Rapid SDLC approach would have been a better implementation choice for Overstock because it would have ensured the delivery of products followed a systematic process. Systems Development Cycle is systemic hence allows the efficient implementation of processes. The process involves planning, creating, testing, and deploying information systems. During the planning phase, Overstock would have conducted preliminary analysis, which could have helped the company to understand the problem it seeks to solve and objective in using Oracle ERP; it could have eliminated any risks created by the rushed rollout of the system.
Also, rapid SDLC would have allowed Overstock to conduct strict system analysis, and the business requirements of the company is using Oracle ERP. System analysis allows a company to define the goals and understand the functions and operations of Oracle ERP. Overstock focussed on how to make maximum profits from the coming shopping season. Meaning, it did not take time to understand how Oracle ERP would have helped the company get both short and long term benefits from the system. Also, it could have helped the company to interpret the facts and trends in the market accurately (Chia-Ing Yu et al,2013, p. 29) However, because of not analysing the policy and requirements of the company, Overstock implemented Oracle ERP based on an unfounded basis; hence, it made a loss of $14.2 million.
Further, rapid SDLC could have helped Overstock to evaluate the efficiency of the system accurately. The EO reported that the loss in the first quarter was caused by rushed implementation. However, the CEO admits that the problems started manifesting when the system could not confirm orders, and in other cases, it declined to process orders. Meaning, the company did not engage in regulator evaluation of the system to assess if it is helping it achieve its business goals and contributing towards customer satisfaction (Church, Schmidt & Smedley, 2016, p. 231). Had it done this, it could have asked for the help of system developers and maintainers to help curb the problems emanating from the system.
Which SDLC phase(s) should not have been rushed? What phase(s) could have corrected Overstock's errors?
System investigation and training and transition phases should not have been rushed. During the investigation, the team developing the system and company could have highlighted the priorities through feasibility studies. An operational feasibility investigation study could have helped the company understand the strengths and weaknesses of Oracle ERP before implementing it. A Financial feasibility investigation could have helped Overstock to predict the projected profitability and cash flow (Chia-Ing Yu et al.,2013, p. 28). As such, the company could have had the opportunity to assess if the system would lead to profits or losses. A technical feasibility investigation could have helped the company incorporate the human and economic factors involved in the system hence creating strategies that could have helped Oracle staff transition smoothly from the home-grown system to Oracle ERP.A time feasibility investigation could have helped the company create enough time for the planning, design, testing, and use of the system.
Training and testing should not have been rushed so that Overstock staff could have enough time to understand and use Oracle ERP in processing customer orders. Rapid SDLC requires that proper training is implemented before staff, and end-users can use the system. Training and testing would have helped Overstock staff understand how the system operates and how to handle any problems in operations before they are costly to the profitability of the company.
The operations and maintenance phase could have helped Overstock to avoid the errors. The step involves making changes and enhancing the system as it is operational before it fails. Overstock staff reported experiencing challenges recording reductions in the order. Also, the system was not automatically logged. If the maintenance could have been done in the right way, Overstock could have established the sources of the problems, alerted the vendors, and ensured that the system is operating as it was envisioned.
Even though this project was driven by upper management and had experienced Oracle consultants, it still failed. Where would you put the blame?
I would blame the upper management because it failed to provide effective leadership on a critical process, which led to the company making losses during the first quarter. The leadership of the company could have allocated enough time for the incorporation and implementation of Oracle ERP. Seemingly, the upper management failed to set realistic time-lines between the designing and implementation of the system. Therefore, the ERP was hurriedly implemented. Also, there may have been no agreement between the upper management and staff on when the latter would be ready to abandon the homegrown system in favour of independently using Oracle ERP. As such, the team was seeing challenges in using the new system but using it anyway because of possible fear of victimization or pressure to take advantage of the shopping season without interruption.
Similarly, the upper management failed in this project because it did not efficiently coordinate the projects. The Oracle consultants admitted that the problems occur in any ERP project if there is no proper planning and care. Therefore, the upper management should have proactively participated in designating the time and sufficient resources to the project instead of underplaying its challenges, which led to the company making losses in the first quarter of the year.
It seemed they used a big bang approach. Would a phased approach have been the better choice? Why?
Yes, Overstock used the Bing bang approach in implementing Oracle ERP. Meaning, all the staff members whose tasks were related to the system started using it the same day. Also, the approach involves taking all the modules live. It means that the Oracle consultants spent time in transferring data from the home-grown system to the ERP. While the method is described as exciting by experts in IT, they also caution that it creates changes all at once, which may adversely affect the operations of the company. Also, it does not give the staff sufficient time to understand how the system operates. The bing bang approach reduced the quality in customizing the ERP to the operations of the company; hence, the staff faced frequent interruptions and inaccurate processing of orders.
A phased out approach would have been better because it would have enabled the company to implement the system sequentially hence promoting efficiency in operations. The approach introduces the system piece by piece, thus allowing the consultant to concentrate on each stage, therefore, improving the chances of the system being successful when it rolled out completely.
What is outsourcing, and why would a company choose to outsource?
Outsourcing is the practice of a company to obtain and services from a foreign company. Outsourcing was first done in the manufacturing industry, where the companies would contract businesses to handle some portions of their business processes. Since then, other industries started to embrace the concept of outsourcing because it helped them achieve flexibility, cost-savings, and efficiency. Some of the fields that outsource include R&D, manufacturing, distribution, call centres, and IT services (Deering, 2015, p. 23). Outsourcing can occur through business process outsourcing, infrastructure and technology outsourcing, and software outsourcing.
Companies choose to outsource so that they can have access to additional IT resources that is not available within the organization. Nowadays, to succeed in business, companies need to strategize on growth and productivity, which require specialized talent. Therefore, companies choose to remotely hire specialized skills like software developers, software engineers, IT workers, web administrators, and other skilled IT workers.
Similarly, a company chooses to outsource to reduce the cost of operation. If a company realizes that it is not operating at a favorable cost and the current employees are not utilizing the available resources efficiently, it may choose to contract a vendor who can efficiently use the resources (Smith, 2007, p. 28). The option will enable it to achieve its objectives at the lowest cost. Also, a company may choose to reduce the cost of operation if it is facing stiff competition and may not have the resources to fight competition efficiently. Generally, research estimates that outsourcing the cost of operations and controls by at least 44% (Deering, 2015, p. 24). However, this is based on the US labor market; hence, the findings may not apply to every country, embracing outsourcing.
Further, a company outsources if it wishes to improve its focus on the customers. A business is built on reputation, which can be maintained or enhanced through desirable customer service. Efficient customer service is demanding and may not be fully implemented with the internal resources and talents within an organization. Outsourcing experts from the field of customer service helps the company focus on developing and improving products and services based on evidenced-based information from the experts in customer service.
In addition, a company outsources if it wishes to hedge against uncertainty. During the 2008-2009 economic recession, many companies were pushed out of business because of the adverse effects on the market and political business climates. For example, a survey in 2008 showed that most CEOs support outsourcing because it is favorable to fluctuations in the business environment. AS such, they believe that outsourcing can help to prevent the occurrence of another economic recession. Therefore, companies outsource so that they can hedge against economic and political uncertainty.
What are the advantages and disadvantages to outsourcing?
Outsourcing is cost-effective. The process enables a company to only focus on the core functions of a business. Therefore, it releases all the non-fundamental roles and focuses on fundamental parts. As such, the company cuts on the cost of hiring staff that performs support roles. Hiring fulltime professionals require companies to cover additional expenses like medical insurance and extra-hours' benefits. However, remotely hiring a professional on a part-time basis for a particular period. Therefore, outsourcing provides the advantage of ensuring a company cuts the cost of operations while it focuses on its fundamental role in business.
Also, outsourcing enables a company to get a good quality of work at a relatively less cost. Outsourced companies charge relatively less for their services and products when compared to full-time employees. Also, it allows the vendors to work at their convenience hence improving productivity (Smith, 2007, p. 11). Meaning, outsourcing allows the company to achieve its business objectives without compromising on quality and timeliness. Through this, the company has better chances of getting maximum profits and reinvesting the amount in the growth of the company.
Additional, outsourcing gives business access to diversified skills and talents at the lowest possible cost. It ensures that a company has access to the best abilities from all over the world based on their portfolio. Therefore, the company forms...
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