KEL 224

MARK JEFFERY AND JOSEPH F. NORTON

Ariba Implementation at MED-X: Managing Earned Value

Chris, what do you mean, we can’t deploy the system on time? It’s a month before the end of the project and now you’re telling me that we may not deploy on time! Do you know what this means? Don’t you understand what the implications are? I don’t understand what went wrong. This entire time I have been reviewing the budget variance and combined earned value reports and everything appeared to be fine. How am I going to explain this to the steering committee? I want to know what went wrong with the project and how you are going to fix it!

Terry Baker, CIO of MED-X Inc., a Fortune 500 pharmaceutical company, was furious. The e-procurement implementation she had been sponsoring was not going according to plan and the project manager had very few answers for her.

Christopher Martin, a consultant from Implementation Technologies, was the project manager for the $2 million Ariba e-procurement implementation at MED-X Inc. This was Martin’s first time managing a full-life-cycle e-procurement implementation and he was having problems figuring out what was delaying the project. He had been aware of some potentially troublesome events early in the project, but had not been comfortable reporting them to his client.

Martin was very bright, had a great deal of technical development experience, and knew Ariba functionality well. He was just completing his MBA in the manager’s program at the Kellogg School of Management, and was looking forward to a big raise when this project was over. However, Martin knew very little about earned value and had never seen it used in project analysis before. His client Terry Baker was demanding answers and Martin had to figure out what was going wrong.

The Ariba implementation was broken up into several phases. However, the critical path went through two major components of the project: technical infrastructure setup and software customization. Looking at the project plan alone, Martin could not figure out which component was causing the delay.

MED-X Inc.

MED-X Inc. was a global pharmaceutical company headquartered in Houston, Texas, with fifty-four plants and more than 40,000 employees worldwide. Founded by a genetic engineering

©2006 by the Kellogg School of Management, Northwestern University. This case was prepared by Alex Gershbeyn ’03 and Derek Yung ’03 in collaboration with Joseph F. Norton, PMP, Senior Fellow, Center for Research on Technology and Innovation, Kellogg School of Management, and Principal, SOCHIN Consulting Group, under the supervision of Professor Mark Jeffery. Some facts within the case have been altered for confidentiality reasons. Cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. To order copies or request permission to reproduce materials, call 800-545-7685 (or 617-783-7600 outside the United States or Canada) or e-mail [email protected]. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of the Kellogg School of Management.

This document is authorized for use only by Lava Qurbani in QSO-420-H5657 Integrated Cost/Sched Control 21EW5 at Southern New Hampshire University, 2021.

ARIBA IMPLEMENTATION AT MED-X KEL224

scientist in 1972, MED-X had been growing rapidly ever since. In 1985 MED-X’s research and development team developed a blockbuster drug to treat skin cancer. In addition to drug development, MED-X established alliances with other pharmaceutical companies whose drugs it licensed and sold thro