example businesscasedocument

SILVER LINING GIFTS AND NOVELTIES cc

BUSINESS CASE DOCUMENT

Document Control

Project: Silver Lining Order Management System

Sponsor: Marilyn Roberts

Project Manager: Amy Lee

Title: Business Case: Order Management System

Version: 2.0

Doc. Reference: BC_SL_OMS_082012 - DipBA-2012-10

Created by: Kerry Crossland

Creation Date: 18 July 2012

Document History

Version Date Status Amended by Saved as: Summary of Changes

V1.0 18 July 2012 Commence business case

Kerry Crossland BC_OMS_v1_0 Addition of the background, goals, objectives and scope

V1.1 25 July 2012 Amended business case

Kerry Crossland BC_OMS_v1_1 Addition of the business requirements; functional, informational and non-functional

V1.2 30 July 2012 Amended business case

Kerry Crossland BC_OMS_v1_2 Addition of potential solutions

V1.3 10 August 2012 Amended business case

Kerry Crossland BC_OMS_v1_3 Addition of benefits and costs

V1.4 19 August 2012 Amended business case

Kerry Crossland BC_OMS_v1_4 Addition of risks, issues, feasibility and recommendation

V2.0 21 August 2012 Final business case

Kerry Crossland BC_OMS_v2_0 Finalisation of the business case for digital hand-in

Management Approval

Name Position Representing Signed Date

Marilyn Roberts Director: Silver Lining Project Sponsor

Leigh Roberts Director: Silver Lining Steering Committee

Distribution List

Name Position Project Stakeholder

Marilyn Roberts Director: Silver Lining Yes

Leigh Roberts Director: Silver Lining Yes

Shaun Ferreira IT Director: Cinder Systems (PTY) Ltd Yes

Ms. A Joubert IT Manager: Supplier X Yes

Ashlina Izaks Customer Relationship Manager: AGM Nitro Logistics (Pty) Ltd No

Mr A Kassiem Branding Specialist Y No

Table of Contents

1. Executive Summary 3

2. Background 4

2.1 Key Business and Project Drivers 4

2.2 Definitions 5

2.3 Business Problems, Opportunities and Needs 5

3. Project Goals and Objectives 6

3.1 Project Goal 6

3.2 Project Objectives 6

4. Scope 7

4.1 Terms of Reference 7

4.2 Stakeholders 7

4.3 Business Area Scope 9

4.4 Project Scope 9

4.5 Solution Scope 10

4.6 Exclusions 10

4.7 Assumptions 10

5. Preliminary requirements definition 11

5.1 Functional Requirements 11

5.2 Informational requirements 13

5.3 Non Functional requirements 14

6. Outline of Solution 15

6.1 Outline of the Out of the Box Solution 15

6.2 Outline of a Customised Solution 16

7. Expected Benefits 17

7.1 Benefits and Beneficiaries 17

8. Budget and Resourcing 18

8.1 Financial Costs Breakdown 18

9. Impact Assessment and Risk Profile 19

9.1 Risk Profile and Containment Strategy 19

10. Feasibility Assessment 21

10.1 Cost justification 21

10.2 Recommendation 21

11. Product Quality Assurance 22

12. Implementation Plan 24

Business Case: Order Management System Page 3

Copyright 2012 Silver Lining Gifts and Novelties cc

1. Executive Summary

Silver Lining desperately needs to find a technological solution to meet the demands of their growing company. The capacity to be able to manage the administrative tasks reached its peak over six months ago and the manual processes and workflow management are no longer efficient.

One of the goals that Silver Lining has is to grow its market share by 30% over the next 2 years. This will not be possible if the current manual processes are not replaced. These manual processes result in frustration, financial loss and hours of wasted time searching for the right product to satisfy the customers needs.

After performing interviews and research, we have found the solution that will provide the required relief to the administrative issues and allow Silver Lining to take another giant leap forward. If Silver Lining wishes to continue to grow their business, they will need to implement a customised order management system, which will provide the system-based, automated workflow required to manage their quotation and order process, provide a product search and compare capability and also supplier, customer and product master data. In addition, this solution will also provide the directors with the knowledge of their customers and their spending behaviours, through various management reports, which will provide the ability for the company to become proactive in addressing their customers needs.

A strong relationship exists with Cinder Systems who already provide basic IT support to Silver Lining, and it is recommended that the development of this solution be delivered by them. The solution should be developed in a modular, phased approach, providing the quick wins in the first phase and then additional value adds in later phases. By taking this approach, it will allow Silver Lining to reap the rewards of the IT system, and allow them the time required to raise additional funds to pay for later developments.

A risk profile was completed for the project and this has been calculated as a medium risk project. Mitigations have been provided for each risk and with only high risk noted, appropriate management will monitor this.

It is estimated that a total investment of approximately R1,2 million will be required to implement this solution and that this can be implemented within 15 months from the date of commencement. If the approval to continue is provided by the end of August, this project will be available by the end of 2013.

The expected Return on Investment (ROI) is just below 21%, with a payback period of 3.5 years. The project has a total Net Present Value of an estimated R190,000.

It is clear from the analysis provided in this business case that it is feasible to continue with the implementation of this solution. Even if the ROI was less than that which has been calculated, Silver Lining would still need to seriously consider this as if nothing is done to improve the efficiencies of the existing processes, this business will cease to grow.



2. Background

Silver Lining is a small, family-owned, promotional company that started trading full time in 2010. The high quality customer service they provided to their first few customers ensured that they became a valued service provider, which resulted in key relationships being formed with their suppliers and customers alike. The company provides branded promotional products and event related services from the individual to large corporates.

The company has seen rapid growth in the past year, with a turnover of less than R150, 000 at the end of their first financial year, to just under R1 million at the end of the second. This is growth of approximately 650%. The current, manual, business processes to manage the quotes and process orders received is no longer effective.

Only 2 people manage the business and the manual nature of the day to day operations is preventing the company from growing any further. The directors of this Close Corporation have reached their capacity in terms of the number of orders they are able to manage on a daily basis and they are unable to keep up with the administration duties required to effectively manage their business. It is often required for the directors to work late into the night to catch up on the administration. A whiteboard is used as the workflow management tool, and when there is not enough space, a nearby window is used.

Being a small, home based business does however have its benefits, in terms of very low monthly overheads. No warehouse is required as the goods are sourced directly from the suppliers, immediately transported to the branding specialists and when the branding work is completed, a courier collects the order and delivers it directly to Silver Linings customer. This has a favourable impact on the profit margin, which is currently at 65% of the annual turnover.

Products are sourced from more than 50 local suppliers to meet their customers needs. The time consuming, manual, process to search for the necessary promotional products requires numerous catalogues being paged through. This places severe pressure on the limited resources to create quotes for customers.

Silver Lining would prefer not to employ additional staff to handle the increased workload, but if Silver Lining wants to remain competitive in the industry and continue experiencing business growth, they need to seriously consider implementing an order management solution.

The Executive Committee has been keeping a portion of their net profits aside to be able to adapt with their changing needs and have managed so far to save an amount of R400,000 as the initial investment into a technology project.

2.1 Key Business and Project Drivers

Silver Linings goal is to offer high quality promotional gifts and apparel, at reasonable prices, with a consistently high level of service to their customers and in so doing, increasing their market share to drive company profits.

The following are the business drivers have been identified by Silver Lining:

To become the promotional and branding company of choice for the large corporate companies within the Cape Town CBD and surrounds

To grow market share by 30% over the next 2 years

To increase the number of suppliers from which promotion products are sourced

To develop systems to eliminate excessive manual processes in the business



Key drivers of the project to develop the automated order management system include:

Improve efficiency by eliminating manual data entry, reduce process cycle time and reduce manual effort to manage the quotations and orders they receive

Improve effectiveness by handle customers orders faster and more accurately, make more informed decisions with consistent execution.

Effective management of supplier, product and customer master data, making it simpler to search for products that match customer needs, which will enable additional suppliers to be included and will allow customer specific marketing to be achieved.

Technology innovation with the development of the first IT system will provide a technology platform and system that will prepare Silver Lining for future growth. The system must be developed with scalability in mind to ensure that the solution will be able to match the expected business growth over the next five years and ensure that the solution will provide the business with a good return on investment.

2.2 Definitions

Terms Acronym Description/Definitions

Customer Protection Act CPA To view more information about the Customer Protection Act please click here

Order Management System OMS A system to manage the orders that must be processed by the company

Protection of Personal Information Bill

PPI To view more information about the PPI Bill please click here

Table 1: Definitions

2.3 Business Problems, Opportunities and Needs

2.3.1 Business Problems

Frustration with the manual quotation and order process

A whiteboard is currently used to manage the workflow for the orders received. With the number of orders rapidly growing, from 10 a month to over 150 a month, the whiteboard is not always big enough to handle the full list of orders. This is a manual process which is no longer efficient and the work is becoming more difficult to manage.

Financial loss

Supplier pricing is extremely difficult to maintain and occasionally the latest supplier pricing is not applied and quotations issued to customers contain errors, which results in financial loss for Silver Lining. It is estimated that the company lost approximately 1% of the turnover due to this problem. This in itself is difficult to calculate because order history is not available in a system to be able to compile reports.

Lengthy turnaround time to find products

Due to the number of paper catalogues for each supplier, a time consuming process of paging through product catalogues places extreme pressure on the two individuals managing the quotations. Silver Lining references in excess of 50,000 products.



2.3.2 Business Opportunities

This project will provide Silver Lining with the opportunity to improve the ordering efficiencies, increase the customer base that they are able to support and offer a wider range of products from additional suppliers. This will enable the business to grow their annual turnover and become more competitive in the industry.

Silver Lining will also gain the ability to centrally store all supplier, customer and product information and pricing, enabling easy updates of information. In addition, it will also create the ability for the business users to search for various details and draw reports relating to products and sales.

Silver Lining will learn valuable insight about their customers buying behaviour, which will allow them to be proactive in addressing product needs.

2.3.3 Business Needs

The following business needs exist for Silver Lining:

To provide accurate quotes to their customers within a maximum turnaround time of 24 hours

To have the ability to search for products, by category, with ease in order to satisfy customer requirements

To automate the management of a customers order; from the receipt of a quote request through to delivery

To determine stock availability and to secure the required products to satisfy the customers order

Match customers that place regular requests for a particular product to current specials

To create and maintain supplier, product and customer information

To draw reports that will enable the business to make sound business decisions

3. Project Goals and Objectives

3.1 Project Goal

The project goal is to ensure alignment to the business goal by creating an order management system which will decrease errors and delays and create a central data repository of products, pricing and supplier/customer master data.

3.2 Project Objectives

In order to achieve the project goal, the following objectives have been identified:

Obtain funding from stakeholders to develop the first phase of the project. Funding for later phases will be requested 3 months after the implementation of phase 1; allowing the stakeholders to time to realise the benefits.

Reduce the time it takes to process and return a customer quote from 3 hours to 20 minutes. This must be met within 2 months of the implementation of the system.

Reduce the current quotation pricing errors by 80% within the first financial year after the implementation of this project.

Reduce the turnaround time to identify a product from 30 minutes to 2 minutes. This must be met within 2 months of the implementation of the system.



Create the ability to search a product type across suppliers to perform a product comparison. This product comparison should take no longer than 2 minutes. This must be met within 2 months of the implementation of the system.

Create a workflow management engine to ensure that all quotes and orders are fully processed to completion. The workflow should escalate any slippages within 6 hours of inactivity. This must be available immediately after the implementation of the system.

4. Scope

The scope defined herein refers to the terms of reference, the stakeholders, the business areas impacted and the scope of the solution and the project.

4.1 Terms of Reference

Funding will be obtained for each phase of the project, before each phase commences.

Silver Lining has a cash injection of R400,000 which they have saved for the project.

The solution may be delivered in a phased, modular approach, implementing the key components first. Key components of this solution include:

o Supplier, product and customer master data

o Receive a product update file from all suppliers

o Quote creation

o Product searching capabilities; containing all product and pricing detail

Compliance of the PPI Bill and the CPA Act must always be maintained. No development must place Silver Lining in a non-compliant situation.

4.2 Stakeholders

Stakeholder Represented by Contact

information Registered interests/needs

Metrics/

references

Internal Stakeholders

Project Steering Committee

Silver Lining EXCO

Cinder Systems Technical Director

Project Manager

See below Require reports

Require feedback in terms of the project status

Must approve project deliverables

Must authorise the commencement of each phase

Project management reports to be provided by the Cinder Systems Project Manager

Approved BRS

Silver Lining EXCO

Marilyn Roberts

Leigh Roberts

See below Obtain funding for the project

Provide input for business processes

Will need training to use the system

Reports for business decision making

Approved funding

Approved BRS

Reporting (see IR1 to IR6)

Director: Logistics

Marilyn Roberts 083 294 6829 Vendor management

Product sourcing

Third party service sourcing

Management order deliveries

BR1

BR3

BR5

IR7

Director: Administration

Marilyn Roberts 083 294 6829 Customer quote management

Customer order management

BR4

BR5

IR1 IR5



Stakeholder Represented by Contact

information

Registered interests/needs Metrics/

references

Internal Stakeholders

Director: Marketing

Leigh Roberts 083 291 4374 Customer Liaison

Group Marketing

Advertising

Promotions and Events

Brand Management

Website content management

BR2

BR3

IR1 - IR5

Director: Finance

Leigh Roberts 083 291 4374 Customer order invoicing

Payment for products and services

Customer Accounts (debtors)

Vendor Accounts (creditors)

Monthly financial reconciliation

Financial year end reporting; in conjunction with Independent Chartered Accountant

Salary payment

VAT Returns

Tax Returns

BR1

BR2

BR4

BR5

External Stakeholders

Technical Director (IT)

Shaun Ferreira, Cinder Systems (PTY) Ltd.

079 523 6533 Requires full Business Requirements Specification to complete System Requirements documentation

Quote on hardware needs for the new solution

Quote on the software development of the new system; including annual support and maintenance costs

Project status reports

Non-Disclosure Agreement

Service Level Agreement (SLA)

Contract of Service

BRS

Systems Requirements Specification

Project Manager Jane Potgieter, Cinder Systems (PTY) Ltd.

021 615 5284 Manage the project deliverables

Manage the project resources

Supplier X Ms. A Joubert 021 729 4294 Sending the product information update to Silver Lining

Receiving the product order request

Submitting the invoice for the order

SLA

BR1

IR7

Branding Partner Y

Mr A Kassiem 021 276 4362 Receive branding order request

Submit invoice for the branding

Submit artwork layout for approval

Receive notification of artwork approval

SLA

Contract for service

BR1

Courier Services Ashlina Izaks, AGM Nitro Logistics

021 872 8726 Receipt of the delivery request

Submit delivery invoice

Submit proof of delivery

Contract of Service

SLA

BR1

Table 2: Stakeholder Analysis



4.3 Business Area Scope

The business areas that will be interviewed, to understand the problems they currently experience and obtain business requirements for the new order management system, and which will be impacted by the implementation of this solution, include Planning, Sourcing, Sales and Finance. The other business areas depicted in the Silver Lining Process Map for 2012 shown below will not be affected.

Diagram 1: Business Area Scope

4.4 Project Scope

4.4.1 The project scope includes:

Project Initiation Approval from Executive Committee

Project Funding

Approved Business Case

Approved Business Requirements Specification for Phase 1, as described in the Section 4 in this document.

Quote from Cinder Systems (PTY) Ltd for the technical specifications and the development of Phase 1

Development of Phase 1

Full end to end testing

Training

On-site support for 2 weeks after the implementation is complete

4.4.2 The project scope excludes:

Contracts with suppliers

Service level agreements (SLAs) with third parties



4.5 Solution Scope

The Context model below illustrates the solution scope of the Order Management System. The components of the solution which are in scope for development include the Order Management System, the Order Management Portal and all databases shown in the Silver Lining Systems block. The external systems and the Pastel Accounts software package are not included in the scope of development, but do have an impact on the solution.

Diagram 2: Proposed Order Management System for Silver Lining

4.6 Exclusions

The following are excluded from the solution development:

A customer ordering portal

Integration with suppliers, branding specialists and couriers

Integration with Pastel Accounting software

4.7 Assumptions

The following assumptions have been made:

The Executive Committee will obtain the funding for the project

The suppliers will be able to provide a product information file in the format provided by the project development team



5. Preliminary requirements definition

5.1 Functional Requirements

The following high level business processes have been identified:

BR1. Manage Vendor

1.1 Create vendor record

Capture vendors company details

Capture vendors Silver Lining account number

List product/service categories supplied

1.2 Update vendor record

Vendor details

Silver Lining account number

Products/Service categories supplied

1.3 Delete vendor record

BR2. Manage Customer

2.1 Create customer record

Capture customers details

Capture Silver Lining customers account number

Capture credit limit available

Capture terms of payment

Capture VIP status

Set account status

2.2 Update customer record

Update customers details

Update Silver Lining customers account number

Update credit limit available

Update terms of payment

Update account status

BR3. Manage Product Catalogue

3.1 Create product categories

List Supplier name

Enter a category description

Add minimum margin rate to be applied to category

Add minimum profit rate to be applied to category

3.2 Maintain product categories

Add supplier name to category

Remove supplier name from category



Update category description

Update minimum margin rate to be applied to category

Update minimum profit rate to be applied to category

3.3 Delete product categories

3.4 Create product listing in a category

List Supplier name

Provide suppliers product reference number

Enter a product description

Enter product availability

Enter a cost price

Enter a sales price

Provide minimum margin to be applied to product (may vary from category)

Provide minimum profit to be applied to product (may vary from category)

3.5 Maintain product listing in a category

Update suppliers product reference number

Update product description

Update product availability

Update cost price

Update sales price

Update minimum margin to be applied to product (may vary from category)

Update minimum profit to be applied to product (may vary from category)

3.6 Delete product Listing in a category

BR4. Manage Quotations

4.1 Search for products

4.2 Compare products by supplier

4.3 Obtain product pricing

4.4 Create a quote

4.5 Send a quote

4.6 Escalate outstanding quote requests

BR5. Manage Orders

5.1 Process a customer order

5.2 Create customer invoice for order

5.3 Create supplier product order

5.4 Create branding order

5.5 Manage artwork requirements

5.6 Create delivery order

5.7 Escalate outstanding customer orders

5.8 Escalate outstanding supplier orders



5.2 Informational requirements

All business reporting and data requirements listed below will need to be provided in the first phase of the project. At this point in time it is not likely that other reports will be required. If there is a need to include additional reporting requirements at a later stage, these will be included in project documentation in the subsequent phases.

IR1. Sales by Supplier and Category Monthly Report, with year on year comparison

This will provide the directors with the ability to determine the suppliers and product categories most used and the annual growth of these. This will assist the Logistics Director to be able to negotiate better discount rates each year which will grow margin, and thus turnover. This report will also assist the Marketing Director with the ability to determine which marketing campaigns should be created.

IR2. Top 20 Customer Orders Monthly Report (value of order, with a list of products)

This will enable the Sales team to focus on the correct customer base and will provide some information on the spending behaviour of its top customers.

IR3. Top 20 Customer Orders Monthly Report (frequency of order)

This will enable the Sales team to focus on the correct customer base and will provide some information on the spending behaviour of its top customers.

IR4. Top and Bottom 50 Products Ordered Monthly Report

This report will also assist the Marketing Director to determine which marketing campaigns should be created. The Logistics Director will also be able to determine which products sourced are the poor sellers so that time is not wasted in trying to source more of these products, but to rather focus on products similar to, or related to the top sellers. Where products that are in the bottom 50 are from the same suppliers, analysis can be done as to why a certain suppliers products are not sold and then realignment may be considered; i.e. perhaps pricing negotiations need to be considered, or margins need to be lowered (after consultation with the Finance Director), etc.

IR5. Top 20 Products Quoted Monthly Report

This report will be useful for the Marketing, Logistic, Administration and Finance Directors. This will help determine which products are receiving the most interest. This will help the company understand market trends and ensure that the correct suppliers have been engaged. The top products quoted may not necessarily be equal to the top products sold. This could also provide insight into whether or not the selling prices are acceptable or not. Where the top product(s) quoted do not equal the top product(s) sold, analysis can be performed with regards to the supplier, margin, selling price, etc.

IR6. Orders Processed (where time to complete exceeds 2 weeks) Weekly Report

The Administration Director would be able to use this report to deal with any exceptions and to determine problems related to the product catalogue or sales staff and to ensure that process inefficiencies are continuously addressed and dealt with.



IR7. Product Update File (from each product supplier)

This is a file that must be received from each supplier, in a format still to be specified, to automatically update any changes or additions to products in the product catalogue. This file will include the cost price (ex. VAT), the stock quantity available, product reference numbers, descriptions, special deals, etc. If no changes are available for the day, a nil report must be sent. This will ensure that no assumptions will be made with regards to the file delivery, which will allow the system administrators to request a file if one was not received. This file should be received by no later than 22h00 each night, expect Sundays.

IR8. Data feed to the Supplier and Product Database

Data will be continuously sent to the supplier and product database by means of a trickle feed. This will include details with regards to sales, new/updates to vendors, products, etc. The product file received from each supplier will also be sent to this database to update the product information. The product search will use this database to ensure that real-time information is used for higher accuracy rates.

IR9. Data feed to the Customer Database

Data will be continuously sent to the customer database by means of a trickle feed. This will include details with regards to sales, new/updates to customers, etc.

IR10. Daily data feed to the Central Data Store

All data updated in the Supplier and Product Database and the Customer Database will be uploaded to the Central Data Store. This data store will be the source of all information for management reporting to ensure that the online databases used for quote creation is not adversely affected while reports are generated in the background.

5.3 Non Functional requirements

The following non-functional requirements have been identified:

NFR 1. Performance

1.1 Response Time: the system should respond within 10 seconds

1.2 Reports: reports should be available online, real-time

1.3 Scalability: the solution should be able to cater for an increase in transaction volumes of 100% per annum

1.4 Bandwidth: the system must be able to operate using a standard Telkom home based ADSL 264mg line

1.5 Usability: the solution must be able to be accessed from 2 separate locations and should be able to handle a minimum of 5 and a maximum of 50 users accessing the system at the same time

1.6 Reliability: the solution should be available 99.9% of the time between 08h00 and 17h00, Monday to Friday and for the last 3 and first 3 business days of the month

1.7 Accuracy: the solution must perform at a 100% accuracy when creating quotes and updating product information

1.8 Flexibility: be able to send and receive messages in a variety of formats to be able to interact with different vendor systems/files



1.9 Monitoring: the solution must be able to be monitored to prevent total systems failures and ensure business continuity

1.10 Disaster recovery: an offsite backup must be maintained to re-establish a working environment within 1 day of a total system failure

NFR 2. Maintenance

2.1 General system maintenance: this may be completed on a Saturday morning between 08h00 and 12h00

2.2 Ad hoc system maintenance: this may be completed at any time between 22h00 and 02h00

2.3 Availability after maintenance: the system must be fully functional after maintenance has been completed and must be available for use at the commencement of the next business day

NFR 3. Control

3.1 Security: the system must encrypted all messages and send these on a secure network

3.2 User Access: each user must have a unique log on and password. A password reset must be automatically prompted every 90 days

NFR 4. Compliance

4.1 Customer Data: all customer data that is stored must adhere to the Protection of Personal Information Bill (PPI) and the Customer Protection Act (CPA)

NFR 5. Other

5.1 Documentation: all documentation created for this project must be completed, approved by relevant stakeholders and stored in a document repository on a computer at Silver Linings Head Office premises. Controlled access must be maintained and the documents must have version control standards in place.

6. Outline of Solution

6.1 Outline of the Out of the Box Solution

The first option identified is to perform a Request for Information (RFI); to determine if a solution exists that can meet the needs of the business. Once the RFI process has been completed, a more informed decision in this regard can be made.

The following products have been identified for an RFI:

DistribuTrak Small Business Complete (Gold Package)

A brief investigation has revealed that this is more of a cloud based sales management tool for eCommerce, which also offers an ordering management component.

GoECart

A cloud based Software as a Service (SaaS) for eCommerce order management.



These systems are all focused on eCommerce and are cloud based solutions and none seem to be purely focused on order management. They cover a wide range of functionality which is not specifically required by the business at this point in time.

This also does not meet all the business requirements of Silver Lining and would require additional customer development in addition to this purchase.

A decision was therefore made to focus on an in-house, customer developed order management system.

6.2 Outline of a Customised Solution

Diagram 3: Outline of Customised Solution

This option is to build a customised solution for Silver Lining, in partnership with Cinder Systems, based on the business requirements to ensure that all the business needs are met.

The in-house system will focus purely on the management of the customer quote request, the customers order and the creation of a central store of supplier, customer and product master data unique to Silver Lining.

Specific reports tailored to Silver Linings requirements will be developed.



7. Expected Benefits

7.1 Benefits and Beneficiaries

Benefit Beneficiary Probability

(1-5) Metric

Increased accuracy in quotations as a result in a centralised product catalogue containing accurate pricing updates

Director: Administration

4

Errors only reported on quotes at a ratio of 1:200.

Financial loss as a request of under-quoted orders will reduce from 1% to 0.2% of the annual turnover. This will be tracked by means of reporting. This means that there will be an increase in turnover of 0.8%.

Increase in number and value of orders as a direct result of employees being able to spend more time providing a service to customers rather than completing manual intensive processes in the office

Directors of:

Administration

Marketing

Finance

4

Increase in number of orders received by an estimated 150% in the first year after the implementation of the system. This equates to an increase from 150 orders a month to 375 orders a month. This can be tracked through reports.

The increase in orders should continue to grow at a rate of 75% per year for the next 2 years thereafter. This will equate to the company receiving 1000+ orders per month.

Turnover is expected to increase by 30% as a result, each year for the next 2 years, after which increase are expected to reduce to a 20% growth annually.

Time to search for appropriate/required products for customers will be significantly reduced as a result of the online product catalogue

Directors of:

Administration

Marketing

5

The time it takes to search for a product and provide options to customers will decrease from an average of 30 minutes to an average of 5 minute.

Ability to easily compare similar products offered by all suppliers and to be able to offer the best priced option to customers. This currently takes about 2 hours to be able to provide this effectively, and then there is still the chance that a better supplier may not be checked. This will be possible as a result of the online product catalogue

Directors of:

Administration

Marketing

5

All suppliers products matching the search criteria will be displayed in a comparison table with an image, description, supplier name and price. This information will be available to the users within in maximum of 1 minute.

Sales, Marketing and Finance reports currently not available. The reports created will ensure that better management/strategic decisions can be made by the directors in future.

Directors of:

Administration

Marketing

Finance

4

Accurate reporting will be provided as per the requirements specified in the project documentation. These will provide useful insight with regards to the customer purchase, suppliers and products sold each month, which will assist the directors with decisions as to where time and effort should be focused to grow the business.

Increase in customer satisfaction. This is an intangible benefit that will be realised as turnaround time improves to issue quotes and with the ability to easily track where in the process their orders are.

Directors of:

Administration

Marketing

Customers

4

More compliments and less complaints received

More quotes/orders requested as a result of happy customers publicising company (word of mouth advertising)

More repeat business with the same customers; which will be determined using the reports showing the customer orders by frequency. (IR3)

Table 3: Benefit Analysis



8. Budget and Resourcing

8.1 Financial Costs Breakdown

Please note that the costs provided below are estimated values, the actual costs could differ:

REQ

. REF

#

REQUIREMENT

AN

ALY

SIS

DES

IGN

DEV

ELO

P

TEST

TOTA

L M

AN

DA

YS

BR1 Manage Vendor 4 4 7 6 21

BR1.1 Create vendor record 1 1 2 2 6

BR1.2 Update vendor record 2 2 3 2 9

BR1.3 Delete vendor record 1 1 2 2 6

BR2 Manage Customer 3 3 5 4 15

BR2.1 Create customer record 1 1 2 2 6

BR2.2 Update customer record 2 2 3 2 9

BR3 Manage Product Catalogue 14 14 41 41 110

BR3.1 Create product categories 3 3 10 10 26

BR3.2 Maintain product categories 2 2 4 4 12

BR3.3 Delete product categories 1 1 4 4 10

BR3.4 Create product listing in a category 5 5 15 15 40

BR3.5 Maintain product listing in a category 2 2 4 4 12

BR3.6 Delete product Listing in a category 1 1 4 4 10

BR4 Manage Quotations 19 19 43 19 100

BR4.1 Search for products 3 3 10 5 21

BR4.2 Compare products by supplier 5 5 15 5 30

BR4.3 Obtain product pricing 3 3 10 5 21

BR4.4 Create a quote 3 3 4 2 12

BR4.5 Send a quote 2 2 2 1 7

BR4.6 Escalate outstanding quote requests 3 3 2 1 9

BR5 Manage Orders 20 20 18 9 67

BR5.1 Process a customer order 3 3 4 2 12

BR5.2 Create customer invoice for order 2 2 2 1 7

BR5.3 Create supplier product order 3 3 2 1 9

BR5.4 Create branding order 2 2 2 1 7

BR5.5 Manage artwork requirements 2 2 2 1 7

BR5.6 Create delivery order 2 2 2 1 7

BR5.7 Escalate outstanding customer orders 3 3 2 1 9

BR5.8 Escalate outstanding supplier orders 3 3 2 1 9

21 29 46 15 111

IR1 Sales by Supplier and Category Monthly Report, with year on year comparison 2 2 3 1 8

IR2 Top 20 Customer Orders Monthly Report (value of order, with a list of products) 2 2 3 1 8

IR3 Top 20 Customer Orders Monthly Report (frequency of order) 2 2 3 1 8

IR4 Top and Bottom 50 Products Ordered Monthly Report 2 2 3 1 8

IR5 Top 20 Products Quoted Monthly Report 2 2 3 1 8

IR6 Orders Processed (where time to complete exceeds 2 weeks) Weekly Report 3 5 5 2 15

IR7 Daily Product Update File (from each product supplier) 2 2 5 2 11

IR8 Data feed to the Supplier and Product Database 2 4 7 2 15

IR9 Data feed to the Customer Database 2 4 7 2 15

IR10 Daily data feed to the Central Data Store 2 4 7 2 15

81 89 160 94 424

648 712 1280 752 3392

HOURLY RATE R 400.00 R 400.00 R 400.00 R 250.00

TOTAL RESOURCE COST R 259,200.00 R 284,800.00 R 512,000.00 R 188,000.00 R 1,244,000.00

COST

Server R 25,000.00

R 25,000.00

TOTAL PROJECT COSTS R 1,269,000.00

TOTAL HARDWARE COSTS

Informational Requirements

TOTAL MAN DAYS

TOTAL MAN HOURS (@ 8 hours per day)

HARDWARE DESCRIPTION

RESOURCE COSTS

HARDWARE COSTS

Table 4: Breakdown of Project Costs



9. Impact Assessment and Risk Profile

9.1 Risk Profile and Containment Strategy

The following risk assessment has been completed:

# RISK PROBABILITY

(1 5) IMPACT

(1 5) FACTOR

(1 25) CONTAINMENT STRATEGY

1

Funding cannot be obtained to pay for the project

3 5 15

Silver Lining has saved R400,000 to put towards the cost of the first phase. A bank loan is to be requested and in need, the development of later phases can be delayed while further funds are saved by the company. Silver Lining is serious about the development of an IT solution and puts 40% of profits in a reserve to fund this project.

2

As a result of potential delays the cost of development could increase over time

2 4 8

Silver Lining will create a contractual agreement to keep the agreed costs of development at the same rate for 2 years. Thereafter the costs may escalate at a rate of the CPI rate.

3

The quotes and orders increase exponentially before the implementation of the system

3 5 15

Silver Lining will employ a Data Capturer to assist with the additional work load if required.

4

Partnership with Cinder Systems IT is dissolves 1 5 5

Every effort is made to ensure a good relationship is maintained. A contract is in place to protect both parties in the event of the partnership dissolving.

5

Loss of revenue due to the system not being implemented 2 4 8

Should the customised solution fail to be realised, Silver Lining will look to buy an off-the-shelf package to minimise the risk until the company has the ability to implement it.

6

The suppliers cannot provide a product update file in the format required by the developers 4 5 20

The developers will need to create a file conversation process to be able to feed the data into the system, or determine which file formats are compatible with both the suppliers systems and the order management system.

AVERAGE PROJECT RISK FACTOR 12

Table 5: Table of Risks

Key:

RISK FACTOR WEIGHTING RATING

Low Risk Factor 1 7

Medium Risk Factor 8 15

High Risk Factor 16 20

Critical Risk Factor 21 - 25

The overall risk profile of this project is medium.



The risk profile below relates to the risks tabulated on the previous page.

The highest risk identified is the availability of the product data file that needs to be provided by the suppliers. This will need to be well managed by the project team because this will have a severe impact on the project if this file is not provided.

Diagram 4: Risk Profile



10. Feasibility Assessment

10.1 Cost justification

The table below illustrated that the expected Return on Investment (ROI) is just below 21%.

This was based on the estimated costs, both project and operational, a cash injection of R400,000 that Silver Lining has saved for a technology advancement, and the expected benefits over the first 4 years after the implementation. An explanation of the benefits is described in Table 3 within this document.

The payback period of the project is expected to be reached within 3.5 years (or 42 months), after the implementation. The Net Present Value of the project is an estimated R190,000.

It is clear from the analysis below that it would make good business sense to continue with the implementation of this solution.

CASH FLOW YEAR 0 YEAR 1 YEAR 2 YEAR 3 YEAR 4 TOTAL

PV Factor (11%) 1 0.901 0.812 0.731 0.659

Development Costs R 1,269,000.00

Technology Savings R 400,000.00

Operational Costs* R 12,000.00 R 13,200.00 R 14,520.00 R 15,972.00

Benefits Derived** R 0.00 R 200,200.00 R 370,410.04 R 426,045.96 R 469,731.29

Costs (time adjusted) R 869,000.00 R 10,810.81 R 10,713.42 R 10,616.90 R 10,521.25 R 911,662.38

Benefits (time adjusted) R 0.00 R 180,360.36 R 300,633.10 R 311,521.14 R 309,426.55 R 1,101,941.15

Net Benefit (time adjusted) R 869,000.00 R 169,549.55 R 289,919.68 R 300,904.24 R 298,905.30

Cumulative Net Benefits R 869,000.00 R 699,450.45 R 409,530.77 R 108,626.53 R 190,278.77

** Increase in net income

Payback Period

3.5 years

Net Present Value of Project ROI = 190278/911662

R 190, 000.00 = 20.87%

* Operational costs and conditions will be specified in the contract beween the parties. This is an estimation.

Table 6: Cost-Benefit Analysis

10.2 Recommendation

Taking all the information within this document into consideration it is recommended that Silver Lining proceeds with the development and implementation of the system. Key requirements should be implemented in phase 1 to deliver the best wins first.

Care should be made when selecting requirements for the future phases and further analysis completed at this time to determine the benefit of implementing additional value adds.

With the IRR being 20.87% and the payback period of 42 months, it makes this a viable solution and the Executive Committee should seriously consider this development.



The greatest risk to the project is with regards to the product updated file which will drive the product search and accuracy of quotations. The Silver Lining Executive Committee is urged to assist with the necessary negotiations with all suppliers to ensure that this is possible.

It is understood that a substantial investment is required to implement the solution, but if this is not developed the company will continue to run inefficient, manual processes that will stump the growth of the business. The employees have explained that they are running at full capacity trying to maintain the current quotes and orders and that the manner in which they are doing this is no longer viable. The business cannot take on additional orders with the existing processes. This will limit the business turnover at just short of R1 million a year.

With the implementation of an automated order management system, the number of quotes and orders could multiply exponentially and the employees would still be able to cope. Almost all work is outsourced and therefore the key to success is being able to effectively manage the orders to ensure swift fulfilment and complete customer satisfaction. With less time being required in the office to battle with manual, paper-based order management processes, the employees could spend more time out the office, selling the services of Silver Lining, growing their customer base and market share. It would also be possible to engage with additional suppliers and offer an even wider range of products and services to their customers.

With solid partnerships already existing with Cinder Systems (PTY) Ltd. it is recommended to engage with them to develop the customised order management system for Silver Lining.

11. Product Quality Assurance

Project Management:

In order to ensure product quality, the traditional Software Development Lifecycle approach will be followed.

Diagram 5: Software Development Lifecycle

Documentation:

All project documentation will be created using agreed standards and each deliverable will be presented to the project committee by means of a document walkthrough before signoff. The documents should have gone through a review process and should be at a minimum of 99.5% completeness when the document walkthrough takes place. This implies that the full project team is satisfied that the deliverable is ready for signoff by the Executive Committee.

Documentation should contain strict version controlling and must be stored in a document repository on the clients computer system, with a backup on the developers system.

No development may continue before all requirements are documented and approved.

Development:

All code will be backed up daily and will contain comments for traceability. This will also ensure that should a developer not be able to continue with the development of the solution, for whatever reason, another developer would easily be able to read the comments in the code to understand the logic behind the decisions made while coding.



Testing:

Testers should be involved at the onset of the project to ensure a complete understanding of the requirement. This will allow them to develop sound test cases and test scenarios. The testers should be included in the document review process to ensure that all requirements specified have sufficient detail to ensure that they can be tested.

Developers should complete development testing throughout their development process and basic integration testing should be completed before handing over the system to the testing team.

The testing team should complete full end to end and usability testing. Load/Stress testing can be completed with the aid of simulation testing tools. All system faults must be clearly documented and stored and these test results must be available for any user to review and any time. Reporting of all system faults must be provided to the project team on a weekly basis, becoming more frequent as the live date draws nearer. The project manager will agree the reporting time lines with the test manager. The business analyst must be kept informed of the testing on a daily basis and should be asked for guidance when required.

The business analyst should complete user acceptance testing alone before performing a system demonstration to the users and Silver Lining Executive Committee. The demonstration should include a review of all requirements.

As part of the pilot, a controlled live test can be completed. During this phase the capture of all current vendors and customers can be completed. In addition, files should be obtained from suppliers to upload into the live system when the pilot starts. The data take-on must be the first live deliverable and is critical for the system to be able to run effectively.

Change Management:

Should any changes be requested by the business, a formal change management process will need to be followed. The impact of the change must be assessed and communicate to the business. When required; timelines and budget will be adjusted.

Training:

Thorough training manuals will be developed and these will continue to be updated throughout the life of the system.

Training will be provided to all users, onsite, in a hands-on, one-on-one session with the trainer.



12. Implementation Plan

The estimated project life cycle has been calculated to 452 man days which is equivalent to 15 months. This is based on one resource for each discipline being used, and should there be a need to reduce this timeframe, multiple resources could be employed to do so. An accurate plan will be created once the details of the resources have been finalised. The commencement period provided below is subject to approval of the business case, go ahead to commence work and funding approval for the first phase.

The implementation plan has been specified into the processes of Analysis, Design, Development, Testing and Handover to Business. The plan is as follows:

TASK NAME DURATION PREDESSORS RESOURCE NAMES

JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC

Order Management System Project 452 daysProject Lifecycle 424 days

Analysis 81 days

Business Case 15 days

Review of Business Case 4 days

Approval of Business Case 1 day

Business Requirements Specification 56 days

Review of Business Requirements Specification 4 days

Approval of Business Requirements Specification 1 day

Design 89 days

Solution Vision Document 35 days

Review of Solution Vision Document 4 days

Approval of Solution Vision Document 1 day

Technical Specification 44 days

Review of Technical Specification 4 days

Approval of Technical Specification 1 day

Development 160 days

Manage Vendor 6 days

Manage Customer 4 days

Manage Product Catalogue 35 days

Manage Quotations 38 days

Manage Orders 15 days

Informational Requirements 40 days

Development Testing 22 days

Testing 94 days

Test Cases and Test Plans 15 days

Manage Vendor 5 days

Manage Customer 3 days

Manage Product Catalogue 35 days

Manage Quotations 15 days

Manage Orders 9 days

Informational Requirements 12 days

Handover to Business 28 daysUse Acceptance Testing 3 days

Training 5 days

Pilot 10 days

On-Site Support 10 days

3RD QUARTER 4TH QUARTER3RD QUARTER 4TH QUARTER 1ST QUARTER 2ND QUARTER

Table 7: Implementation Plan

example businesscasedocument

Documents

key business

business problems

scope v1

project scope

silver lining gifts

business area scope

project objectives

project goals