Return on Investment
ROI Analysis The development of the Task Management System should impact Simmons Vedder’s multi-family development projects by increasing vendor accountability and decreasing labor costs. With the way information is currently flowing in the course of these projects, Simmons Vedder does not have access to daily updates on the status of outstanding construction or design issues. The current employment of Word documents to track projects is disorganized and inefficient. Once the system’s capability is established, Simmons Vedder will have the ability to ensure tasks and issues are completed in a timely manner. This will mean that Simmons Vedder employees will spend less time monitoring issues that have already been identified and more on time moving the project forward. Cost/Benefit Analysis In deciding the correct path to implement a system to solve their problem, Simmons Vedder enlisted the help of Professor Linda Bailey and Daniel Campbell to research the possibilities. In their final report from a year ago, they performed a cost/benefit analysis of a custom system while researching alternative technologies. Ultimately, they decided that custom code was best because the result would be owned by Simmons Vedder and it was the only way to achieve all of the desired functionality. The recommended route to this solution was through the System Development course at the McCombs School of Business. The report’s analysis assumed high costs from a consulting firm since receiving a project bid from a group in the course was not certain. Currently, with students developing the system, the costs have changed greatly, so the analysis has been updated accordingly. The quantified benefits, however, have been kept the same. The benefits of this project are potentially quite substantial; however they are mostly intangible in nature. The main benefit of the system will be reducing costs associated with managing complex projects. This cost reduction refers to reduced in-house labor costs per project and reduced contractor labor costs. A robust task management system allows for more streamlined efficiency for Simmons Vedder project managers and the time it takes to interact with their contractor counterparts. The estimated cost of in-house labor used for analysis is $44 per hour ($85,000 yearly salary) and $100 per hour for contractors’ time. Since students are developing the system for free, Simmons Vedder has a greatly increased payback period compared to a year ago when they were quoted $48,400 by a local consulting firm. However, there are still some basic costs to consider. In conducting research on server options, the best path to mitigate risk is to pay for monthly ASP.NET hosting services and reliable support from a hosting firm. This allows Simmons Vedder to truly test the system in action before making the more serious investment of leasing a server and paying for a .NET license. Since the project’s success
is contingent on contractors’ use of the system, this allows for a relatively inexpensive implementation (~$100/month). Development Costs (Performed by team JCART&B of MIS 374 Systems Development Course)
Project Planning Application Development Development Hosting Testing & Debugging User Manual & Documentation Total Cost Cost $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
*Development hosting will be performed on the McCombs School of Business MIS .NET class server Operational Costs
Hosting Total Cost Cost $5,690.00 $5,690.00 Details PV of cost at $100/month for 3 years
Payback & Benefits
Payback (Hrs) Payback (Months) 0.40 0.18 Benefits $44 / hour $100 / hour
Reduction of Coordination cost Reduction of Project Delays Total Payback
64.65 28.45
93.1 0.58 *Assumes 20 work days in a month and 8 hours per work day (160 work hours / month)