Read the running case at the end of the chapter. Analyze each of the four projects. Then summarize each of the proposed projects in a simple table format suitable for presentation to top management. In the table you should include the following:
Include the name for each project
Identify how each project supports business strategies
Assess the potential financial benefits
Assess any other potential benefits
Provide your initial assessment of the value of each project
Write your results in a one to two page memo to top management, including appropriate backup information and calculation
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 healthcare 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, and walking.
• Allow employees to register for company-sponsored classes and programs to helpthem manage their weight, reduce stress, stop smoking, and manage other health-related issues.
• Track data on employee involvement in these recreational and health-managementprograms.
• Offer incentives for people to join the programs and do well in them (e.g., incentivesfor achieving weight goals, winning sports team competitions, etc.).
2. Health Coverage Costs Business Model: Develop an application to track employee healthcare expenses and company healthcare costs. Healthcare premiums continue toincrease, and the company has changed insurance carriers several times in the past10 years. This application should allow business modeling of various scenarios as well astracking and analyzing current and past employee healthcare expenses and companyhealthcare costs. This application must be secure and run on the current intranet so sev-eral managers and analysts can access it and download selected 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 healthcare 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 and service categories and different sales reps based on those products and services. You see great opportunities to increase sales to current customers by providing discounts when they purchase multiple products and 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 improvedevelopment 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 that the system will take one year and $3 million to develop and require 20 percent of development costs each year to maintain.