1. Provide a brief outline of the project’s business case. Explain the rationale for the new system depicted above.
As the trade volumes were increasing at an average rate of 3 to 4 percent per annum, ACS (Australian custom service) introduced Custom Management Re-engineering to develop next generation IT system. The main aim behind the initiative was to develop an integrated system for managing, recording and controlling the movement of all the goods into and out of the country regulating Australia’s trading environment. The initiative mainly focused on development of new system that envisioned being an end to end solution that facilitated overall increase in efficiency and effectiveness, integrated risk assessment, closer link with the clients, greater cooperation and coordination amongst government agencies, increased use of self assessed shipment and an approach to accrediting low risk and good security.
The rationale for the new system depicted above:
‘ Commitment of government to online service delivery
‘ Globalisation of trade
‘ Integrate and modernise Custom’s IT applications
‘ Reduce cost of business by streamlining cargo management
‘ Improving the efficiency and effectiveness of the services to government
‘ Secure communication gateway amongst the stakeholders
‘ Standardised channel for end to end business
‘ Integrated risk assessment
2. Consider the ‘iron triangle’ of cost, schedule and functionality/quality. Which corner of the triangle was the priority in the project? Why? Do you agree?
Considering the facts reported in the report, and the iron triangle of cost, schedule and functionality, the project mainly concentrated on functionality and schedule.
The main objective and scope of the project was to modernise all required operations involved in receiving, delivering, processing and registering a cargo manifest at ports and also adopting to new business and organisational structure. Customs mainly focused on the following aspects as their main priorities:
‘ Replacing the legacy cargo management system and introduce the trade modernisation legislation to support new security and trade facilitation environment.
‘ To integrate people, processes and technology.
‘ The decision of implementing ICS was mainly based on online service delivery, globalisation of trade and modernise IT applications which speaks more about the improvement in the functionality(without understanding the complexity of the environment in which the project was to be implemented and operated)
‘ Accredited client program: This program allowed highly compliant clients to produce monthly reports rather than producing it for each and every client.
‘ Custom’s transition to the new structure focused on Australia’s border as whole, rather than as separate border and commercial environment.
‘ The project also included legislative changes to provide legal basis for an electronic business environment and it required the ICS to be introduced within two years of the Act being passed. This means that the priority was schedule as well.
3. Mark Toomey in his November 2005 paper suggests that this project suffered from a lack of governance. It can also be argued that the failures resulted from excessive complexity. What do you think? Why?
As per Mark Toomey’s report, key highlights are on the failure of the project due to lack of governance which is true but is not the only reason of the failure. The essential components of good governance is delivering value and managing performance which is true for the success of any project.
The success of the project depends on various factors of which the most important are: meeting the requirements and quality expectations, within the budget and timeline, satisfying stakeholder groups and delivering sustained business benefits.
The customs project suffered from lack of governance that is it failed to evaluate the performance and risk management associated with the project but most importantly it failed to understand the excessive complexity of the system.
The initiative of Australian Custom Service was in the context of border control and trade facilitation functions. The opening of Australia’s economy to external trade and the subsequent force of globalisation resulted in increase of import and export transactions. Hence ACS wanted to address these issues through the introduction of a new border control management system. The ACS did not understand about the complexity involved in the environment in which the project was to be implemented and executed.
The project was not just to integrate people, process and business and develop end to end transaction but also enforcing compliance with the legislative requirements. The major concern was also about the segregation of security profiles, increasing the risk inappropriate access to information or data. The excessive complexity was also because of the considerable risk to Australian’s border security and Custom’s revenue collection responsibilities. These profiles covered areas such as counter terrorism, illicit drugs, revenue prohibited items and compliance.
The project initiative was about the replacement of Legacy system and modernisation of IT applications but the high risk was with regards to the business environment because the impact was not only within the domestic territory but also was on the relationship with the other countries. Thus developing integrated Cargo system balancing the regulations of legislation was very complex. Not understanding the implications of such a complex environment was also one of the major reasons of failure.
4. Provide a recommended process diagram model for this project. You might want to consider a more iterative approach to address the complexity of this project and include better governance.
The Cargo Management Reengineering was initiated to replace the legacy system of cargo management by integrated IT solutions. Replacing any legacy system involves a lot of risk because of the complexity, size and the environment in which the new project initiative is to be operated. Hence the traditional software development models are ruled out in such projects (as a matter of fact in any small scale projects as well). A recommended process model for CMR project would be Iterative software development with agile development framework. The model can be called as Entrepreneurial Culture Iterative development.
This model offers ideal balance between planning and incremental, iterative development for fast, effective deployment and helps to keep the project on target while incremental iterative design ensures timely implementation through a model of incremental improvement.
Plan & Budget Process & Information Application & Technology
5. List the top 5 risks that the project faced and for each one propose an effective mitigation strategy.
The top 5 risks that the project faced are as follows:
a) Complexity and size of the project: Customs underestimated the size and the complexity of the project. Their initiative was to replace the legacy system of cargo management with the modern IT standards but Customs did not efficiently assess the risk and failed to understand the impact of significant changes involved in system design, operating procedures, working relationships, business process, skill levels and attitudes. The extent of these changes also meant that the impact on industry stakeholders would be substantial.
‘ A thorough analysis in understanding the complexity and size of the project by consulting project team and the stakeholders.
‘ Evaluate the environment in which the project is to be operated.
‘ Evaluate degree of change implicit in the project.
‘ Use the methodologies like function point count( which it used at later stages) to understand the size of the software project.
b) Estimated cost of the project: There was no project budget or financial management plan prepared for the project.
‘ Analysing and estimating the cost using the advanced estimation techniques.
‘ Monitoring of project costs
‘ Get the full cost through ‘scope extensions’, ‘enhancements’, and ‘additional features’.
‘ Reducing and controlling cost with cost containment strategies.
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