System projects are notorious for being late and over budget. When should management stop a project that is late or costing more than the intended budget? Consider this case:
Valley Enterprises opted to implement Voice over Internet Protocol (VoIP) service in its Phoenix, Arizona, service area. The company has 15 locations in the Phoenix area, all with local area networks and all with secure Wi-Fi connections. The company’s current phone system was designed and implemented in the 1950s, when Valley operated in three locations. As more locations were added, standard telecommunications solutions were implemented, with little thought devoted to compatibility.
Over the years, phone services were added as new buildings and facilities arose. Valley CEO Doug Wilson heard of VoIP at a trade show and contacted TMR Telecommunications Consultants, requesting a bid. TMR spent a week with the CIO of Valley Enterprises, gathering data, and submitted a bid for $50,000 in late 2007. The project was to be started by March 2008 and completed by January 2009. The bid was accepted.
TMR started the project in March 2008. In late July 2008, TMR was bought out by Advanced Communications of Scottsdale, Arizona. The merger delayed the project by over a month initially. In early September 2008, some of the same personnel from TMR, as well as a new project manager from Advanced Communications, went back to the project.
By March 2009, the project had already cost
$150,000 and only 8 of the locations had implemented VoIP. Advanced Communications insisted that the local area networks were obsolete and were unable to carry the expanded load without major upgrades to the bandwidth, the routers, and other telecommunications equipment.
1. Is it time to end this project? Why or why not?
2. What negotiations should have occurred between TMR and Valley Enterprises prior to December 2008?
3. What should a project manager/project coordinator from Valley Enterprises have done when the project first started to slip?