JWD Consulting's business case
1.0 Introduction/Background
JWD Consulting core business goal is to provide world-class project management consulting services to various organizations. The CEO, Joe Fleming, believes the firm can streamline operations and increase business by providing information related to project management on its intranet site, making some information and services accessible to current and potential clients.
2.0 Business Objective
JWD Consulting's strategic goals include continuing growth and profitability. The project management Intranet site project will support these goals by increasing visibility of the firm's expertise to current and potential clients by allowing client and public access to some sections of the intranet. The project will also improve profitability by reducing internal costs by providing standard tools, techniques, templates, and project management knowledge to all internal consultants. Because JWD Consulting focuses on identifying profitable projects and measuring their value after completion, this project must meet those criteria.
5.0 Analysis of Options and Recommendation
There are three options for addressing this opportunity:
1. Do nothing. The business is doing well, and we can continue to operate without this new project.
2. Purchase access to specialized software to support this new capability with little in-house development.
3. Design and implement the new intranet capabilities in-house, using mostly existing hardware and software.
TABLE 3-2 JWD Consulting's business case (continued)
Exhibit: Financial Analysis for Project Management Intranet Site Project
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Discount rats
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8%
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Assume the project is done in about 6 months
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Year
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0
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1
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2
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3 Total
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Costs
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140,000
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40,000
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40,000
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40,000
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Discount factor
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1
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0.93
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0.86
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0.79
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Discounted costs
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140,000
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37,037
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34,294
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31,753 243,084
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Benefits
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0
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200,000
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200,000
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200,000
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Discount factor
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1
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0.93
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0.86
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0.79
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Discounted benefits
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0
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186,185
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171,468
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158,766 515,419
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Discounted benefits - costs
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(140,000)
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148,148
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137,174
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127,013
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Cumulative benefits - costs
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(140,000)
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8,148
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145,322
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272,336 41- NPV
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Payback in Year 1
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Discounted life cycle R01--->
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112%
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Assumptions
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Costs
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# hours
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PM (500 hours, 550/hour)
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25,000
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Staff (1500 hours, PO/hour)
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105,000
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Outsourced software and services
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10,000
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Total project costs (all applied in year 0)
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140,000
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Benefit
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|
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# consultants
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400
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Hours saved
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40
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S/hour profit
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10
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Benefits from saving time
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160,000
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Benefits from 1% increase in profits
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40,000
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Total annual projected benefits
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200,000
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