Assignment: MAKE OR BUY ANALYSIS The Students complete the assessment on whether they are going to make or to by services needed to help transition the staff from Saber Company to Mammoth Company. The Submission consists of: 1. The cost elements (calculations) for the Make Analysis Make Option Item Quantity Rate Cost 2. The cost elements (calculations) for the Buy Analysis Buy Option Item Quantity Rate Cost 3. Weighted Scoring Analysis Weighted Scoring Criteria Scoring Weight Make Buy 3. Recommendation to either make-or-buy using the four criteria weighted scoring analysis Fall 2014 1 Overview In this Assignment, you need to complete the assessment on whether you are going to make or buy the services needed to help transition the staff from Saber to Mammoth. 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 Comment Salary Senior 2 $10,000 These are the face of the organization and need to be Management 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, work to be done 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 existing website. Finance $7,000 Let go, work to be done by Mammoth finance department Legal 1 $9,000 Let go, work to be done by Mammoth legal department 1 $7,000 Let go, work to be done by Mammoth HR department The Saber full-time resources are all located in one city in Europe, but the Mammoth head office is in North America. Mammoth has a small office in Europe, but not in the same city as Saber's head office. In talking to your HR department, 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 that is being let go. The severance package will be the same for a make or buy option. Mammoth uses a 4 criteria weighted scoring model described in the table below: Criteria Scoring Weight Cost 1-Lowest, O-Highest 50% Lawsuit Risk 1-Low, 0.5 Medium O-High 20% HR Projects 1-On schedule, O-Delayed 20% Time 1-Fastest, O-Lowest 10% Total 100% For this decision, you have been asked to use this model. HR 3:18 + 1. Assignment 1, 20%, Make or B... ASSIGNMENT Buy Option You have completed an RR, and you discovered that there are some companies that do type of wort. In general, these companies can get the work done in a month and looks like their cost will be about 5150,000 is estimated a month will be required for the procurement resulting in a total duration of 2 months for the buy option The Mammoth HR department, based on their experience with hiring these firms, ses that typically they will have to have one of their resources supporting the organisation full time fora month, and then they need another internal staff member full time for 2 months after they leave to id up the mess" for a total of 450 hours at $75/hour. However, some of the HR department projects will be delayed. Also, their experience has been these companies have mishandled the employees which result in lawyers getting hiland The net result is a risk of having to pay more for the severance. You figure the additional severance cost could be $100,000 and there's a 20% chance that one of the staff members from Saber would go this route. Also, there will be an internal cost to do the procurement which you estimate will be 100 hours a $75/hour 1 ASSIGNMENT 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 has 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 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 three months and will result in an additional month of pay before Saber resources are let go over the buy option. For example, if the Make option is selected, the Finance resource would have to be paid one extra month of salary before being let go and given a severance package. However, for the 2 Senior Management resources, their salary does not have to be included as they are not being let go and thus have to be paid whether the make or buy option i on is selected 2014 Assignment: MAKE OR BUY ANALYSIS The Students complete the assessment on whether they are going to make or to by services needed to help transition the staff from Saber Company to Mammoth Company. The Submission consists of: 1. The cost elements (calculations) for the Make Analysis Make Option Item Quantity Rate Cost 2. The cost elements (calculations) for the Buy Analysis Buy Option Item Quantity Rate Cost 3. Weighted Scoring Analysis Weighted Scoring Criteria Scoring Weight Make Buy 3. Recommendation to either make-or-buy using the four criteria weighted scoring analysis Fall 2014 1 Overview In this Assignment, you need to complete the assessment on whether you are going to make or buy the services needed to help transition the staff from Saber to Mammoth. 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 Comment Salary Senior 2 $10,000 These are the face of the organization and need to be Management 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, work to be done 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 existing website. Finance $7,000 Let go, work to be done by Mammoth finance department Legal 1 $9,000 Let go, work to be done by Mammoth legal department 1 $7,000 Let go, work to be done by Mammoth HR department The Saber full-time resources are all located in one city in Europe, but the Mammoth head office is in North America. Mammoth has a small office in Europe, but not in the same city as Saber's head office. In talking to your HR department, 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 that is being let go. The severance package will be the same for a make or buy option. Mammoth uses a 4 criteria weighted scoring model described in the table below: Criteria Scoring Weight Cost 1-Lowest, O-Highest 50% Lawsuit Risk 1-Low, 0.5 Medium O-High 20% HR Projects 1-On schedule, O-Delayed 20% Time 1-Fastest, O-Lowest 10% Total 100% For this decision, you have been asked to use this model. HR 3:18 + 1. Assignment 1, 20%, Make or B... ASSIGNMENT Buy Option You have completed an RR, and you discovered that there are some companies that do type of wort. In general, these companies can get the work done in a month and looks like their cost will be about 5150,000 is estimated a month will be required for the procurement resulting in a total duration of 2 months for the buy option The Mammoth HR department, based on their experience with hiring these firms, ses that typically they will have to have one of their resources supporting the organisation full time fora month, and then they need another internal staff member full time for 2 months after they leave to id up the mess" for a total of 450 hours at $75/hour. However, some of the HR department projects will be delayed. Also, their experience has been these companies have mishandled the employees which result in lawyers getting hiland The net result is a risk of having to pay more for the severance. You figure the additional severance cost could be $100,000 and there's a 20% chance that one of the staff members from Saber would go this route. Also, there will be an internal cost to do the procurement which you estimate will be 100 hours a $75/hour 1 ASSIGNMENT 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 has 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 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 three months and will result in an additional month of pay before Saber resources are let go over the buy option. For example, if the Make option is selected, the Finance resource would have to be paid one extra month of salary before being let go and given a severance package. However, for the 2 Senior Management resources, their salary does not have to be included as they are not being let go and thus have to be paid whether the make or buy option i on is selected 2014