BIS 261 DeVry Week 2 I Lab Latest
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<strong>BIS</strong> <strong>261</strong> <strong>DeVry</strong> <strong>Week</strong> 2 I <strong>Lab</strong> <strong>Latest</strong><br />
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<strong>BIS</strong> <strong>261</strong> <strong>DeVry</strong> <strong>Week</strong> 2 I <strong>Lab</strong> latest<br />
<strong>BIS</strong><strong>261</strong><br />
<strong>BIS</strong> <strong>261</strong> <strong>DeVry</strong> <strong>Week</strong> 2 I <strong>Lab</strong> <strong>Latest</strong><br />
Scenario and Summary<br />
You are a business analyst working for a small business that is considering a project to implement a Customer<br />
Relationship Management (CRM) system for use by field sales personnel. The system will use the ACT! software<br />
application from Sage Software, Inc. Management has asked you to prepare a preliminary economic feasibility analysis<br />
for this proposed project.<br />
The company has nine field sales representatives and one sales manager. The sales representatives and the manager<br />
already have desktop computers and Blackberry smartphones with cellular data plans, so these items do not have to<br />
be considered in your analysis.<br />
The project requires the purchase of the following:<br />
Ten copies of the latest version of the Sage ACT! Premium software application (one copy for each of the nine field<br />
sales representatives plus an additional copy for the sales manager).<br />
Installation of the software on all 10 desktop PCs will take a computer technician from the company’s internal IT<br />
department two hours to complete. The computer technician earns $20/hour.<br />
All users will attend a one-day (i.e., eight-hour) training class on the ACT! Premium software provided by Real World<br />
Training. The cost for the training class is $800 (this is for the entire class, not per person).<br />
After the system is in operation, the company expects to purchase subscriptions to the ACT! Mobile Live service to<br />
allow the sales representatives to access their ACT! data through their Blackberry smartphones. A subscription will be<br />
required for each of the nine sales representatives (but not for the manager). Each subscription costs $120 per year.<br />
Benefits expected from the system include:<br />
Earnings from increased sales: $1,500 per year; and<br />
Cost savings by avoiding hiring a part-time administrative assistant for the sales manager: $2,500 per year.<br />
The project has a five-year time horizon and the company uses a discount rate of 10%.<br />
Upon completing this lab, you will be able to:<br />
Research and prepare a basic economic feasibility analysis spreadsheet for a project, and interpret the results.<br />
Necessary materials:<br />
All materials marked with * are already installed in your lab environment.<br />
Background information (Scenario/Summary section above)<br />
Economic Feasibility Analysis workbook (<strong>BIS</strong><strong>261</strong>_W2_i<strong>Lab</strong>_Template.xlsx; download from i<strong>Lab</strong> Files folder in Doc<br />
Sharing)
Microsoft Excel* for performing the feasibility analysis<br />
Deliverables<br />
Submit your completed Economic Feasibility Assessment workbook with price quotations, feasibility analysis, and<br />
conclusions.<br />
Grading rubric:<br />
Item<br />
Percentage<br />
Quotations sheet 30%<br />
Analysis sheet 40%<br />
Conclusions sheet 30%<br />
100%<br />
i<strong>Lab</strong> Steps:<br />
STEP 1: Read and analyze the business case<br />
Carefully read the Scenario/Summary given above and identify the benefits, one-time costs, and recurring costs<br />
associated with this proposed project. In your review, make notes on each of the following. These notes will not be<br />
turned in, but you will use them in completing the remaining steps in this lab.<br />
<br />
<br />
<br />
What are the benefits that the company will obtain for each year that the system is in operation?<br />
What are the one-time costs that the company must pay before putting the new system into operation?<br />
What are the recurring costs that the company must pay each year that the system is in operation?<br />
STEP 2: Download and open Economic Feasibility Analysis workbook template<br />
Download the file <strong>BIS</strong><strong>261</strong>_W2_i<strong>Lab</strong>_Template.xlsx from the i<strong>Lab</strong> Files area of Doc Sharing, and open it in Microsoft<br />
Excel. You will use this Excel workbook to record the results of your research, perform your economic feasibility<br />
analysis, and document your conclusions.<br />
STEP 3: Research costs<br />
Select a vendor for the application software needed for the project and determine the costs associated with purchasing<br />
this software.<br />
Do research to identify vendors who supply this application software and their pricing. You may want to do research on<br />
the Internet (for example, on the website of the software publisher and other ecommerce sites that sell business<br />
software). You may also consider checking with local retailers who sell business software.<br />
Select a specific vendor to use for a price quotation. You may select the vendor with the lowest price, or you may<br />
choose to select a higher-priced vendor if you decide that other factors (such as reliability or convenience) justify the<br />
higher cost.<br />
In the One-Time Costs section of the Quotes worksheet, record the name of the software application under Product or<br />
Service. Record a description of the application (including the specific version) under Description. Record the vendor<br />
that you selected under Vendor. Record the vendor’s price per copy under Unit Cost. Record the number of copies<br />
needed for the project under Quantity.<br />
Notice that a formula in the worksheet automatically calculates the Extended Cost.<br />
STEP 4: Record additional cost and benefit line items<br />
At the top of the worksheet, enter your name for Prepared By and the current date for Date.<br />
In the Benefits section of the worksheet, for each expected benefit of the project, enter the Benefit Item, How<br />
Determined, and the Annual Value. If the annual value of a benefit item was given in the Scenario/Summary, enter
Given in scenario in the How Determined column. If you need to perform any research or calculations to determine the<br />
Annual Value, use the How Determined column to briefly describe what you did.<br />
In the One-Time Costs section of the worksheet, for each additional one-time cost item for the project, enter the Product<br />
or Service, Description, Vendor, Unit Cost, and Quantity (using the rows below the entry for application software that<br />
you made in Step 3). If a service is provided by a company employee rather than purchased from an outside vendor,<br />
enter In-house in the Vendor column.<br />
In the Recurring Costs section of the worksheet, for each recurring cost associated with the project, enter the Cost<br />
Item, How Determined, and Annual Value. If the annual value of a cost item was given in the Scenario/Summary, enter<br />
Given in scenario in the How Determined column. If you needed to perform any research or calculations to determine<br />
the Annual Value, use the How Determined column to briefly describe what you did.<br />
Notice that formulas in the worksheet automatically calculate the totals for each section.<br />
STEP 5: Perform the Economic Feasibility Analysis<br />
Enter values in the blue-shaded cells in the Analysis worksheet to calculate the Net Present Value (NPV), Return on<br />
Investment (ROI), and break-even point for the project, as follows.<br />
Enter a descriptive name for the project in the cell marked [Enter Project Name Here].<br />
Enter the discount rate for the project (the discount rate is given in the Scenario/Summary).<br />
Take the Total Annual Value of Benefits from the Quotes worksheet and, on the Analysis worksheet, enter this value<br />
in the Net Economic Benefit row for each year that the project will be in operation (Year 1 through Year 5). Be sure to<br />
enter benefit values as positive numbers.<br />
Take the Total of One-Time Costs from the Quotes worksheet and, on the Analysis worksheet, enter this value in the<br />
One-Time COSTS row under Year 0. Be sure to enter this cost value as a negative number.<br />
Take the Total Annual Value of Recurring Costs from the Quotes worksheet and, on the Analysis worksheet, enter this<br />
value in the Recurring Costs row for each year that the project will be in operation (Year 1 through Year 5). Be sure to<br />
enter cost values as negative numbers.<br />
Notice that formulas in the worksheet automatically calculate the Overall NPV, Overall ROI, and break-even point for<br />
the project.<br />
STEP 6: Document conclusions<br />
On the Conclusions worksheet, write a brief memo (three-to-five paragraphs) to your manager, including the following:<br />
1. Enter your name after FROM: and the current date after DATE:;<br />
2. Summarize your research findings and the results of your feasibility analysis in narrative form (one or two<br />
paragraphs);<br />
3. State your own interpretation of these results--what they mean in your own words (one or two paragraphs);<br />
and<br />
4. Finish with a clear statement of your opinion on whether or not the project is economically feasible for the<br />
company, and why (one paragraph).<br />
STEP 7: Save and submit<br />
Save your completed workbook as a Microsoft Excel file using the following naming convention:<br />
LastName_w2_ilab.xlsx.