However an optional medical insurance package can be reassessed after year one. 4.2. Infrastructure Costs The individual cost per cloud server is $2,500.00, with each one able to handle the workload of 5,000 front-end users. This amount already includes maintenance and support provided by the cloud service provider as well as back-up and business continuity services.With an expected volume of 5,000 daily active users in year one, this results in $2,500 in server infrastructure costs during year one. During years two and three, the individual server cost is expected to decrease by two percent each year due to negotiated volume discounts. With the daily active users projected to increase by ten percent each year, this adds up to $4,900 and $4,802 in infrastructure costs for years two and three respectively. OverseasEd - Project Plan v1.1 26
Figure 5.2. - Server Costs Year 1 Year 2 Year 3 Users 5,000 5,500 6,050 Servers 1 2 2 Rate $2,500.00 $2,450.00 $2,401.00 Cost $2,500.00 $4,900.00 $4,802.00 4.3. Marketing Expenses The marketing team requests a budget of one percent from the annual revenue. These budgets based on the projected revenues are shown in figure 5.3. Figure 5.3. Year 1 Year 2 Year 3 Gross Revenue $3,064,000.00 $3,370,400.00 $4,078,184.00 Marketing Budget $30,640.00 $33,704.00 $40,781.84 4.4. Variable & Miscellaneous Costs OverseasEd’s visa application services entails variable costs. They are outsourced to a third-party agency and are processed at a flat fee of $25.00 per application. The projected amount of visa applications for the first year is 3,000 with a growth rate of ten percent each year. Provided that the fee does not increase which OverseasEd will try to have the agency guarantee, this adds up to $75,000 in variable expenses in the first year of operations and $82,500 and $99,825 for the second and third years respectively. The team expects the need to acquire some equipment and to incur some sundry expenses during research, sales and other operating activities. Therefore $10,000 is allotted for such miscellaneous expenses. Petty cash is also taken from this fund. OverseasEd - Project Plan v1.1 27
4.5. Summary The expenses incurred from salaries, infrastructure, marketing, cost of services and miscellaneous expenses amounts to $201,340 in the first year, covering initial product development and launching. These costs are primarily maintained, changing mainly due to inflation, discounts and customer growth. Despite less ground-up development work after the first year, costs remain because the same human resources are retained but focused on enhancements, support and maintenance. The total costs per year are summarized in figure 5.5., broken down by the main cost centers. Figure 5.5. Year 1 Year 2 Year 3 Salary & Benefits $83,200.00 $183,040.00 $183,040.00 Cloud Infrastructure $2,500.00 $4,900.00 $4,802.00 Variable Expenses $75,000.00 $82,500.00 $99,825.00 Marketing $30,640.00 $33,704.00 $40,781.84 Miscellaneous $10,000.00 $10,500.00 $11,025.00 Total $201,340.00 $314,644.00 $339,473.84 OverseasEd - Project Plan v1.1 28
5. Communication Plan 5.1. Tools The following communication tools will be used for this project. They were selected based on functionality, cost and their inclusion in the other development and planning platforms that are being utilized to deliver the product.
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- Summer '19
- Project Management, project manager, Project plan