You will need some projects to complete the work in this module. We have been focusing largely on what we need and how much it will cost. If you recall from previous week’s work, you were assigned to be the project manager, but it was a late in the process, you came on pretty much just before the implementation, this is common, but it is advantageous to be part of the feasibility and early planning where the projected cost savings are determined. The later financial data, like last week’s work, supports (or not) the early calculations. Refer to previous modules since this is a continuation of the same project. This module we will make the following assumptions for simplicity:

• All computers that are replaced are new computers
• Every employee that gets a new computer makes $10 per hour ($400 per week).
• Every employee gets two weeks of vacation (works 50 weeks per year)
• There are 3 shifts, so calculate labor on 24 hours, 5 days a week.
• The speed of the new computers will do the same jobs in 45 minutes where the old computers took an hour to do the same work.
• All calculations are based upon 1 year.
• All numbers in the examples below are arbitrary and for example only, you will have different data for your report.

Hint: Project labor will need to be separate from employee labor who are getting computers.

A major section called “Financial Data” as a section that will be put into the larger course project. You will have 4 chief areas that you will need to include in this section along with an introductory paragraph and a summary paragraph.

1. You will give a paragraph giving an overview of the material you are about to present. It will point out any changes or important things to be aware of when the reader views the supporting data.
2.  SWOT Analysis subsection. SWOT stands for Strengths, Weaknesses, Opportunities, and Threats. This is a visual representation, divided into 4 quadrants that show the “why” we are doing this. The Strengths are our current capabilities, and what we do well. Weaknesses details where the gap is between where we are as an organization today and where we are trying to attain. The Opportunities represents what we will achieve by completing this project in direct response to the threats. The Threats are why we are compelled to do this now, does a competitor have some advantage that we should react to? There is more detail in this module’s activity for clarification and format. For the purposes of the course project, each quadrant should have 3 bulleted, short sentences that convey the overall picture. It will give some detail, but not be vague. Concise is the keyword here.
3. A Budget subsection. You will include your spreadsheet that details all your costs (line items and costs). This will be a carryover from prior week’s work, but if you must adjust any figures, you much also have a note to the right of the dollar amount explaining the variance.
4. A Return on Investment (ROI) section. This is the heart of the entire body of work this module. The ROI shows in one simple calculation that this information technology project will pay for itself and to what degree. There are two key steps, one that shows the cost saving or return in terms of dollars, and the other step show how much the return or saving will be expressed as a percentage. For example, let’s say a project costs $30,000 and the outcome that there is a savings of $50,000 in labor or lower product costs it would be expressed as shown below:

Labor Savings $50,000

Project Cost = $30,000

Total Savings $20,000

This can be expressed as a percentage for how much of a return it is:

Projected Cost Savings = $20,000 = 66.6% ROI

Invested Amount $30,000

1. The next section to be included is a Break Even (BE) Analysis. It is important to understand that there is a return on investment, but it is almost equally important to understand how long it will take. Some projects take longer to realize savings and this can occasionally factor into the decision to do the project or seek quicker remedies with quicker returns. This is a case of “it depends” in many cases, only answered by the final decision makers on whether the project gets funded or not. The calculation is not difficult. We know from our ROI data that the project will make money and it is justifiable. Now we just need to know how long it will take. In the assignment this module, we know how much the project will cost. We know how much the total labor savings will be. If we divide the total labor savings (based on a year) by 12 months, we have labor savings per month. Then it is simple math:

Total Project Cost ÷ 1 Mo. of Labor Savings = Number of Months to BE

For Example:

$40,000 ÷ $3,800 = 10.52 months until BE

1. Lastly, summarize your findings and reiterate how you arrived at the numbers and if there are further recommendations needed.