financial benefits of the project as much as possible in the business case. This is usually done in the form of a cost benefit analysis. The purpose of this is to illustrate the costs of the project and compare them with the benefits and savings to determine if the project is worth pursuing. 23
Running Head: BUSINESS CASE The following table captures the cost and savings actions associated with the WP Project, descriptions of these actions, and the costs or savings associated with them through the first year. At the bottom of the chart is the net savings for the first year of the project. Action Action Type Description First year costs (- indicates anticipated savings) Purchase Web-based product and licenses Cost Initial investment for WP Project $400,000.00 Software installation and training Cost Cost for IT group to install new software and for the training group to train all employees $100,000.00 Reduce HR and payroll staff by 5 employees Saving s An immediate reduction in overhead equal to the annual salary of 3 HR specialists and 2 payroll analysts. - $183,495.00 Managers no longer required to work non- billable payroll and administrative tasks Saving s 18 provincial directors right now normal 16 hours for every week non- billable time. It is foreseen that this number will be lessened to close to 2 hours for every week. At a normal of $36.00 every hour this outcomes in ($36.00 x 14 hours/wk lessened non- billable time x 18 administrators) $9072.00 expanded income every week. - $471,744.00 24
Running Head: BUSINESS CASE Action Action Type Description First year costs (- indicates anticipated savings) System maintenance required every 6 months instead of monthly Saving s Less frequent use of IT resources working on non-value added tasks results in approximately $42,000 savings per year. -$42,000 Reduce employee turnover by 10% Saving s Savings in cost to out-process exiting employee and recruit, hire, and train new employees is approximately $50,000 in the first year. -$50,000 Net First Year Savings $247,239.00 Based on the cost benefit analysis above we see that by authorizing the WP Project, Smith Consulting will save $247,239.00 in the first year alone. This represents a significant improvement in our operating costs and is a clear indicator of the benefit this project will have on the company. 7. A LTERNATIVES A NALYSIS All business problems may be addressed by any number of alternative projects. While the business case is the result of having selected one such option, a brief summary of considered alternatives should also be included—one of which should be the status quo, or doing nothing. The reasons for not selecting the alternatives should also be included. The following alternative options have been considered to address the business problem. These alternatives were not selected for a number of reasons which are also explained below. 25
Running Head: BUSINESS CASE No Project (Status Quo) Reasons For Not Selecting Alternative Keep the mainframe legacy system in place Unnecessary expenditure of funds for increased staffing levels Continued occurrence of a high number of data errors Poor and untimely reporting Lack of automation Alternative Option Reasons For Not Selecting Alternative
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