Kevin
Respond to the post and include citations
The triple constraints of project management are time, cost, and scope. A change in any of the three has a direct effect on the others as well as the projects overall quality. However, unsuccessfully managing the scope of the applicant tracking system will result in the system becoming too complicated or larger than originally planned (IT Project Management, 2022). Not managing the scope would raise costs and take more time. So, I believe managing the scope would be the most important constraint.
There would be a few different approaches to take when managing the scope of the new applicant tracking system. Managing the time and cost of a project can be controlled with the scope.
Scope and Time:
If time is running out on a project, reducing your projects scope will also reduce the time of your project. If the stakeholders come up with extra implementations, you can also increase the time by increasing the scope.
Scope and Cost:
Reducing the scope will result in executing fewer task which will also lower the cost. And vice versa, a larger projects scope results in higher costs (Westland, 2022).
Reference
s
IT Project Management. (2022). Retrieved from https://learn.umgc.edu/d2l/le/content/622997/viewContent/25150642/View
Westland, J. (n.d.). The triple constraint in Project Management: Time, scope … Project Manager. Retrieved February 24, 2022, from
The Triple Constraint in Project Management: Time, Scope & Cost
Deborah
Respond to the post and include citations
“There are four key variables associated with any project, and they are time (schedule), resources (human and financial), the scope of work, and quality. Time, Cost, and Scope are often referred to as the Triple Constraints as a change in any of these three has an impact on the others and the project quality”. (UMGC, 2022). I chose “cost” as the most critical constraint for the project of implementing an enterprise hiring system.
I chose Cost because it is the heartbeat of the project. Every individual interviewed expressed they wanted a fast, functional, capable, and able to install quickly, but the chief information officer (CIO) wanted a cost-effective system. MTC has a reputation to uphold, and the shareholders want to take this business globally, and to do that cost of any new system is a factor. The triple constraints rely on each other to keep balance. If the scope changes, the budget changes (cost), and so does the timeline (time). Costs drive deadlines which in turn drives people to complete the job. Every aspect of implementing a new hiring system is tied to cost.
Selecting the best method of communication is key to successful implementation. “Electronic communication (email or updates to the MTC website) is best when the communication is simple in nature, like announcing the meeting date and time.
The best way to communicate is with a face-to-face meeting, video conference, or phone to discuss implementing a new project at least weekly or bi-weekly. (Zucker, 2019)
UMGC. (2022). IT Project Management. Retrieved from IT Project Management: https://learn.umgc.edu/d2l/le/content/622997/viewContent/25150642/View
Zucker, A. (2019, December 2). Engage Your Stakeholders. Retrieved from Project Management Essentials: 2019
Isaac
Respond to the post and include citations
Time or scheduling of the triple constraints of project management involves the time to complete tasks, the timeframe of the project, and setting a deadline for completion of a project (Lucidspark 2022). Depending on the time needed will affect the other sides of the triple constraints triangle through cost/resources and scope/quality. An example of this is if a project needs to be completed quickly or needs a reduction in time than costs will go up and quality can suffer (UMGC 2022). However time is important for any project to meet demands of customers, clients, or even a organization itself to stay competitive. Taking too long and ones organization will fall behind, lose out on sales, and lose out on customers.
For MTC, they are currently working on getting new contracts that require more consultants. The issue is needing a new hiring process to meet the new demand to stay competitive and gain these contracts. There biggest issue is “Time”. MTC needs the project of changing their hiring process done quickly that meets deadlines that are realistic while still having some wiggle room for possible complications during the project.
The reason I picked “Time” as the most important constraint for MTC project of new hiring system is there is already pressure to complete the project to meet the demand of having enough consultants within 60 days of signing a new contract for two new possible contracts (MTC Case Study UMGC 2019). Scope and Cost are both important in the project but isn’t the main issue the project has for completion. If MTC can’t hire enough consultants than they lose out on the contracts and lose reputation for future dealings.
Reference
Lucidspark (Retrieved 2/25/2022) The Triple Constraint Theory in Project Management
https://lucidspark.com/blog/the-triple-constraint-theory-in-project-management
MTC Case Study UMGC (11/23/2019) Maryland Technology Consultants Case Study
https://learn.umgc.edu/d2l/le/content/622997/viewContent/25150590/View
UMGC. (2022). IT Project Management. Retrieved from IT Project Management:
https://learn.umgc.edu/d2l/le/content/622997/viewContent/25150642/View
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IT Project Management
In this course, we will briefly overview what project management entails and the role of a
project manager. To become a good project manager, you should complete further study
in this area. Project management certificates are offered by universities such as UMGC,
and there is at least one recognized certification authority—the Project Management
Institute (PMI). PMI evaluates both your experience as well as your knowledge before a
certification is awarded, because project management is best learned from a combination
of classroom study and real-world experiences. To best understand a discussion of project
management, you should be familiar with the following definitions:
Term Definition Examples
project temporary endeavor
undertaken to create
a unique product,
service, or result
with a specific start
and end
build a house; write a research paper; plan
a wedding.
project
scope
describes the work
that must be
accomplished to
complete the
project
three-bedroom, two-bath house
completed and occupancy certificate
obtained; research paper submitted to
professor; wedding held
project
manager
“expert” responsible
for planning,
managing, and
controlling all
aspects of a project
construction manager; student; wedding
planner
Learning Resource
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Term Definition Examples
project
management
the application of
knowledge, skills,
tools, and
techniques to
project activities to
meet project
requirements
Overseeing the construction for building
the house; developing the “to-do” list for
researching and writing the
research
paper; defining activities for the wedding
planning notebook
project
deliverables
concrete, tangible
outcomes, results, or
products generated
as a result of a
project
drywall completed on new house
construction; first draft of research paper
written; wedding invitations printed
milestones key dates when
specific, critical tasks
or groups of
activities are
completed
March 15: electrical wiring completed;
May 1: research completed; June 1:
reception hall booked
contingency anticipating delays
or problems, and
having an alternative
solution or strategy
planned
backup plumber and electrician identified
in case primary contractors are
unavailable; reserve an extra day before
the paper is due in case of delay; have
tents ready in case it rains on the wedding
day
What is the role of a project manager? Is the role of an IT project manager different? A
project manager must control the four key variables associated with any project: time
(schedule), resources (human and financial), scope of work, and quality. The project
manager leads the development of a project plan that takes all of these into consideration.
Depending on the organization and scope of a project, there may be both a
business
project manager and a technical project manager assigned to an IT project. It is essential
that the business owns the solution (fully responsible for its success). IT’s role is to help
the business identify the best technology solution for the business problem.
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Project Management Variables
Frequently, trade-offs are required during the establishment and life of a project. Project
management is the science of making intelligent, conscious trade-offs. While it is likely
impossible to eliminate problems within a project of any size, having a sound project
management methodology puts in place a process and means with which to deal with
issues as they arise. As things change, the project manager must adjust the four variables
to keep them in balance. For instance, the budget may be limited, which can restrict the
scope of the work and the number of people who can work on the project. Or, the project
may have a firm deadline, which can drive costs up since more people would have to be
hired to complete the project on time. When any one of the four variables changes, it will
have an impact on at least one (and often more than one) other variable. Time, Cost and
Scope are often referred to as the Triple Constraints of project management as a change
in any one of these three has an impact on the others and the project quality. A strong
project manager pays close attention to the project plan and the progress of the project
against the plan, and manages the variables appropriately to ensure successful completion
of the project. Successful completion is accomplished if the project is delivered on time,
stays within the allocated budget, and performs the required functions correctly. This role
is the same for any project manager, including an IT project manager.
The project methodology provides the structure and processes to define and plan a
project, monitor its progress, and evaluate its end result. A standard methodology also
provides for consistency, allows the process to be refined and improved over time by
incorporating lessons learned, and increases the transferability of skills among team
members. Project methodologies include project initiation, project planning, and project
execution.
Project Initiation
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The first step is the selection of strategic projects. However, the project manager does not
select the projects alone; usually that is done by senior management after the
presentation of a business case that outlines the business need (problem or opportunity)
and options for potential solutions (how to address the need rather than specific
products). Often a feasibility study is undertaken to determine the viability of the effort
and potential solutions. The feasibility study can also include cost estimates and identify
potential risks.
Project Planning
Once senior management approves the business case and allocates resources, the project
manager ensures the project plan is fully developed and executed according to plan. The
project plan provides the road map for the project. The project manager is responsible for
building a realistic plan to achieve the desired results and then monitoring to ensure that
tasks are completed on schedule, resources are available as planned, and key milestones
and deliverables are met. Clearly defining the project scope and business requirements are
key to project planning. A smart project manager makes sure that his or her plan has
SMART criteria. The SMART criteria below will help to ensure that clear, understandable
and measurable objectives have been established for the project:
Specific
Measurable
Agreed upon
Realistic
Time framed
These objectives are documented in the project plan and used throughout the project’s
life to help keep the project on track. A sound project plan is:
easy to understand—Tasks and deliverables are specifically presented in commonly
understood, well-defined terms.
readable—Graphical representation follows standard structure and layout.
communicated to all key stakeholders—Those involved and affected know what the
plan is.
appropriate to the project’s size, complexity, and importance—The plan is not overly
involved or complicated for a minor, small-cost, short-term project, and is not too
general and abbreviated for a complex, high-cost, long-term, high-priority project.
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prepared by the team—Project team members contribute to the project plan
development, rather than a project manager developing it in a vacuum.
Project Execution
This is where the project plan provides the roadmap, and the project work is carried out.
The project manager monitors progress against the plan, managing any changes and
mitigating risks as they become known. Project risk management involves identifying
potential events or conditions that could have a negative effect on the project, estimating
the impact if the risk occurs, determining a mitigation strategy to reduce the likelihood of
the risk occurring, and identifying what will be done if the event or condition actually
arises. Keep in mind that the job of the project manager is to stay on top of all the
variables and manage the cost, schedule (time), scope, and quality. Routine status reports
are an important part of tracking the progress of the project. This monitoring
process
helps the project manager keep time, cost, and scope in balance. He or she must seek
additional resources (money or people) or a schedule change (time) when the scope
increases, and must be able to articulate the effect on quality if additional resources or a
schedule change are not authorized. The project manager is responsible to senior leaders
to monitor the variables, keep leadership informed, and propose solutions for changes as
they occur.
For our purposes, we will assume that a correct business process redesign occurred and
the best solution was chosen. So what do we need from a project
management
perspective? It would seem easy enough: plan the work and work the plan, and voilà! The
solution is implemented on schedule and on budget.
Of course, anyone who has participated in a project knows that it rarely happens that
way. Building a house gets complicated because two solid weeks of rain delay the pouring
of the concrete. You thought you could conduct your term paper research on Saturday,
but a friend had a ticket for the big game and you could not decline his offer; therefore,
you didn’t gather the information so you could begin writing your paper on Sunday. And
planning a wedding—there are so many potential issues there—the bridesmaids hate their
dresses, the caterer backed out, the organist broke her wrist, and so forth. You get the
idea; even the best-planned project will have challenges.
The four variables are interdependent; you cannot change one without affecting the
others. For example:
Decreasing a project’s time frame means either increasing the cost of the project or
decreasing the scope of the project to meet the new deadline.
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Increasing a project’s scope means either increasing the project’s time frame or
increasing the project’s cost (or both) to meet the increased scope changes.
Decreasing a project’s resources (either people or money) will necessitate a
reevaluation of the scope and/or the quality. The scope may need to be reduced to
avoid decreasing the quality. If the scope must remain unchanged, quality will suffer.
Increasing a project’s quality requirements will require more time and money to
incorporate more perfection and test all possible outcomes for correctness.
Having a well-prepared project plan can help reduce the risk of project failure, but it
cannot eliminate the possibility of failure. There are many reasons why even a well-
planned project can fail. Some common project problems result from mismanagement
(Whitten & Bentley, 2008, p. 81):
failure to establish upper-management commitment to the project
poor expectations of management (expectations of users and managers not in
agreement, or expectations change over the life of the project)
premature commitment to budget and schedule
overly optimistic
mythical man-month (unrealistic estimate of the amount of work an individual can
perform on the project)
inadequate people-management skills
failure to adapt to business change
insufficient resources
failure to work the plan
As you review this list, how many of these causes are related to hardware, software, or
other technology issues? Right—none! This indicates that it is frequently the human
aspect of projects that creates most of the problems and greatly increases the risk of
failure. Therefore, the importance of paying attention to the softer skills of managing
people on IT projects cannot be overemphasized.
If you look back at the list of causes of project failures, you will see that many connect to
one or more of these interrelated elements. For example, premature commitment to
budget and schedule will definitely affect the time and cost variables. Let’s relate this
cause to our earlier examples.
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Project Cause of Failure Project Cause of Failure
Building a
House
estimating the construction budget with insufficient research into
the current costs of construction materials, or assuming stable
pricing
Preparing a
research
paper
planning your schedule to complete the paper without considering
other course assignments or personal requirements
Planning a
wedding
establishing a budget for “dear old dad” without obtaining the costs
of catering the reception
Scope Management
Failure to manage the scope of a project will result in scope creep—the natural tendency
of projects to become bigger than originally intended, with detrimental impact on cost,
time, and outcome. Using our previous examples, some scope creep occurs when while
building a house, we decide to add a home theater in the basement; you decide to add a
PowerPoint presentation to your research paper; and the wedding reception
entertainment changes from Cousin George, the DJ, to an eight-piece jazz ensemble.
Since almost no project goes exactly according to plan, the project manager needs a tool
to detect and manage the changes. The process of change management is this tool. The
project manager documents all approved changes, revises the project plan accordingly,
and then continues managing and monitoring the project.
To minimize inadvertent scope creep, effective project managers define a change
management process specifically related to the project. (This is different from the
organizational change management strategies that relate to generally managing the
changes within the organization that a new solution may create.) At the risk of
oversimplifying this concept, for the purposes of our discussion, we are talking about a
structured process (part of an overall project management methodology) to address
changes in requirements or expectations on the specific project outcome.
As you can imagine, changes affect resources. A change may require additional staff
hours, hardware and/or software costs, testing, systems configurations, and/or the
assessment of impact on related IT components. There are times when these changes are
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necessary to maximize the intended business solution, address some unforeseen problem,
or meet a changing business strategy or requirement. Having a structured methodology in
place means that the change is treated as a potential mini-project:
The requirements are documented and analyzed.
The impact (time, money, and other resources) is analyzed, and the effects on budget
and schedule are defined.
At this point, the business sponsor or project owner may decide whether or not to
proceed with the change.
In many larger organizations, a change control board (CCB) exists for just such situations.
Representatives from the affected areas review the documentation and decide whether or
not to proceed. If the decision is to proceed, the additional impact is inserted into the
project plan, and appropriate adjustments are made.
What Makes an Effective Project Manager?
The critical skills needed for IT or business project managers are the ability to (1) manage
people and (2) manage the project effectively. The project team can be staffed with
technical expertise, but it is much more difficult, if not impossible, to make up for a
project manager’s shortcomings in the areas of understanding the business and addressing
the human aspects. Project managers must also address team issues to help guide the
project team. People should be recognized for their contributions and successes and held
accountable for failing to meet commitments. Far too often, members of project teams
know things aren’t going well, but bolster themselves by vowing to get caught up next
week. Addressing problems as early as possible in the project allows time to make
corrections and help keep the project on target.
If we look back at our definition of project manager, it seems like this individual bears
most of the responsibility for making projects successful. Although he or she may
delegate various tasks, the buck frequently stops with the project manager. Because of
the many hats project managers wear, the variety of skills they must have, and the
constant juggling act they must perform, it is no wonder that highly capable and skilled
project managers can be scarce and are in great demand. Let’s look at the skills, or
competencies, a good project manager must have.
Project Manager Competencies
Competencies Description
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Competencies Description
business
achievement
connects projects with corporate strategy and objectives
partners with and involves stakeholders throughout the
process
provides quality perspective
people
management
communicates
effectively
facilitates team process
coaches team members to work cohesively and fosters a
spirit of collaboration
provides resources and training to develop team members
prepares, monitors, and controls project plan—gathers input
and adjusts as needed
problem-
solving
displays initiative to show creativity and innovation
calculates risks and prepares contingencies
applies critical thinking to problem resolutions
provides systems perspective
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Competencies Description
influence understands and is sensitive to interpersonal motivations and
behaviors of others
is aware of corporate political landscape and can navigate it
effectively
understands the implications of project decisions and
manages risks
knows how to enlist cooperation and build consensus among
business managers, users, and IT staff
self-
management
displays self-confidence, but with humility
“walks the talk”
has personal accountability
works well under pressure and adverse conditions
Successful project managers combine knowledge and skills with experience in
participating and managing projects. Lessons learned from past projects can help inform
best practices to be applied to future projects. Consistent application of a sound project
management methodology along with strong interpersonal and leadership skills enable
project managers to help organizations gain strategic advantage through successful
project delivery.
References
Whitten, J. L., & Bentley, L. D. (2008). Introduction to systems analysis and design. New
York, NY: McGraw-Hill.
© 2022 University of Maryland Global Campus
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All links to external sites were verified at the time of publication. UMGC is not responsible for the validity or integrity
of information located at external sites.
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Implementing a SaaS
Solution
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Implementing a SaaS Solution
Differentiating Between Commercial Off-the-Shelf Software (COTS)
and SaaS Solutions
Up to this point, we have been using the term commercial off-the-shelf (COTS) to include
software-as-a-service (SaaS) solutions. COTS is most-often used to refer to applications
that are purchased and installed at the user location, either on a personal computer or on
a server for multiple individuals to use. This includes such familiar purchased software as
word processing or spreadsheet applications. Some COTS solutions come with vendor
maintenance and updates, while others require an additional payment to be made for an
upgraded version. Once the organization purchases a COTS solution, the vendor’s
involvement in the day-to-day operation is nonexistent.
A SaaS solution, on the other hand, is usually leased or subscribed to by the customer, and
the software is owned by the vendor, runs on the vendor’s hardware, and is accessed via
the internet as a “service.” Microsoft is now providing its office applications as a service
via Office 365 for Business, which is provided as a subscription service rather than a
purchased download. In that instance, it becomes a SaaS application. Even though it is a
COTS product, the way it is delivered to the end user via the internet, along with ongoing
service and maintenance from the vendor, makes it a SaaS solution. Other well-known
SaaS products are SalesForce (customer relationships management system), Amazon Web
Services (eCommerce platform), and DocuSign (electronic signature services). For SaaS
solutions, the vendor is responsible for the day-to-day operation of the system, for the
ongoing operation and maintenance of the system, for protecting the sensitive business
data housed in the system, for upgrading and enhancing the system, and for providing
training and support. Usually all that is required at the customer location is an internet
connection and end-user devices to connect to the system.
Unique Considerations for Selecting a SaaS Solution
Learning Resource
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When a SaaS solution is being considered, a primary aspect is that the relationship with
the vendor is very different from a solution that is hosted on-site at the organization. A
long-term relationship is established with the vendor beginning with the lease or
subscription to the system. The customer becomes reliant upon the vendor for all the
services listed above.
Since the system is not purchased (instead, the customers are “renting” or “leasing” the
software and services), the customer will make monthly or annual payments for its use;
these can either be a set amount or can fluctuate depending on the actual use of the
system. A Service Level Agreement (SLA) is used to document the responsibilities and
commitments of the vendor and the customer. Most vendors of SaaS solutions have an
SLA already developed for their customers; this should be studied thoroughly, and
changes negotiated if necessary, prior to the customer signing up for the services.
One big consideration is that the system is operated at the vendor’s location. It is much
more likely that a vendor supporting multiple customers can achieve a higher level of
security for the system than an individual organization. The vendor has the combined
resources to hire and retain security experts to manage the system, the hardware, the
network, and the facility. Many SaaS vendors have implemented a distributed system so
that hardware, software, and databases are housed at multiple locations; many vendors
provide “hot backup” meaning that the database is replicated elsewhere so that if one
database or system is unavailable, there is an automatic switch to the replicated database.
SaaS vendors also can afford to offer quick recovery at a much lower cost than is available
to an individual organization. They are also much more likely to have physical security
measures in place to protect the data center, including fire suppression, surveillance,
access security, and guards.
Since SaaS solutions depend on use of the internet to connect users to the application or
system, the following should also be considered:
the availability and speed of the internet connection;
protection of proprietary or personal information transmitted via the internet; and
location of the system. Some government systems are required to be hosted within
the United States, and not overseas.
Identifying COTS/SaaS Solutions
Over the past decades, COTS and SaaS solutions have proven to be viable models for
acquiring software. SaaS is now a mature model that can be relied upon if a vendor is
selected based on a deliberate evaluation and selection process. There are many sources
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for locating a vendor, including technical journals, industry survey, vendor advertisements,
advisory or consultancy services, and even internet searches. An organization would be
wise to identify a few solutions that appear to meet their needs and then conduct a
detailed evaluation of each one. It is important to identify solutions that align with
achieving the business strategy, improve the process(es), and meet the requirements.
Evaluating COTS/SaaS Solutions
In evaluating a COTS or SaaS solution, four major factors are involved: user requirements,
system performance requirements (system quality and security requirements), the vendor,
and cost. The method for evaluating each of these is discussed below.
Most SaaS vendors provide access to a “free” trial version of their system. During the
product evaluation period, the trial version can be used to determine the basic
functionality and performance of the system. This version of the software is used for
marketing purposes and may not exactly represent how the software would function in a
specific situation. Some vendors may offer to provide access to a more robust version of
their system in order to allow further testing and evaluation. An organization should try
out the software for itself and not rely on vendor demonstrations, which can be set up to
appear to provide functionality and ease of use that is actually not part of the system.
User Requirements
The first step in evaluating a COTS/SaaS solution is to address the user requirements and
answer the following questions:
How closely do the capabilities and functions of the solution meet the
requirements?
Conversely, are there a lot of extra “bells and whistles” that the organization does
not need or would not use, but add to the cost and complexity of the system?
How closely does the application package fit the process used by the organization?
If the solution is implemented, would the organization be able to use it for their
process? Will the business process need to change significantly, requiring additional
training and other organizational changes? Would the changes in the process used
by the vendor’s solution actually help improve the business process? The more the
business process has to adapt to the system, the less likely the system is to be
accepted by the users. If significant differences exist between the system and the
process in use, and major changes are required to the off-the-shelf system, the cost,
complexity, and risk may well outweigh any benefits of the COTS solution. However,
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if the organization is seeking to improve its business processes, COTS/SaaS
solutions often implement optimized business processes in the software, a benefit
for the organizations that implement them.
How much configuration or customization will be needed to put the COTS system
into use? Some COTS products allow or require extensive configuration or
customization in order to make the system useful to any organization. Others
require minimal configuration to set the system up for use in a specific organization.
These activities are major determinants of initial cost and implementation time, and
add to the ongoing maintenance costs.
Configuration is functionality that can be created using built-in workflow tools
and templates that come with the product.
Customization is functionality that is added to or replaces functionality as
provided by the vendor. There is no guarantee that customizations will be
compatible with future upgrades, and they can be extremely costly to maintain
over time.
How much and what data will need to be migrated to the new application/system?
How easily can that be accomplished and at what cost? The organization likely has
information that supports the process for which a system is being sought, and that
information will most likely need to be imported into the new system. If the data is
already in electronic form (in a spreadsheet or database), the migration of that data
should be accommodated. However, if data is in paper form, decisions will need to
be made about how much of the existing data is to be manually entered into the
system, and in what form it will be entered.
Migrating data into a new system can be very time consuming and costly, so these are
important considerations for the organization.
System Performance Requirements
Next, the quality of the COTS/SaaS solution is evaluated answering the following types of
questions regarding the attributes of the system (which are specified as system
performance requirements):
Usability—Can new users quickly adapt to the software? How easy is the system to
use, and how is help provided for the users? Does the vendor provide training? Is
online help provided in the system? Is user support provided (e.g., a help desk or
documentation)?
Scalability—Can the system accommodate the anticipated number of eventual users
and/or records/transactions? Can it be scaled back if there are actually fewer users
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or transactions?
Availability—Will the system be available for use when needed? If there is any
anticipated maintenance downtime, is that compatible with the organization’s
needs?
Reliability—Does the system create and maintain the data correctly?
Maintainability—What is the vendor’s approach to maintenance and how often are
updates applied? How quickly can corrections be implemented?
Performance—Is the system able to meet response time requirements? Is it able to
handle the volume of the expected workload (or number of transactions)?
Portability—Does the system run or operate on the types of end-user devices and
operating systems that the organization uses or anticipates using?
Interoperability—Is the system capable of exchanging data with any required legacy
(existing) system?
Security—What security protections are provided by the vendor? What security
steps are needed within the organization? How is the system protected from
malicious or accidental actions? How will users authenticate to the system and be
authorized to perform functions and/or access data? Does the system effectively
prevent unauthorized access and prevent unauthorized ability to change data? How
is data protected as it is transmitted and when it is stored? Does the system keep a
log of who logged in, when they logged in, what information they accessed and what
changes they made? What data backup and recovery is provided by the vendor?
The answers to these questions will help determine whether the system provides
adequate security.
Vendor Ability
The vendor’s ability to support the organization and provide the services needed is a third
area of consideration. The organization should do its due diligence and consider the
financial stability of the vendor and look at such things as how long they have been in
business, how robust their customer support is, and their industry reputation. The number
of paying customers and the length of time they have been with the SaaS vendor is a
good indication of the quality of the software and the vendor’s services. In evaluating a
SaaS vendor, it is a good idea to check with some of their customers to learn about their
experience with the SaaS. The organization needs to ensure the vendor will be able
support it for some time to come. Keep in mind that once the organization signs up, the
expectation is that there will be a long-term relationship—the organization does not want
to keep changing its SaaS software and vendor, and the vendor will want to keep the
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organization as a long-term customer providing recurring revenue. At the end of the day,
the organization is responsible for the use of the system as it impacts their employees and
customers. Although the vendor owns and hosts the system, the reputation of the
organization can be at risk if issues arise and are not properly addressed.
Total Cost of Ownership (TCO)
The fourth area of consideration is the cost of the COTS/SaaS solution. In determining
how a system is to be acquired and/or which system is to be acquired, the organization
must consider the total cost of ownership (TCO) of the solution. The TCO for each
alternative can be estimated in order to make comparisons. This concept is something we
are very familiar with when we are making a major purchase in our daily lives. In general
terms, the total cost of ownership (TCO) is the sum of all costs associated with an
acquisition that will accumulate over the life of the asset. One of the personal acquisitions
for which we use the TCO is the purchase of a new car. Clearly, the purchase price is not
the only consideration. Today, automakers recognize the importance of the TCO to their
customers; in their advertising, they talk about gas mileage, resale value, length of
warranty, free servicing over some period of time, and special financing terms.
The table below identifies the cost categories of an IT TCO. Although there are several
ways of categorizing and listing the costs, this list contains some of the often overlooked
and crucial costs that are important to understand. The specifics of how the categories
apply to a SaaS solution are also provided.
Cost Categories of an IT TCO
Cost Categories Description
Costs as Applied to SaaS
Solution
acquisition The costs of acquiring IT
assets: the lease, purchase,
or subscription cost of
hardware and software,
including research, travel,
freight, and tax; and/or the
cost of developing the
software from scratch.
Lease or subscription costs for
software and system (SaaS
vendor).
Purchase or lease of end-user
hardware devices (PCs, tablets,
printers, etc.).
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Cost Categories Description
Costs as Applied to SaaS
Solution
communications The cost of all
communications, including
network costs, wiring,
service provider fees,
communications hardware,
and software.
Initial setup costs of Internet
Service Provider (ISP) and
ongoing monthly charges.
security
The costs of ensuring
security of the IT
infrastructure and data,
including security software,
usage monitoring, and
facility security costs.
Most security services provided
by vendor, documented in the
SLA.
End-user policies and device
protection are the responsibility
of the customer organization.
installation The costs of making IT
assets operational; could
include building
modifications, increased
cooling requirements, and
increased utility capacity at
the datacenter.
Responsibility of the
vendor.
configuration The costs associated with
COTS or SaaS software to
set it up to function
correctly within the
organization; using built-in
tools such as workflow,
report layout, terminology
and/or organizational logo.
Costs to configure SaaS to
function for the organization
(e.g., workflow, reports,
terminology, logo).
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Cost Categories Description
Costs as Applied to SaaS
Solution
customization The costs of making
changes to the COTS or
SaaS software that are
unique to the organization.
The ongoing cost of
maintaining these changes
over time and testing
future upgrades must be
considered as well.
Costs to make changes to the
software for the specific
customer; may cause additional
cost for maintenance.
testing The costs of preparing test
cases and using the system
to determine whether it is
functioning properly and
meets the requirements.
Also includes the costs of
recording deficiencies and
re-testing when changes
are made.
Costs generally are limited to
the customer creating and using
test cases to ensure the system
works as needed. This is very
different from using a
demonstration or “free trial”
system before selection; it is
testing the actual system after it
is configured and is operational
for the customer.
support The cost of keeping the
infrastructure functioning
as planned; could include a
help desk, hardware
technicians,
telecommunications
specialists, programmers,
and maintenance support
staff.
Most costs borne by vendor.
There may be an additional
charge for user help-desk
support or technical support, or
it may be included in the
monthly/annual fee.
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Cost Categories Description
Costs as Applied to SaaS
Solution
maintenance The cost of keeping IT
assets current and in a
condition that can meet
their planned functions;
includes updates and
enhancements as well as
fixes for problems; could
include maintenance
contracts, programmers,
and telecommunications
specialists.
These costs are borne by the
vendor. The customer pays a
monthly/annual fee for ongoing
service and system
maintenance.
coordination
costs
The costs related to
keeping the infrastructure
tuned to maintain optimal
performance when changes
to an infrastructure
element are required
These costs are borne by the
vendor.
disaster
recovery
The costs of ensuring
continued operation of the
infrastructure, including
maintenance of a current
plan, cost of backup sites
and equipment, costs of
emergency power, and
costs of practice exercises.
Most of these costs are borne
by the vendor (if the vendor
provides disaster recovery
services) since the vendor is
responsible for its hardware,
software and internet access;
but the organization is
responsible for its own
infrastructure (end-user devices,
internet access, local power,
etc.).
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Cost Categories Description
Costs as Applied to SaaS
Solution
organizational
change
management
Any costs associated with
organizational changes
resulting from
implementation of the
system; includes such
things as consolidating
departments, establishing
new groups or
responsibilities,
reorganizing or reassigning
personnel.
Always a customer cost.
data migration The costs of determining
what existing data (either in
electronic or paper form)
would need to be entered
into the system to get
started, and entering that
data.
The customer must bear the
cost of determining what
existing data (electronic or
paper) is to be entered into the
system.
The cost of entering the data is
borne by the customer;
sometimes the vendor is willing
to assist for a fee.
SaaS solutions generally offer many of these categories of service as part of their initial
fee and/or the ongoing maintenance fee. All must be taken into consideration when
developing the TCO.
Making the Selection
In the end, a cost-benefit analysis can be used to determine which solution best meets the
needs of the organization. All four factors discussed above must be considered, with the
organization determining which of them is most important or which combination of the
factors best suits that organization, considering any specific needs, such as security of
highly sensitive data, particular functionality that must be present, controlling costs, etc.
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Implementing the System
Implementation of a COTS or a SaaS solution is a major project for the organization. A
system owner and a project team should be designated, and best practices for IT project
management should be employed. A project plan for implementing a SaaS solution should
include the following steps:
Establish the vendor agreement, contract or SLA; a mechanism needs to be put in
place to give the organization access to the system, identify responsibilities of the
vendor and the customer, and lay out initial and ongoing costs.
Acquire the end-user hardware and telecommunications, if necessary, and/or
validate the capability of existing hardware and telecommunications to access and
use the system.
Configure the system for use in the organization; identify what needs to be done to
implement the organization’s desired workflow, reports, terminology, logo, etc.;
identify who will configure the system and how it will be done, and whether there is
any additional
cost.
Develop a plan for User Acceptance Testing (UAT), and test the configured system to
ensure requirements are met and that it is functioning correctly, including use of any
user support tools or services provided. The UAT plan explains how each
requirement will be specifically tested to ensure it is working properly and the
requirement is met. For example, if the requirement is that the system determine the
customer’s city and state based on the zip code entered, then a zip code would be
entered into the system and the result would be checked to ensure the correct city
and state were provided.
Apprise the employees of what is taking place and why, and make any organizational
or process changes that are needed. Leaders of the organization need to be involved
as sponsors and coaches to encourage system adoption and use, and they should
employ change management techniques to ensure a smooth transition.
Train administrative personnel in their role(s) for supporting the system.
Conduct user training.
Migrate the data needed to operate the system; determine how this will be done
(electronically, manually, etc.), who will do it, how long it will take, and what it will
cost.
Oversee operations to ensure continued end-user support and system maintenance
are performed by the vendor according to the SLA; identify any need for support or
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maintenance by the organization itself, such as hardware and software upgrade for
end-user devices, a local help desk, etc.
Using a comprehensive project plan as laid out above will help ensure a successful
implementation and ongoing support for the new system.
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