The purpose of this assignment is to explain how you will evaluate and measure the success of the problem solution you intend to implement in the organization. This solution evaluation proc
The purpose of this assignment is to explain how you will evaluate and measure the success of the problem solution you intend to implement in the organization.
This solution evaluation process will be used to determine the potential success of your implemented solution. Success can be measured using both qualitative and quantitative methods, therefore it is important to determine which tools and metrics you will use to evaluate the data you have collected.
In this assignment, you will use cost-benefit analysis to evaluate the financial outcomes of your solution. Create a data chart or graph to most effectively display the cost-benefit evaluation metrics that you will use to measure the success of your solution. Review the study material "Cost Benefit Analysis Solution Evaluation" Excel spreadsheet to assist you. Then, write 250-word explanation of the degree of confidence you have regarding the cost-benefit analysis and the assumptions you are required to make for cost, risk, benefits, and the financial outcome of your proposed solution. Include an explanation of how you will measure whether the solution is successful in addressing the problem and meeting the needs of the business, employees, and customers.
This summary will be used as part of the Business Proposal Presentation in Topic 7 and within the Final Business Proposal in Topic 8. Evidence of revision from instructor feedback will be assessed on the final business proposal.
Prepare this assignment according to the guidelines found in the APA Style Guide, located in the Student Success Center. An abstract is not required.
This assignment uses a rubric. Please review the rubric prior to beginning the assignment to become familiar with the expectations for successful completion.
Descriptors
| Definitions: |
| Payback period – the period of time, expressed in months, that a project requires to recover the money invested in it (including the one-time savings which are often excluded by some calculators) |
| Benefit-cost ratio – an indicator that is often used to decide whether the benefits of a given project or solution outweigh the actual costs (the higher the ratio the better the investment) |
| Analysis horizon – the number of months the project is expected to be utilized before replacement or major upgrade |
| Implementation costs include capital costs (equipment, constructions, etc.), training, travel, outside professionals, lost of productivity during implementation & training, implementation costs such as installation, etc. |
| Ongoing costs include maintenance costs (monthly costs relating to the ongoing maintenance) and operational cost (internal labor, expendables, materials, supplies, etc.) |
| Hard savings – the direct benefits that affect the bottom line and can directly improve the financial performance of the organization (examples are: sales/price increase, cost reduction and productivity savings) |
| Soft savings – the indirect benefits which are difficult measure (they are mainly improved yield of a business process, the increased stakeholder satisfaction and the increased safety in the workplace) |
| One-time savings – examples are value of inventory reduction and sale of unneeded assets |
Example
| Call Center | |||||||||||
| $, hours, units | E.g.: $/unit | $ | Year-1/partial year | Year-2 | Year-3 | ||||||
| Cost/Benefit | Unit | Entry/Quantity | Final/Total | Description | |||||||
| Project Title | C O S T S | Implementation costs (one time) | 8,000 | ||||||||
| CRM Rules for CCR Quality | 1 | Update rules in CRM | 8,000 | Cost to update rules | |||||||
| Solution Title/Description | 2 | ||||||||||
| 3 | |||||||||||
| Sponsor | 4 | ||||||||||
| CC Manager | Ongoing costs (monthly) | 0 | |||||||||
| Project Manager | 1 | ||||||||||
| J Doe | 2 | ||||||||||
| Timeframe for CBA (in months) | 3 | ||||||||||
| 12 | 4 | ||||||||||
| Estimated cost/savings year one (maximum 12) | >>>Total Costs (monthly) | 667 | 3,333 | 11,333 | 19,333 | ||||||
| 5 | B E N E F I T S | Hard and soft savings (monthly) | 1,200 | ||||||||
| Average labor cost (hourly / daily) | 1 | Saving from reduced calls | Calls | 5000 | 1,000 | ||||||
| $23.00 | 2 | Saving from reduced QC | QC | 500 | 200 | ||||||
| Assumptions/Comments | 3 | ||||||||||
| 1 | 4 | ||||||||||
| 2 | Savings (one time) | 0 | |||||||||
| 3 | 1 | ||||||||||
| 4 | 2 | ||||||||||
| 5 | 3 | ||||||||||
| 6 | 4 | ||||||||||
| 7 | >>>Total benefits (monthly) | 1,200 | 6,000 | 20,400 | 34,800 | ||||||
| Benefit-cost ratio | 1.80 | 667 | Monthly payback | Net cash flow | Net gains | 2,667 | 9,067 | 15,467 | |||
| Monthly payback period | 6.7 | 0 | 6.7 | 1,200 | ROI | 80.0% | |||||
Cost Benefit Analysis
| $, hours, units | E.g.: $/unit | $ | Year-1/partial year | Year-2 | Year-3 | ||||||
| Cost/Benefit | Unit | Entry/Quantity | Final/Total | Description | |||||||
| Project Title | C O S T S | Implementation costs (one time) | |||||||||
| 1 | |||||||||||
| Solution Title/Description | 2 | ||||||||||
| 3 | |||||||||||
| Sponsor | 4 | ||||||||||
| CC Manager | Ongoing costs (monthly) | 0 | |||||||||
| Project Manager | 1 | ||||||||||
| J Doe | 2 | ||||||||||
| Timeframe for CBA (in months) | 3 | ||||||||||
| 4 | |||||||||||
| Estimated cost/savings year one (maximum 12) | >>>Total Costs (monthly) | ||||||||||
| 5 | B E N E F I T S | Hard and soft savings (monthly) | 0 | ||||||||
| Average labor cost (hourly / daily) | 1 | 5000 | |||||||||
| 2 | 500 | ||||||||||
| Assumptions/Comments | 3 | ||||||||||
| 1 | 4 | ||||||||||
| 2 | Savings (one time) | 0 | |||||||||
| 3 | 1 | ||||||||||
| 4 | 2 | ||||||||||
| 5 | 3 | ||||||||||
| 6 | 4 | ||||||||||
| 7 | >>>Total benefits (monthly) | ||||||||||
| Benefit-cost ratio | Monthly payback | Net cash flow | Net gains | ||||||||
| Monthly payback period | 0 | ROI |
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