Response to query related to action required from QA manager !!!

From the Question it appears that every thing has gone wrong here.

• Schedule overrun
• Cost overrun
• Product not functioning as expected

Hence its very clear that there are gaps in the processes and procedures followed.

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As the first step you would want to analyze the situation. 

• Talk with the customer to get details of what exactly is not functioning as expected.
• Check if the functionality was mentioned in the requirements document or was it missed out completely.
• If the Functionality was not in the requirements then its missed requirements issue. Will have to do RCA to find gaps in the requirements gathering process  and then implement process improvements.
• If the functionality was mentioned correctly in requirements and it was not interpreted correctly by the development team, then we have to again do RCA of the process subsequent to Requirements, to find the gaps.
• After analyzing the missing functionality with customer, sit with your team to find the causes of Schedule and Cost over run.
• As the outcome of the analysis we will have factors that contributed to schedule or cost overrun. Use fish bone diagram to find the Root cause.
• Ensure that we have a clear list of causes at the end of this excercise

Step 2:

  Once you have identified the causes of the problems. Document that root causes and issues. Check if the gaps in functionality identified by customer can be considered as defects and authorize the fix. 

Step 3 :

For each of the root causes identify what needs to be improved in the process ( GAPS). Then make process improvement plan. For this step its critical to take inputs from entire team. Jointly prepare the process improvement plan . This will help in getting buy-in from the team. And simplify your process improvement implementation.

Step 4:

Roll out the process improvements and make sure the team understands and answer relevant questions. Check if any team members need training in understanding or implementing the changed process.

Step 5: 

This is an iterative process. Now you should monitor the use of process. ( Check phase in PDCA Cycle)  . Based on the results you should "Act" to make further adjustments, improvements or simplifications.