Group Presentation - web based customer ordering system.pdf-Adobe Acrobat Reader

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Group Presentation - web based customer ordering system.pdf-Adobe Acrobat Reader DC e Edit View Window Help ome Tools Group Presentation.X ? Sig What process would you follow to make this impor- tant decision? Who needs to be involved? 1. Assume that your project team has been working for three a. months to complete the systems design of a new Web- based customer ordering system. Two possible options seem to meet all users' needs. The project team must make a final decision on which option to implement. The following table summarizes some of the key facts about each option. b. c. What additional questions need to be answered to d. Based on the data, which option would you recom- e. How would you account for project risk in your deci- make a good decision? mend and why? sion making Option 2 Option 1 $1.5 million $3.0 million $1.5 million $2.2 million 0.5 million $1.0 million Factor Annual gross savings Total development cost Annual operating cost Time required to implement Risk associated with project (expressed in probabilities) Benefits will be 50% less than expected Cost will be 50% greater than expected Organization will not/cannot make changes necessary for system to operate as expected Does system meet all manda- tory requirements? 9 months 15 months 20% 35% 25% 30% 20% 25% Yes Yes

Explanation / Answer

Factors Option1 Option2 Annual Gross saving 1500000 3000000 3000000 Total Development Cost 1500000 2200000 Annual oprating Cost 500000 1000000 Time required to implement 9months 15 Moths Annual operating cost* Required month/year 375000 1250000 Total cost $1,875,000 $3,450,000 Saving + cost $3,375,000 $6,450,000 Benefit will be 50% less than Expected 0.5= 13% 15% Optimization will not make change necessary 100000 250000 Revenue 0 0

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