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.

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