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COMP507 IT Project Management

Tasks:

The objective of this assignment is to practice using various quantitative analysis tools discussed in this course to support decision making in ITPM. Five areas are covered including:

• Financial analysis using ROI and payback
• Cost control using Earned Value Management
• Schedule management using Critical Path Analysis
• Project selection using Weighted Scoring Model, and
• Risk analysis using Expected Monetary Value 

Task 1: Business case financial anaylsis (15 marks)
The Business Case (MYH)
Manage Your Health, Inc. (MYH) is listed in the Fortune 500 Company that provides a variety of healthcare service across the globe. They have 25,000 full-time and 12,000 part-time employees. A study found that MYH, Inc. pays 45% more than the industry average for their employee healthcare premiums, due to the poor health of its employees. Therefore, the company has planned to provide a web application that provides online functionalities to help their employees enrol and manage their health-management and recreational programs. This application will have the following capabilities:

• Allow employees to register for company-sponsored recreational programs such as soccer, netball, bowling, jogging and walking etc.
• Allow employees to register for company-sponsored classes and programs to help them manage their weight, reduce stress, and stop smoking etc.
• Track employees’ involvement in these recreational and health-management programs
• Over incentives for people to join the programs and do well in them  Project’s financial information

The project is expected to cost the company $1,500,000 for the web application development and $800,000 for web and database servers. The project is expected to take 11 months to complete. They believe that this application will help improve their employees’ health after a year of its rollout so that the company can negotiate lower healthy insurance premiums, providing a net saving of at $600 per employee per year for full-time employees and $300 per employee per year for part-time employees This assignment is worth 50% of your overall final grade and is submitted on Blackboard. It is due  at 6pm on Sunday 17 October 2021 New Zealand Standard Time (NZST) (end of week 12).

Submission Requirements:
• This is an individual assignment. The cover page (template provided in the last page of this document) must be fully filled and signed.
• Please use 1.5-line spacing and 12pt font size (no handwritten assignment will be marked except for drawing the AOA (Activity-On-Arrow) diagram) over next five years.

The company does not expect any savings in employee healthcare premiums for the first year when the application will be up and running. A yearly budget of $600,000 has been set aside for the next five years for system maintenance. A new role “Application Support Engineer” has been created with the responsibility to work with the software engineering team to develop the application and to provide on-going application support after the roll out of the application. This role will cost the company $100,000 with a 6% yearly increase in the annual salary. Assume that the discount rate is 10%. 

1.1 You are required to prepare a financial analysis up to year 5 using the table provided below for the MYH’s project to find the Return on Investment (ROI) and payback period of the project based on the financial information provided. (7 marks)  

1.2 Calculate the ROI of the project (3 marks)
1.3 Calculate the payback period of the project (3 marks)
1.4 Justify if the proposed project is worthwhile undertaking (2 marks) 

Task 2: Project cost control (25 marks)
You are required to control the budget for the MYH project described in Task 1.
2.1 What is the total budget at completion (BAC) for the project? (3 marks)
2.2 Assume that the work for the first week is completed in the project. The following information has been provided as a result of work done so far.

Plan Value (PV) = $400, 000
Earned Value (EV) = $250, 000
Actual Cost (AC) = $600, 000

Answer the following questions 2.2.1 – 2.2.5 (must show all the working)

2.2.1 Explain a likely reason for the difference between PV and AC for the first week of this project. (4 marks)
2.2.2 Calculate the cost variance (CV) and the cost performance index (CPI) for the first week in this project? Is the project under or over budget? (6 marks)
2.2.3 Calculate the schedule variance (SV) and the schedule performance index (SPI) for the first week in this project? Is the project ahead of or behind schedule? (6 marks)
2.2.4 Calculate the new estimate at completion (EAC) for this project after the completion of first week’s work. (3 marks)
2.2.5 Calculate how long it will now take to finish this project after working on the project for a week. (3 marks)

Task 3: Project schedule development (30 marks)

The Table shown below provides the activities (A to L) and their three-point estimates for an Auckland city IT infrastructure (LAN Network) project. 

3.2 Draw the network (AOA) diagram to show the order in which all the activities will be undertaken in this project. The diagram must be clearly labelled. (6 marks)
3.3 List all the possible paths for this project with their total durations. (5 marks)
3.4 Clearly identify and briefly explain the critical path for this project. (7 marks)
3.5 This network is expected to be up and running within 4 months from the time the work on the project is started. Does this opening date appear feasible? (4 marks) 

Task 4: Project selection (30 marks)
You are required to perform some analysis to help identify the order in which the projects will be undertaken from the available four projects.
4.1 Use the information below to create a table that must show the weighted score and priority for each project for a software vendor environment. (7 marks)

The factors that impact the success of a project include (a) the availability of a principle engineer (20%); (b) development team assigned based on at least 4 senior software engineers with local development experience (20%); (c) availability of a product manager as a on-site customer) (20%); (d) support for the project from sales & marketing team (20%); (e) availability of an agile tester (10%); and (f) an established product backlog based on high level requirements (10%). Table below provides the scores based on these factors for each project.  

4.2 Explain the order in which the four projects should be undertaken. (3 marks)
4.3 Based on the information provided below, perform a quantitative risk analysis using a decision tree diagram to calculate the Expected Monetary Value (EMV) and the contingency reserve for each project. (10 marks) 

4.4 Explain the contingency reserve for each project (10 marks)

COMP507 IT Project Management

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