Question

In: Operations Management

There was a company (XYZ Cruise Lines) in the vacation industry that had a reservations system...

There was a company (XYZ Cruise Lines) in the vacation industry that had a reservations system for their cruise operations that was designed for agents to book cruise passengers for individual bookings within five to seven minutes. This system created a competitive advantage among travel agents as they can book their clients fast from the start of the process to the payment screen. Their largest competitor had a reservation system that took approximately 15 minutes, which was a clear competitive advantage for XYZ Cruise Lines. However, the competitor had an automated process to check in customers at the pier and provided for an electronic boarding pass where the passengers would carry an identification card with a magnetic strip to allow for faster embarkation of the ship at the pier and at the ports of call. XYZ Cruise Lines was still utilizing a manual system for embarkation and utilized paper-boarding passes. Since customers tend to remember any bad experiences with the beginning (embarkation process) and the end (disembarkation process) of the trip more than during the trip, the embarkation process has caused a lot of dissatisfaction especially among those passengers who sailed with the competitor in the past. In an effort to improve the process, XYZ Cruise Lines a state-of-the=art Ship Embarkation System was being developed. This new planned system will allow the passengers to be processed faster for the embarkation process and a plastic card with a magnetic strip will be activated and utilized as the electronic boarding pass. Additionally, this same card will also be utilized as the Point of Sale purchase card creating a cashless process for the passengers to buy drinks and other extras on board the ship during the voyage. This will further XYZ as the completive leader in the industry. This new system will have to communicate with the current reservations system via satellite connectivity. This software development project had four main components: (a) Ship Embarkation System, (b) Point of Sale System (POS), (c) Satellite Technology Utility for connectivity from the HQ's Reservations System to the Ship, and (d) Upgrade to the existing Reservations System to generate the upload to the Ship's Embarkation and POS systems. All components were completed by December 1st and was ready for the integration testing process so that the project can be implemented on December 15th just before the start of the busy season at which time further software project implementations are not permitted for six months due to the heavy volume impacting the Reservations System. When it came time for the integration testing, the upgrade for the Reservations System could not be made for the test environment because the upgrade was not moved to the Quality Control environment and the software changes was still in the programmer's work file. No other developer or anyone in IT management had access to these files. The programmer that had worked on these changes had a heart attack and was in the hospital. As a result, the Project Manager informed everyone that they were going to miss the deadline and now had to wait six more months before this project could be implemented and the Business Sponsor was furious. The Quality Assurance Manager asked the reason for the missed deadline and when she heard the story, she asked the IT Project Manager for the Risk Management Plan. He said that they do not believe in planning for risk events because this was a negative process and they support a positive approach towards the systems development process. Since there was not a risk matrix created and the risk for the developer to have a heart attack was not considered, the project was delayed and the company lost an opportunity to improve their competitive advantage, which equaled to millions of dollars in potential future bookings. Questions by Senior Management after reading the Quality Assurance Manager's report included: (1)What does PMI recommend about Risk Management Planning, Monitoring Risk, and Controlling Risk? (2)Explain why a project manager or any stakeholder should not view risk planning for projects as a negative activity?(3) Did the organization follow due diligence regarding the creation of a risk management plan, assess all major risks, and developing appropriate risk responses and a plan for monitoring and controlling risks? Explain your rationale. Should this risk event in this case been identified in the beginning? Why or why not? (4)What are some contingency plans or actions that could have been taken to limit the impact of this possible risk event and other such related events such as a key team member leaving for any reason? (5)What would be your recommendations for such projects in the future based upon this case?

Solutions

Expert Solution

1. PMI Recommends that there should be risk mitigation process in place which if the project goes wrong can come into play to reduce or eliminate the risk by proper management and process in place. The project is monitored at each step and any chances of delay in project completion are avoided by providing the solution for the case. In this case particularly, a new software developer would have accompanied the main developer and would have replaced him immediately when he got the sick.

2. The project manager being sure about projects completing in time is a good thing and confidence and commitments also holds good. However, the risk planning should not be viewed as something that is negative. Risk planning only ensures that at times of risk there should be proper action which takes place and handles the situation for delivery of project in time. This in fact should be viewed as positive as it is a proper mechanism to ensure that any risk can be mitigated or resolved in events of its occurrence. This only shows that the management must be prepared for all possible events while completion and implementation of project.

3. Organization did not follow due diligence regarding the creation of the risk management fail that is where it failed to implement the software and project on time.

The risk event shall have been thought at the very beginning. A proper mechanism to identify, preventive approach to have a team of developer at standby mode to take over the project had any issue or risk would have arrived. And the risk would have been reduced or eliminated had it been identified at beginning by having proper risk assessment, control team in place.

4. Risk contingency plans would have included another developer in line who should have been assigned to take the project and would have been instructed to follow and work with main developer could have possibly solve the problem and he would have taken charge of the duty to complete the process in such bad event.

5. Recommendations would be to have a risk monitoring, risk assessment and risk control team in place which can immediately come into action by identifying the risk at right time and doing all that can be done by implement their risk management authority to make sure that projects get implemented at right time and business does not suffer any harm or damage.


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