Question

Companies often face a situation in which there is a business opportunity or need that requires more resources than are available internally. When this happens the company may decide to pursue the opportunity by considering sourcing solutions.

PPI finds itself in this situation. PPI is pursuing three new IT projects designed to improve business operations, but has neither the staffing nor the expertise to handle them all in-house. They will have to rely on another division of PPI or an outside consulting service for some or all of the upcoming projects.

Read this description of the Stargate Initiative, PPI’s code name for the three IT projects, and use this information to create a report that addresses the following:

Public Website:

This development of a new website is intended to support a global marketing campaign. The website will provide an attractive, modern online experience that will provide the company with a larger audience for its educational games than ever before. The website will specifically showcase the new educational video games, though ultimately it will redirect the user to the PPI main website to view PPI’s additional products, which will also require modifications to support a new level of interactivity for the customer.

PPI will specifically be advertising their new educational games for preschool and elementary-school children. The games will be available in both online and downloadable computer versions as well as a version for a popular gaming console. Games for individual players as well as group-based games will be offered. Some of the basic games will be publicly available for play on the website. More advanced games, however, will require users to register with PPI and create a user account. Different levels of membership will be offered. The basic membership will be free. Several levels of memberships with more features and privileges will be available at increased rates.

Inventory Management System:

The current inventory management system (IMS) was developed haphazardly over the years since the company was founded. As the company grew, the IMS had to be updated by adding new software packages. The director of IT describes the IMS “like an intricate series of pipes of different sizes and shapes, all glued together without a blueprint.” Currently, as much as 45% of the IT staff time is devoted to managing the IMS and attempting to ensure it is available and operating correctly.

Besides the internal issues associated with the IMS, there are external issues as well. PPI relies on several other companies for the successful creation of its plush toys, such as Packet the Porcupine.

Company A provides the plush material for the toys’ exterior, while Company B provides the buttons and eyes. Company C provides the quality zippers needed for several of the toys and the toy bags that often accompany them. Company D assembles Byte the Bobcat, Wire the Weasel, Router the Raccoon, while Company E specializes in the more recent Packet the Porcupine and also provides the stuffing material for all of the toys. Packet the Porcupine requires a higher-grade stuffing than the other animals. Company B creates the quills required for Packet’s distinctive exterior. Companies F and G fill the orders and send the deliveries via the U.S. Postal Service, FedEx, the United Parcel Service (UPS), or a local delivery service, as requested by the customer.

Coordinating the efforts of all of these companies is a significant logistical challenge. PPI must ensure that sufficient materials and supplies have been ordered from every company involved in the supply chain. Furthermore, detailed contracts with each company are necessary to deliver the materials and finished products in time to meet expected boom markets at the beginning of the school year and the holiday season. PPI also wants to avoid having a huge amount of inventory on hand that will not be sold for a long period.

Communication with all the participating companies is a problem since each company has its own proprietary software applications used to manage internal production systems. These distinctions are a problem for PPI because it has to coordinate all of the efforts for all of the companies.

Customer Support System:

PPI also wants to improve its customer service through its new Customer Support System. A common problem customers face is the inability to determine the status of their orders. The help desk support staff can look up the date on which an order was placed but cannot determine whether it has actually been filled or whether it is currently being delivered and, if so, what the tracking number is.

A further complication arises when a customer orders an item currently out of stock. The help desk staff cannot estimate when the order will actually be filled. All these issues result in significant customer dissatisfaction. The Customer Support System, when completed, will alleviate these issues.

Choose one of the three projects within this initiative and determine whether that project is a viable candidate for any of the following:

• Outsourcing to another division (located in a different section of the country)
• Outsourcing to a consulting service in a different state
• A combination of these two options
• None of the options

Provide a detailed justification for your decision, including the benefits and risks of this choice, not only for the project you’ve selected, but also what the impact of this decision could be on the other projects within the initiative.

Discuss the issues likely to arise during the management of relationships in a sourcing project.

Submit a 3- to 4-page report in APA style that contains your responses.

Answer 1

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