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3 Mature Procurement of Large Scale Systems: A Better Way to Buy
Author(s) -
Courteney H.,
Ruston S.
Publication year - 1999
Publication title -
incose international symposium
Language(s) - English
Resource type - Journals
ISSN - 2334-5837
DOI - 10.1002/j.2334-5837.1999.tb00257.x
Subject(s) - procurement , order (exchange) , scale (ratio) , risk analysis (engineering) , product (mathematics) , point (geometry) , business , focus (optics) , computer science , process management , operations management , industrial organization , marketing , economics , finance , physics , geometry , mathematics , quantum mechanics , optics
This paper examines current procurement practices in the systems engineering industry, and identifies some underlying features of the system that sometimes make it fail. It will mainly focus on the structure of rewards within and between organisations, and will also touch briefly on the unrealistic treatment of requirement specification. Finally it will be argued that a more mature approach to procurement is needed, and describe some features that ‘mature’ organisations might be expected to have. Performance metrics and fixed price contract bids have been central in the systems engineering industry for the past decade. These have provided some important management tools, but there can be a damaging downside to these practices. This paper will examine a characteristic of some metrics within companies, contractual arrangements between organisations, and procurement policies, that can result in the opposite outcome to the intended goal. A further point will examine the unrealistic assumptions about requirement specifications made by current commercial practice. It will be suggested that large scale projects based upon such false premises are inevitably flawed from the outset, and that a more realistic approach is needed to achieve program plans that actually deliver a satisfactory product on time and within budget. Finally, it will be suggested that the next generation of management and commercial policy should refine their current approach in order to take account of these factors. A possible means by which this might be achieved is outlined.