Final Project Spec #2/The Business Case.
Final Project Spec #2/The Business Case.
A business case is the first deliverable defined in the IT Project Methodology. It provides an analysis of the business value, several alternatives for achieving the project’s MOV, the feasibility of the alternatives, as well as the costs, benefits, and risks. The business case is not a budget or the project plan; however, it does provide all the information necessary for senior management to make a decision whether a specific project should be undertaken. Below is a suggested outline for developing your business case. Please feel free to make necessary assumptions about your project and document them in your business case. Please provide a professional-looking document that includes the following: 1. Project Name – You came up with a name for your project team when you developed your team charter. Now you need to come up with a name for your project.2. Project Team – At this point you should have your project team in place. Be sure to identify your team by its name and list all of the members of your team.3. Project Description – Provide a brief description of the project you choose. A project description should be written so that anyone unfamiliar with the project can read and understand what the project is about. Include a brief description of the organization and the problem or opportunity that led to initiating the project. 4. Measurable Organizational Value (MOV) – The MOV is the goal of the project and is used to define the value that your project will bring to your client. It will also be used to evaluate whether your project was a success later on. In reality, you would work very closely with your client in developing an MOV. Your responsibility would be to lead the process, while the client would commit to specific areas of impact, metrics, and time frames. Once the MOV is defined, it becomes the responsibility of all the project stakeholders to agree whether the MOV is realistic and achievable. For the purposes of this assignment, you will have to come up an MOV on your own. Use the following process to define your project’s MOVa. Identify the desired area of impact – At this point, what areas do you think are the most important to your client? Based on Table 2.1, rank the following areas in terms of their importance:o Strategic o Customer o Financial o Operational o Social b. Identify the Desired Value of the IT Project – Value to an organization can come from doing something better, faster, or less expensively (i.e., cheaper). On the other hand, it can come from growth by doing more of something that the organization is currently doing (e.g., increase market share). The next step in developing an MOV is to identify the project’s potential value to the organization. In general, an IT project should focus on delivering one or two of the following types of value.o Better? For example, is improving quality important to your client? o Faster? For example, does your client want to increase speed, efficiency, or reduce cycle times? o Cheaper? For example, is cutting costs important to your client? o Do More? For example, does your client want to continue the growth of something that they are currently doing? c. Develop an Appropriate Metric – Once you have identified the desired area of impact and value to the organization, the next step is to develop a metric that sets a target and expectation for all of the project stakeholders. For example, if an organization desires to do more of something that is strategic to the organization (i.e., increase market share of a particular product or service), then the organization’s management may feel that an IT project will bring value to the organization if they can grow their current market share from 10% to 25%. On the other hand, a bank may be able to process a loan request within 10 days. By developing and implementing a proposed information system, the bank’s management may believe that it can reduce the cycle time of processing a loan to 24 hours or less. This would allow the company to do something faster operationally. Therefore, it is important to come up with a quantitative target. This target should be expressed as a metric in terms of an increase or decrease of money (dollars, euros, etc.), percent, or a specific numeric value. d. Set a Time Frame For Achieving the MOV – Once you have identified the area of impact, value to the organization, and an appropriate metric, you need to set a time frame for achieving the MOV. Keep in mind that this time frame may not coincide with the scheduled completion of the project work. For example, reducing the time to process a loan within 24 hours may be achievable once the system is implemented, but instant growth of market share from 10% to 25% may take a few months. Setting the time frame for achieving the MOV can be determined by asking the question: When do we want to achieve this target metric? e. Summarize the MOV in a Clear, Concise Statement or Table – The area of impact, value, metrics, and time frame are agreed upon, the MOV should be summarized so that it can be clearly communicated to all of the project stakeholders. The MOV can be summarized in a statement by completing the statement: This project will be successful if _____? On the other hand, a table format may be more appropriate for summarizing the MOV if it has a growth component over two or more time periods. Keep in mind that the MOV should tell everyone what the project will achieve, not how it will be achieved. The MOV should focus on the organization, not the technology that will be used to build or support the information system. 5. A Comparison of Alternatives – To keep things simple, you may consider only three alternatives for your client: maintain the status quo (i.e., do nothing), your project, and one more alternative. Compare each of the alternatives based on the following criteria: a. Total Cost of Ownership (TCO) – This can be only a rough estimate at this time. Later on, you will develop a detailed project schedule and budget that can be compared to your ballpark estimate now. Determine any hardware and software that your project may need. This will require a reasonable amount of research using the Web, library, or company catalogs to estimate to cost of the hardware and software and to support your initial estimate. Keep in mind that total cost of ownership should include: o All direct or upfront costs o Indirect costs o Ongoing support and maintenance costs b. Total Benefits of Ownership (TBO) – Total benefits of ownership should include all of the direct, indirect, and ongoing benefits for each proposed alternative. It should focus on:o Increasing high-value work o Improving accuracy and efficiency o Improved decision making o Improving customer servicec. Weighted Scoring Model – Develop a set of criteria and assign percentage weights based on the importance of each criterion. Use weighted scoring model method to compare the three alternatives6. A Recommendation – Based on the result of your weighted scoring model, you need to make a recommendation to your client and support it. Given the limited amount of information and time, you should still be confident that your recommendation provides the best value to the organization and that the benefits outweigh the costs. Be sure that you not only recommend one of the three alternatives, but that you provide support based upon your NPV and ROI analysis to back it up. a. NPV and ROI Analysis for your Recommendation – Perform the NPV and ROI analysis, you can estimate the yearly cost and yearly benefit based on the TCO and TBO numbers you come up with earlier. The discount rate is 6%. Use the result to support your recommendation.
Odyssey Business ConsultingPilot Angels Scheduling SystemBusiness Case
Executive Summary 3Project Goal 3Introduction 4Pilot Angels Scheduling System (PASS): 4Desired Areas of Impact 5Desired Value of the project 6Alternatives 7Analysis of Alternatives 7? Total Cost of Ownership 8
? Total Benefit of Ownership (TBO): 10
Required Funding and Support 12
Executive SummaryPilot Angels, a charitable service coordinated by Huskie Air, works with hospitals, health-care organizations and organ banks to transport patients, medical personnel, supplies or donor organs wherever they are needed by partnering volunteer pilots. Currently Pilot Angels used a paper based manual system to track and schedule such requests which requires extensive effort to identify available volunteer pilots and appropriate planes many times ending up in inefficient use of time.The Pilot Angels Scheduling System (PASS) is an initiative to identify alternative solution to the current process and implement it successfully. The system will track the volunteer pilot information, plane information, customer information and service information towards making the scheduling more effective and easier.Project GoalsThe Pilot Angles envisions becoming a reliable provider of charitable transportation services in DeKalb area by • increasing the number of patients served by 50% within 24 months, • increasing schedule accuracy by 20% within 24 months, • reducing stop-over to 3 for every 1000 flight miles within 12 months,• reducing scheduling time to 2 hours from the time of request within 12 months and• recognizing volunteer pilots who have contributed most amounts of their time and cost.Based on our research, there were four potential alternatives1. Continue with the current system.2. Purchase an ASP service. There are many ASPs providing services at reasonable price3. Purchase packaged software. There are several alternatives available at various prices and functionalities and4. Develop a customized flight planning system.Based on the Total Cost of Ownership and Total Benefit of Ownership analysis, developing a customized flight planning and tracking system is recommended. This has high relevance to meet the organizational goals.IntroductionHusky Air is a fixed base operator (FBO) providing a variety of aviation services in the Dekalb area. As an FBO, Husky Air provides:• Business Jet, propjet, helicopter, and propeller aircraft charter, Aircraft rental• Refueling• Airframe, engine, propeller, and avionics maintenance• Flight instruction• Pilot supplies• Pilot angelsPilot Angels, a charitable service coordinated by Huskie Air, works with hospitals, health-care organizations and organ banks to transport patients, medical personnel, supplies or donor organs wherever they are needed by partnering volunteer pilots. Patient’s being their primary customers, Pilot Angels serves by transporting them, their family, the medical personnel, supplies or donor organs the patient needs.The current system that Pilot Angels use to co-ordinate the service is a paper based manual system. The volunteer pilot information is currently stored in folder. When a request for transportation is placed the Huskie Air staff goes through the volunteer folder and calls the volunteers to find out who are available and puts together a flight route. The situation gets more complicated as the planes have different capacities and sometimes may not be able to accommodate the customer load. The system is very slow as it involves calling multiple volunteer pilots and also checks their plane’s load capacity. This has become an issue for Pilot Angels as a lot of personnel time is lost in phone calls and preparing a concrete schedule. This is a very crucial issue as Pilot Angels is striving to establish itself as a reliable charity service.Pilot Angels Scheduling System (PASS):Pilot Angels Scheduling System (PASS) is an initiative to evaluate the need for a new system and evaluate alternatives for the existing one. The main objective of this would be to evaluate alternatives and identify a replacement to the current system that will provide for an effective way of tracking volunteer pilot information, their aircraft and the request for services from patients, hospitals, clinics and organ donors and also the flight service information. Through PASS, the goals of the organization will be achieved.Desired Areas of ImpactThe MOV table below lists the potential areas that this project will impact and summarizes the measurable organizational value of the PASS.OrganizationalImpact Value Metric Time FrameStrategic Increase reliability and the brand image of Pilot Angels Reduce turn downs due to non availability of pilots from 35% to 20%Reduce schedule changes from 40% to 20% 24 months
12 monthsCustomer Reduce the scheduling time for each customer.Provide better schedule and less stopovers
Provide matching volunteers Reduce ‘time to fly’ by 6 hours.Reduce no of stopovers per 1000 flight mile from 5 to 3.Reduce the average wait time between flights from 2 hours to ½ an hour.Increase availability of matching volunteers from 40% to 60% 12 months
12 months
12 months
12 monthsFinancial Reduce personnel & communication cost of scheduling.Reduce total cost of scheduling Reduce personnel & communication cost of scheduling by 73%.Reduce total cost of scheduling by 59% 12 months
60 monthsOperational Reduce the scheduling cycle time.
Recognize specific pilots for their contribution. Reduce scheduling time from 8 hours to 2 hours.Increase the accuracy of contribution recognition program to 95% 12 months
24 monthsSocial Increase the number of patients served. Increase the number of patients served from 100 to 150 24 monthsTable 1 PASS – MOVAt an average the Pilot Angels serves about 100 patients per year. Pilot Angels want to move up the list of top charitable aviation transport services. Through PASS, Pilot Angels will be able to reduce the scheduling cycle time from 8 hours to 2 hours within 12 months which will reduce the time- to-fly for the customers by 6 hours, reduce the current personnel and communications cost by 73% in 12 months and the total scheduling cost by 59% in 5 years. This will enable the Huskie staff to schedule flights effectively by reducing the stop-overs from around 5 to 3 for every 1000 flight miles and also reduce the time wait between flights from 2 hours to ½ an hour. This will also increase match of volunteers and special customer requests to 60% within 12 months and increase the schedule accuracy by 20%. These combined with the effective recognition program to recognize contribution of the volunteer pilots (which also will attract more volunteer pilots) will increase the ability to fly more patients and there by reduce the turn downs due to non-availability of volunteers within 24 months.Desired Value of the project
From the information we gathered and after careful analysis of the problem and opportunity, it is clear that this project will deliver better service and add value to the organization. The above figure illustrates how the MOV relates to the organizational goal of the Pilot Angels.AlternativesBased on research conducted over the Internet OBC team identified the following four alternatives for the PASS. 1. Continue to use the current system. This will referred as Alt 1.2. Utilize a packaged solution. Review of several scheduling solutions resulted in a clear choice of Flight Operation System (www.flightoperationsystem.com) which has the required functionalities. The system can be implemented in 2 waysa. ASP model: Under this Pilot Angels can purchase this service for $7,200/year for a limited use license and will require a little re-programming to meet the requirements. Since this is a proprietary system the programming costs are at a premium of $55 per hour. All the server costs are taken by the service provider. This will be referred as Alt 2.b. Individual product model: Under this Pilot Angels can purchase the product and host them in their own environment. A lot of re-programming is required for customizing the system and implementing them. Since this is a proprietary system the programming costs are at a premium of $55 per hour. This will be referred to as Alt 3.3. Develop a customized flight planning and tracking solution which meets all requirements satisfactorily and is also built with a scalable scope. The programming costs will be on a regular cost of $45 per hour since the skills required are relatively common. This will be referred to as Alt 4.Analysis of AlternativesThe following section analyzes the alternatives Alt 1, Alt 2, Alt 3 and Alt 4 based on Total Cost of Ownership (TCO) and Total Benefit of Ownership (TBO).
? Total Cost of OwnershipThe following table analyzes the total cost of ownership for all the alternatives. PASS – Total Cost of Ownership Resource Description Alt 1 Alt2 Alt 3 Alt 4Personnel Time 8 hours of additional work for every request@ $25.00 per hour 20,000.00 5,000.00 5,000.00 5,000.00Communication 15 calls for every request@ $5.00 per call 7,500.00 2,500.00 2,500.00 2,500.00Software Alt 2: Flight Operation System ASP Subscription. Alt 3: Flight Operation System Alt 4: Database for Custom System 7,200.00 21,600.00 2,000.00Programming Flight Operation System@ $55/hr and custom system @ $45/hr 1,650.00 6,600.00 16,200.00Training 2 day onsite training @ 500/day 1,000.00 1,000.00 1,000.00Hardware Machine description (see footnote) 2,350.00 4,000.00 4,000.00iiSupport & Maintenance The subscription for FOS @ 1000 per year and the customized system @ 750 per year 1,000.00 1,000.00 750Total 27,500.00 20,700.00 41,700.00 31,450.00Table 2 PASS – TCOAlt 3 has the highest TCO while Alt 2 has the lowest TCO at the time of start up. Since these amounts are only a snapshot figures, it is essential to look at some future projection before the system is finalized.The table 3 lists yearly outflow for five years from each of the alternative. Note that from the years 2 onwards the no of patients served will increase from 100 to 150. It is evident that Pilot Angels was able to successfully co-ordinate the service with their manual system for an annual patient strength of 100. If the Pilot Angels have to serve more patients according to their organizational goal then they will have to go for one of the other alternatives to manage the process.PASS – Out flow for 5 years Year 0 Year 1 Year 2 Year 3 Year 4Alt1 27,500.00 27,500.00 41,250.00 41,250.00 41,250.00Alt2 20,700.00 15,700.00 19,450.00 19,450.00 19,450.00Alt3 41,700.00 8,500.00 12,250.00 12,250.00 12,250.00Alt4 31,450.00 8,250.00 12,000.00 12,000.00 12,000.00Table 3 PASS Outflow for 5 Years
From table 3 it is evident that Alt 2 has the lowest start up cost. But its costs in subsequent years are consistently remaining high. But whereas Alt 3 and Alt 4 have relatively high start up cost but their yearly outflow in the subsequent years are significantly reduced.Table 4 summarizes the total costs incurred for each alternative at the end of the years 0, 3 and 5. From table 4 it can be found that though Alt 2 has the lowest start up cost its total cost is the highest at the end of year 5. Whereas Alt 4 has higher start up cost but on the long run offer significant savings than Alt 2. PASS – Total Cost at the end of years Year 0 Year 3 Year 5Alt1 27,500.00 96,250.00 178,750.00Alt2 20,700.00 55,850.00 94,750.00Alt3 41,700.00 62,450.00 86,950.00Alt4 31,450.00 51,700.00 75,700.00Table 4 – PASS total cost at the end of the years? Total Benefit of Ownership (TBO):In order to finalize the products the TBO is an effective tool. Table 5 lists the benefits required for PASS and rates alternatives which are weighted by their relevance to MOV.Benefits Weights Alt1 Weighted Alt1 Alt2 Weighted Alt2 Alt3 Weighted Alt3 Alt4 Weighted Alt4Functional Track Pilot information 5 2 0.1 7 0.35 7 0.35 9 0.45Track Plane information 5 2 0.1 7 0.35 7 0.35 9 0.45Track Pilot / Plane association 12.5 0 0 7 0.875 7 0.875 9 1.125Track customer information 7.5 2 0.15 5 0.375 7 0.525 9 0.675Track service information 12.5 0 0 7 0.875 7 0.875 9 1.125Match customer request 12.5 2 0.25 4 0.5 7 0.875 9 1.125Usability User friendly 7 2 0.14 7 0.49 7 0.49 9 0.63Availability 8 2 0.16 6 0.48 7 0.56 9 0.72Phone availability 8 2 0.16 6 0.48 6 0.48 9 0.72Scalability 7 0 0 6 0.42 7 0.49 9 0.63Ownership 5 10 0.5 4 0.2 10 0.5 10 0.5Security 10 10 1 5 0.5 10 1 10 1Weighted Benefits 100 2.56 5.90 7.37 9.15Table 5 PASS – TBO
It can be found that Alt 4 has the highest benefit relevance to the MOV followed by Alt 3 and Alt 2. The effective alternative can be identified by comparing the TCO and the TBO scores. The following figures compare the TBO with the TCO at the end of 5 years, 3 years and at start up. It can be found that Alt 4 has highest TBO score and has lesser TCO and is an ideal choice for PASS. These analysis indicates that Alt 4 has a high cost during start up in the long run proves cost effective than other alternatives.Required Funding and SupportThe start up investment for PASS is $ 31,450. This includes the development of the system, implementation and training. The support will be provided at the rate of $750 per year.Not-for-profit organizations will face difficulty in funding such projects out of their own budget. But several options are available to raise funding for the project.1. Targeted fund raising can be done for contributions from partner organizations like hospitals, health care organizations, organ banks and individual contributions.2. Partner with patient care or transportation organizations like Corporate Angels Network (CAN) or other Angel Flight organizations like Lifeline Pilots at Illinois.3. Husky Air could fund some parts of the project since the system will significantly reduce their cost of service provided. Costs for hardware and some part of the system can come off their budget.4. Submit the project proposal and apply for funding through some organizations like Johnson & Johnson Community Health Care Initiative to get some aid.http://www.jhsph.edu/johnsonandjohnson5. Work together with the nationwide organizations like Air Care Alliance and AirLifeLine to provide better services. http://www.nffr.org/Airlifeline.htmhttp://www.aircareall.org/