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OutlineOutline

the case of Metalco factual information

discussion

justification of projects

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MetalcoMetalco

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Information from the CaseInformation from the Case

background of company business of company philosophy of company structure of company history of information projects history of MIS Group IMI project attitude towards the proposal justification method

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Open-Ended Questions Open-Ended Questions about Metalcoabout Metalco

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Open-Ended QuestionsOpen-Ended Questions

Would you approved the proposal if you were a member of the G14?

What would be the attitude of the four directors towards the proposal?

comments on

the justification process

the selection process of the software

the needs of Metalco on the proposed system

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Justification of ProjectsJustification of Projects

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General ApproachGeneral Approach

identify needs to change set up working group/task force define objectives and identify constraints identify alternatives, and for each one

determine costs and benefits, tangible or not perform sensitivity analysis

compare alternatives and select the best

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Identify AlternativesIdentify Alternatives

understand system requirements thoroughly hardware, software, existing technology

get help from experienced and experts take more options, include the do-nothing

option use simple, mature technology

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Determine Tangible CostsDetermine Tangible Costs

total cost in the planning horizon contingency factor from the bill-of-material of the system

basic components: hardware, software, labor, miscellaneous

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Hardware Cost EstimationHardware Cost Estimation

quantities types peripherals new systems

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Software Cost EstimationSoftware Cost Estimation

whole system, including for system integration, data conversion, etc

estimation from in-house personnel request for proposal

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Labor Cost EstimationLabor Cost Estimation

estimate for current and proposed practices

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Labor Cost EstimationLabor Cost Estimation

read past headcount directly from the historical record

for future, estimate the volume and use the current productivity indicator

get advise from front-line supervisor calculate section by section, year by year,

direct and indirect

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Labor Cost EstimationLabor Cost Estimation

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Labor Cost EstimationLabor Cost Estimation

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Miscellaneous Costs EstimationMiscellaneous Costs Estimation

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Comparison of Tangible FactorsComparison of Tangible Factors

different aspects payback period time value of money internal rate of return depreciation

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Different Comparison AspectsDifferent Comparison Aspects

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Calculate SavingCalculate Saving

can easily calculate differences in quantifiable costs between current and proposed practices

compare tangible and intangible items

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Perform Supplemental AnalysisPerform Supplemental Analysis

sensitivity analysis to design for uncertainty

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Comparison for Intangible FactorsComparison for Intangible Factors

various methods: AHP, multi-attribute optimization, scoring, etc.

general scoring procedure identify a set of factors determine the weights of factors set the score levels within each factor