Captiva Case Study

CAPTIVA CASE STUDY ANALYSIS

I. Major Facts

• Captiva Conglomerate held a senior management meeting to discuss the issues related to the contract with S.O. Software (SOS) for the custom inventory and spare parts management system.

• Gerry (Captiva’s president) negotiated the contract with SOS, calling out “best efforts” and “whenever possible” thereby potentially limiting legal recourse Captiva may have. The specifications appear to have been drafted by SOS.

• Sam Sliderule, Inventory and Spares Manager, is thoroughly unsatisfied with the initial tests of the system – calling them a “disaster” - and the system is 4 months behind schedule. Additionally, the regional and centralized inventory management system is 10 months late.

• Jana Perry, director of Information Technology, has also used the system and thinks it works well, however she has a M.S. in Information Technology which implies the system does function however it is not user friendly. Besides the company president, Jana is presumably the only other person who saw the specification prior to contract signature with SOS.

• SOS has already spent the $1M allocated to the contract and has had 17 unpriced change orders.

• The system was intended to provide “better support” and “more uptime.”

II. Major Problem

The president of Captiva negotiated an ill-defined subcontract without consulting the various relevant organizations and only one department – Information Technology – approved the specifications. The company is now in a position where it has invested money in a system that was supposed to provide better support and uptime but is actually behind schedule and over budget with Captiva having little to no legal recourse to try to recover.

III. Possible Solutions/Alternatives

A. Engage the legal organization to review the contract with SOS and determine if there is any legal recourse. For example, review what has been delivered to date and when in conjunction with what would have been expected...