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Captiva Conglomerate Case Study

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The major facts that are to be taken into consideration are that the company Captiva Conglomerate has a contract with S.O Software developer for a new custom inventory and spare part management system. The management of Captiva Conglomerate is concerned with what to do at this point in the contract. Also, the president of Captiva Conglomerate signed the contract that states “best effort” which as long as S.O Software can prove it will be hard to sue for damages. Major Problems:

The software is behind, over budget and the currently version is not user friendly to the non IT personnel. The software design/specifications were written by the software developer and the Director of the IT department just signed off on the design. The software design was not processed through all departments for approval and comments. The system design was not clearly defined. There have also been 17 unpaid change orders. The contract calls for S.O Software’s best effort with no guaranteed deliverables. The regional and centralized system is 10 months behind and the spare management is 4 months. Possible Solutions/Alternatives:

The possible solution that Captiva Conglomerate has is to suspend the development of the current software with S.O Software and find a new software developer to complete the process. Another possible solution is to allow S.O Software to continue the development of the software with Captiva Conglomerate paying the fee and waiting the time. The third solution is that Captiva Conglomerate sues S.O Software or the uncompleted software and the 1$ million dollars in cost over runs. Lastly, Captiva Conglomerate can attempt to modify the terms and conditions of the contract to correct the current issues and change the terms to add deliverable and milestones. Choice and Rationale:

The best solution is to have Captiva Conglomerate suspend the development of the current software with S.O Software and find a new software developer to complete the process. The reason why this is the best solution is the current agreement with S.O Software will be hard to modify and will cost Captiva more money in the long run. Captiva has already spent over 1$ million dollars and they do not have a working system. The terms of the current contract as “best effort” means S.O Software could continue to require more money be never deliver and working product. The contract with the new contractor can include deliverables and required milestones that the contractor has to accomplish to be compensated for the work. The specification and design of the software should be made by cross functional team of every department that will use the new software. Implementation/The Action Plan:

The first step in implementing the plan is to seek legal service and terminate the current contract with S.O Software. Once the contract is terminated a cross functional team should be established to develop and define the specification need for the new software. The team should also develop rational goals and milestones for product development along with a budget. While the team is developing the specification a search for a software company with a strong past performance should be conducted to find the best qualified companies. The companies should be given the statement of work with all required performance objective, timeline, milestones and capabilities with a deadline for proposals. Once Captiva has received the proposals the cross functional teams along with management should process the proposals to come up with the best values for the company. Once the software firm is chosen, negotiation should be conducted to complete the initial contracting process. One the contract is in place it will be turned over to the contract administration function with status, problem and issues being forwarded to the cross functional team for decisions.

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