Case summary

MED – X Inc. a global pharmaceutical giant that has seen a sustained growth ever since its inception. In
order to maintain its competitive advantage, the company has decided to closely monitor the
procurement process and make it more efficient. For this they have brought in Implementation
Technologies, to install its Ariba application to transform the existing set of procurement procedures
into a decentralized purchasing model having a self-service philosophy. This process will help in
streamlining the process between suppliers and MED-X while ensuring better connectivity, reducing
cycle time and cost involved.

At present Christopher Martin of Implementation technologies is facing a challenge of completing the

implementation project on time. In order to gain the insights on the various problems that the project
may be facing an earned value analysis is to be conducted.

Analysis

Earned Value Analysis

Software  
Monthl Septem
Customiz May June July August Till Date
y Plan ber
ation
Monthly BC $120,00 $192,00 $192,00 $192,00 $192,00 $888,000
Plan
status WS 0.00 0.00 0.00 0.00 0.00 .00
  Actual AC $119,00 $187,00 $165,00 $189,00 $186,00 $846,000
burn WP 0.00 0.00 0.00 0.00 0.00 .00
  Actual $1,005,2
BC $133,25 $197,00 $220,00 $215,00 $240,00
perform 50.00
WP 0.00 0.00 0.00 0.00 0.00
ance
                 
Ratio  
Schedul $13,250 $5,000.0 $28,000. $23,000. $48,000
Calculati SV
e impact .00 0 00 00 .00
on
    SPI 1.11 1.03 1.14 1.12 1.25 1.13
  Cost $14,250 $10,000. $55,000. $26,000. $54,000  
CV
impact .00 00 00 00 .00
    CPI 1.12 1.05 1.33 1.14 1.29 1.19
  Control
  1.24 1.08 1.52 1.28 1.61 1.35
ratio
 
Technical
Monthl Septem
Infrastru May June July August Till Date
y Plan ber
cture

Monthly BC $120,00 $192,00 $192,00 $192,00 $192,00 $888,000

Plan
status WS 0.00 0.00 0.00 0.00 0.00 .00
  Actual AC $120,00 $215,00 $192,00 $216,50 $170,00 $913,500
burn WP 0.00 0.00 0.00 0.00 0.00 .00
  Actual $838,000
BC $120,00 $170,00 $173,00 $190,00 $185,00
perform .00
WP 0.00 0.00 0.00 0.00 0.00
ance
                  
Ratio  
Schedul ($22,00 ($19,00 ($2,000. ($7,000.
Calculati SV $0
e impact 0.00) 0.00) 00) 00)
on
    SPI 1 0.88 0.9 0.99 0.96 0.94
  Cost ($45,00 ($19,00 ($26,50 $15,000  
CV $0
impact 0.00) 0.00) 0.00) .00
    CPI 1 0.79 0.9 0.88 1.09 0.92
  Control
  1.00 0.70 0.81 0.87 1.05 0.87
ratio
Combine  
Monthl Septem
d May June July August Till date
y Plan ber
Projects
Monthly BC $240,00 $384,00 $384,00 $384,00 $384,00 $1,776,0
Plan
status WS 0.00 0.00 0.00 0.00 0.00 00.00
  Actual AC $239,00 $402,00 $357,00 $405,50 $356,00 $1,759,5
burn WP 0.00 0.00 0.00 0.00 0.00 00.00
  Actual $1,843,2
BC $253,25 $367,00 $393,00 $405,00 $425,00
perform 50.00
WP 0.00 0.00 0.00 0.00 0.00
ance
                 
Ratio  
Schedul $13,250 ($17,00 $9,000.0 $21,000. $41,000
Calculati SV
e impact .00 0.00) 0 00 .00
on
    SPI 1.06 0.96 1.02 1.05 1.11 1.04
  Cost $14,250 ($35,00 $36,000. ($500.0 $69,000  
CV
impact .00 0.00) 00 0) .00
    CPI 1.06 0.91 1.1 0.99 1.19 1.05
  Control
  1.12 0.87 1.12 1.04 1.32 1.09
ratio

Which of the two components are underperforming according to the plan? How do you know this? 

As per our above analysis, Technical infrastructure component of our project is not performing as per
our plan. We can see that the average CPI is 0.93 and average SPI is 0.94 the project is behind on both
the cost basis and time basis. The work is not being done on time as planned and the project is going
overbudget. This is not the case for our software customization component as the CPI and SPI values are
both above 1.

Are the components of the projects within budget? How do you know? 

Technical infrastructure component is overbudget as we can see that Cost variance (CV) is negative for
the last four months of the project. The average and month wise CPI (Cost performance index) is also
below 1 for technical infrastructure. This indicates that the component is incurring additional cost than
planned.

software customization component has positive average CPI and CV for each month proving that the
component is performing while being underbudget. As their SPI is also above 1, it shows that the
component is underbudget while being ahead of schedule.

What can you conclude by looking at the combined earned value data for the project? 

The combined EV analysis data shows us that overall the project is still underbudget and performing
within the schedule as the overutilization of resources is by technical infrastructure is being made-up for
by the underbudget and ahead of schedule performance by software customization component.
Although, we cannot be assured that the project will be completed within budget, neither we can say
the same for time of completion. As the technical infrastructure component still needs to be finished to
declare the project complete, its additional cost and additional time will determine the final cost and
time of the project.

Why did Terry Baker think that the project was going according to plan the entire time? 

As mentioned in the case, there had been some issues in the beginning of the project regarding some
resources which martin did not report to terry. Another incident of the pulling out of MED-X staffer off
the team and the delay of sun server equipment delivery. These incidents points towards a lack of
communication between the implementing company and MED-X CIO Terry Baker.

As all the communication was going through martin, he may have been apprehensive of reporting the
shortcomings of the project to his superior. Also as there was no proper checks and control system for
the project in place, it might have been that Martin himself came to know about the delay at the end
stages of the project.

How much longer will the project take? 

We can declare the project as complete only after the technical infrastructure component is complete.
To calculate that we will calculate estimated time at completion.

Estimated time at completion

Total estimated project time (in
days) 153.00  
SPI 0.94  
ETC 162.77  
Additional time required 9.77  

The project would require additional 10 days to complete.

What should Martin have done earlier in the project timeline to prevent delays? 

Martin could have implemented the following measures to prevent delays.

  Formalized the intelligence sharing process so that each concerned party is aware of the
progress of the project
 Set up guidelines for exit and entry of personnel from the project. This would prevent
unnecessary pulling away of resources from the project
 Periodic check on the progress of project should have been implemented using proper
measuring tools and techniques. Technical infrastructure was lagging from the second month.
This could have been corrected in the subsequent months if it was detected early.
 Decentralized the decision-making power for different components of the project as being the
sole head may have impacted his judgement.
 Proper feedback channel from each and every project component should have been put in place
to gather real time knowledge of the project

What should Martin do when managing future projects to prevent similar problems from developing? 

Martin should focus on implementing the above-mentioned points in his project planning to prevent the
problems that caused the delay of this project. A project that involves various long time, resource
consuming steps to be implemented can be completed on intuition. More open communication
channels and proper guidelines are necessary for a project to succeed. It also leads to quick resolving of
any issues that might crop up.