Sinosecurities.com Postscript

1
Sinosecurities.comPostscript

• Ken Peffers
• UNLV
• March 2004

2
What is the important management issue or problem
in this case?

• Should OSIL have taken on the Sinosec contract?
• How could OSIL have managed the Phase 1 of the
  contract to avoid the problems it encountered?
• Should Sinosecurities walk away from Phase 2 of
  the project?

3
Material facts

• Sinosec contract was 26 pp.
• Functional objectives were 3 pp. in bullet
  points. This included mention of the online
  brokerage platform with TP gateway to Shenzhen
  and Shanghai Stock Exchanges. Also, trading
  interface with multi currency functionality.
• Four payment installments, based on milestones.
• Phase 1 designing and coding the platform and
  beta testing with the Shenzhen Stock Exchange and
  four local brokerages.
• Phase 2 upgrading the gateway to include set-top
  box transaction and full AMS/3 compatibility.

4
Material facts

• OSIL cautioned steering committee that adding
  set-top box and AMS/3 compatibility would be
  extremely difficult.
• Sinosecurities adamant about maintaining them in
  the specs.
• Minor interface changes set the project back 1
  week and added 1 ½ man months to the project
  Phase 1
• Sinosecurities never remitted second and third
  100,000 payments. Resulted in loss of 156,800
  for OSIL.
• OSIL decides legal action not viable.

5
Causes

• Inadequate project specification. Neither
  contract nor systems analysis produced adequate
  specifications.
• OSIL agreed to specifications that it thought
  were infeasible.
• Separation of sales and development???
• OSIL discovered the infeasible specs when it
  reviewed the specifications

6
Recommendation

• Should Yang have walked away from the project
  when he discovered the feasibility problem?
• What should he do now?