help

cs 250 Due Wednesday, November 29 Fall 2023 Pre-enhancements Em 10 ee Level c Blended Cost er Hour Post-enhancements Em 10 ee Level Human Resources Policy Planning Inc. (HRPP) is a firm that helps corporate clients review, audit, and write or update their HR policies and procedures (P&Ps). In an environment where HR laws, regulations, and market practices are changing rapidly, HRPP has found a rapidly growing niche, with HRPP performing reviews and updates for 700 different clients on a yearly basis. This is generating $3 in revenue per year. However, HRPP finds that it is struggling to support that growth as effectively as it might. In particular, reading, reviewing, and updating clients' HR P&Ps requires deep expertise and judgement from senior HRPP consultants. For example, out of five consultant seniority levels (the most junior, Level A, through the most senior, Level E), the process requires the top three levels to do more than half the work (see the "Pre-enhancements Employee Level" grid that follows). This means that HRPP's growth is limited currently at I O percent per year by the time needed for newly hired junior staff to gain experience and judgement. The cost of these senior consultants is also high, meaning that HRPP's profitability is lower than it might be, with an operating margin of 45 percent. Because of these issues, HRPP has initiated a systems project to improve system support for its HR P&P services via automation, natural language processing, and artificial intelligence. Based on studies of its business processes, HRPP believes that his project would 10 hours of labor effort per client per year. Further, HRPP believes that the project will reduce the amount of work that must be performed by senior staff, with the top three levels only needing to do 30 percent of the work (see the "Post-enhancements Employee Level" grid) This will allow HRPP to lower its blended cost per hour. It will also allow HRPP to grow at double the current rate 20 percent per year rather than 10 percent per year. Using the general analysis approach detailed in the case study presented in section I I .2, utilize the current state versus future state parameters to generate estimated business benefits at three levels. Utilize the data and templates that follow; using a three-year business benefits planning horizon, estimate the increased business benefits to HRPP over a three-year planning period. Known parameters are already filled in in these templates. Hourl $30 $40 $47 $53 $77 Hourl $30 $40 $47 $53 $77 Rate Rate %Effort 10% 30% 20% 20% 20% %Effort 40% 30% 15% 10% 5% c Blended Cost Factor Clients er Hour Annual revenue for book of business Annual revenue er client O eratin mar n O eratin costs O eratin costs client Blended cost erhour Hours of effort er client Assumed time savin s er client Post-enhancement hours of effort er client Post-enhancement o eratin costs er client Increase in rofitabili er client Increase in rofitabili for book of business Post-enhancement o eratin m n Sales owth rate er ear re-enhancement Assumed sales wth rate st-enhancement 2. 3. 4. Estimate overall business benefits, including efficiencies gained from reducing the amount of time needed each client's yearly review and update, but not changes in the mix of consultants or additional growth in clients. Building on (l), estimate the overall business benefits when also including efficiencies from changes in the blended labor cost per hour. Building on (2), estimate overall business benefits when also including a more rapid growth in clients. Assume that HRPP requires a minimum estimated ROI ratio of 2:1 (using Method I as defined in this chapter: Bueiness Benefits + System Costs), with a preferred estimated ROI ratio of 3: l. Discuss the decision regarding approval of the project if the projected system costs are a. $1.4 million b. $2.1 million c. $3.1 million Wei hted Wei hted Values 700 45% 10 100/0 20% Year 1 Current State no enhancements Clients Revenue O eratin rofit Future State with enhancements Year O 700 700 Year 2 Year 3 Total (3 ears Clients Revenue O eratin Increased rofit rofit over 3 ears