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.
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.)
Question 3 Performance-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."
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.
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.
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.