1.  1  Outline  the case of Metalco  factual information  discussion  justification of projects

2. 2 Metalco

3.  3  Information from the Case  background of company background of company  business of company business of company  philosophy of company philosophy of company  structure of company structure of company  history of information projects history of information projects  history of MIS Group history of MIS Group  IMI project IMI project  attitude towards the proposal attitude towards the proposal  justification method justification method

4. 4 Open-Ended Questions about Metalco

5.  5  Open-Ended Questions  Would you approved the proposal if you were a member of the G14?  What would be the attitude of the four directors towards the proposal? What would be the attitude of the four directors towards the proposal?  comments on  the justification process the justification process  the selection process of the software the selection process of the software  the needs of Metalco on the proposed system the needs of Metalco on the proposed system

6. 6 Justification of Projects

7.  7  General Approach  identify needs to change  set up working group/task force  define objectives and identify constraints  identify alternatives, and for each one  determine costs and benefits, tangible or not  perform sensitivity analysis  compare alternatives and select the best

8.  8  Identify Alternatives  understand system requirements thoroughly  hardware, software, existing technology  get help from experienced and experts  take more options, include the do-nothing option  use simple, mature technology

9.  9  Determine Tangible Costs  total cost in the planning horizon  contingency factor  from the bill-of-material of the system  basic components: hardware, software, labor, miscellaneous

10.  10  Hardware Cost Estimation  quantities  types  peripherals  new systems

11.  11  Software Cost Estimation  whole system, including for system integration, data conversion, etc  estimation from in-house personnel  request for proposal

12.  12  Labor Cost Estimation  estimate for current and proposed practices

13.  13  Labor Cost Estimation  read past headcount directly from the historical record  for future, estimate the volume and use the current productivity indicator  get advise from front-line supervisor  calculate section by section, year by year, direct and indirect

14.  14  Labor Cost Estimation

15.  15  Labor Cost Estimation

16.  16  Miscellaneous Costs Estimation

17.  17  Comparison of Tangible Factors  different aspects  payback period  time value of money  internal rate of return  depreciation

18.  18  Different Comparison Aspects

19.  19  Calculate Saving  can easily calculate differences in quantifiable costs between current and proposed practices  compare tangible and intangible items

20.  20  Perform Supplemental Analysis  sensitivity analysis to design for uncertainty

21.  21  Comparison for Intangible Factors  various methods: AHP, multi-attribute optimization, scoring, etc.  general scoring procedure  identify a set of factors  determine the weights of factors  set the score levels within each factor