Activity 1 Document Requirements: Identify or select a performance problem in a business
activity that you believe could be resolved or substantially improved by the acquisition of IT
services performed by a contractor selected in open competition as a result of an RFP (request
for proposal). The acquisition of IT services may also include the acquisition of IT software and
hardware, as needed. Document your performance problem as Activity 1 using Template 1
provided by IT Economics Corporation.
Activity 2 Document Requirements: Define and document the requirements to solve the
problem you identified in Activity 1. Use Template 2, located in the reference list reading
titled T2-Requirements Development.pdf to document the requirements for solving the
business performance problem.
Activity 3 Document Requirements: Identify and document alternative solutions that meet the
requirements identified in Activity 2. Use Template 3, located in the reference list reading
titled T3T4-Identifying Alternatives.pdf. Fill in the template with your information to complete
this activity. Provide at least three alternative solutions. Keep in mind that the status quo is not
an alternative solution.
Activity 4 Document Requirements: In this activity, you enter your three or more alternative
solutions, analyze them, and rank them based on how well they meet the Activity 4 criteria. (In
Activity 6, the risk analysis will be used to screen out all but the two best alternative solutions,
taking into account benefits, cost, and risk.)
Activity 5 Document Requirements: Develop a work breakdown structure (WBS) for each of
your alternative solutions to your performance problem.
The reading (T5-Work Breakdown Structure.pdf) in the reference list leads to the IT Economics
WBS reading, which includes an explanation of how to develop a WBS and illustrations of work
breakdown structures. The illustrations can serve as a model for your preparation of Activity 5.
The explanation and illustrations should give you an idea of the level of detail appropriate for
the WBS required for each of your alternative solutions.
Activity 6 Document Requirements: Perform a Risk Analysis on each of your two or three best
alternative solutions to your performance problem.
The reading from IT Economics Corp., Risk Analysis of Alternative Solutions, includes a risk
analysis template along with five broad risk criteria and their definitions. Also, there are three
examples of the use of the template to document a risk analysis. Use this template and the risk
criteria to conduct and document a risk analysis for each of your alternative solutions.
In using this template for this course, you are not expected to do as thorough a risk
identification as would be required in an actual project. You are expected, though, to identify
the major risks associated with the alternative solutions for your project. Also, you need to
have a minimum of two viable alternative solutions after you perform the risk analysis and
screen out any too-risky solutions. The two best alternative solutions are needed in order to
use the remaining templates. The risk analysis can help you to identify areas in which risk
mitigate strategies can and should be used.
Organization:
Component:
Submitted by:
Date:
Description of the
Problem
Business Activities
and Processes
Affected by the
Problem
Actual Performance
(e.g., current
baseline)
Target Performance
Performance Gap
Organizational KPIs
Affected
Principal
Stakeholders
Tentative Solution
Strategy
Acquisition Need
Confirmation
Template 1
We/I confirm that this problem can only be solved through the acquisition of
IT services (and IT products as needed) from a contractor selected in open
competition.
OBJECTIVE OF THE
REQUIREMENTS:
REQUIREMENTS CATEGORY
1. Stakeholder Considerations that
Need to be Reflected in the Solution
(including the expectations and
satisfaction managers, internal users,
and external customers) and factors
related to the business environment)
2. Factors to Take Into Account
Related to the Business Environment
(including legal factors, regulations,
competition, and business cycles)
3. New Capabilities and/or
Functionality Required by a Solution
(including requirements for ease of
use, quality, interoperability, and data
sharing)
4. Existing Business Process Shortfalls
(why current business process and/or
systems cannot meet the needs or be
changed to meet the needs)
5. Cost Limitations (may be stated in
terms of preferred cost range; may
specify a maximum cost; cost figures
need to include associated overhead
costs; may be specified as an annual
limit or life cycle limit or both)
6. Other Limitations or Constraints
(e.g., availability of key personnel,
such as subject matter experts,
training methods and time available
for training, limitations related to
maintenance or to external support).
7. Security & Privacy Requirements
(any requirements beyond those
currently being used by the
organization for non-critical and nonsensitive applications)
8. Number to be Implemented (e.g.,
specify the number of places the
solution will need to be implemented
and whether they are at different
geographical locations)
Reduce the amount of time required to prepare graphics for
proposals and to integrate them with the text, as stated in
the Performance Gap document
REQUIREMENTS DEFINITION
OBJECTIVE OF THE
REQUIREMENTS:
REQUIREMENTS CATEGORY
9. Schedule (explain any schedule
constraint, whether for financial or
non-financial reasons--e.g., if the
solution be in place as of a certain
date, specify the date and why)
10. Other Requirements Not
Specified Above (e.g., any related to
vendors, consultants, partnerships
with other entities, unique user
interface requirements,
documentation needs, special
certification requirements)
Template 2
Reduce the amount of time required to prepare graphics for
proposals and to integrate them with the text, as stated in
the Performance Gap document
REQUIREMENTS DEFINITION
OBJECTIVE:
Name of Solution
Alternative
Summary Description of Solution That Meets the Stated
Requirements
Alternative Solution #1:
Alternative Solution #2:
Alternative Solution #3:
Alternative Solution #4:
[Name of Alternative
Solution #5]
IT Acquisition Confirmation
Template 3
[and so on, if there are additional alternative solutions]
Each alternative solution described above requires the acquisition of
IT services from an external IT service provider selected in open
competition. [Note: Do not remove or change this statement.]
Alternative
Solution
Altern. #1
Altern. #2
Altern. #3
Altern. #4
[and so on]
Template 4
Responsiveness
to Requirements
Feasibility (Capable
of Being Successful)
Enterprise
Architecture
Risks and
Constraints
Affordability
New Opportunities
Rank
Order
Alternative Solution #1 (Tentative Solution Rank Order #1):
Risk Category
Probability
Impact If
Occurs
Mitigation Strategy
Organizational Risk
Information Security
and Privacy Risk
Complexity Risk
Infrastructure Risk
External Risk
Average
Probability
Total Approximate Risk Exposure:
%
Template 6. Alternative #1 Risk Analysis Results
Approximate
Risk Exposure
Risk
Priority
Organization:
Component:
Submitted by:
Date:
XYZ Community Hospital
Clinical Medication Compliance Group
Salma Ashraf
September 14, 2019
The problem is that the amount of time and cost related to the
Description of the
acquisition, packaging and distributions of pharmaceutical medications
Problem
decreased the effective service to the first line caregivers and decreases
the overall timely care of the hospital patient population.
Business Activities
The problem directly affects preparation activities associated to
and Processes
medication distribution, medication waste, and inventory control. It also
Affected by the
has a major impact on all customer processes that depend on timely
Problem
delivery of service.
At present, the hospital pharmacy uses a manual inventory system that
comprises of a daily count of medication in order to know which
Actual Performance
medications to purchase. It uses manual personnel to package, date,
(e.g., current baseline)
and label medications for dispense. It uses manual personnel to count
and inspect packaging for expirations and recalls.
To increase medication acquisition and dispensing as well as to increase
Target Performance
inventory management and control.
The performance gap is the opportunity to increase staff efficiency,
Performance Gap
decrease inventory waste, increase inventory efficiency, increase
customer satisfaction, and increase patient safety.
Organizational KPIs Return on asset, return on investment, customer satisfaction, patient
Affected
safety, cost reduction, inventory efficiency.
Principal Stakeholders Department managers, department staff, direct and indirect customers.
Investigate an IT solution that will assist with packaging at a high rate of
Tentative Solution
speed and efficiency that will interface with current systems that report
Strategy
on inventory, wastes and trends.
We/I confirm that this problem can only be solved through the
Acquisition Need
acquisition of IT services (and IT products as needed) from a contractor
Confirmation
selected in open competition.
Professor’s feedback:
This is a great start to your problem definition. You mention amount of time and cost, but you
do not state specifics. If you can add these metrics then your problem statement will be
stronger. This will also allow decision makers to see that there is a real problem that needs to
be addressed. Numbers will always get action! If you can tie lost revenue and time to this then
you will have a problem definition that will be very strong.
Identifying Organizational Performance Gaps
IT Acquisition Template 1
This article explains what a performance gap is and how it is identified. It then describes the “value
chain,” which demonstrates why even lower level activities, such as an employee training program, can
affect the organization’s performance and its return on investment. It then points out that IT is in
virtually every significant activity in the organization, which means there usually are many opportunities
to employ IT to enhance the organization’s performance and its achievement of its strategic goals.
The importance of including quantitative information in your Template 1 entries is then explained and
examples are provided.
Finally, Template 1 is provided along with two examples of its use. Template 1 is used to document a
performance problem and a tentative solution strategy.
Key Performance Indicators and Performance Gaps
What is a KPI (key performance indicator)?
Organizations perform strategic planning to establish strategic goals, related objectives, and key
performance measures. The performance measures provide feedback to managers on how well specific
objectives are being achieved in support of the strategic goals and objectives. The most important
organizational performance measures are called key performance indicators, or KPIs, and are used by
senior management.
The performance of the organization and the performance of its chief executive are measured by the
same high-level KPIs. These KPIs indicate how well strategic goals and objectives are being met. The
number of these high-level KPIs various with the organization, its size, and its characteristics. The
Balanced Scorecard is an approach used by many organizations to document their KPIs--much
information is available about this on the Web. Also, many organization use “dashboards” to constantly
monitor their performance on their KPIs.
Individual departments and divisions in an organization define lower-level KPIs for themselves, but these
KPIs must align with and support the higher-level KPIs for the organization and its chief executive.
Template 1 refers to organization-level KPIs and not to the lower level KPIs of components of the
organization.
All references to KPIs in the following material refer to the high-level organizational KPIs. (For more
information on KPIs, Wikipedia has an easy-to-read document, available at:
http://en.wikipedia.org/wiki/Key_performance_indicators.)
What is a Performance Gap?
A “performance gap” exists when the actual performance on a KPI is below the planned or expected
level of performance. Examples of KPIs include return on investment (ROI), product or service quality,
and extent of customer satisfaction.
Many organizations have more than one line of business. For example, one line of business may be to
provide consulting services, another might be to manage IT applications that have been outsourced to it
by customers, and a third might be to develop custom software for customers. The managers of each
line of business use KPIs to measure performance, so they will know how well they are doing. Similarly,
the senior executives and board members of the organization rely on organization-level KPIs to monitor
how well the organization is performing in relation to its goals and performance objectives.
One or more KPIs may indicate, for example, that production is lower than planned in one line of
business, that costs in another line of business are higher than planned, and that risk exposures in a
third line of business significantly exceed those planned for in the risk management plan. These
constitute three “performance gaps” that the organization will have to close if it want to achieve its
goals and objectives.
Value Chains - Chains of Results in the Organization
The terms “value chain” and “results chain” generally can be used interchangeably. Some like the term
“value chain” because the generation of value is a critical goal of organizations. Others argue that the
term “results chain” should be preferred because a critical goal of any organization is to produce certain
desired results. We’ll use both terms, with a slight edge toward value chain.
What is a Value Chain?
The strategic goals and objectives of the organization generally focus on producing the products and
services customers want and will pay for. How well these goals and objectives are being achieved are
measured by the organization’s high level KPIs. A value chain (or results chain) consists of the work
activities required to achieve one or more strategic goals as measured by the KPIs. In other words, it is
the mix of direct and indirect work activities required to transform the inputs received by an
organization into the outputs required by the customers.
Typically, a value chain contains many interrelated work activities, which means that poor performance
of any work activity in the chain can affect the output performance of the organization as measured by
the KPIs. Here is a graphic that can be used to illustrate the value chain concept. Notice that some work
activities are called “primary” and some are called “support.” Both classes of work activities are
important to organizational performance. The high-level KPIs are inside the boundary of the
organization at the end of the value chain.
Figure 1. Value Chain Illustration (Based on the work of Michael E. Porter, Harvard Business School)
When we look at Figure 1, it is not difficult to see that if any work activity represented by the orange
boxes (the primary work activities) is significantly underperforming, it will affect the quality, timeliness,
and/or cost of products delivered to customers. The result would be a “performance gap” because the
KPIs for quality, timeliness, cost, and/or profit would communicate the underperformance to
management.
But what could be the cause of the underperformance? There are many possibilities. The four support
work activities (pink circles) support all of the primary work activities. One of the sub-activities of the
work support activity Human Resources Management is staff training. Whether the quality of the
training is outstanding or poor, it will affect the performance of the primary work activities that receive
the training. In other words, you could trace the positive or negative results of the Human Resources
Management work activity (and its sub-activities) to the results provided to the customer. There is a
results chain (or “value chain”) that can be traced from this support work activity through other work
activities until it reaches the customer.
What if the Procurement work activity (another pink circle) is significantly underperforming? Let’s say it
is procuring parts that are of poor quality or that it is buying from vendors who cannot meet contractual
delivery dates. The results of the underperformance by the Procurement work activity will flow through
each of the primary work activities of the organization and produce poor results for the customers. This
is another example of a results chain.
The point is: If the quality, quantity, and or timeliness of a final product or service relies on a work
activity, that work activity is in its value chain/results chain.
Every service or product produced by an organization relies on the performance of a group of work
activities. The group of work activities varies somewhat for each product and service because not every
work activity supports every product or service. Knowing which work activities are responsible for
producing the results being measured by specific KPIs of the organization is important. It aids in
analyzing the causes of performance successes as well as performance gaps. It also demonstrates to the
individuals performing those work activities how important their work activities are to the success of the
organization.
Primary and Support Work Activities
In Figure 1, above, there are three internal primary work activities for this value chain and four internal
support work activities. All of these are located within the organization. However, activities that are
outside of the organization and provide inputs to a value chain can also affect the performance of the
value chain. For example, external suppliers and customers are located outside of the organization. If
their inputs to a value chain are faulty, they will negatively affect the performance of the value chain.
For example, if an external vendor supplies software with numerous bugs, the bugs can in turn cause
costly errors in the value chain. Similarly, the preferences of customers can change--they may decide
that they no longer want wired networks, but instead want wireless networks. External factors must be
monitored and taken into account in designing, revising, and otherwise managing a value chain.
KPIs are at the organizational level (i.e., for the organization as a whole) as well as for specific lines of
business. Every line of business (LOB) manager wants to know how well he or she is doing, and the KPIs
for his or her LOB are intended to provide that information. There often are lower-level work activity
performance measures that are linked to the higher level KPIs. The documented linkages make it
possible to quickly identify the work activity or activities responsible for a performance gap.
IT in Primary and Support Work Activities
Virtually every work activity in the organization is supported by IT. IT is used in every one of the primary
and support work activities shown in Figure 1. IT can be the cause of poor performance on a KPI (e.g.,
the current system lacks the needed capacity and speed) or it can be a principal enabler of performance
improvement and customer satisfaction.
A performance gap for an LOB can result from either a problem in a primary or a support work activity
for that LOB. For example, the lack of a good training program (a support activity) may mean the
employees in one primary work activity make many errors that result in poor quality products or
services. Or it could be that the LOB does not track customer requirements well (primary work activity)
and therefore develops a product (e.g., software) that fails to meet important customer requirements.
The IT used by another LOB in the organization may be key to having a profitable price and value
advantage over competitors.
Solving Performance Problems
It is always desirable to try to solve a performance problem without having to invest in a new capital
asset, such as acquire new IT. Acquiring new IT should be considered only when analysis indicates that
it is the best value solution to the problem. The individual or team sponsoring a proposal to acquire IT
must always seriously investigate possible methods of solving the problem without acquiring IT. If the
team concludes that the best value solution requires new IT, the team must be able to convincingly
defend its recommendation that the acquisition and implementation of new or different IT is the best
way to solve the performance problem and the best use of the funds that would be required. Of course,
the team may not have information about all of the other possible uses of the funds, which is why the
team must make the best possible case for the investment in IT. Management will make the ultimate
decision about the best use of the investment funds.
Importance of Including Quantitative Information
When it is completed, Template 1 produces a document that identifies a performance problem and
describes a preliminary solution strategy. In most organizations, there is much competition for funds to
solve various performance problems. The Template 1 documents that appear to be the best use of the
limited funds for such activities will be selected to continue to the next step (using Template 2 and
others) and the other Template 1 documents will be rejected, delayed, or sent back for revision.
It is very important for competitive purposes for the Template 1 information to communicate well with
executive decision makers. The best way to do this is to include quantitative information to help
describe the problem and the benefits of solving the problem. Failure to include quantitative
information will seriously reduce the likelihood that a Template 1 document will earn an approval to
continue to the next steps.
What is quantitative information? It is information that is quantified. One definition of “quantify” is “to
express as a number or measure or quantity.” Executives desire quantitative information because it tells
them the dimensions of the problem and the value of solving it.
The Description of the Problem section in Template 1 MUST provide a narrative description of the
problem. It is not always necessary to include quantitative information in this section, but doing so can
have advantages. Some executives may not read beyond this section unless it stands out from other
Template 1 documents. One way to make it stand out is to selectively include summary quantitative
information that will impress them. Where can you get such information? It comes from--that is, it
summarizes--detailed quantitative information that must be provided in the Actual Performance, Target
Performance, and Performance Gap sections of Template 1.
The Actual Performance section MUST include quantitative information, such as how often the problem
occurs, who and how many are affected, how are they affected (such as number of labor hours lost,
number and severity of errors that result), and the estimated cost of the problem to the organization.
Then the Target Performance section MUST show the target performance, such as the percentage
decrease in the occurrence of the problem, the reduced number of labor hours achievable, the reduced
number of errors achievable, the percentage increase in productivity achievable, and the estimated
dollar savings or financial gain expected to result. The expected reduction in the risk exposure (and
related financial exposure) should also be stated.
The Performance Gap section MUST include quantitative information. It must state the difference
between the Actual and the Target performance. If you’ve provided quantitative performance
information in those prior sections, than it is simply a matter of subtraction to show the performance
gap. See “Quantifying Information Illustration” below.
Quantifying Information Illustration
For example, let’s say the problem is that too many malicious attacks are getting through the
organization’s firewall, an average of 50 per day. The analysis by the integrated project team (IPT)
indicates that solving this information security problem can reduce the average number of daily attacks
by 80% and the risk exposure from such attacks by 90%, from $1 million dollars to $100,000. The
problem now requires 12 labor hours per day to combat the problem, which would be reduced to 4
hours per day with the solution. The IPT might create a table, such as the one below, to make the
calculations. The table, “Daily Malicious Attacks Penetrating Firewall,” illustrates that the Performance
Gap figures are arrived at by subtracting the Target Performance from the Actual Performance.
Incidentally, saving 4 labor hours per day at a cost of, say, $60 per hour, times 240 work days a year
results in an annual savings of $57,600 for labor cost alone.
Daily Malicious Attacks Penetrating Firewall
Actual
Target
Gap
Number
Malicious
Attacks
50
10
40
Ongoing
Risk
Exposure
$1,000,000
$100,000
$900,000
Labor
Hours
Required
12
4
8
Template 1 - Documenting a Performance Gap and Tentative Solution
Strategy
Two examples of using Template 1 are given below. Note that adding quantitative information does not
have to be complicated but it can do much to communicate the dimensions of the problem.
Note that Template 1 summarizes a performance problem and a tentative solution strategy. It is
“tentative” because solution strategies tend to change as new information becomes available. It is a
“summary” because it does not contain all of the detailed information developed by the IPT in analyzing
the performance problem.
It is of great importance that the information provided in the template be understandable and
convincing to executive decision makers. These executives make the decisions about which Template 1
documents will be approved and their IPTs permitted to go to the next step and which Template 1
documents will be rejected, delayed for consideration in the future, or sent back for revision.
The last row of the template is a confirmation from the IPT preparers that the problem can only be
solved through the acquisition of IT services (and IT products needed) from a contractor selected in
open competition. If you are a preparer, be sure you can correctly answer “yes.” If your answer is “no,”
do not submit a Template 1 document because the acquisition of IT services is not needed.
First Example of a Completed Template 1
Organization:
Jaguar Consulting of America
Component:
Business Capture Group
Submitted by:
Iam Smart
Date:
January 26, 2010
The problem is that the amount of time required to prepare graphics for
proposals and to integrate them with the text is costly in terms of time,
money, and demands on proposal team members. This limits the number of
proposals the organization is able to prepare which, in turn, limits the revenue
to the organization.
Description of the
Problem
Business Activities
and Processes
Affected by the
Problem
Actual Performance
(e.g., current
baseline)
Target Performance
Performance Gap
Organizational KPIs
Affected
Principal
Stakeholders
Tentative Solution
Strategy
Acquisition Need
Confirmation
The problem directly affects proposal preparation activities. It also has a major
impact on all processes that depend on proposals to generate their work.
At present, we are able to provide graphics to support an average of 10
proposals per month. Graphics support for proposal preparation costs $6000
per month, or an average of $600 per proposal.
Provide graphics to support an average of 15 proposals per month, which is
the target established in the last strategic planning session, for the $6000 per
month cost of graphics support. The average cost will be $400 per proposal.
The performance gap is graphics support for an average of 5 proposals per
month and the opportunity to increase sales revenue by about one third. The
financial benefit from the solution is an expected increase in productivity of
$3,000 per month or $36,000 per year.
Sales revenue, return on assets, return on investment
Chief Executive Officer, other chief officers, manager of Sales Department, and
managers of departments that perform work resulting from proposals
Investigate the feasibility of acquiring and implementing a speedy, easy-to-use
tool or tool set for graphic creation, graphics inventory management, the
integration of graphics with text, and the ability to interface with related
systems.
We/I confirm that this problem can only be solved through the acquisition of
IT services (and IT products as needed) from a contractor selected in open
competition.
Template 1 (Example 1). Performance Problem and Tentative Solution Strategy
Second Example of a Completed Template 1
Organization:
Future Financial of America
Component:
Financial Services Department
Submitted by:
Elio Smith
Date:
January 26, 2010
The problem is the inefficiency and poor quality of our loan management
system. Our Financial Services Department lends money to franchisees for
special purposes, such as to further develop their property. We manage these
loans through a series of complex spreadsheets, which is slow, labor intensive,
and subject to human error.
Description of the
Problem
Business Activities
and Processes
Affected by the
Problem
Actual Performance
(e.g., current
baseline)
Target Performance
Performance Gap
Organizational KPIs
Affected
Principal
Stakeholders
Tentative Solution
Strategy
Acquisition Need
Confirmation
Loan management process; franchisee relations process
At present, the loan management process requires an average of 160 labor
hours per month to enter and manage loans and an average of 30 labor hours
per month for resolving data entry problems
An achievable target is for the loan management process to require an
average of 80 labor hours per month to enter and manage loans and 10 labor
hours per month to resolve data entry problems. In addition, there will be an
improvement in the franchisee relations process, from a 70% satisfied rating
to a target satisfied rating of 90%, which will help to retain franchisees and
attract new franchisees.
The performance gaps total 100 labor hours per month in excess of
established target performance. At an average cost of $60 per hour, this is a
savings of $6000 per month in labor cost. Also, a 20 percentage point
improvement in satisfactory ratings from franchisees--to a target of 90%--is
forecast.
Return on investment, return on assets; franchisee relations
Managers of the Franchisee Services Department and the Customer Relations
Department; loan processing personnel; franchisees receiving loans.
Investigate feasibility of acquiring and implementing a speedy, easy-to-use,
commercially-available loan management software that will automate the
loan management process, including entering loan information, tracking loan
performance, sharing data with other systems, and generating timely loan
reports.
We/I confirm that this problem can only be solved through the acquisition of
IT services (and IT products as needed) from a contractor selected in open
competition.
Template 1 (Example 2). Performance Problem and Tentative Solution Strategy
IT Acquisition Requirements Analysis
IT Acquisition Template 2
The left column of the table below summarizes most of the categories of information required for the
requirements definition activity of the Acquisition Planning Process. The table can be used as a template
for documenting a summary of the requirements. With the template, this is done by entering summary
information in its right column. Many organizations have their own templates, some of which may be
superior to this one. In using this template, all ten of the Requirements Categories in the left column
must be answered in the right column.
The example in the table (right column) is a relatively simple case because its purpose is to illustrate the
use of such a template. The template helps to ensure that the correct requirements have been defined,
agreed to, and documented, with no important requirement or constraint overlooked.
The requirements generally evolve as comments are sought from experts, users, and other key
stakeholders. Ideally, key stakeholders, including the users and others who will be directly affected by
the acquisition, will all agree on the “final” requirements before the next steps in acquisition planning
are taken.
The final requirements that emerge from this process are intended to describe the solution needed. The
acquisition planning team may identify and evaluation alternative solutions that meet these criteria.
Contractors may be asked to submit proposals to implement one of these solutions or to propose other
solutions to the problem that might be better. Proposed solutions that satisfy or exceed the
requirements and are acceptable in terms of cost and risks will likely be considered by the organization.
Often the one with the best value will be selected.
In using this template, include all ten Requirements Categories. However, feel free to exclude the
parenthetical statements in the left column, which merely elaborate on each of the requirements. If you
wish to add one or more additional requirements, do so after the tenth one in the left column.
In regard to column on the right, exclude the example case and substitute your text pertaining to your
case requirements. Be sure to respond to all of the requirements categories. Although these are
summaries of requirements, they must be understandable to stakeholders, executives, and others who
may review this summary. This means your template entries need to clearly communicate the essential
aspects of each requirement.
OBJECTIVE OF THE
REQUIREMENTS:
REQUIREMENTS CATEGORY
1. Stakeholder Considerations that
Need to be Reflected in the Solution
(including the expectations and
satisfaction managers, internal users,
and external customers) and factors
related to the business environment)
2. Factors to Take Into Account
Related to the Business Environment
(including legal factors, regulations,
competition, and business cycles)
3. New Capabilities and/or
Functionality Required by a Solution
(including requirements for ease of
use, quality, interoperability, and data
sharing)
4. Existing Business Process Shortfalls
(why current business process and/or
systems cannot meet the needs or be
changed to meet the needs)
5. Cost Limitations (may be stated in
terms of preferred cost range; may
specify a maximum cost; cost figures
need to include associated overhead
costs; may be specified as an annual
limit or life cycle limit or both)
6. Other Limitations or Constraints
(e.g., availability of key personnel,
such as subject matter experts,
training methods and time available
for training, limitations related to
maintenance or to external support).
Reduce the amount of time required to prepare graphics for
proposals and to integrate them with the text, as stated in
the Performance Gap document
REQUIREMENTS DEFINITION
Chief officers seek increased ROI and ROA (return on assets)
that can result from producing the target number of
proposals. Sales Department Manager is responsible for
proposal production. All department heads can benefit from
achieving target proposal production.
Competitors have the capabilities described here
A software solution is needed that will speed up the
development of quality graphics for use in proposals by 40%,
which could result in millions of dollars of new business at
the current proposal hit rate.
Must be able to capture, store, and edit existing images,
create photo compositions, draw vector graphics and take
graphics and integrate them with text and take the result to
the printed page, websites, video, and mobile devices. Must
maintain an inventory of reusable graphics. System must be
easy to use, fast and flexible, and function cross-platform.
Must be extensible, scalable and open architecture. Must
operate with Windows XP and Adobe publication systems.
Current software being used is dependent on many manual
graphics activities, has no inventory and output re-use
capability, cannot integrate text and graphics, and cannot
interface with related systems.
Expected cost is $500 per software system. Cost of system is
not a significant constraint up to $1000 per system. Total
cost, including implementation and training and overhead, is
expected to be in the $150,000 to $200,000 range.
Must be easy to learn by individuals who are telecommuting
and may not be available to attend a course. It must also
have high reliability with automatic online updates.
OBJECTIVE OF THE
REQUIREMENTS:
REQUIREMENTS CATEGORY
7. Security & Privacy Requirements
(any requirements beyond those
currently being used by the
organization for non-critical and nonsensitive applications)
8. Number to be Implemented (e.g.,
specify the number of places the
solution will need to be implemented
and whether they are at different
geographical locations)
9. Schedule (explain any schedule
constraint, whether for financial or
non-financial reasons--e.g., if the
solution be in place as of a certain
date, specify the date and why)
10. Other Requirements Not
Specified Above (e.g., any related to
vendors, consultants, partnerships
with other entities, unique user
interface requirements,
documentation needs, special
certification requirements)
Reduce the amount of time required to prepare graphics for
proposals and to integrate them with the text, as stated in
the Performance Gap document
REQUIREMENTS DEFINITION
No special requirements aside from established network
security.
The solution must be provided for three workstations that
are used to prepare graphics for proposals and other
purposes.
Acquire and implement within next six months (xx/xx/xx xx/xx/xx). Doing so within three months brings quicker
financial benefits.
Require minimal in-house support; must be returnable if
factory defect or new version is issued within six months.
Vendor must provide assurance of fast response times to
requests for help.
Template 2. Documentation of Requirements
IMPORTANT NOTES:
1. This template should be used with a Microsoft Word (or other word processor) document. It should
not be used in an Excel worksheet because this is not an appropriate medium for transmitting the
document to others or for printing it for distribution.
2. The template is adjustable. After the template is copied to a Word document, replace the sample
entries in the cells with your own information. You can change the length and width of the template
and its cells after you copy the template to your document. If you put your cursor on a line in the
template, the line can be moved horizontally or vertically, depending on the line, to best fit your
information. There is no need to color any of the cells in your Word version, though color is used in
the example above.
Risk Analysis of Alternative Solutions
IT Acquisition Template 6
Perceptions of Risk
There is risk everywhere, which is why two basic considerations, probability and impact, are widely used
to determine which risks are most important and should be managed. Even so, judgments of probability
and impact vary based on past experience, organizational culture (which includes values), and
professional competence. It is no surprise, therefore, that risk identification and assessment results for
similar projects vary from organization to organization. Moreover, it is no surprise that not all use the
same set of risk assessment criteria. The variations in risk perceptions and practices from organization to
organization is why a buyer organization and its IT services contractor often have somewhat different
views of the risks involved with an IT project.
Allocating Risk Responsibilities
Assuming the buyer and contractor can come to an agreement on the major risks associated with a
project, the next question is which organization is in the best position to control a specific risk, the buyer
or the contractor? This is important because sometimes a buyer will ask the contractor to be responsible
for a risk that only the buyer can control. The contractor cannot make the mistake of accepting such a
risk, especially in a fixed price contract. Both parties need to have sufficient understanding of each
significant risk and who can best control it. Allocating risk between the buyer and the organization must
always reflect which party is in the best position to control the risk. If neither party can control the risk,
the best approach usually is for both parties to share the risk.
Risk and Contract Price
The contractor’s proposed price generally reflects the contractor’s understanding of the work, including
the amount of risk the contractor expects to assume. If the contractor has a poor understanding of the
risk, the price may be too high or too low and the allocation of risk might be detrimental to both parties.
Similarly, if the buyer has a poor understanding of the risk, the buyer might pay too much or too little for
the contractor’s services, and the allocation of risk could similarly be detrimental. This means that both
the buyer and potential contractors need to have a good understanding of the project risks by the time
contract negotiations take place
Sometimes there are so many unknowns that it is not possible for either party to have a good
understanding of the potential risks in advance of contract negotiations. The contractor cannot be
expected to assume such risks at its own expense. The contractor normally takes this uncertainty into
account in establishing its proposed price, usually with contingencies built into the contract.
Use of Integrated Project Team (IPT)
The principal reason for using an Integrated Project Team to identify and assess risk is because it brings
many different perspectives, which is important in identifying and evaluating risk. The team members
represent all of the key business areas affected by the proposed project. As a team, they are better able
than a single person to know what the risks are and how they might be avoided or mitigated.
Risk Analysis Process
Identifying risk should begin at the beginning of the pre-solicitation the planning, well before the formal
risk analysis documented in this template (Template 6). As risks are identified, they can be document for
subsequent consideration. The risks identify for some alternative solutions will be eliminated when the
solutions are screened out. The risks associated with the solutions that are not screened out need to be
retained for further analysis in the formal risk analysis documented in Template 6.
The risk analysis process consists of identifying the sources and types of risks associated with each
alternative solution and its work breakdown structure, evaluating each risk in terms of probability and
likely impact, and establishing a mitigation strategy for each risk. For the alternative solution that is
ultimately selected, this risk information will become part of a risk management plan that is used to
monitor and manage risks during the project. The process of identifying and evaluating risk, planning risk
mitigation strategies, and monitoring risks takes place throughout the life cycle of the IT investment. The
process ends with the disposal of the IT system at the end of its life cycle.
The most critical time to use the risk analysis process is early in the planning--for two purposes: (1) to
screen out alternative solutions that would present too much risk and (2) to determine how to modify
otherwise acceptable alternatives to reduce their risk. Too many organizations do a poor job of
identifying risk. In particular, they ignore the fact that many major risks can be avoided either by not
selecting certain alternative solutions or by modifying an alternative to reduce its risk.
In evaluating alternative solutions, risk analysis of alternative solutions generally precedes the economic
analysis of the alternatives because the economic analysis must take risk into account. The economic
analysis results (see Template 7) are “risk adjusted,” which requires that the risks associated with each
alternative solution be identified and quantified.
Risks Identified with the Work Breakdown Structures
Work breakdown structures have been prepared for at least two or more of the “best” solutions based
on prior analysis. The review of the work breakdown structures for Template 5 is likely to have identified
risks that could not be avoided or otherwise eliminated by modifications of the solutions. Those risks
need to be taken into account in the risk analysis. It is advisable for the IPT to perform a formal risk
analysis of each WBS, not only to confirm the risks identified earlier, but also to identify risks that may
have been missed.
Risk Criteria Categories
Leading organizations group related risks into a single “risk category” that is given a name that identifies
the types of risks in that category. The organization may establish five, six, seven or more categories to
represent all of the possible risks that might be identified. The table below illustrates the risk categories
used by two different organizations.
Organization B’s Risk
Categories
Organization A’s Risk Categories
•
•
•
•
•
•
•
Strategic/Commercial Risk
Economic/Financial/Market Risk
Legal and Regulatory Risks
Organizational Management/People Issues
Political/Societal Issues
Environmental Factors/Acts of God
Technical/Operational/Infrastructure Risks
•
•
•
•
•
•
Business/Strategic
External Factors
Procurement
Organizational Factors
Management
Technical
Each risk identified by an organization must be documented in one of the risk categories. To facilitate
this, organizations develop a detailed definition of each category and the risks that it includes and they
provide checklists, examples, and other aids to help individuals identify risk and correctly document
them in the correct categories. Leading organizations have policies and procedures that support a
professional approach to risk identification, documentation, assessment, mitigation, and management.
They are aware that most project failures occur because important risks were not identified until it was
too late to avoid the risks or effectively mitigate them.
Research-Based Risk Categories
Listed below are a set of risk criteria categories and definitions that grew out of a number of years of
research on planning and implementing IT projects. The risk category definitions have been abbreviated
for use here, but as stated they give a good idea of the nature of each category. Also, none of the aids
associated with each category (e.g, checklist, examples) is shown. It is important to keep in mind that,
while organizations may use the same criteria categories, they will modify the definitions of these
categories to best address their own situations. For example, a law firm is likely to have some different
risk exposures related to its IT projects than a clothing manufacturer.
1. Organizational Risk: Extent of buy-in by key stakeholders (e.g., affected managers, users, other
employees, customers). Extent to which qualified individuals will be available to manage and
staff the project. Extent to which employees with the required knowledge and skills are likely to
be available to staff the implemented system. Extent to which the organization is otherwise
ready to successfully implement and use the system. Possibility for loss of senior management
support at some point in the project and possibility for resistance to change by one or more
managers who are or will be affected by the project.
2. Infrastructure Risk: The extent to which it places demands on the organization’s infrastructure,
including its IT infrastructure (e.g., will it incur non-project costs elsewhere in the organization;
will it slow up other processes or reduce needed flexibility; will it interoperate with other
systems without undue cost or risk?)
3. Information Security and Privacy: The extent to which it meets the established standards for
information security and privacy.
4. Complexity Risk: Degree of complexity of the project and/or the proposed solution. Extent to
which all of the assumptions have been identified, are supported, and taken into account in the
planning. Likely accuracy of forecasts for benefits, costs, and risks.
5. External Risk: The extent to which external risks pertain to this solution (e.g., affect on
corporate partners, the environment, compatibility with law and regulation). Includes
contractual relationships and regulations.
Every risk associated with an alternative solution is documented and placed in its proper risk category.
Risks that fall into the same risk category are often related and similar risk management strategies may
be applicable. Sometimes an overarching strategy can help to control all of the risks in the category.
A variety of sources of information may be used to estimate the probability of the risk occurring and the
likely financial impact if it does occur. Analyzing the risk will be important in judging the probability and
likely impact. Other important sources are the organization’s performance with past projects and any
“lessons learned” from them. The probability and likely impact make it possible to calculate the
organization’s financial “risk exposure” for each risk, which enable the risks to be prioritized. The highest
priority risks based on the risk exposure calculation get the most attention and resources for managing
them.
Template 6 is used to summarize the findings of the detailed analysis of each alternative.
Documentation of the detailed analysis should be maintained to support and defend the entries made in
the template. One Template 6 form is used for each alternative.
Here is an important finding based on the experience of organizations using the five risk criteria
provided in the template: The greatest proportion of project failures are caused by risks that fall into
the Organizational Risk category. Such risks include stakeholder buy-in and senior management
support. This underlines the need for stakeholder participation in the project to help obtain and
maintain stakeholder buy-in and the importance of appointing an executive to serve as an executive
change manager and project champion.
Using Template 6 - the Risk Analysis Template
The use of Template 6 should follow a full risk identification and analysis process (e.g., using checklists
and other aids). Template 6, below, uses the five research-based criteria categories and definitions
provided above.
A separate Template 6 is used for each alternative solution that is analyzed for risk. Enter the name of
each alternative solution at the top of each template, as shown in the examples below.
•
Identify and Document the Risks. Use the risk categories and definitions above to identify and
categorize the risks for each alternative solution. Specifically, use each of the five categories of
risk and their definitions, one at a time, to help you determine if one or more important risks in
a risk category is associated with your alternative solution. If it is, document the risk—as
illustrated in the Template 6 examples below—under the proper category name. As shown in
the first example below, three significant risks were identified in the Organization Risk category.
•
Estimate Probability of Occurring and the Impact if it Occurs. After you have identified and
documented a risk, estimate its probability of occurring and then the likely financial impact if it
does occur. The financial impact is usually indicated by a range of dollar costs because it is
almost impossible to forecast a precise dollar figure.
•
State Mitigation Strategy for Each Risk. Next, state the mitigation strategy for the risk--your
recommendation for avoiding or otherwise controlling and minimizing the risk.
•
Calculate Risk Exposure. Then calculate the approximate risk exposure for that risk and enter it
in the Approximate Risk Exposure column. The purpose of calculating the risk exposure is to aid
in prioritizing the risk—the greater the risk exposure, the higher the priority. Risks that fall into
the same category tend to be interrelated, enabling certain risk management strategies to be
applied at the aggregate level. Here is an explanation of how to calculate the risk exposure of
individual risks:
Calculating Risk Exposure
The risk exposure of any given risk is the probability of the
risk occurring times the total loss if the risk occurs. We are
using a financial cost (loss) range, so you need to multiply
the probability times the low-cost figure and the probability
times the high cost figure.
For example, if there is a 20% probability of risk “X”
occurring and the impact cost (loss) is in the range of
$20,000 to $50,000, the risk exposure range calculation
would be as follows:
20% x $20,000 = $4,000 Low end of risk exposure
20% x $50,000 = $10,000 High end of risk exposure
Risk exposure range for risk “X” = $4,000 - $10,000
•
Prioritize the Risks. After the risk exposure range has been calculated for each risk, the risks
need to be prioritized based on their risk exposure. The greater the risk exposure, the higher the
priority. A simple way to prioritize them is to form three categories, Low, Medium, and High,
and define each. The definitions of the ranges will vary with the organization. For the Template
6 examples below, the following ranges were used: L (low) = $1,000 - $5,000; M (medium) =
$5,001 - $15,000; and H (high) = $15,001 and up. L, M, and H are used to identify the priorities in
the Risk Priority column in the template.
•
Compute the Average Risk Probability. At the bottom of Template 6, there is a cell titled
Average Probability. The entry to be made in this cell is merely the average probability of
occurrence for the risks listed above for this alternative. For example, assume the sum of eight
risk probability entries in the column is 170%. Dividing the 170% by eight, we find that there is a
21.5% average probability that the risks will occur. This average is simply a general reference
point in assessing the riskiness of an alternative solution. [Note, the economic analysis software
used with Template 7 requests entries for the “probability that this benefit will be achieved.”
This is looking at risk from a different perspective. If the risk is, say, 21.5% that the benefit will
NOT be achieved, the probability that it WILL be achieved is 78.5% (100% - 21.5% = 78.5%).]
•
Compute Total Approximate Risk Exposure. At the bottom of Template 6, there is a place for
entering the sum of the risk ranges for the individual risks. It is titled Total Approximate Risk
Exposure. The figures to enter are obtained by summing the dollar impact figures at the bottom
of the range for each risk’s probability range and then summing the dollar impact figures at the
top of each risk’s probability range. This produces the total cost impact range of from $X to $Y.
These total impact figures permit a comparison of alternative solutions based on their risk
probabilities and their likely impacts.
•
Make Recommendations for Alternative Solutions. After a Template 6 has been used to
document and analyze the risks associated with each alternative solution, it is necessary to state
which alternatives should be carried forward for further analysis and which should be
eliminated because of risk. Generally, an alternative solution with even one unacceptable risk is
screened out. Similarly, if the total amount of risk for an alternative solution is unacceptable to
the organization, the alternative needs to be screened out. There needs to be at least two
acceptable alternative solutions carried forward. If there are not two that are are acceptable, it
will be necessary to modify the alternative solutions so at least two will be acceptable or to
identify new ones that will be acceptable. Note the statement below following the fourth
Template 6 form, which describes the recommendations regarding the four alternative
solutions.
The use of Template 6 is illustrated below. Four alternative solutions to a performance problem were
assessed in terms of their risks. The Template 6 forms illustrate the risks that were identified and
documented in each risk criteria category. This is followed by a statement recommending that two of
the alternatives be eliminated and two retained. The entries are illustrative and are not meant to
represent a full risk assessment.
Alternative Solution #1 (Tentative Solution Rank Order #1):
Acquire In-house Graphics Management System - Hire a contractor to recommend, acquire, and install the graphics
management tool or tool set and provide training, using a performance-based contract
Impact If
Approximate
Risk
Risk Category
Probability
Mitigation Strategy
Occurs
Risk Exposure Priority
Organizational Risk
a. Use of representative IPT;
frequent meetings with users to
a. Scope creep (users
a. $4,000 inform and prevent
a. $20,000 may increase
$10,000
misunderstandings
$50,000
functionality
a. M
a. 20%
requirements)
b. $2,500 b. $5,000 - b. Pre-sell new system, provide
b. M
b. 50%
$10,000
training; remove old systems as of
$20,000
b. Users may resist
a specified date
use of new system
c. M
c. 20%
c. $2,000 c. $10,000 $6,000
$30,000 c. Frequent executive briefings;
c. Possible loss of
stress link to the organization’s
executive support
key performance indicators
during project due
to new priorities
Information Security
and Privacy Risk
Identify proprietary graphics at
$3,000 $15,000 M2
outset; establish and test security
20%
$10,000
$50,000
Potential loss of
measures to safeguard them
control of proprietary
graphics
Complexity Risk
Require all estimates and
assumptions to be justified; obtain
a. $1,000 a. Possible
a. $5,000 independent verifications of
$4,000
a. L
unrecognized
a. 20%
$20,000
assumptions and estimates; assign
assumptions
responsibility for specific assumptions
b. $500 b. L
b. 10%
b. $5,000 and estimates to individuals by name
$1,000
$10,000
b. Accuracy in
and hold them accountable for their
forecasting costs
accuracy.
and benefits
Infrastructure Risk
Require onsite pilots by vendors to
$2,000 identify and address potential
$300 - $1,500
L
Possible
15%
$10,000
problems
interoperability
Problem
Require certification of the contractor
External Risk
by the software vendor; check related
$20,000 $3,000 15%
L
past performance and staff to be
$30,000
Contractor
$4,500
assigned; use performance-based
underperformance
contract
Average
$16,300 Probability
Total Approximate Risk Exposure:
$47,000
21.25%
Template 6. Alternative #1 Risk Analysis Results
Alternative Solution #2 (Tentative Solution Rank Order #3):
Outsource the Graphics Management Functions - Outsource the graphics design and management work to an expert
graphics design and production company under a negotiated time and materials contract with incentives and penalties.
Impact If
Approximate
Risk
Risk Category
Probability
Mitigation Strategy
Occurs
Risk Exposure Priority
Organizational Risk
a. Scope creep (users
may increase
functionality
requirements)
b. Users may resist
use of new system
c. Possible loss of
executive support
during project due
to new priorities
a. 20%
b. 40%
c. 20%
d. 40%
d. Internal staff not
able to qualify to
manage
outsourcing
contract
Information Security
and Privacy Risk
a. Potential loss of
control of
proprietary
graphics
a. 30%
b. 15%
b. Contractor security
breach
Complexity Risk
a. Possible
unrecognized
assumptions
b. Accuracy in
forecasting costs
and benefits
c. Initial relationship
policies and
procedures may
have defects and
new ones will need
to be developed.
a. 20%
b. 20%
c. 30%
a. $5,000 $50,000
b. $5,000 $20,000
a. Use of representative IPT; frequent
meetings with users to inform and
a. $1,000 prevent misunderstandings
$10,000
b. Pre-sell new system, provide
training; remove old systems as of
a specified date
b. $2,000 $8,000
c. $2,000 c. $10,000 c. Frequent executive briefings;
$6,000
$30,000
stress link to the organization’s key
performance indicators
d. $12,000 d. $30,000 $20,000
$50,000
d. Hire or train to gain qualified
personnel
a. Identify proprietary graphics at
outset; establish and test security
a. $50,000 measures to safeguard them
$150,000
b. $15,000 - b. Confirm contractor’s security
controls; include contractual
$50,000
penalties
a. $5,000 $20,000
b. $5,000 $10,000
c. $10,000 $50,000
a & b. Require all estimates and
assumptions to be justified; obtain
independent verifications of
assumptions and estimates; assign
responsibility for specific assumptions
and estimates to individuals by name
and hold them accountable for their
accuracy.
c. Hire expert advisor to make
recommendations; investigate and
adopt suitable best practices in
graphics outsourcing; establish
integration monitors; give issue
resolution high priority
a. $3,000 $10,000
b. $2,250 $7,500
a. $1,000 $4,000
b. $500 $1,000
c. $3,000 $15,000
a. M
b. M
c. M
d. H
a. H
b. M
a. L
b. L
c. L
Infrastructure Risk
Possible
interoperability
Problem
$5,000 $10,000
15%
a. Hire experienced outsourcing legal
experts to prepare, modify, and/or
review proposed outsourcing
a. $10,000 contract. Assess contractor’s past
$20,000
performance in outsourcing;
establish contractual penalties.
b. $10,000 $20,000 b. Perform due diligence prior to
selection; negotiate conflict of
interest policies, procedures, and
penalties
External Risk
a. Services are not as
described
b. Selected company
has relationship
with our
competitor
Onsite pilots by contractors to
identify potential problems
a. 20%
b. 10%
Average
Probability
Total Approximate Risk Exposure:
22.5%
Template 6. Alternative #2 Risk Analysis Results
$750 - $1,500
L
a. $2,000 $4,000
a. L
b. $1,000 $2,000
$42,950 $126,000
b. L
Alternative Solution #3 (Tentative Solution Rank Order #2):
Use Software as a Service - Use a graphics management system that is hosted on the computer of a service provider.
This is a web-based solution that falls in the category of “cloud computing.”
Impact If
Approximate
Risk
Risk Category
Probability
Mitigation Strategy
Occurs
Risk Exposure Priority
Organizational Risk
a. Use of representative IPT; frequent
meetings with users to inform and
a. Scope creep (users
prevent misunderstandings
may increase
functionality
b. Pre-sell the host system approach
a. $5,000 requirements)
a. $4,000 via presentations, visit to host
$50,000
$10,000
sites, and Q&A sessions;
a. M2
b. Users may resist
subsequently remove old systems
a. 20%
b. $5,000 use of a hosted
b. $1,000 as of a specified date
$20,000
b. L8
system
$4,000
b. 20%
c. Frequent executive briefings;
c. $10,000 c. M4
c. Possible loss of
c. $2,000 stress the value and potential of
c. 20%
$30,000
executive support
$6,000
SaaS; stress the expected
d. M1
during project due
contributions to the organization’s
d. 25%
d. $20,000 to new priorities
d. $5,000 key performance indicators
$40,000
$10,000
d. Internal staff may
d. Have internal users help to select
not be satisfied
the SaaS system, including test it
with the host
before selection, and after
system
selection be trained in its use by
arrangement
qualified training personnel
Information Security
and Privacy Risk
a. Identify proprietary graphics at
a. $1,500 outset; establish and test security
a. $15,000 a. Possible
a. L5
$5,000
measures to safeguard them
$50,000
productivity loss
a. 10%
through internet or
b. M3
b. $2,250 b. $15,000 - b. Confirm contractor’s security
other network
b. 15%
$7,500
controls; include contractual
$50,000
problems
penalties
b. Contractor security
breach
Complexity Risk
a. Possible
unrecognized
assumptions
b. Accuracy in
forecasting costs
and benefits
c. Users may seek to
use capabilities
available from host
that are beyond
their training and
experience
a. $10,000 $25,000
a. 10%
b. $5,000 $10,000
b. 15%
c. 20%
c. $5,000 $20,000
Infrastructure Risk
Possible
interoperability
Problem
$5,000 $10,000
15%
b. Selected host has
relationships with
our competitor
c. In coordination with host, block
user access to host system
capabilities that have not been
approved for use by the users;
establish a program to give users
training and access to selected new
capabilities that can strengthen our
organization’s performance.
Conduct tests to ensure that host
system will interface smoothly with
related internal systems.
a. Hire experienced SaaS experts to
assist in evaluating the host and
developing a mutually beneficial
c. $10,000 SaaS contract. Assess host’s past
$20,000
performance in serving its clients;
establish contractual penalties.
d. $10,000 $20,000 b. Perform due diligence prior to
selection of host; as needed,
interest-protection policies,
procedures, and penalties
External Risk
a. Services are not as
described
a & b. Require all estimates and
assumptions to be justified; obtain
independent verifications of
assumptions and estimates; assign
responsibility for specific assumptions
and estimates to individuals by name
and hold them accountable for their
accuracy.
c. 20%
d. 10%
Average
Probability
Total Approximate Risk Exposure:
16.67%
Template 6. Alternative #3 Risk Analysis Results
a. $1,000 $2,500
b. $750 $1,500
c. $1,000 $4,000
$750 - $1,500
a. $2,000 $4,000
b. $1,000 $2,000
$22,666 $80,666
a. L9
b. L11
c. L7
L12
a. L6
b. L10
Alternative Solution #4 (Tentative Solution Rank Order #4):
Acquire Graphics Management Firm - Acquire a small graphics arts firm with demonstrated expertise in graphics
creation and management in support of business proposals.
Impact If
Approximate
Risk
Risk Category
Probability
Mitigation Strategy
Occurs
Risk Exposure Priority
Organizational Risk
a. Use of representative IPT; frequent
meetings with users to inform and
a. Scope creep (users
prevent misunderstandings
may increase
functionality
b. Involve firm being acquired in all
requirements)
integration planning activities;
pilot test each procedure involving
a. $20,000 a. $4,000 b. Culture conflicts
graphics support services; conduct
$50,000
$10,000
(differences in
two or more welcoming get-toa. 20%
a. M3
values, priorities,
know-each-other events
b. $50,000 b. $25,000 expectations, and
$100,000
b. 50%
b. H1
$50,000
practices)
c. Frequent executive briefings;
stress link to the organization’s key
c. $10,000 c. 20%
c. M5
c. $2,000 c. Possible loss of
performance indicators
$30,000
$6,000
executive support
d. 40%
d. M2
during project due
d. Ensure that the firm can afford the
d. $20,000 d. $8,000 to new priorities
cost of acquiring the firm,
$30,000
$12,000
considering other demands on its
d. Inability of firm to
resources; establish minimum
pay relatively large
performance requirements for the
up-front
acquired firm; seek to negotiate
expenditure to
mutually-beneficial arrangement
purchase the firm
for paying the purchase cost over a
period of time.
Information Security
Conduct briefing sessions with
and Privacy Risk
acquired group regarding proprietary
$15,000 information and security measures;
$750 - $2,500
L7
5%
$50,000
Potential loss of
as needed, conduct background
control of proprietary
checks
graphics
Complexity Risk
a & b. Require all estimates and
assumptions to be justified; obtain
a. $1,000 a. Possible
a. $5,000 independent verifications of
$4,000
a. L6
unrecognized
a. 20%
$20,000
assumptions and estimates; assign
assumptions
responsibility for specific assumptions
b. $500 b. L9
b. 10%
b. $5,000 and estimates to individuals by name
$1,000
$10,000
b. Accuracy in
and hold them accountable for their
forecasting costs
accuracy.
and benefits
Infrastructure Risk
Require monitored pilots by graphics
$5,000 firm to identify and address potential
$750 - $1,500
L8
Possible
15%
$10,000
interoperability problems
interoperability
Problem
External Risk
Possible liabilities
associated with the
firm’s customers and
past activities
$10,000 $40,000
20%
Average
Probability
22.22%
Require an audit of the graphic firm’s
assets, liabilities, and other financial
aspects; check past performance and
reputation with customers; ensure
that key staff will be retained if the
firm is acquired; consider making
purchase price contingent on postacquisition performance
Total Approximate Risk Exposure:
Template 6. Alternative #4 Risk Analysis Results
$2,000 $8,000
$44,000 $95,000
M4
Recommendation: Eliminate Alternatives #2 and #4 and Retain Alternatives #1 and #3
Based on this risk analysis and in consideration of the likely benefits and the Template 4 ratings,
Alternatives #2 (outsource the functions) and #4 (acquire a small firm) are eliminated from further
consideration. Alternative #2 is eliminated principally because of the risk of losing control of
proprietary information by placing it in the hands of a third party. Alternative #4 is eliminated for
three reasons: the risk of not finding a qualified firm that wishes to be purchased, the relatively large
up-front costs that would be involved, and the time it would likely take to integrate the small firm into
the corporate culture. Alternatives #1 and #3 also have less risk than other two alternatives and are
expected to cost less. Although the organization has no experience with the Alternative #3 solution
(SaaS), this alternative is expected to be especially attractive financially and in terms of expected
performance. It could be the least costly solution and the risks involved are only slightly greater than
those of Alternative #1 but are outweighed by the potential for greater benefits. It is recommended
that alternatives #1 and 3 be further analyzed to determine which is the better solution for our
organization.
Template 6. Recommendation of Alternative Solutions for Further Analysis
IMPORTANT NOTES:
1. This template should be used with a Microsoft Word (or other word processor) document. It
should not be used in an Excel worksheet because a worksheet is not an appropriate medium
for electronically transmitting the document to others or for printing it for distribution.
2. The template is adjustable. After the template is copied to a Word document, replace the
sample entries in the cells with your own information. You can change the length and width of
the template and its cells after you copy the template to your document. If you put your cursor
on a line in the template, the line can be moved horizontally or vertically, depending on the line,
to best fit your information. There is no need to color any of the cells in your Word version,
though color is used in the examples above.
The Work Breakdown Structure
IT Acquisition Template 5
Nature of This Template
This template does not provide a standard form to be filled in. Instead, it provides guidance for the use
of a standard approach for preparing work breakdown structures. A work breakdown structure (WBS)
depicts the full scope of the project, including its phases and tasks. Since the great majority of projects
are unique, there is no one-size-fits-all WBS that can be used. However, the same general approach can
be used to prepare a WBS for any project. The material below describes how to create a WBS and how
to follow established standards for labeling its various parts.
A WBS is prepared for the two or three best alternative solutions. They will depict the scope and
expected cost of each alternative. A WBS breaks the work down into task or work packages (we will
refer to them as tasks). These tasks must be analyzed to determine the resources that will be required
to successfully perform them. In preparing a WBS, it is very important to obtain good estimates of labor
hours, labor costs, and the cost of other resources for the tasks in each phase. This makes it possible to
make an informed estimate of the probable cost of a proposed solution. The cost information also
serves as inputs into the Template 7 economic analysis software. The economic analysis enables the IPT
to compare the two or three best alternative solutions from a financial standpoint.
The initial WBSes--in this case, one for each of the final alternative solutions--will be subject to detailed
evaluation and critique by the integrated project team (IPT) members, with representatives from the
business and technical areas affected by the project. The team will examine such things as:
•
•
•
•
•
•
•
Accuracy of the WBS in depicting the solution
Suitability and logic of the work breakdown
Duplicate or overlapping tasks
Omission of a needed task
Unavailability of a critical resource
Misuse of resources likely to cause conflicts and other problems
Task costs and total solution cost
This detailed examination generally results in revisions and improvements in the WBSes until each is
believed to accurately and effectively encompass the complete project and its tasks and the resources
required. Although this examination will identify risks and a WBS may be modified because of this, each
WBS will be subjected to a formal risk analysis (Template 6). A financial comparison will then be
performed using the economic analysis worksheets provided in Template 7. The results of the economic
analysis serve as inputs to a "comparative analysis" (Template 8) to determine which of the final
alternatives is the best solution to the problem.
It is the WBS for the best solution, along with its supporting documentation, that becomes a major
source of information for the preparation of the Gantt chart, which is a detailed project schedule that
shows staffing and other resource usage over the life of the project.
There is a standard method of numerically coding the WBS boxes (phases, tasks, etc.) and these are the
same codes that will be used to identify the phases and other parts of the WBS in the Gantt chart
(project schedule) prepared with Microsoft Project. Microsoft Project actually assigns the WBS numeric
codes in the Gantt chart when the WBS information is entered properly (how to do this is explained in
instructions provided by Microsoft Corp.). Having the same codes in the WBS and the Gantt chart enable
ongoing coordination between the phases and tasks shown in the project management software and
the phases and tasks shown in the related WBS. A change in one requires a change in the other.
Creating a Work Breakdown Structure (WBS)
A WBS is prepared for the two or three best candidate solutions to the problem. The process of
preparing the WBS forces the integrated project team (IPT) to take a close look at each alternative
solution because it must define all of the tasks required for its implementation and estimate the labor
and resources costs of each task. As the WBS is being prepared, it will reveal risks that need to be
avoided or otherwise mitigated. For example, it may be found that the project costs more than would be
acceptable to management, that it requires skill that likely to be unavailable, that it assumes data from
other are complete and accurate when they are neither, that certain tasks overlap, and so on. If the
alternative solution is to proceed to the next step, the risks identified need to be avoided, transferred,
worked around, mitigated through various strategies, and in some cases simply accepted because they
will have a low impact if they occur. This information developed in preparing the WBSes make it possible
to later compare and evaluate (in Template 8) the relative costs, benefits, and risks associated with each
alternative solution.
A WBS takes the form of a tree structure, as shown in the graphic below, Figure 5.1. Notice that the
alternative solution to which the WBS applies is stated above the WBS. At the very top of the WBS
structure is the name of the project (or possible project), over the box labeled "1.0." The objective now
is to break the project down into smaller and smaller parts until the parts are equivalent to work
packages or tasks that can be assigned to individuals or teams. The WBS development process identifies
work packages/tasks that can be performed independent of other work packages/tasks. Usually, the
WBS included by the buyer in the request for proposal is limited to only the top three levels. The
contractor usually further breaks down the WBS to lower levels for project management purposes.
In Figure 5.1, we see a relatively simple WBS. The first breakdown of the project is into three phases,
which are given names as well as identified with the WBS numerical codes of 1.1, 1.2, and 1.3. Then
each of these phases is broken down to the next lower level. For phase 1.1, a further breakdown is
necessary before the work is at a task level. For phases 1.2 and 1.3, the next breakdown is at the task
level.
This process of breaking down the work until it is at a manageable task level is called "decomposition."
In a large project, the tree structure can be rather complex. A WBS for a small project, however, would
be more along the lines of the example shown in Figure 5.1. Note that the tasks are listed under each
phase, with a milestone indicating the end of each phase. It is an established standard that each task
name begins with an action verb.
WBS for Alternative #2: Customize Off-the-Shelf Financial Analysis Software System
1.0
Modernize Financial
Analysis System
1.1
Labor Hours: 440
Cost: $31700
Other Resources
Cost: $5000
1.2
1.3
Design Phase
Programming Phase
Testing & Transition Phase
Labor Hours: 140
Cost: $9800
Labor Hours: 120
Cost: $8400
Labor Hours: 180
Cost: $13500
Other Resources
Cost: $500
Other Resources
Cost: $3000
Other Resources
Cost: $1500
1.1.1
1.1.2
Design Part 1
Design Part 2
Labor Hours: 60
Cost: $4800
Labor Hours: 80
Cost: $5000
Other Resources
Cost: $250
Other Resources
Cost: $250
Design Input Screens
Design Input Processing
Design Matrix Update
Design Analysis Options
Design Reporting Options
Milestone
Conduct System Test
Conduct Integration Test
Conduct Training
Transition to Operations
Milestone
Program Input System
Program Matrix Update
Program Analysis Options
Program Reporting Options
Milestone
What Is Excluded from the WBS for the RFP?
It is possible to create a WBS that includes both the pre-solicitation planning activities as well as the
implementation project that will be conducted with the aid of an IT services contractor. The presolicitation activities are generally funded differently from the post-solicitation project to be conducted
with the IT services contractor. The post solicitation project must generally be approved via a business
case or acquisition strategy document submitted to an executive committee. The cost justified in the
business case/acquisition strategy document will be based on the cost of a WBS developed for post
solicitation project. Accordingly, the WBS described below is limited to the project that will be
conducted with the aid of an IT services contractor. This WBS will be included in the request for
proposals that will be issued to IT services contractors.
The WBS developed for the proposed project focuses on activities that will take place within the project
rather than other activities that may be related to the project. Here are examples of activities that are
normally excluded from this WBS:
•
•
•
•
The preliminary study of the problem that led to the project
Development of the request for proposal
Activities related to selecting the contractor
Activities related to monitoring the contractor's performance
Excluding these activities from the WBS does not mean their costs are ignored. Rather, they will be
accounted for in other budgets. For example, the cost of the preliminary study and the cost of
developing the RFP may come from the budget of the department(s) sponsoring the RFP. The cost of the
contract officer who will be a monitor of the project will probably be charged to the overhead of the
buyer organization. These types of activities and costs are managed and controlled elsewhere and not
from within the project. Accordingly, they are not included in the WBS.
Of course, the buyer organization's chief financial officer will include all of these costs when calculating
the total cost of solving the problem. The financial focus of the WBS, though, is the cost of the
implementation project.
The WBS prepared by the buyer organization may be agreed to without change by the selected
contractor or agreed to only after negotiated changes in the WBS have been made. The contractor may
provide valuable recommendations for improving the project that it is agreed should be in the WBS and
the contract. The agreed-upon WBS is called the contract WBS.
Costing WBS Tasks
The WBS is costed at the task level and then summed for each phase and the complete project. Each
task of the WBS requires resources to accomplish it. Each task is analyzed to determine how many labor
hours will be required to complete the work, the cost of those specific hours, and any other resource
costs associated with performing the task. Once the labor hours, their cost, and the cost of the other
resources required to perform each task are estimated, the cost figures summed for the phases and the
entire project and then entered into the WBS diagram as shown in the Figure 5.1 graphic above. As
indicated, the costs at the task/work package level are rolled up into the phases and then up to the
project as a whole. In Figure 5.1, only the rolled-up figures are shown. The total number of labor hours
and their cost and the cost of other resources are shown in the top box of the WBS. Of course, there
must be separate documentation of the basis for the cost figures.
The costs need to include both "direct" and "indirect" costs. For example, there is usually an "overhead
rate" that applies to the contractor's direct charges for labor.
There are various ways of recording the supporting information for WBS costs. There can be separate
online files. In addition, the project management software will maintain detailed cost figures, though it
will not indicate how those figures were estimated.
Organizations vary regarding the amount of cost information they place in a WBS graphic. Sometimes no
cost is shown in the WBS graphic and all of the cost information is contained in an accompanying
document. This means a second document must be referred to for any cost information. In other cases,
just summary cost figures are provided, as in our example. The summary figures are often enough for
some executives, though they are free to access and review the detailed cost information.
An important point: The tasks shown in the WBS are intended to be all of the tasks necessary to
conduct the project. If all of the tasks are not identified and all of their resource requirements not
determined, the project will face problems of inadequate resources, incorrect schedule, and jeopardized
objectives. A task appearing in the WBS may be broken down later during the project into several
"subtasks" without any impact on the contract for the project. However, any "subtask" that cannot be
traced to a task appearing in the WBS is out of scope and must not be performed without an official
modification of the WBS and probably of the related contract for the project.
Of course, many projects operate in dynamic environments, which means that after a project is
underway and new information is obtained, there may be a need to make changes in tasks, resources,
and the schedule. Such changes are not due to poor initial planning but to a need to adjust the project
to take advantage of better information or changing requirements in a dynamic environment.
The WBS facilitates efficient planning of resource allocation, assignment of responsibilities, performance
measurement, and project control. The WBS example above is organized around phases of the project
and their deliverables.
Here is another example of how a WBS was created for a project. It is organized around deliverables and
could provide you with some good insight if you have never developed a WBS before.
Appearance of the WBS You Prepare
A WBS that appears in a Request For Proposal (RFP) will exclude labor hours and cost information
because competing contractors will provide such information in support of their response to the RFP.
Some websites depict a WBS of the type that might be in an RFP—that is, without labor hours or cost
information. The WBSes you are asked to prepared will resemble the one in Figure 5.1, which includes
labor hours, labor costs, and the cost of other resources.
(Note: If you are doing a college or university student project, the WBS that you prepare should
generally resemble the one in the Figure 5.1 above, with labor hours, labor costs, and other resource
costs entered as illustrated in the figure.)
Preparation of a WBS for Each Final Alternative Solution
If the final best two (or more) proposed solutions are to be compared, it is necessary to generate the
information that makes it possible to compare them. Creating a WBS for the best two or three
alternative solutions produces information that will help to compare them from a cost standpoint.
If you wish to look ahead, Sheet 3 of the Economic Analysis Worksheet for Template 7 contains an
example of how a WBS was used to generate data used in the Economic Analysis Worksheet.
Cautionary Note About Microsoft Project and the WBS
If the entries are made in Microsoft Project to create a Gantt chart (project schedule), that data can be
used by Microsoft Project to generate a WBS. However, never use this backward approach. It is
considered a poor and risky management practice to prepare a WBS from a Gantt chart (without first
preparing the WBS). Moreover, Microsoft Project does not prepare a WBS in the graphical form shown
above in Figure 5.1. The best practice approach is to first prepare the WBS, which provides data that
helps you prepare a Gantt Chart.
DRAWING YOUR WBS
An attempt is being made to identify a low cost or no cost WBS preparation tool for students who use
this website. A notice will appear here if and when such an arrangement is made. In the meantime,
students can consider these alternative tools for preparing a WBS:
1. Use WBS-preparation software if you have access to it. Paste the result in a Word file for submission
to your instructor, which will ensure that your instructor will be able to read the file.
2. Some students have used a trial copy of SmartDraw to create WBSes. I suspect that this software
can have many other uses in most organizations. Since I do not have this software, my students who
use this will need to paste the result in a Word file so I can read it.
3. Use PowerPoint to create and submit your WBS. Even if the WBS type looks small in a PowerPoint
slide, your instructor can enlarge the text on his/her computer so the text can be read.
Here is an example of a Visio WBS drawn using the 2007 version of Visio:
In any submission, each WBS must be properly labeled with its alternative solution name and number.
IT Acquisition Requirements Analysis
IT Acquisition Template 2
The left column of the table below summarizes most of the categories of information required for the
requirements definition activity of the Acquisition Planning Process. The table can be used as a template
for documenting a summary of the requirements. With the template, this is done by entering summary
information in its right column. Many organizations have their own templates, some of which may be
superior to this one. In using this template, all ten of the Requirements Categories in the left column
must be answered in the right column.
The example in the table (right column) is a relatively simple case because its purpose is to illustrate the
use of such a template. The template helps to ensure that the correct requirements have been defined,
agreed to, and documented, with no important requirement or constraint overlooked.
The requirements generally evolve as comments are sought from experts, users, and other key
stakeholders. Ideally, key stakeholders, including the users and others who will be directly affected by
the acquisition, will all agree on the “final” requirements before the next steps in acquisition planning
are taken.
The final requirements that emerge from this process are intended to describe the solution needed. The
acquisition planning team may identify and evaluation alternative solutions that meet these criteria.
Contractors may be asked to submit proposals to implement one of these solutions or to propose other
solutions to the problem that might be better. Proposed solutions that satisfy or exceed the
requirements and are acceptable in terms of cost and risks will likely be considered by the organization.
Often the one with the best value will be selected.
In using this template, include all ten Requirements Categories. However, feel free to exclude the
parenthetical statements in the left column, which merely elaborate on each of the requirements. If you
wish to add one or more additional requirements, do so after the tenth one in the left column.
In regard to column on the right, exclude the example case and substitute your text pertaining to your
case requirements. Be sure to respond to all of the requirements categories. Although these are
summaries of requirements, they must be understandable to stakeholders, executives, and others who
may review this summary. This means your template entries need to clearly communicate the essential
aspects of each requirement.
OBJECTIVE OF THE
REQUIREMENTS:
REQUIREMENTS CATEGORY
1. Stakeholder Considerations that
Need to be Reflected in the Solution
(including the expectations and
satisfaction managers, internal users,
and external customers) and factors
related to the business environment)
2. Factors to Take Into Account
Related to the Business Environment
(including legal factors, regulations,
competition, and business cycles)
3. New Capabilities and/or
Functionality Required by a Solution
(including requirements for ease of
use, quality, interoperability, and data
sharing)
4. Existing Business Process Shortfalls
(why current business process and/or
systems cannot meet the needs or be
changed to meet the needs)
5. Cost Limitations (may be stated in
terms of preferred cost range; may
specify a maximum cost; cost figures
need to include associated overhead
costs; may be specified as an annual
limit or life cycle limit or both)
6. Other Limitations or Constraints
(e.g., availability of key personnel,
such as subject matter experts,
training methods and time available
for training, limitations related to
maintenance or to external support).
Reduce the amount of time required to prepare graphics for
proposals and to integrate them with the text, as stated in
the Performance Gap document
REQUIREMENTS DEFINITION
Chief officers seek increased ROI and ROA (return on assets)
that can result from producing the target number of
proposals. Sales Department Manager is responsible for
proposal production. All department heads can benefit from
achieving target proposal production.
Competitors have the capabilities described here
A software solution is needed that will speed up the
development of quality graphics for use in proposals by 40%,
which could result in millions of dollars of new business at
the current proposal hit rate.
Must be able to capture, store, and edit existing images,
create photo compositions, draw vector graphics and take
graphics and integrate them with text and take the result to
the printed page, websites, video, and mobile devices. Must
maintain an inventory of reusable graphics. System must be
easy to use, fast and flexible, and function cross-platform.
Must be extensible, scalable and open architecture. Must
operate with Windows XP and Adobe publication systems.
Current software being used is dependent on many manual
graphics activities, has no inventory and output re-use
capability, cannot integrate text and graphics, and cannot
interface with related systems.
Expected cost is $500 per software system. Cost of system is
not a significant constraint up to $1000 per system. Total
cost, including implementation and training and overhead, is
expected to be in the $150,000 to $200,000 range.
Must be easy to learn by individuals who are telecommuting
and may not be available to attend a course. It must also
have high reliability with automatic online updates.
OBJECTIVE OF THE
REQUIREMENTS:
REQUIREMENTS CATEGORY
7. Security & Privacy Requirements
(any requirements beyond those
currently being used by the
organization for non-critical and nonsensitive applications)
8. Number to be Implemented (e.g.,
specify the number of places the
solution will need to be implemented
and whether they are at different
geographical locations)
9. Schedule (explain any schedule
constraint, whether for financial or
non-financial reasons--e.g., if the
solution be in place as of a certain
date, specify the date and why)
10. Other Requirements Not
Specified Above (e.g., any related to
vendors, consultants, partnerships
with other entities, unique user
interface requirements,
documentation needs, special
certification requirements)
Reduce the amount of time required to prepare graphics for
proposals and to integrate them with the text, as stated in
the Performance Gap document
REQUIREMENTS DEFINITION
No special requirements aside from established network
security.
The solution must be provided for three workstations that
are used to prepare graphics for proposals and other
purposes.
Acquire and implement within next six months (xx/xx/xx xx/xx/xx). Doing so within three months brings quicker
financial benefits.
Require minimal in-house support; must be returnable if
factory defect or new version is issued within six months.
Vendor must provide assurance of fast response times to
requests for help.
Template 2. Documentation of Requirements
IMPORTANT NOTES:
1. This template should be used with a Microsoft Word (or other word processor) document. It should
not be used in an Excel worksheet because this is not an appropriate medium for transmitting the
document to others or for printing it for distribution.
2. The template is adjustable. After the template is copied to a Word document, replace the sample
entries in the cells with your own information. You can change the length and width of the template
and its cells after you copy the template to your document. If you put your cursor on a line in the
template, the line can be moved horizontally or vertically, depending on the line, to best fit your
information. There is no need to color any of the cells in your Word version, though color is used in
the example above.
Identifying Alternative Solutions
IT Acquisition Templates 3 and 4
There is a difference between “alternative solutions” to a problem and “alternative sources” of
contractors to implement the solution. Do not confuse the two. You are not ready at this point to issue a
request for proposal from competing or “alternative sources.”
Identifying alternative solutions builds on the documented definition of the requirements for the
solution. Its purpose is to identify the possible alternatives that could meet the requirements and
thereby solve the problem. Organizations hope to find solutions that do not require an additional capital
investment, but this cannot always be achieved.
There are many techniques for identifying alternative solutions, including brainstorming, the use of
group support systems (GSSs), and investigating the solutions that leading organizations have adopted.
Each technique involves the use of a group, rather than relying on a single individual. The group--or
groups--can include experts, the intended users, executives, and other stakeholders. Leading
organizations use integrated project teams (IPTs) to define requirements and perform other acquisition
activities.
It is important to avoid personal biases and preferences. An IPT, which involves appropriately
representatives from the affected components of the organization, must avoid being pressured into a
pre-selected alternative, whether or not the pressure is intentional. This can happen when a senior
executive is convinced that he or she knows the solution to the problem.
Summarizing Alternative Solutions (Template 3)
It is a best practice to identify at least three alternative solutions that will meet the requirements to
solve the problem. Requiring a minimum of three alternative solutions forces the integrated project
team to identify solutions that may not be obvious. It helps to prevent automatically adopting a “preselected” solution because of the prevailing biases. A meaningful investigation of alternative solutions
can identify a solution that produces substantially superior results compared to what initially appeared
to be the obvious solution. Individuals who have a pre-existing strong bias toward a specific solution are
often not aware of other potential solutions, especially the latest, most innovative solutions.
Template 3, below, is used document, in summary form, alternative solutions that meet the
requirements identified in Template 2. The first column of Template 3 gives the name of an alternative
solution and the second column summarizes it. The “Objective” of the alternative solutions is entered at
the top of Template 3.
Note: These templates are intended to help plan for acquiring IT services (and software and hardware as
needed) from an external IT services contractor selected in open competition. The use of this and the
other acquisition planning templates assume that the possibility of a solution using only internal
resources or by making a commodity purchase from a product vendor have been analyzed and found to
be not possible. Therefore, every alternative solution listed in Template 3 must require the use of an
external IT services contractor because it has already been determined that one is required.
Reduce the amount of time required to prepare graphics for
proposals and to integrate graphics with the text
OBJECTIVE:
Name of Solution
Alternative
Summary Description of Solution That Meets the Stated
Requirements
Alternative Solution #1:
Acquire an In-house Graphics
Management System
Alternative Solution #2:
Outsource the Graphics
Management Functions
Hire a contractor to recommend, acquire, install, and integrate a
graphics management and design tool or tool set and provide
training, using a performance-based contract.
Outsource the graphics creation, graphics management, and
graphics-text integration functions to an expert graphics design and
production company under a negotiated time and materials contract
with incentives and penalties.
Alternative Solution #3: Use
Software as a Service
Contract with a Software as a Service (SaaS) provider to obtain the
functionality required via a Web connection
Alternative Solution #4:
Acquire Expert Small
Graphics Arts Specialty Firm
Acquire a small graphics arts specialty firm with state-of-the-art
technology and demonstrated required expertise, to merge with our
organization and function as a support department.
[Name of Alternative
Solution #5]
[and so on, if there are additional alternative solutions]
IT Acquisition Confirmation
Each alternative solution described above requires the acquisition of
IT services from an external IT service provider selected in open
competition. [Note: Do not remove or change this statement.]
Template 3. Summarizing Alternative Solutions
Screening Alternative Solutions (Template 4)
There should be at least three a...
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