代写代考 SWEN90016 Software Processes and Project Management - 2 - IT ALL STARTS HER

Outsourcing, Contracts & Procurements
Andrew of Computing and Information Systems The University of Melbourne
Copyright University of Melbourne 2017-2022
2022 – Semester 1 Week 8

Intended Learning Objectives
Outsourcing.
Procurement. Contracts.
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What is Outsourcing
Definition: The practice of engaging an external party (under contract) to perform services or create goods that are traditionally performed in-house by the company’s own employees.
Types of Outsourcing:
1. Onshoring:
• Relocating activities inside national borders to access targeted benefits.
2. Nearshoring:
• Activitiesrelocatedtoanothercountry
with close proximity e.g. , Indonesia.
3. Offshoring:
• Activitiesrelocatedtoanothercountry irrelevant of geographical location and time zones.
Various activities are better suited to the type of Outsourcing:
• Architecture
• Change Management
• ProjectManagement
• BusinessAnalysis
• Software Development Testing
• Operational(Application&Infrastructure) Support
• All the above
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Why Outsource?
Accessing a broader skills base at a lower cost
Reference www.glassdoor.com.au/Salaries/index.htm
Side Note: Graduate salaries are about ~$55,000-66,000 AUD in computing & information systems in Australia. Reference www.compared.edu.au/compare/study-areas
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Why Outsource
• Reducescosts
• Access to difficult to find capabilities & skills
• Lossofcontrol
• Time savings – 24/7 based activities •
• Freeing scares internal resources to focus •
on core business activities
• Leverage best practice
• Access to better Technology • • Lower training costs in high turn over jobs • • Flexibility – Ramp up and down • • Increased Accountability – Contracts
Lower quality work / work to contract
Time zone, cultural & language challenges Location stability – Political, Economic, Religious
• Risk mitigation – Access established and proven approaches e.g. Agile, Project Management etc
• Ethical standards – environment, slave / child
Difficult to change key stakeholders
Process / supply chain fragmentation Security issues
Employees feel threatened
• Additional effort and cost to engage and
• Damages to the local job markets
• Loss of Relationship building opportunity with
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Outsourcing
Why you should Outsource your IT- Infrastructure example

Why Outsourcing is bad for business:

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L9.2 – What is Outsourcing and why is it used
Contrary to what the sales people tell you it is NOT a .
Outsourcing is a powerful tool for Project managers and organisations and it does add value.
Critical to understand your key drivers, risks you want to / can manage and ensure you look at and include the total picture.
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Intended Learning Objectives
L9.2 – Outsourcing.
L9.3 – Procurement.
L9.4 – Contracts.
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The Procurement Management Process
If there is no need to buy (outsource) any products or services from outside the organisation, then there is no need to perform any of the procurement management processes.
However you will find that most (if not all) projects will contain some sort of external sourcing which will require a procurement.
The Procurement Management Process consists of 3 broad stages: 1. Plan.
2. Source. 3. Manage.
Reference www.procurepoint.nsw.gov.au/policy-and-reform/nsw-government-procurement-information/nsw-procurements-approach
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The Procurement Management Process
Planning in procurement involves consulting key stakeholders to define the ‘real’ need, analysing how the supply market works, assessing risks and ultimately defining the best Procurement Strategy to meet the organisations requirements.
Reference www.procurepoint.nsw.gov.au/policy-and-reform/nsw-government-procurement-information/nsw-procurements-approach
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The Procurement Management Process
Reference www.procurepoint.nsw.gov.au/policy-and-reform/nsw-government-procurement-information/nsw-procurements-approach
Source, the principal objective of this stage is to identify and engage suppliers who will provide the best value for money outcome, in a framework of probity and fair dealing. A key deliverable for this stage is to determine the appropriate sourcing method, with consideration given to alternatives other than just tendering.
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L9.3 – The Procurement Management Process
Manage, Every arrangement articulates the rights and responsibilities of the parties so it is important to identify, understand and manage them in order to better ensure you ‘get what we contracted for’.
Signing an arrangement is not the end of a process, but rather the start of an on-going relationship with the supplier. It needs to be managed in order to deliver the best outcome for the organisation.
Reference www.procurepoint.nsw.gov.au/policy-and-reform/nsw-government-procurement-information/nsw-procurements-approach
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Sourcing Procurements
The procurement process is typically conducted with the issuing of a Request For X (RFx), where x = Bid, Information, Proposal, Tender or Quote.
Reference www.searchcrm.techtarget.com/definition/RFx
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Sourcing Procurements – RFx
The RFx document is prepared by the buyer and will have specific information depending on the what it is (RFI, RFP, RFT/Q). It will typically include:
1. Purpose of RFx.
2. Organisation’s Background.
3. Basic Requirements.
4. Hardware and Software Environments.
5. Description of RFx Processes & Evaluation.
6. Statement of Work and Scheduled Information.
7. Appendices:
a. Current Systems Overview.
b. Systems Requirements.
c. Volume and Size data.
d. Required Contents of Vendor’s Response to RFx.
e. Sample Contract.
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Sourcing Procurements – SOW
A key component of the RFx document is to analyse the business needs and establish a detailed Statement of Work (SOW).
A Statement Of Work is a description of the work required. A good SOW is detailed and gives bidders an understanding of buyer’s expectations, key items include:
• ScopeofWorktobecompleted
• LocationofwheretheWorkistobecompletedfrom • MeasurementandPerformancecriteria
• Deliverables,milestonesandschedule
• ApplicableStandardsandAcceptableCriteria
• AnySpecialRequirements
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Sourcing Procurements
Approach the Market, Select, Negotiate and Award:
• Deciding whom to ask and potentially do the work
• Sending appropriate documentation to potential sellers / bidders
• Obtaining proposals / bids
• Evaluating responses and selecting a preferred supplier
• Negotiating the contract
• Awarding a contract
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Sourcing Procurements
Evaluation Processes:
1. Evaluation team review of RFx response and evaluate against predetermined criteria.
2. Schedule short-listed vendor presentations.
3. Check vendor references.
4. Short-listed vendor presentations.
5. Evaluation team site visits to short-listed vendors / references.
6. Evaluation team finalises evaluation and selects short-listed firms.
7. Best and Final Offer (BAFO) with short-listed firms.
8. Conduct final negotiation with preferred supplier.
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Sourcing Procurements
Sample Evaluation Sheet:
Proposal 1
Proposal 2
Proposal 3
Technical Approach
Management Approach
Past Performance
Total Score
To calculate the score multiply the weight of the criterion by the rating for the proposal
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Managing Procurements
Implement, Manage & Renew:
• Implement the agreement & services as per the contract and SOW
• Manage the agreement to ensures the seller’s performance meets contractual requirements
• Review and control all changes – It is critical that project managers and team members watch for Constructive Change Orders
– If change is requested then contractor can legally bill the buyer for additional work
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Managing Procurements
Renew / Closing Procurements:
• Involves completing, settling contracts and resolving issues • The project team should:
– Determine if all work was completed correctly and satisfactorily
– Resolve any issues or outstanding items
– Up date records to capture all lessons learnt & outcomes
– Archive information
– Capture all knowledge and lessons learnt
• The contract itself should include requirements for formal acceptance and closure
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Intended Learning Objectives
Outsourcing. Procurement. Contracts.
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L9.4 – Contracts
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Contracts are the one source of truth for all activities that are to delivered by the external parties.
What is a Contract?
• A mutually binding agreement that obligates the seller to provide the specified products or services and obligates the buyer to pay for them
• A document that clarifies responsibilities and sharpens focus on key requirements – deliverables, quality, timeframes etc
• A document that must be detailed and and accurately as they are used as the final position (you get out of them what you put to them)
• It is rarely used or relied on and seen as a last point of call.
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Different types of Contracts are used in different situations with all having pros and cons:
• FixedPricecontracts:involveafixedtotalpriceforawell- defined product or service.
• Time&Materialcontracts:involvepaymenttothesellerfor actual time spent and any materials used in providing the service.
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Contracts Fixed Price
Time & Material
LOW BUYER’S RISK HIGH HIGH SELLER’S RISK LOW
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Reference www.cleveroad.com/blog/types-of-contracts-in-outsourcing-how-to-make-a-wise-decision
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Reference www.cleveroad.com/blog/types-of-contracts-in-outsourcing-how-to-make-a-wise-decision
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Contracts should include specific clauses that take into account issues that are unique to the project – Quality, Time, Location etc
Key contractual conditions should include
• Intellectual Property Ownership and Indemnities
• Milestones and Deliverables
• Quality Criteria / Performance and Acceptance testing
• Variations / Change request process
• Non-Performance / Termination – Convenience, Breach etc
• Disengagement & Transition
• Liquidated Damages
• Fees and Penalties
• Warranties
Reference www.mdplaw.com.au/insights-publications/software-development-agreement
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