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Managing the OSIL-Sinosecurities Contract: Avoiding Feasibility Issues

Analyzing a case study on OSIL's contract with Sinosecurities, exploring management issues and offering recommendations to prevent feasibility problems in project phases.

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Managing the OSIL-Sinosecurities Contract: Avoiding Feasibility Issues

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  1. Sinosecurities.comPostscript Ken Peffers UNLV March 2004

  2. What is the important management issue or problem in this case? • Should OSIL have taken on the Sinosec contract? • How could OSIL have managed the Phase 1 of the contract to avoid the problems it encountered? • Should Sinosecurities walk away from Phase 2 of the project?

  3. Material facts: • Sinosec contract was 26 pp. • Functional objectives were 3 pp. in bullet points. This included mention of the online brokerage platform with TP gateway to Shenzhen and Shanghai Stock Exchanges. Also, trading interface with multi currency functionality. • Four payment installments, based on milestones. • Phase 1: designing and coding the platform and beta testing with the Shenzhen Stock Exchange and four local brokerages. • Phase 2: upgrading the gateway to include set-top box transaction and full AMS/3 compatibility.

  4. Material facts: • OSIL cautioned steering committee that adding set-top box and AMS/3 compatibility would be extremely difficult. • Sinosecurities adamant about maintaining them in the specs. • Minor interface changes set the project back 1 week and added 1 ½ man months to the project Phase 1 • Sinosecurities never remitted second and third $100,000 payments. Resulted in loss of $156,800 for OSIL. • OSIL decides legal action not viable.

  5. Causes • Inadequate project specification. Neither contract nor systems analysis produced adequate specifications. • OSIL agreed to specifications that it thought were infeasible. • Separation of sales and development??? • OSIL discovered the infeasible specs when it reviewed the specifications

  6. Recommendation • Should Yang have walked away from the project when he discovered the feasibility problem? • What should he do now?

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