Software Project Decision Point

docx

School

Meru University College of Science and Technology (MUCST) *

*We aren’t endorsed by this school

Course

HUMAN RESO

Subject

Management

Date

Nov 24, 2024

Type

docx

Pages

Uploaded by kipketervictor40

1 Software Project Decision Point Student Name: Institutional Affiliations: Date of Submission:

2 Introduction Software projects are essential for organizations to enhance their performance and maintain their competitive edge. However, these projects require careful planning and decision- making to ensure their success. The decision to adopt any particular software package involves several factors that must be considered. This paper will evaluate two options, the FunSoft package and the SoftComm package, for an organization planning to implement a software package to boost its performance (Laroussi, 2022). The paper will discuss the cost, customization, maintenance, savings, and expected sales increase for both options to determine which option is most suitable for the organization. Option 1: Purchase the FunSoft package The FunSoft package costs $200,000 for software and $85,000 for hardware in the first year. In addition, there will be a one-time customization fee of $50,000 and an annual licensing fee of $40,000 for the life of the contract (Laroussi, 2022). It is assumed that the contract will have a minimum lifespan of five years, as stated in the introduction. The implementation of this package will result in the layoff of a clerk, resulting in an annual saving of $61,000. Cost and Customization The total cost of acquiring the FunSoft package in the first year is $285,000 ($200,000 for software + $85,000 for hardware). The customization fee of $50,000 and the annual licensing fee of $40,000 will also be incurred in the first year of implementation (Montali & Rivkin, 2019). This brings the total cost for the first year to $375,000. The organization will need to bear a recurring cost of $40,000 per year for the remaining four years of the contract. The customization fee of $50,000 is essential to ensure that the software is tailored to the specific needs of the organization. The customization process involves configuring the software

3 to align with the organization's processes and procedures (Montali & Rivkin, 2019). This ensures that the software will be user-friendly and easy to navigate, resulting in increased efficiency and productivity. However, the organization needs to carefully evaluate its customization needs to avoid over-customization, which could lead to delays and additional costs. Licensing fees are a standard source of revenue for software vendors. The cost of the annual licensing fee for the FunSoft package is relatively low compared to other software packages in the market, making it an attractive option for organizations with limited budgets (Farion, 2022). However, it is important to note that these fees are recurring, and failure to pay them may result in the termination of the contract, which could cause disruptions in the organization's operations. Maintenance and Savings The FunSoft package does not have a maintenance contract, making it unclear how the organization will handle any issues that may arise during the software's lifespan. This could result in additional costs for the organization in case of any software-related problems (Farion, 2022). However, the layoff of a clerk will result in annual savings of $61,000. This is a significant amount that can be utilized in other areas of the organization. Expected Sales Increase The FunSoft package is expected to increase sales by 10% per year after full implementation. This means that the organization's sales are projected to increase from $1 million in the first year to $1.610 million in the fifth year. This is a considerable increase that will result in increased revenues for the organization. Option 2: Purchase the SoftComm package

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

4 The SoftComm package costs $250,000 for a five-year license, with the payment split into two equal parts, with the first installment due upfront, and the remaining due during the first year of implementation. The package comes with a maintenance contract of $75,000 per year, which covers all identified modifications for the first three years. This option also results in a 50% reduction in the clerk's work hours, resulting in an annual saving of $25,000. Cost and Customization : The total cost of acquiring the SoftComm package is $375,000 ($250,000 for the five- year license + $75,000 for the maintenance contract). However, the cost is split into two installments, with the first installment of $125,000 due upfront and the remaining $250,000 due during the first year of implementation. This brings the total cost for the first year to $375,000, similar to the FunSoft package. The SoftComm package comes with a maintenance contract, which provides the organization with the assurance that any identified modifications will be covered for the first three years. This reduces the risk of incurring additional costs for the organization, as any software-related issues will be resolved by the vendor. However, after the initial three years, the organization will need to pay for any modifications, which could result in additional costs. The SoftComm package operates on the vendor's hardware, eliminating the need for the organization to purchase hardware separately. This reduces the initial cost of implementation, making it a more cost-effective option than the FunSoft package. Maintenance and Savings The SoftComm package comes with a maintenance contract that covers all identified modifications for the first three years. This provides the organization with the peace of mind that any software-related issues will be addressed by the vendor. After the initial three years, the

5 organization will need to pay for any identified modifications, but this cost is relatively low compared to the annual licensing fee for the FunSoft package (Krieger et al., 2019). The option also results in a 50% reduction in the clerk's work hours, resulting in an annual saving of $25,000. While this is significantly lower than the annual savings from the FunSoft package, it is still a considerable amount that can be utilized in other areas of the organization. Expected Sales Increase Similar to the FunSoft package, the SoftComm package is expected to increase sales by 10% per year after full implementation. This will result in increased revenues for the organization, similar to the FunSoft package. Evaluation of Options Based on the cost, customization, maintenance, and savings, the SoftComm package appears to be a more attractive option for the organization. While the initial cost of acquisition is the same for both packages, the SoftComm package comes with a maintenance contract, eliminating the need for the organization to bear additional costs for identified modifications for the first three years (Krieger et al., 2019). This significantly reduces the risk for the organization and provides it with the assurance that any issues will be addressed by the vendor. However, the customization fee for the FunSoft package is lower than the SoftComm package. The organization needs to carefully evaluate its customization needs to avoid over- customization, which could lead to delays and additional costs. In addition, the annual licensing fee for the FunSoft package is lower than the SoftComm package, reducing the recurring cost for the organization. The layoff of a clerk in the FunSoft package results in a higher annual saving compared to the SoftComm package. This is a significant consideration for organizations that are looking to reduce costs (Krieger et al., 2019). However, the SoftComm package offers a 50%

6 reduction in the clerk's work hours, resulting in an annual saving of $25,000. While this is a lower saving, it is still a considerable amount that can be utilized in other areas of the organization. The expected sales increase is the same for both options, with both expected to increase sales by 10% per year after full implementation. This means that the organization's sales are projected to increase from $1 million in the first year to $1.610 million in the fifth year, regardless of which option is chosen (Zhang et al., 2019). This indicates that both options can effectively support the organization's growth and performance. Conclusion In conclusion, both options have their pros and cons, and the organization needs to carefully evaluate them to determine which option is most suitable for its specific needs and goals. While the SoftComm package appears to be more cost-effective, the FunSoft package offers a higher annual saving and a lower recurring cost. It is essential for the organization to consider its current budget and long-term goals when making this decision (Zhang et al., 2019). In addition, the organization needs to carefully evaluate its customization needs to avoid over- customization, which could result in additional costs and delays. Both options offer the potential for increased sales and performance, and the organization needs to carefully weigh its options before making a decision.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

7 References Laroussi, Z. (2022). The Rise of Consumer Society in Morocco. Journal of Applied Language and Culture Studies , 5 , 177-207. Farion, C. (2022). The Ultimate Guide to Informed Wearable Technology: A hands-on approach for creating wearables from prototype to purpose using Arduino systems . Packt Publishing Ltd. Montali, M., & Rivkin, A. (2019, May). From DB-nets to coloured petri nets with priorities. In International Conference on Applications and Theory of Petri Nets and Concurrency (pp. 449-469). Cham: Springer International Publishing. Krieger, K. J., Bertollo, N., Dangol, M., Sheridan, J. T., Lowery, M. M., & O’Cearbhaill, E. D. (2019). Simple and customizable method for fabrication of high-aspect ratio microneedle molds using low-cost 3D printing. Microsystems & nanoengineering , 5 (1), 42. Zhang, M., Guo, H., Huo, B., Zhao, X., & Huang, J. (2019). Linking supply chain quality integration with mass customization and product modularity. International journal of production economics , 207 , 227-235.

Software Project Decision Point

Related Documents