Determining the Feasibility of the Investment in Integrated Transport Systems - Essay Example

Project Feasibility Study By + Table of contents Executive summary………………………………………………………….3 2. Introduction……………………………………………………….. ……….3 3. Project background………………………………………………………….3 4. Project scope…………………………………………………………………4 5. Key business functions………………………………………………………4 6. Problem statement……………………………………………………………5 7. Proposed solution…………………………………………………………….6 8. Recommended approach……………………………………………………..7 9. Cost estimate…………………………………………………………………..7 10. Risk Management………………………………………………………………7 11. Business case……………………………………………………………………8 12.Bibliography…………………………………………………………………….10 Executive summary Our client is a large transport company that has extensive interests in the transport sector. The organization has 825 employees, 154 trucks and 67 buses for public transportation and to move cargo across the country. As such, the managers and the board members need to be able to get timely, comprehensive and accurate data in regards to the operations of the business. This information is useful as it is used to make important decisions in regards to the company. Important decisions that are made are those that enhance the safety of travellers, safeguard the shareholders investments and the day to day operational guidelines. So far, the company has been using basic computer software to run the business and get the information required. However, with continued increase of the scale of the business, this is proving difficult. As a result, the company wants to shift to new Integrated Transport System software that will run all the business operations and provide the data required. Our duty is to analyze whether this project will deliver the expected results. Introduction This paper presents the final publication of the findings and the recommendations of the integrated Transport System. It will serve as the final report to the organization and will be used to determine the feasibility of this proposed investment in Integrated Transport Systems. Project Background This section will provide a brief history of the Excel software (Gaol 2013). The excel software has been in use by the company due to its simplicity, anyone can input data directly to the system and it is also a one stop shop for all information regarding the company. The system has played a key role in storing information about the vehicles and the various assignments that the business has been involved in. the problem with this system is that it cannot analyze the data automatically and produce the required reports which are needed on a frequent basis. Project scope The software used presently by the company is a combination of Excel sheets that are used to monitor the trucks and the buses on an individual basis (Renuka, 2013). There is a page for each vehicle and this contains all the particular details. These include the name of the driver, maintenance schedules, routes assigned to the truck and the mileage covered by the truck. There are pages where basic business operations such as procurement, revenue and expenses, financial reporting and the general ledger are recorded. Key functions of the business Asset management: this involves management of the various assets of the business. This includes the trucks and the buses that belong to the company (Xie, 2013). It involves calculation of their life cycles down to the basics such as setting the maintenance costs and dates of the various units. Human resources: involves the management of the employees of the company in all the areas such as their employment, the leave schedules and the wages that they should be paid by the organization (Meredith 2012) Performance management: this involves setting the relevant strategies that will ensure the business meets its goals. This will involve the preparation of the budgets and tracking performance of the business based on the financial reports of the company. Procurement: this involves the purchase of all the equipment and services that the company needs so that it can operate smoothly and without any hitches (Choate 2008). It involves selection of vendors, ensuring delivery of the products and paying for the product. Cost accounting; this involves all cost accounting duties such as cost allocation plans to the various departments. It also involves tracking of the revenues and expenditures Problem Statement The systems do not directly provide the managers with information that they can use to make important decisions in regards to the company. For this information to be obtained, staff must be engaged further to do calculations and come up with a more meaningful report. The use of Excel sheets is troublesome since the huge amount of data that is put into the system usually leads to the program ‘hanging.’ It is therefore quite unreliable as the software is very unstable. The fragile nature of this system can severely affect business operations. There is lack of internal controls when using Excel sheets (Kerzner 2013). This means that anybody can access the information about the company and use it against the company. Furthermore, there is no standardized approval process to be followed when making changes to the excel sheets. Based on this information, the organization realized the need for more functional software. Such software will easily cater for all the needs of the organization. This led to the option of sourcing for more complex software that could meet all the requirements of the organization. Our role was therefore to ensure if this proposed system could function as envisioned. Proposed solution To address the challenges that are as a result of using Excel sheets, the organization plans to replace the current software with an Integrated Transport system (ITS) that comes with a wide array of functionality to suit the needs of the business. ITS is an off the shelf software that has been developed to meet the needs of companies in the transport sector and its wide use can be a symbol of its effectiveness. The ITS software provides several integrated software that enable data which is captured at the source to be availed at various points. Furthermore the software will be able to cover all the key functions of the business such as procurement, human resources, asset/ fleet management, inventory and handle the accounts (Berka 2009). The software comes with improved security features whereby each employee will have access codes based on their level within the organizational structure. There will also be limits on who can edit data once it has been input into the system. This will ensure that credibility of the data is maintained. The ITS will be able to come up with periodical reports that will be based on the data that has been input into the system (Gaynor 2004). These reports can be monthly, weekly or annually and can cover various aspects of the businesses such as mileage covered per vehicle, monthly amount of cargo transported, total revenue expected and a forecast of future incomes for the business. A key functionality of this software is that information on the system will be stored in a server and can be accessed at various points of the premises as long as one had the relevant access identification. Recommended Approach This is based on various factors that are affecting the business such as the budget constraints and time (Davidson 2001). The best approach will be to purchase the system and run it alongside the existing systems so that employees get to learn more about the product while still having the option of reverting back to the previous method. In case of any difficulty with the new system, the users can simply switch back to the old system where they are more assured of their actions. Key elements of the recommended approach are: Implementing the ITS that will meet all the business requirements Executing the implementation project with close collaboration of key staff members. ITS provides software that is required in all spheres of the business and as such its implementation will be of invaluable benefit to the operations of the business (Bos 2008). Cost estimate Given the type and popularity of the Integrated Transport System, it will be costly to the firm based on a number of factors. The firm will have to pay the costs for purchasing the system. It is valued at slightly over $100000. A separate cost will have to be incurred in the form of installation fees and an annual maintenance fee is charged each and every year. The estimated cost for the project to be fully operational in the first year is $125000. However, when considering the benefits to the company, this figure is menial. Risk Management As expected, there are several risk factors of implementing a project of this magnitude. The most common risk is that implementation will result in the laying off of workers, particularly in the information technology field (Alex 2010). The use of the excel sheets was labor intensive and required up to 10 employees on a full time basis. However, The Integrated transport System needs a maximum of two employees who will oversee the daily operations. Each department will have to input their own data and the role of the employees will be purely supervisory. To deal with this problem, the affected employees may be reassigned to other departments and given new roles that make them relevant to the operations of the business. Business Case The ITS feasibility has identified various quantitative benefits that can be obtained from implementing this software across various departments of the organization. When the ITS is fully operational, it is estimated that the organization can achieve quantifiable cost benefits in the range of $1.6m annually. These savings are as a result of various benefits such as cost savings from inefficiencies, avoidance of future costs and shifting of staff from menial clerical duties to more specialized roles. Some of the benefits are: Improvement in the management of assets and other inventory Automation and consolidation of accounting with other support functions. More efficient revenue collection practices and billing Better procurement practices Reduction in the information technology costs Conclusion and Analysis The procurement of the Integrated Transport System will play a key role in the future success of the business. This is because it offers an opportunity for the business operations to be closely monitored and evaluated on a constant basis. 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