EXECUTIVE REPORT



EXECUTIVE REPORT

OPC Assignment

INSS 640 (SUMMER 2010)

(Assignment 3)

GROUP F

July 13, 2010

Group Members: Eric Czajkowski

Christopher Headrick

James McEntee

Burt Richards

grade 38/45

CSF

cost/benefit

risk

grade = -3

DFd -3

CPM -1

Executive Summary

Launching an E-Commerce company takes more then simply creating a website. While it Is easy to read about success stories like Amazon and eBay needing little more than a great idea, reality shows a lot of time, effort, and capital may be needed. Not wanting to be left behind, Sam, Lisa, and Lee have an idea that establishes an intermediary website – aggregating leads for service industries. The website would not actually perform the services but put client in touch with service providers.

This report provides an in depth analysis of strategic and tactical moves that can be implemented to ensure the company’s viability. For starters changing the intended website domain, since the desired domain is already owned, to . Additionally our consulting firm has provided a scope for launching the site and a baseline plan that if implemented will ensure a successful investment. We analyzed the risks and performed a through financial analysis. Diagrams are referenced through out the report – these diagrams further certify the website’s potential.

Part 1 - Scope:

Develop website

• Choose and register domain name - not first choice but is currently available

• Select domain host

• Website designer via 3rd party

• Webmaster

• Google Analytics

Services

• Food orders for delivery

o Choose restaurants to offer

o Contact restaurants to get permission to refer their business and arrange for referral fees

• Make emergency appointments

o Select which hospitals to offer if necessary (unless including all available)

o Contact hospitals to get permission to refer their business and arrange for referral fees

• Provide rides

o Choose which taxi/transportation services to offer (unless including all available)

o Contact merchants to get permission to refer their business and arrange for referral fees

Software & Hardware

• Research & Select

• Hire developer

• Purchase

• Install/setup

Upload service information to website (webmaster)

• Testing

Database

• Hire developer

• Interview with owners to see what they want tracked and analyzed, though creator would be expert

• Create structure

• Testing

Integrate database with website

• Hire developer

• Testing

Develop reports for analysis

• Testing

Final testing of all components

Go live

Part 2 - Baseline Plan: (OK)

Our team of consultants believe that we can be successful in developing a web service that provides services in the areas of “Food Order for Delivery”, “Emergency Appointments”, and “Transportation Service”. Our business will be purely web-based with little to no investment in plant, property, and equipment. We will not provide any of the actual services, but will provide customers with a way to connect with the third party business in the various service categories. In turn, we will provide a new channel of business for the businesses that already operate in the various service categories. Revenue will come from a fee placed on all transactions.

To be successful, an attractive, modern website will need to be developed that will make it as easy as possible to be reached by customers as well as service providers. “Green_Delivery_” was thought to be a high-ranking choice for the site’s name; however, underscores (“_”) are not permitted in domain names, and so this name will not be suitable. Instead, consider coming up with a more succinct and catchy domain name such as “” (available as of July 12, 2010). Regardless, you should be able to procure an available, appropriately named domain name for around $15 per year. Savings could be incurred if the domain name is reserved a longer period of time ().

A main priority for our business is to be as “green” as possible. This will be achieved in any number of ways. In considering the structure on which our site will be based, it has been decided that allowing Amazon Web Services (AWS) to host our site and its applications is the most economical and environmentally choice. Although AWS’s servers till (???) use energy, it is our opinion that they have the greatest incentives and technologies, as well as the greatest opportunities to create economies of scale in order to minimize our business’s impact on our environment. It is difficult to forecast our exact needs in this area; however, we can approximate that these services will cost up to $2,500 per year, with the possibility of it being significantly less, based on usage (aws.).

A webmaster and designer (OK) will be necessary in order to create a modern, attractive website that is effective. The webmaster will be responsible for all things related to the website in terms of its aesthetics and functionality with regards to our users. A fair salary for a webmaster would be approximately $65,000 per year (). The website design phase might be expected to take as much as 2 months, including the integration of web applications into the site.

A web developer will be needed to develop applications within the site in order to make sure that you have the most advanced site possible and that it runs smoothly. The web developer will also need to be familiar with the database development and management, and will be responsible for making sure that the two are fully integrated. The database for our site will need to verify information on our customers such as their personal information, most-used services, favorite providers, and more. It is our belief that the bulk of web development, including database storage can be accomplished at little or no software cost with platforms such as HTML5 Web SQL Database and Google App Engine. Additionally, you should expect to pay a web developer approximately $60,000 per year (). The software development stages can be expected to take as long as 3.5 months.

A significant effort will have to be mounted to test the site, putting it through all possible scenarios, and assuring that it is doing all that is advertised. For this task, it would be prudent to hire two lower level Web Analysts, who can be expected to make approximately $50,000 each. This process can be expected to take as long as 1.5 months, approximately.

For the administrative side of the business, cloud applications offered by Google Apps will be used for all day to day software needs, including e-mail, document management, knowledge retention, and other communication. This is also a “green” choice that is also economically feasible at an annual cost of $50 per year, per user. This is relatively easy software to use, with little set up or transition costs to worry about.

Services

For each of the planned business segments for which our site will address, it will be of the utmost importance for us to expand the list of participating providers as well as integrating specific information on each provider onto our site. The additional challenge will be to develop an innovative system in which customer requests can communicated to our partner businesses. This will be integral to our business model. Efficiency is important as is developing a system that works for both us and our partner businesses and providers.

For the “Food Orders for Delivery” segment, the important tasks will be to gather potential provider businesses to participate as partners as well as to gather their menus and integrate them into our site. This service will need to collect the location for where the user is in terms of their physical address so that they can accept a delivery. It will need to be able to collect specific menu selections and preferences, including special instructions. It should allow the user to schedule a delivery for a later date or time.

For the “Emergency Appointments” segment, adding potential providers, and incorporating each of their schedules will be the core activity on our part. Our process will need to have a means of integrating with a providers scheduling service. A host of information related to the customer’s history with a particular provider would need to be collected, including their reason for making the appointment, and information related to their medical insurance, history, and more.

For the “Transportation Service” segment, adding potential businesses, and finding a way to integrate their services into our business model will be important. This process will need to have precise location information as to where the customer is as well as where they’re going. It could potentially pull exact coordinates from a GPS on a smartphone that would allow the process to pinpoint the customer to a particular block or street corner. The provider would also want some specific info on the destination.

Part 3 - List of critical success factors:

An organization’s success can be defined by successfully implementing a few critical and measurable goals. (p 528) Critical success factors are influenced by managers and external factors. Identifying the critical success factors provides guidance to developers and management regarding which projects have priority and must not fail. Successful implementation all but assures the organization’s success. Failure in these areas makes succeeding increasingly difficult. Critical success factors are determined by executives after collaborating with top managers. Each manager has his/her teams own individual critical success factors that each manager wants incorporated as the company’s critical success factors. Only the most important individual critical success factors are selected as organizational critical success factors as not every individual priority makes or breaks the company’s success. The management team recognizes the critical success factors as: 1) simple conversion process trusted by users 2) high quality data collection and reporting 3) flexibility in facilitated services.

also (very important in ebiz)

Attractive web site..WYSIWYG

24/7 support

minimum down time

Data security (like credit cards etc..)

no deadlinks.. which could turn customers away:

Each of these organizational critical success factors are interrelated. Failure in either one, all but ensures corporate failure. A simple conversion process trusted by users should be the number one priority. The web site should be designed to be very user friendly with a trained support staff on standby. The site does not generate revenue per unique visitor to its page, but instead generates revenue by aggregating leads for its partners. If the user gets to the page but either does not trust inputting personal information or has a hard time navigating, a potential repeat client is lost. If the company is able to successfully convert the site’s users but is unable to analyze the data efficiently, market trends (good or bad) may go unnoticed until it is too late. This data can and should be analyzed to determine where the site should focus advertising efforts (external facing) and information systems upgrades (internal projects). Lastly, if the company is able to analyze the data easily and determines significant revenue is driven by acting as an intermediary to one particular service, the company should have the flexibility to shift additional resources to either maximize the opportunity or to build up the not so profitable areas. Regardless, if either of the organizational critical success factors fails so too will the company. It is imperative everyone within the organization from the developers to the executives works to ensure these three factors’ success.

Part 4 - Resource requirement, allocation and analysis:

Once an organization determines what the corporate critical success factors are, several strategic analyses are conducted to guide the corporate information systems development. A portfolio analysis should be conducted similarly to a financial analysis weighing the costs of projects (asset development) with the benefits (value created). Costs can be divided into several categories including: professional fees, technology costs, administrative costs, sales and marketing, and wages and benefits. ()

Professional fees, if not handled by in-house corporate counsel, are fairly minimal and range from a few hundred to a few thousand depending on the complexity of the contracts, incorporation, and/or patent application. It would be advised in this situation to hire an outside lawyer on a need-based circumstance. Once the business a more specific cost benefit analysis can be performed to see if value is added by hiring a full time corporate attorney. At this time, a few hundred dollars an hour would be cheaper than a $75k salary plus benefits for in-house counsel.

Administrative costs include business insurance, rent, utilities, etc. The magnitude of these costs can easily be under estimated. Although rent is a fixed cost, numerous variable costs increase as more computers and servers are brought online. With each new hire a desk and chair is needed. The more employees the more copies are made, the more faxes are sent, the more paper and toner gets used. Assuming rent is stable at each month, utilities and other administrative expenses should be projected then increased until historical data can be analyzed for future projections. Adding fixed and variable administrative expenses (as well as factoring in a slight adjustment upwards) costs the company about $10k per month.

Wages and benefits will certainly be the biggest monthly expense (benefit as expense!!!) for the startup. Even if employees take less money and forego benefits in return for corporate stock, hiring an analyst, software developer, human resources manager, operations manager, and executive team will prove costly. (see figure below for breakdown).

Techonology expenses will rise and fall with the growth of the company. Initial start up costs for computers, copiers/fax, servers, etc. will be required. As the company grows new computers and servers will be needed at additional costs. As an e-commerce business, the cost of sales expenses gets rolled into the marketing expenses. In order to compete customers must know about the service. Using a $20k a month interactive marketing budget allows the company to attract business without over paying for leads. As the business grows and the sites functionality is optimized additional marketing dollars can be spent capturing leads.

| | |Month 1 |Month 2 |Month 3 |

|Professional fees |$500 |$500 |$500 |

|Administrative expenses |$10,000 |$10,000 |$10,000 |

|Techonology | |$15,000 |$1,500 |$3,500 |

|Sales and Marketing |$20,000 |$20,000 |$30,000 |

|Wages | |$30,700 |$28,500 |$31,500 |

|Total Monthly Expenses |$76,200 |$60,500 |$75,500 |

|Total Expenses YTD |$76,200 |$136,700 |$212,200 |

| | | | | |

|Wages by position: | | | |

|Software developer (contract employee @ $50hr) |$6,000 |$4,500 |$6,000 |

|Business analyst |$2,700 |$2,500 |$1,500 |

|HR manager | |$3,000 |$3,000 |$3,000 |

|Operations manager |$4,000 |$4,000 |$4,000 |

|Sales manager |$3,000 |$2,500 |$5,000 |

|Executives | |$12,000 |$12,000 |$12,000 |

|Total Wages | |$30,700 |$28,500 |$31,500 |

| | | | | |

|Technology costs: | | | |

|Computers | |$5,000 |0 |2000 |

|Copiers/Fax | |$5,000 |0 |0 |

|Cables | |$2,000 |$1,500 |0 |

|Servers | |$3,000 |0 |$1,500 |

|Total Technology Costs |$15,000 |$1,500 |$3,500 |

need to identify tangible/intangible benefits and perform cost/benefit analysis)

Part 5 – WBS

See Attached

Part 6 – Critical Path

See Attached

task should be connected, they can not be in isolation for you to define CPM

Part 7 – Risks

The main dimensions of project risk are project size, project structure and experience with technology. The risk of a project is directly related to its size, with projects generally becoming more complex as they grow. The risk of a project is also directly related to its level of structure, with projects having less structure being of greater risk. Finally, the risk of a project is directly related to the level of technical expertise of the project team.

Based on our past experience we feel that the risk of the project is relatively low because it is relatively small, both in terms of scope and cost, and it is also highly structured. Both the project team and the information systems staff have the required technical expertise to successfully design and implement the new system. Furthermore, being that the end-users participated in the design of the system there should be a low level of counter implementation.

Our planned use of cloud computing should also benefit the project from a risk perspective. Cloud computing refers to a model of computing where firms and individuals obtain computing power and software applications over the Internet, rather than purchasing their own hardware and software. We have decided to use Amazon Web Services and Google Apps, with both companies possessing the technical expertise and support to facilitate your goals. As a result, you can avoid sunk costs from investing in software and hardware that may not be compatible or adaptable to your business in the future.

The only major problem that we foresaw at the outset of this project was the integration of the database with the website. We will eliminate this risk by hiring a developer with the knowledge and expertise to design and create both the website and the database.

It should be noted that our group has taken the added measure of implementing formal planning and control tools for this project. (what are they??) It is our belief that our efforts to map out the project will help you to manage your project effectively. For your use, we have created a Gantt chart, network diagram, and Work Breakdown Structure (WBS) diagram.

others:

hackers

business failure

dead sites

changing requirements

behind schedule

Part 8 - System Development Methodology:

For this project, it would appear that prototyping (OK) but it should use available tools like shopping carts, digital signature etc..is the best system development methodology to employ. Prototyping involves “building an experimental system rapidly and inexpensively for end users to create.” As this is a new business venture, the preferred system design, requirements and deliverables are not fully known and will likely require a certain amount of trial and error. In addition, it would appear that continued input from the users throughout the process will be critical in order to create the best possible system. By developing multiple system prototype iterations, the optimal system design can be identified along with the necessary requirements and deliverables, some of which may not have been apparent at the outset. Ideally, one of the prototype iterations will serve as a template for the final system.

Below is an outline of the prototyping process:

Step 1: Identify the user’s basic requirements.

▪ We will interview each of you to discern the requirements/deliverables at the outset.

▪ Given our expertise, we will develop the system design/structure.

Step 2: Develop and initial prototype.

▪ Using our expertise and your input (from Step 1), we will create the initial prototype of the system (quick process).

Step 3: Use the prototype.

▪ We will test the system from an operational/functionality standpoint.

▪ You will test the system from a requirements/deliverables standpoint.

Step 4: Revise and enhance the prototype.

▪ Using our combined testing of the systems, any necessary changes will be made.

▪ Steps 3 and 4 will be repeated until an acceptable final system can be created.

This methodology is certainly subject to your approval, but we feel that its advantages meet the needs of this project. With the uncertainty regarding system requirements and deliverables, your extensive involvement in the prototyping process will ensure we produce the ideal system that will be easy to use while also serving your needs. The primary risk associated with prototyping is rapid development, which could complicate future enhancements, but we are confident that we will carry out this project with efficiency, diligence and attention to detail.

Part 9 – Data Flow Diagram

See Attached

process is NOT greendelivery web site but ORDER PROCESSING

need to have more data going in/out of customer

need credit agency to check credit

Sources:

Laudon, Kenneth & Jane. Management Information Systems “Managing the Digital Firm”. Eleventh Edition. Prentice Hall 2010.



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