Sample_Business_Case (2)

Anywhere College Business Case for Implementing a New LMS System A Cost-Benefit Analysis Author: Joe Analyst 6/15/2015

Table of Contents 1 Executive summary .............................................................................................................................. 1 2 Introduction ......................................................................................................................................... 2 3 Situation .............................................................................................................................................. 2 4 Scope and References ......................................................................................................................... 3 5 Cost-benefit analysis ............................................................................................................................ 4 6 Calculation of metrics and KPIs ............................................................................................................ 5 7 Comparison of alternatives .................................................................................................................. 6 8 Risks, assumptions and constraints ..................................................................................................... 6 9 Implementation plan ........................................................................................................................... 7 11 Recommendation and conclusion .................................................................................................... 8

2 Introduction 2.1 Proposed action (strategy) To implement D2L with the vendor-hosted option. 2.2 Business objectives To increase mobile usage by 33% within three years and to reduce operational costs by 10% within three years. 2.3 Scenarios considered The following scenarios were considered: 1) to implement D2L with the vendor-hosted option 2) business-as-usual (upgrade to the latest version of Blackboard) 2.4 Document audience Decision-makers and other impacted stakeholders 2.5 Document purpose (1) to enable decision-makers to make a go-no-go decision and (2) to support budgeting and planning 2.6 Decision criteria ROI, Payback Period, Licensing and Operating Costs, Desired Functionality, and Alignment with Mandate 3 Situation 3.1 Project history (problem statement) Anywhere College is currently using the BlackBoard LMS, but the license is due to expire within two years. The current LMS is expensive to upgrade, lacks desired functionality and causes process inefficiencies. This problem impacts faculty, administrators, students and IT support. An ideal solution would be implemented before the current license expires, would be cost-effective to implement and operate, and would have the desired functionality. 3.2 Strategic alignment (opportunity statement) The upcoming Blackboard license expiry is an opportunity to realize the following organizational goals: position as a brand leader in online education, efficiency and cost-effectiveness. 3.3 SWOT analysis  Strengths: Anywhere College was ahead of the curve in adopting online learning.  Weaknesses: Some faculty are used to BB LMS and may be resistant to change.  Opportunities: The BB license is due to expire and must be upgraded or replaced.

 Threats: MOOCs (massive open online courses), courses offered by other institutions. 3.4 Benchmarking analysis Nowhere College reported a 25% increase in online enrolment after switching to the D2L platform. 4 Scope and References 4.1 Scope The following costs were included in the cost-benefit analysis:  Initial license fee  Annual support fee  Training of technical & support staff  Migration of courses  Server operation The following benefits were included in the cost-benefit analysis:  Increased enrolment in online courses  Increased enrolment in in-class courses  Cost savings in initial license fee  Cost savings in server operations The following costs were NOT included in the cost-benefit analysis:  Hardware depreciation 4.2 Timeframe for analysis The cost-benefit analysis will be based on a three-year timeframe. This is based on the fact that the current license is due to expire within two years. 4.3 References Cost and benefit estimates were based on the following data sources:  The data source for the above cost estimates was the vendor proposal, except for the server operation estimate, which was based on the previous year operating budget  The data source for the increased enrolment projections was benchmarking information provided by Everywhere College  The data source for the savings in the initial license fee was the vendor estimate  The data source for the savings in server operation was the previous year operational budget

5.3 Incremental cash flow statement Total Costs (1,325,000) (325,000) (325,000) Net Cash Flow (25,000) 975,000 975,000 Incremental CF (Proposal - BAU) Year 1 Year 2 Year 3 Benefits Enrolment in online courses 0 75,000 150,000 Enrolment in in-class courses 0 80,000 160,000 Initial license fee 250,000 0 0 Annual support fee 0 250,000 250,000 Server operation 0 250,000 250,000 Total Incremental Benefits 250,000 655,000 810,000 Costs Training of technical & support staff (50,000) (150,000) 0 6 Calculation of metrics and KPIs Costs Training of technical & support staff (50,000) (150,000) 0 Migration of courses (500,000) (250,000) 0 Total Incremental Costs (550,000) (400,000) - Incremental Cash Flow (300,000) 255,000 810,000 Cumulative Incremental Cash Flow (300,000) (45,000) 765,000 Financial Metrics Payback Period = first year when cumulative incremental cash flow > 0

7 Comparison of alternatives 7.1 Pros and Cons Table Proposed action Business-as-usual Pros Cons Pros Cons Lower license fee Users may be resistant to change Users already familiar with current LMS system Higher license fee Lower operating costs Remotely hosted and therefore less customizable Locally hosted and therefore more customizable Higher operating costs 7.2 Weighted Scoring Table Proposed action Business-as-usual Criteria Weighting Licensing Cost 20% 9 1.8 5 1 Operating Cost 30% 8 2.4 6 1.8 Desired Features 20% 8 1.6 6 1.2 Change Impact 15% 2 0.3 8 1.2 Alignment with Mandate 15% 9 1.35 7 1.05 Total weighted score 100% 7.45 6.25 Score (out of 10) Weighted Score Score (out of 10) Weighted Score 8 Risks, assumptions and constraints 8.1 Risks I D Risk description Mitigation Owner Probabilit y Impact CSF? 1 Implementation of new system not finished before existing license expires Add buffer to schedule and monitor closely John Low High Yes 2 Users resist using new system Communicatio n and training Paul High Mediu m Yes 3 Benefits (increased revenue) do not reach expected levels Advise management to monitor Mary Medium High No

11 Recommendation and conclusion The upcoming Blackboard license expiry is an opportunity to realize the following organizational goals: position as a brand leader in online education, efficiency and cost-effectiveness. It is recommended that the D2L software be implemented with the vendor-hosted option. This will support the following objectives: increasing mobile usage by 33% within three years, and reducing operational costs by 10% within three years. Next steps: Engage DL2 to begin the implementation process and set up a change management committee within Anywhere College.