Quality Standards and Contract Management

By Sudipta Das(11BM91R01) Ramesh chandra Das(11BM91F02)

Decision for outsourcing

All Companies try to rely on its core competency
Management of a non-IT company decides on outsourcing

IT system contains program, process and service management

The application development process consists of a number of stages for both SDLC and Unified systems Success of service depend on quality and contract

Service Management
Def: Service management is about assessing and managing the performance of the service provider to ensure value for money

Importance: In service sector 23% labor forces are involved and contributes 55% of GDP Obj:To ensure that the IT services are aligned to the business needs
Service is the acts, deeds, performances or efforts. The success of service management depends on two factors, process efficiency and contract negotiation

Customer Satisfaction
The quality of software service is based on value, satisfaction and preference

Service quality is a measure of comparison between what the customer feels should be offered and what is provided Aim: Customer satisfaction by providing value for money

Value is an intangible term hence there is a conflict of perception between service provider and customer.

Source:Business Information Systems - Prithwis Mukerjee

Measurement of satisfaction
Customer satisfaction is the product of two factors one is perceived benefits and other is the quality
Hence value for money can be decomposed of two factors as

Utility
Utility depends on no. of features added like- edit, modify, compare etc and each component adds more utility Each additional component requires additional effort hence additional cost.

Quality level
Quality is "Conformance to requirements.

Quality is "Fitness for use."

Quality is measured in terms of service level like no of defects, time to deliver etc. Each service requires some effort hence it has a cost.

Value for Money

The interpretation of the first three terms is that a good process has good quality service level hence better utility. As more components are delivered with lesser effort the process is more efficient.
The fourth product depends on contract efficiency

Quality standards
Quality Standards is to control quality and maintain a high standard of customer satisfaction of a product, service, or process for certain minimum levels
Quality control is concerned with the product, while quality assurance is processoriented ISO is the International Organization for Standardization ISO 9000 refers to the set of quality management standards

Quality process improvement

CMMI (Capability Maturity Model Integration) is an industry framework to improve the processes, manage the development, acquisition, and maintenance of products or services.
This is done through appraisals and assessments of the organization's processes, based on CMM criteria.

SEI CMMI helps the process to be audited by a auditor

Contract management
Def: The process that enables both parties of the contract to meet their obligations to deliver the objectives.

Price is determined by the market. Difficult to measure how much effort is put to produce a component. The effort or cost may change before or during delivery.

Kind of contracts

Fixed price contracts: Fixed price are paid upfront Time and material contracts: Based on labor rate per hour determined by how many hours are spent per month

Both contracts depend on trust.

Pricing strategy
Two stage pricing: First stage: Fixed price for design and analysis Second stage: Fixed price after development and deployment
Quasi flexible pricing strategy:

The vendor and the client first agree on a fixed labor-rate or the cost per hour of work delivered. Then the vendor breaks up the project into a set of activities or components and shares with the client his estimate of the number of hours required for each activities.

Structure of software contracts

Master services agreement:

Focuses on the various legal aspects like compensation,tax,warranties and intellectual property right.

Appendices:
Focuses on the technical aspects of the project, the scope of work,
business requirements, deliverable, schedules, cost etc.

Contracts Negotiations
The success of the contract depends upon Interdependency between customer and provider Trust, fairness, communication, and recognition of mutual aims

References

1.Business

Information Systems - Prithwis Mukerjee 2. Google.com 3.youtube.com