Taking_a_Giant_Step

MEMORANDUM TO: Span Systems Employees FROM: Patricia Ancar Smith, project manager DATE: March 30, 2010 SUJECT: Citizens-Schwarz Contract Span Systems has a $6 million business venture in pipeline with Citizen-Schwarz Bank. It is necessary for Span to work to resolve the problem between Citizens-Schwarz Bank and Span Systems. It is inevitable that each party involved have had some pitfalls with the progress of the business venture C-S has expressed a great deal of dissatisfaction with the deliverables, low quality, and time frame of the project. Citizen-Schwarz wants immediate transfer of all unfinished code and asserted the rescission of the contract. . (University of Phoenix Simulation) Principles and specific measures to minimize legal risk Span must go back to the drawing board to figure out a resolution not to lose this contract. The project is eight month underway, the deliverables are unacceptable and there are major bugs being detected in the user stage. Either side cannot afford schedule slops because of deadlines for company, investor or stockholders. Consequently, there are problems at both ends. User and system requirements have grown in view of the fact that original contract is making it difficult to accommodate originally agreed upon cost and timelines. C-S approval and review time have been affected lately do to a change in its project management structure. Consequently, Span has overextended to accommodate, but quality is not excellent. Span is doing everything to make C-S happy. Alternative to resolve problem There need to be re-negotiations in the contract because of three contract breaches: • Substantial performance—neither party man cancel this agreement, in whole or in part, subsequent to more than 50% of the considerations have been tendered by the other. • Internal escalation procedures for disputes—prior to the filing of any formal proceedings with respect to a dispute, the party believing itself aggrieved shall call for progressive management involvement in the dispute negotiation by written notice of the other party. • Requirement changes reporting—in the event of C-S AG requiring any ordinary changes to the user and system requirements originally agreed to C-S AG will notify Span Systems as soon as possible during regular business hours and pay Span Systems any accruals at the rate agreed. Any changes in functional requirements or enhancements will be handled according to the procedures outlines in the Information Technology Project Methodology Standards. . (University of Phoenix Simulation) Span will take these proactive measures to help C-S achieve its business goals. • Upload daily project updates on Span’s extranet for authorized and for C-S personnel to review. • Scale up the Span programmers to deliver the project within a reasonable time frame. • Appoint a change control panel to review change request and flag any resulting change in project scope. . (University of Phoenix Simulation) Alternative approach Span’s performance will be as follow: • Contract clause—C-S is entitled to receive all work products in progress or complete as of date of terms on cancellation. Subject to clearance of 50% of the payments. . (University of Phoenix Simulation) • Change Control—any changes to the user and system requirements originally agreed and monitored by a Change Control Board (CCB), compose of the project manager and software engineer from Span Systems and C-S. The CCB will decide the changes to be accepted or rejected. The CCB will also measure the resulting change in size of the report. Citizen-Schwarz agrees to compensate Span Systems for subsequent new requirements based on incremental increase in size. . (University of Phoenix Simulation) • Communication and reporting—project status reports in the form of minutes of meetings and tracked project plan, will be uploaded on Span’s extranet available to authorized C-S personnel. A project manager from C-S will be stationed in Span Systems’ office in California who will participate in project meetings and act as the direct interface between C-S and Span. The cost of the stationing the project manager will be paid entirely by Citizens-Schwarz. . (University of Phoenix Simulation) • Project structure—meet the software delivery schedule originally, Span Systems will scale up the team size by at least 10 additional programmers within 10 days of the effective date of this contract. Span will send the resumes of each new programmer to C-S within five days of the effective date of the contract. The cost of training the new team members will be paid by Span Systems. . (University of Phoenix Simulation) In conclusion, Citizen-Schwarz AG, a banking company sought to increase its competitive presence in the American market by hiring software developer, Span Systems. In accordance with a contract drawn up by both parties, Span Systems developed a Java-based banking transaction processing software. However, many issues arose that culminated with Citizen-Schwarz AG calling for the rescission of the contract. Five provisions for a contract were revised; performance, change control, communications and reporting, project structure, and dispute resolution. To prevent delays, Span Systems performance progress will be monitored by a Citizen-Schwarz AG project manager and through an extranet portal also provided to Citizen-Schwarz AG employees. A change control mechanism will be established to define which party has rights in making changes to contract. To ensure effective communications and reporting, bi-weekly meetings and reports will be required without fail. Changes to the project management structure to either party must also be made know within two days of occurrence. Project structure will also be afforded a greater degree of attention. A timeline will be developed depicting project requirements and how much notification is required in the event changes are needed. A new clause will be entered stating disputes to addressed by a neutral mediator not affiliated with either party. In the absence of a settlement, mediation will be followed by arbitration. A contract dispute may arise between parties when either side is dissatisfied with what has been produced based on a contract. The revised contract provisions aim to ensure the needs of each party are met and that their corresponding risks are minimized. The contract will therefore be provide increased specificity with improved detail outlining the expectation and requirements to ensure a mutually beneficial outcome for both parties. References Jennings, M. M. (2006). Business: Its Legal, Ethical, and Global Environment. : Thomas Nelson, Inc. University of Phoenix. (). Contract Creation and Management. Retrieved from University of Phoenix, LAW531 website. Retrieved from http://www.gotessays.com Retrieved for http://www.peerpapers.com