Captiva Conglomerate purchased a set of software solutions from an outside developer to improve its inventory management system. Preliminary tests have demonstrated these applications are not suitable for the needs of this enterprise. These applications are too difficult to use, and many of them do not correspond to the initial requirements. At the given moment, the management of Captiva Conglomerate has to decide what kind of strategy they need to adopt.
The problems, encountered by Captiva Conglomerate are manifold. On the one, their inventory management system does not function properly, and the existing IT applications are not of great use to them. The second issue is that they cannot sue the software developer because the contract, which was signed with this company, is very ambiguous or even one-sided since it does not fully protect the rights of the customer.
Moreover, one should note that the specifications for the software were written by the suppliers but at each of them was initiated by the company’s IT manager. Thus, it will be more difficult to prove that Captiva Conglomerate was provided with poor quality software. Hence, the management needs to improve the work of their inventory management system and determine whether they should continue business relationships with their software supplier.
The main recommendation for the management of Captiva Conglomerate is to request the software developer to make necessary changes to the existing IT solutions so that they could better fit the company’s operational environment.
It has to be admitted that this solution will inevitably incur extra expenses because they will need to make payment for the redesign, but these expenses are inevitable in this case. We should take into account that the IT applications were designed by their requirements.
The main advantage of this solution is that it will enable Captiva Conglomerate to improve their inventory management within the shortest period. Their current software supplier knows how the existing system should be re-designed and what kind of adjustments should be made. Furthermore, this company is interested in preserving relations with Captiva Conglomerate, and they will not deny their request.
The main limitation of this solution is that Captiva Conglomerate can become too dependent on the actions of their software supplier. Again, we have to emphasize the point that from a legal standpoint, this organization is not obliged to comply with the request of Captiva Conglomerate. Additionally, it is possible that they will overprice their services.
The management of Captiva Conglomerate can decide in favor of a different alternative. For instance, they can sue this software supplier and try the services of another IT company. If they choose to act in this way, they will have some chance of receiving reimbursement.
But such an outcome is rather unlikely, especially given the fact that the company’s IT manager, Jana, initiated the specifications for the software. Moreover, they may lose a substantial amount of time, and this will result only in extra operational expenses.
Implementation of the solution
Several steps have to be taken by the management of Captiva Conglomerate to resolve this issue. 1) First, they need to inform their supplier about the malfunctioning of software and request for the necessary changes. 2) Secondly, the management of Captiva Conglomerate should negotiate a new contract with the supplier, since the existing one does not accurately define the responsibilities of both parties. 3) Finally, it is necessary to precisely specify the requirements for the system since this could be the root cause of their problems.
Burt D. Petcavage S. & Pinkerton R. (2010). Supply Management (8th ed.). London: McGraw-Hill Irwin.