBS, resource availability needs to be reliably
foreseen.
Note: Indicate your answer to true-false questions by noting the
following in your exam document.
Q8 = X; Q9 = X; Q10 = X; Q11 = X; Q12 = X; Q13 = X. Where
“X” is either Tfor true or F for false
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