CSE1IS Assignment 1

3

Problem Description

Bundooraville is a small, private school in Victoria, Australia. For the past 10 years, it has offered a curriculum for preschool through grade 3. It also offers after-school care, usually referred to as after-care, on premises. Last year the school added a new classroom to allow the curriculum to expand to provide a grade 4-6 program. Bundooraville is experiencing significant increases in enrolment applications for all programs from pre-school through the Grade 4-6 program. Increases in applications coupled with the expanded program and increased demand for after-care have led to a very high workload for the administrative staff. Bundooraville is a non-profit, and is not in a position to hire another full-time administrative position, which is what the principal and administrator think would be needed to handle the increased workload.

You are an IT consultant, specialising in developing IT solutions for small business needs. You have been contacted by the parent of one of the students to speak to the school principal, administrator and teaching staff about the possibility of setting up an information system to handle some of the schools administrative and financial tasks. While there is not money in the budget to add a full-time position, the school does have a very active board of directors and parent committees that are experienced and enthusiastic about fund-raising for projects that do not fit into the budget. It is the hope of the school that it might be feasible to use a combination of grants and fund-raising to cover the initial cost of purchasing and setting up and information system, and the ongoing cost of a part-time support position for the system.

System Analysis Phase Development Strategies [35 marks]

Conduct cost-benefit analysis to determine if the information system development project described below should proceed.

Simon is considering building an information system for his business - Simons Pizza and Pasta Take-Away to manage its daily operation. The information system takes 12 months and $34K to develop and install. It also requires a network upgrade which costs $15K. Staff training can be conducted during the systems development and the cost is $3K. After installation, the system can start its normal operation immediately. The cost to maintain its normal operation is $2K annually. The system can be used for 7 years, and it generates $9K of salary saving and $2K intangible benefit in the first year of its operation. The salary saving increases each year by 10%. The intangible benefit remains the same in the following years.

(1) Conduct the Payback Analysis to find the payback period for the project

(2) Calculate the Return of Investment (ROI) for the project

(3) Assume the annual interest/discount rate is 5%, calculate the present value of a future dollar and fill the form below.

Year
0	1.0
1
2
3
4
5
6
7

(4) What is the projects net present value at the end of the 7th year?

(5) Based on your analysis, should the project proceed? Why?

Appendix 2 - Fact Finding Results

Invoicing and payments for Bundooraville have two components, tuition and after care. Tuition is a fixed fee. After care fees have two components, a fixed fee based on the time-block of after-care the student is pre-registered for, and a variable fee based on any additional time that the student may have used on a drop-in basis. There are several time blocks that students can be registered for in after-care, dependent on whether the child is in pre-school, kindergarten or primary school.

There are two payment options for tuition and the fixed component of after care. Parents can pay the entire amount prior to the start of the school year; or the fixed fees can be spread out over a 10-month period. A discount of 5% is applied to fees for parents choosing the lump sum payment option. Parents who have more than one child enrolled at Bundooraville are eligible for a 5% discount on tuition for all enrolled children.

Payment for after care used on a drop-in basis is invoiced monthly, and is added to the invoices for parents who are paying in 10 monthly instalments. New invoices are generated for drop-in care for those who paid fees in a lump sum.

Monthly invoices for fees and drop-in care are due on the first of the month, and are distributed to parents one week prior to their being due. Parents who have more than one child enrolled in Bundooraville receive a separate invoice for each child.

The invoicing is done using Microsoft Excel. Susan sets up a new workbook for each academic year. Each month Susan creates a new worksheet in the workbook. The worksheet maintained contains one line per student. Each line contains the following invoicing and payment information for the student. This is the list of the required information: Name of student, Names of parents, Amount of discount on fixed fees, Monthly fixed tuition fee, Monthly fixed after care fee, Discounted fixed fees, Monthly drop-in fees, Total monthly fee (calculated field), Payment received, Amount paid to date (calculated field), Amount outstanding (calculated field)

The entry for each student is updated twice each month, once to prepare the invoices and once to record payment. Entry for invoice preparation requires the monthly statements from after-care detailing all drop-in hours for each student. Currently the monthly statements include a listing for each child, detailing date(s) and time(s) of drop-in hours. From this listing, Susan Brown enters a total charge for additional after care provided.

A summary monthly report is generated for the financial committee from this spreadsheet summarizing fee collections for tuition and after care. The financial committee also receives separate monthly reports detailing payroll expenses for all employees.

Susan Brown has indicated that the most useful new feature that could be added to the system would be the ability to generate one invoice per family per month, listing each students charges separately, and an overall total. Also useful would be the ability to automatically generate a receipt at the time payments are recorded. This receipt should contain information required for reimbursement requests from different types of dependent care and tuition accounts, including name, location and tax number of the school. In addition, parents have asked for a separate statement accompanying their invoice itemising all drop-in after care hours for that statement, including childs name, date(s) and time(s) being invoiced for.