Design and implement the new intranet capabilities in-house

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Reference no: EM13793457

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

Discount rats	8%
Assume the project is done in about 6 months		Year
	0	1	2	3 Total
Costs	140,000	40,000	40,000	40,000
Discount factor	1	0.93	0.86	0.79
Discounted costs	140,000	37,037	34,294	31,753 243,084

Benefits	0	200,000	200,000	200,000
Discount factor	1	0.93	0.86	0.79
Discounted benefits	0	186,185	171,468	158,766 515,419

Discounted benefits - costs	(140,000)	148,148	137,174	127,013
Cumulative benefits - costs	(140,000)	8,148	145,322	272,336 41- NPV
	Payback in Year 1
Discounted life cycle R01--->	112%

Assumptions
Costs	# hours
PM (500 hours, 550/hour)	25,000
Staff (1500 hours, PO/hour)	105,000
Outsourced software and services	10,000
Total project costs (all applied in year 0)	140,000
Benefit
# consultants	400
Hours saved	40
S/hour profit	10
Benefits from saving time	160,000
Benefits from 1% increase in profits	40,000
Total annual projected benefits	200,000

Reference no: EM13793457

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