Project Implementation and Control

Saber has a total of 12 full-time resources doing various roles. In addition, there are about 20 Subject Matter Experts (SMEs) who also have to be transitioned. This deliverable is included in the 4.0 Artifacts work stream. The 12 full-time resources have been classified as follows: Role Number Monthly Salary Comment Senior Management 2 $10,000 These are the face of the organization and need to be kept as employees. Sales 2 $6,000 These staff sell ads on the web site. Your company has no experience with this type of sales and thus you want to retain these resources. Support 2 $5,000 Let go, assumed by Mammoth IT department Technology 3 $6,500 These are the technical resources that maintain the website and understand the architecture and must be kept as long as you are using the website. Finance 1 $7,000 Let go, assumed by Mammoth finance department Legal 1 $9,000 Let go, assumed by Mammoth legal department HR 1 $7,000 Let go, assumed by Mammoth HR department The full-time resources are all located in one city in Europe, but your head office is in North America. You also have a small office in Europe, but not in the same city as Saber. In talking to your HR, they indicated that there are no vacancies in the departments for the redundant staff at this time, especially since they are based on Europe. In your analysis, you do not have to include any severance to be paid to the staff. The severance will be the same for a make or buy option. Make Option The Mammoth HR department feels that if they defer four of their projects freeing up 2 people, and take on the HR person from Saber for 6 months (there would be a 40% increase to their monthly salary to cover Admin and overhead costs), they would have enough capacity to handle the transition of these Saber resources. The HR Department has recently completed another similar transition and have calculated it would take 1,500 hours at $75/hour to complete. Plus, the HR Manager would need some legal advice to support the transition because it is outside of North America. Based on past experience, the HR Manager estimates this would require 100 hours of support at $200/hour. It is expected that with the Mammoth HR Department handling the transition, it will take about 3 months and will result in an additional month of pay before Saber resources are let go over the buy option. Buy Option UNIVERSITY OF TORONTO SCHOOL OF CONTINUING STUDIES File: 1937 PIC Assignment 2 Make-or-Buy Page: 2 of 3 You have completed a RFI and you discovered that there are a number of companies that do this type of work. In general, these companies can get the work done in a month and it looks like their cost will be about $150,000. The Mammoth HR department, based on their experience with hiring these firms, say that typically they will have to have one of their resources supporting the organization full time for a month and then they need another internal staff member full time for 2 months after they leave to “tidy up the mess” for a total of 450 hours at $75/hour. In addition, their experience has been these Companies low ball the employees which results with lawyers getting involved. The net result is additional costs and having to pay more for the severance. You figure the additional severance cost could be $100,000 and there is a 20% chance that one of the staff members from Saber would go this route. In addition, there will be an internal cost to do the procurement which you estimate will be 100 hours at $75/hour. Assignment Requirements Your submission should consist of: 1. The cost elements (calculations) for the Make Analysis 2. The cost elements (calculations) for the Buy Analysis 3. Your recommendation for one of the options and the rational why 4. A well-structured, professional document with title page, page numbers and no spelling or grammatical errors.