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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

 

 

 

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