Assignment 2: Requirements and Designs Change Assessment (20%)

Purpose

The purpose of this assignment is to perform requirements and designs change assessment by implementing change assessment techniques.

How to Proceed

1. Read through the case-study provided below. assessment document :
   1. a definition of business needs;
   2. a statement of desired outcomes (i.e., evaluation criteria);
   3. the identification and assessment of alternatives; and
   4. recommendation of a solution.
2. Include one appendix to support your analysis and recommendations. The appendix can include calculations or tables.

Case Study

This case study is built on the PrivateWealth case study provided in Assignment 1. The text is extracted for you as background information for this case-study.

From Assignment 1

PrivateWealth Inc.

PrivateWealth Inc. is a financial planning and investment management company that serves over half a million individual Canadians, from coast-to-coast. The company provides tailored financial planning and a wide range of investment products to its clients via a network of 2,000 financial advisors. The main focus of the company is to help its clients to achieve their personal goals (e.g., saving, retirement, tax and estate planning) via detailed financial planning and then matching their plans with the company's investment product offerings. The company also offers various insurance, mortgage, and short-term loan products.

External Environment

PrivateWealth is exposed to various changes and risks. Federal fiscal and monetary policies greatly impact the investment industry where PrivateWealth operates. When major local and international economic, or political, events occur, they usually affect the company's bottom line. Technological advancements disturb the sector, by creating opportunities to cut costs and provide better services to the clients.

Private Wealth also operates in a highly regulated industry. Investment Industry Regulatory Organization of Canada (IIROC), Mutual Fund Dealers Association (MFDA), Canadian Securities Administrators (CSA), Office of the Superintendent of Financial Institutions (OSFI), and the Canada Revenue Agency (CRA) are some of the main federal regulatory organizations.

Finally, the competition level in the industry is very high. Large banks, credit unions, and other investment dealers/brokers compete with PrivateWealth for a share in the private wealth management market of Canada. The competition and other external factors require PrivateWealth to always stay agile and flexible in its day-to-day and long-term operations.

Competitive Advantages

A network of financial advisors is a crucial element in PrivateWealth's business model. It is the advisors' personalized interactions with clients that put PrivateWealth apart from other big, one-size-fits-all players. At the same time, the company has to offer a wide range of products to address the personalized needs and plans of the customers. The advisors' superior service and innovative product offerings are the main reasons that PrivateWealth is different from other investment, insurance, and mortgage brokers.

Main Contributors

Comprehensive commission strategies, policies, and systems are key contributors to the financial advisors' superior service and the company's bottom line.

These strategies, policies, and rules are the responsibility of the following key business units:

• Advisor Commission and Support is the main department responsible for incentivizing and supporting Financial Advisors' practice. The department owns the existing commission system.
• The Field Office Operations department is responsible for supporting advisors in the field. They update advisors' information and enter clients' transactions. Most of the administrative and manual tasks related to the advisors' commission is performed by this department.
• The Head Office Operations department is responsible for supporting the Advisor Commission and other departments in the HO. The department investigates and corrects Advisors Commission related issues and adjustments. The department is also second level support for the Call Center and Field Office Operations.
• The Financial Advisor Compliance department is responsible for monitoring the advisors' and clients' financial activities. They ensure that the regulators' rules and the organization's best practices are followed.

Multiple highly integrated applications (seeFigure 1) make up the system component of the solution:

• The Commission system calculates and pays commissions to financial advisors. Advisors pay-slips and CRA forms are generated from the commission system. The system can provide all necessary operational and management reports.
• The Advisor Data Administration system provides the capability to enter and manage financial advisors' names, addresses, certifications, training, tenure, achievements, subordinates, office information, team information, personal choice benefit information, etc. All necessary information is passed to the commission system for calculations.
• The Client Account Administration system is used to manage the clients' accounts. The system maintains client account balance, transaction, and investment/product information. It generates all the necessary reports and statements.
• The Product Management system is used to combine and manage client investments. Investment products and instruments are created in the product management system.
• The Advisor Web Portal is a central information access point for the financial advisors. Advisors can find all the necessary information on the portal.

Figure 1. Current State. Created by Bekzod Ruzimatov for Extended Education, 2019. Used with permission.

Time for a Change

Although business policies and rules are constantly reviewed and updated, PrivateWealth's existing commission system is outdated. It was built and is maintained on 30-year-old technology. PrivateWealth's leadership recognizes that its age creates considerable operational risks and decides to replace the old commission system with a modern application.

The leadership initiates a commission system modernization project, deciding that there must be one-to-one replacement of the existing solution and it must be completed within one year. Additionally, the initiative must not impact day-to-day operations and should not be visible to advisors.

Project Scope and Constraints

Replace the existing commission system with a newer solution. The same commission calculation logic, rules, and processes must be reproduced in a new system. Calculations and payments must be accurate and timely. The business should be able to perform the task as they do with the existing system.

Project Plan

The Lead Project Manager has prepared the following project schedule to start on January 1:

It has been decided that the project will follow the waterfall approach. The highly predictable nature of the project allows for planned roll out, with minimal disruption to the business processes.

Based on the defined scope, solution, and estimated work, the project manager has identified the following requirements for the resources:

The Project Analyst has estimated an average of $150/hour run-rate across all disciplines (i.e., project, management, analysis, development, etc.) This run rate includes both personnel, hardware, and software costs.

In addition to the average run-rate, it is estimated that there will be a one-time fixed cost of $150,000 for licensing and vendors engagement; no other additional charges are expected. If overtime is required, it is paid at hourly pay rate X 1.5.

It is estimated that each business unit will allocate the following full-time equivalent (FTE) resources:

No budget for the business stakeholders has been allocated. They will have to deliver the project outcomes, while keeping up with their day-to-day activities. All business units are at 90-100% capacity, performing their day-to-day functions. The following periods are especially busy for the stakeholders:

• Operations (Head Office, Field Office, and Contact Center) are busy during tax and RRSP seasons.
• Q3 is busy for the Compliance department. They file reports with the regulators.
• Q2 and year-end are busy with the Finance department.

Consider the following alternative to the original solution design and create a change assessment document. Your change assessment must include a comparison of both options and recommendations:

• The commission system replacement project has been running for two months when it becomes apparent that the new commission system's reporting capabilities are not enough to address operational, compliance, and management reporting needs. Furthermore, revised assessments suggest that it will take an additional two months for the project team to deliver two-thirds of the required reports. The remaining system reports will have to be replaced with regular manual efforts.
• The project team explored an alternative solution to address reporting requirements. PrivateWealth has an existing business intelligence application that can address all reporting needs. Furthermore, direct access to data can be provided to end users for a self-service. Advanced business users can develop own reports in the future.
• If the business intelligence alternative is selected, initial estimates on systems analysis, development, and testing efforts will drop by 20%. The cost of building new reports in the business application package will be $400,000. Additional user licenses will be required for the cost of $40,000 annually.
• From an additional effort perspective, new user accounts and security need to be set up in the business intelligence application. Data marts and data models need to be created and loaded with data from the source systems. It will require new interfaces from the commission and advisor data administration systems. The business intelligence system will also need to send data to the advisor web portal.
• Although the business intelligence system is used by the Commission, Finance, and Compliance departments, Field Office operations have no experience of using the application. All departments have to update their procedures to use two different systems, one for data entry and another one for reporting.
• From the scheduling perspective, building the reports in the business intelligence application will take an additional three months. The company possesses internal resources, with enough capability and capacity to build the solution.