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Austin Community College

BCIS 2390 - Systems Analysis and Design: Project Management

Lab 4 - Project Integration Management

Running Case'

Manage Your Health, Inc. (MYH) is a Fortune 500 company that provides a variety of health care services across the globe. MYH has more than 20,000 full-time employees and more than 5,000 part-time employees. MYH recently updated its strategic plan, and key goals include reducing internal costs, increasing cross-selling of products, and exploiting new Web-based technologies to help employees, customers, and suppliers work together to improve the development and delivery of its health care products and services. Below are some ideas the Information Technology department has developed for supporting these strategic goals:

1. Recreation and Wellness Intranet Project: Provide an application on the current intranet to help employees improve their health. A recent study found that MYH, Inc. pays 20 percent more than the industry average for employee health care premiums, primarily due to the poor health of its employees. You believe that this application will help improve employee health within one year of its rollout so that you can negotiate lower health insurance premiums, providing net savings of at least $30/employee/year for full-time employees over the next four years. This application would include the following capabilities:

• Allow employees to register for company-sponsored recreational programs, such as soccer, softball, bowling, jogging, walking, and other sports
• Allow employees to register for company-sponsored classes and programs to help them manage their weight, reduce stress, stop smoking, and manage other health-related issues.
• Track data on employee involvement in these recreational and health-management programs
• Offer incentives for people to join the programs and do well in them (e.g., incentives for achieving weight goals, winning sports team competitions, etc.).

2. Health Coverage Costs Business Model: Develop an application to track employee health care expenses and company health care costs. Health care premiums continue to increase, and the company has changed insurance carriers several times in the past ten years. This application should allow business modeling of various scenarios as well as tracking and analyzing current and past employee health care expenses and company health care costs. This application must be secure and run on the current intranet so several managers and analysts could access it and download selective data for further analysis. The new application must also import data from the current systems that track employee expenses submitted to the company and the company s costs to the insurance provider. You believe that having this data will help you revise policies concerning employee contributions to health care premiums and help you negotiate for lower premiums with insurance companies. You estimate that this application would save your company about

$20/employee/year for full-time employees over the next four years and cost about $100,000 to develop.

3. Cross-Selling System: Develop an application to improve cross-selling to current customers. The current sales management system has separate sections for major product/service categories and different sales reps based on those products and services. You see great opportunities to increase sales to current customers by providing them discounts when they purchase multiple products/services. You estimate that this system would increase profits by $1 million each year for the next three years and cost about $800,000 each year for development and maintenance.
4. Web-Enhanced Communications System: Develop a Web-based application to improve development and delivery of products and services. There are currently several incompatible systems related to the development and delivery of products and services to customers. This application would allow customers and suppliers to provide suggestions, enter orders, view the status and history of orders, and use electronic commerce capabilities to purchase and sell their products. You estimate that this system would save your company about $2 million each year for three years after implementation. You estimate it will take one year and $3 million to develop and require 20 percent of development costs each year to maintain.

TASKS

1. Summarize each of the above-proposed projects in a simple table format suitable for presentation to top management. Include the name for each project, identify how each one supports business strategies, assess the potential financial benefits and other benefits of each project, and provide your initial assessment of the value of each project. Write your results in a memo to top management, including appropriate back-up information and calculations.
2. Evaluate the four projects in the Running Case section above by preparing a weighted scoring model using the template attached to this Lab assignment link in Blackboard (wtd_decision_matrix.xlsx). Develop at least four criteria, assign weights to each criterion, assign scores, and then calculate the weighted scores. Save the spreadsheet and bar chart with the results
3. Prepare a business case for the Recreation and Wellness Intranet Project. Assume the project will take six months to complete and cost about $200,000. Use the business case templates attached to this Lab assignment link in Blackboard (business_case.docx and business_case_financials.xlsx).
4. Prepare a project charter for the Recreation and Wellness Intranet Project. Assume the project will take six months to complete and cost about $200,000. Use the project charter template attached to this Lab assignment link in Blackboard (charter.docx) and the sample project charter provided in your textbook Chapter 4: Table 4-1 as a guide.

Turn In

All labs will be graded in Blackboard. Once you have completed the tasks related to this lab, submit solution files on the Lab 4 link (Assignments/Labs/Lab4):

1. Results Memo
2. Weighted scoring model
3. Business case including business case financials.
4. Project charter

Charter.docx

business_case.docx

wtd_decision_matrix.xlsx

business_case:financials.xlsx

Project Charter Project Title: Project Start Date: Budget Information: Projected Finish Date Project Manager: Name, phone, e-mail Project Objectives: Main Project Success Criteria Approach: Roles and Responsibilities Role Name Organization/ Position Contact Information Sign-off: (Signatures of all above stakeholders. Can sign by their names in table above.) Comments: (Handwritten or typed comments from above stakeholders, if applicable) Business Case for Project Name Date Prepared by: 1.0 Introduction/ Background 2.0 Business Objective 3.0 Current Situation and Problem Opportunity Statement 4.0 Critical Assumption and Constraints 5.0 Analysis of Option and Recommendation 6.0 Preliminary Project Requirements 7.0 Budget Estimate and Financial Analysi3 8.0 Schedule Estimate 9.0 Potential Risks 10.0 Exhibits Exhibit A: Financial Analysis Weighted Decision Matrix for Project Name Created Criteria Date: Weight Project IProject 1Project Project 4 25% 15% 1 590 10% 90 70 50 25 20 50 20 56 78.5 50 50 50 50 50 50 50 50 41.5 20 20 20 70 90 50 90 90 90 20% 10% 100% 20 70 50 Weighted Project Scores Weighted Score by Project Project 4 Project 3 Project 2 Project 1 20 40 60 80 100 Financial Analysis for Project Name Date Created by: Note: Change the inputs, shown in green below (i.e. interest rate, number of years, costs, and benefits). Be sure to double-check the formulas based on the inputs Discount rate 8.00% Assume the project is completed in Year 0 Year 2 3 Total Costs Discount factor Discounted costs 140,000 40,00040,000 40,000 1.00 0.93 0.86 0.79 140,000 37,200 34,400 31,600243,200 Benefits Discount factor Discounted benefits 0 200,000 200,000 200,000 1.00 0.93 0.86 0.79 0 186,000 172,000 158,000516,000 Discounted benefits costs Cumulative benefits costs (140,000) 148,800 137,600 126,400 272,800NPV (140,000) 8,800 146,400 272,800 ROI 112% Payback in Year 1 Assumptions Enter assumptions here Project Charter Project Title: Project Start Date: Budget Information: Projected Finish Date Project Manager: Name, phone, e-mail Project Objectives: Main Project Success Criteria Approach: Roles and Responsibilities Role Name Organization/ Position Contact Information Sign-off: (Signatures of all above stakeholders. Can sign by their names in table above.) Comments: (Handwritten or typed comments from above stakeholders, if applicable) Business Case for Project Name Date Prepared by: 1.0 Introduction/ Background 2.0 Business Objective 3.0 Current Situation and Problem Opportunity Statement 4.0 Critical Assumption and Constraints 5.0 Analysis of Option and Recommendation 6.0 Preliminary Project Requirements 7.0 Budget Estimate and Financial Analysi3 8.0 Schedule Estimate 9.0 Potential Risks 10.0 Exhibits Exhibit A: Financial Analysis Weighted Decision Matrix for Project Name Created Criteria Date: Weight Project IProject 1Project Project 4 25% 15% 1 590 10% 90 70 50 25 20 50 20 56 78.5 50 50 50 50 50 50 50 50 41.5 20 20 20 70 90 50 90 90 90 20% 10% 100% 20 70 50 Weighted Project Scores Weighted Score by Project Project 4 Project 3 Project 2 Project 1 20 40 60 80 100 Financial Analysis for Project Name Date Created by: Note: Change the inputs, shown in green below (i.e. interest rate, number of years, costs, and benefits). Be sure to double-check the formulas based on the inputs Discount rate 8.00% Assume the project is completed in Year 0 Year 2 3 Total Costs Discount factor Discounted costs 140,000 40,00040,000 40,000 1.00 0.93 0.86 0.79 140,000 37,200 34,400 31,600243,200 Benefits Discount factor Discounted benefits 0 200,000 200,000 200,000 1.00 0.93 0.86 0.79 0 186,000 172,000 158,000516,000 Discounted benefits costs Cumulative benefits costs (140,000) 148,800 137,600 126,400 272,800NPV (140,000) 8,800 146,400 272,800 ROI 112% Payback in Year 1 Assumptions Enter assumptions here

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