You are helping the IT team at Game Technology study several software acquisition options for their...

 

 

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You are helping the IT team at Game Technology study several software acquisition options for their Customer Contact Care system (C). First, you review Chapter 7 of your systems analysis textbook and the material on financial analysis tools, including the Video Learning Sessions. The IT team is considering two commercial software packages and an in-house development option. They prepared the following summary: Option Description Costs Benefits $8,000 to purchase $1,500 to install and configure $2,500 to load existing data $1,000 additional hardware needed $2,000 annual support fee after first customer care, and better year free $9,000/yr. through positive customer response. Cannot predict other specific savings. Increased sales, improved Software Software package Solutions, Four-year useful life Inc. Less flexible than in-house system Some customizing needed productivity are expected. Software package Five-year useful life Less flexible than in-house $7,000 to purchase $2,500 to install and configure $2,000 to load existing data $4,000 additional hardware needed $1,200 annual support fee in all five CRM Same as above Corp. system Moderate customizing needed Runs slower than other options years Develop In-house system $15,000 to develop, install, and Same as above Six-year useful life, can use our configure system in-house Easiest to update and maintain $1,000 to load existing data Existing staff can handle support software and hardware Challenge Tasks After you complete the Practice Tasks, you learn about new developments at Game Technology. It seems that the Game Technology team liked your work, and asked you to perform some additional tasks. Task 1. Perform ROI and NPV analysis of the CRM package. Use an 8% discount factor. Task 2. Perform NPV analysis of the in-house option. Use an 8% discount factor. You are helping the IT team at Game Technology study several software acquisition options for their Customer Contact Care system (C). First, you review Chapter 7 of your systems analysis textbook and the material on financial analysis tools, including the Video Learning Sessions. The IT team is considering two commercial software packages and an in-house development option. They prepared the following summary: Option Description Costs Benefits $8,000 to purchase $1,500 to install and configure $2,500 to load existing data $1,000 additional hardware needed $2,000 annual support fee after first customer care, and better year free $9,000/yr. through positive customer response. Cannot predict other specific savings. Increased sales, improved Software Software package Solutions, Four-year useful life Inc. Less flexible than in-house system Some customizing needed productivity are expected. Software package Five-year useful life Less flexible than in-house $7,000 to purchase $2,500 to install and configure $2,000 to load existing data $4,000 additional hardware needed $1,200 annual support fee in all five CRM Same as above Corp. system Moderate customizing needed Runs slower than other options years Develop In-house system $15,000 to develop, install, and Same as above Six-year useful life, can use our configure system in-house Easiest to update and maintain $1,000 to load existing data Existing staff can handle support software and hardware Challenge Tasks After you complete the Practice Tasks, you learn about new developments at Game Technology. It seems that the Game Technology team liked your work, and asked you to perform some additional tasks. Task 1. Perform ROI and NPV analysis of the CRM package. Use an 8% discount factor. Task 2. Perform NPV analysis of the in-house option. Use an 8% discount factor.

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