Homework assignment 5 Business Case - Copy

Homework assignment 5 Business Case - Copy - Homework...

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Homework assignment 5 Business Case Sushant Arora 2505446 Executive Summary
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This business case is to move the company from CMM level 3 to level 4 in 2 years as big contracts are on the way and also it will help us in competing contracts on U.S. Government.Our main competitors are on level 4 so this will equal the play ground. Being at level 3 shows that we possess documented,standardized and integrated management and engineering process and there is stable foundation for Software Engineering and Management but being at level 4 means that process is measured and operates within limits and it provides structure for all elements of startegy.So,clearly we are in need of “process improvement program”. The budget for the process group ,responsible to accomplish the task, for this year will be $ 2.4 million with staff of eight including two part timers and two retirees. Also, when early error detection and correction will be done then cost avoidance will be $ 1.2 million/year and that will increase quality and customer satisfaction as well. Systematic reuse will avoid cost of around $ 10 M and helps improve quality 10 times and we start gaining profits in 3 years of starting. Use of COTS will do cost avoidance of $ 1 M/year with improved maintenance and productivity improvement will avoid cost by $ 4M. The average gain that our company was gaining during past five years was approximately 20% annually as it moved from level 3 to level 4.Thus the ROI calculated in second year is annual benefit/Investment which is $ 6.2M/$2.4M i.e. >250% in second year .Here, cost avoidance due to systematic reuse is not included because of timing Business opportunity This transition from level 3 to level 4 will definately be a boon to our company as not only it will raise the standards and be a mark of improvement and will show how organised , standardised we are but also open myriad number of business opportunities to work with as
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This note was uploaded on 04/12/2010 for the course CIS 635 taught by Professor Mcintyre during the Spring '10 term at Cleary University.

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Homework assignment 5 Business Case - Copy - Homework...

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