I am quite stuck with this problem and I need some help with it. This is for my Accounting Information System class.
Business Continuity Planning Case Cash Collections Process Case Description Jans Medicino is the owner of a mid-sized medical services company, Health Nuts. Jans has delegated almost all of the decision-making authority for his company to you. However, after he heard about a competitor whose business was nearly destroyed by a malicious hacker, he approached you with a concern about a business continuity plan for the cash collections process. Specifically, he would like to ensure that the company would be able to generate adequate cash collections to maintain the business in the event a malicious hacker was to disrupt the current collections process. Currently, Health Nuts does not have a business continuity plan for such a disruption. Your task is to propose such a plan. Background All of Health Nuts' revenues are collected from insurance companies that issue policies to Health Nuts' customers (patients). Currently, Health Nuts' employees (e.g. doctors and nurses) manually enter claims into an accounting information system, which automatically submits claims to the respective insurance provider through an online extranet portal. Exhibit A provides a numerical breakdown of the forecasted revenue for 2020, ordered by magnitude expected from each insurance company: Exhibit A: 2020 Forecasted Revenue by Insurance Company Insurance Company Annual Revenue % of Annual Revenue 1. United Healthcare $17,000,000 63.0% 2. Anthem 5 3,300,000 12.2% 3. Aetna 5 2,500,000 9.3% 4. Cigna 5 2,300,000 8.5% 5. Humana 5 1,200,000 4.4% 6. (Five) Other Providers 5 700,000 2.6% Total from Insurance Providers $27,000,000 100.0% Based on the timing of cash collections and cash outflow needs, Health Nuts relies on cash collections from insurance companies to fund $1,500,000 of its working capital. That is, Health Nuts cannot afford to collect less than $1,500,000 in cash from insurance companies in any given month. In addition, Jans Medicino does not like returns of less than 20% on any cash collected from insurance companies (including that which is used for working capital). Risk Assessment Your risk assessment team has determined that the likelihood ofa malicious attack such as that which incapacitated your competitor is 4% per year. However, after performing a business impact analysis, your team has determined that such a malicious attack would essentially render the automated billing system completely unusable until it is restored. The team estimates that it would take 90 days to restore the accounting system without any additional plan in place. Business Continuity Plan Options After performing several analyses, your business process engineering team has offered several response alternatives. Each alternative is listed in Exhibit B. Case Deliverables Jans Medicino has asked that you provide him with a summary of your recommendation(s), with both analytical (quantitative) and subjective justication. At a minimum, your Business Continuity Planning consultant recommends that you provide Jans with the following: 1. Quantify the Expected Impact (cost) of a malicious attack. 2. If a malicious attack occurs, what is the Maximum Tolerable Downtime (MTD) before Health Nuts can no longer function? 3. Quantify and compare the Expected Benets of each of the response alternatives listed in Exhibit B, relative to the Expected Impact of a malicious attack. 4. Rank the alternatives in order of your recommendation. Justify your recommendation using both quantitative and qualitative considerations. The project should be completed individually and turned in through the Canvas Assignment portal. Please rename the submitted le using the following naming format: "Business Continuity _[Student's Last Name]_[Student's First Name] Example: Business Continuity_Cannon_James.x|sx Exhibit B: Business Continuity Response Alternatives Alternative System Downtime Quantitative Qualitative 1. Medical professionals 2 days for training $15,000 in one-time training costs Would require Health Nuts to hire additional submit manual claims to (does not reduce per each insurance providerl. medical professionals at the time of crisis insurance providers the 90 days until the $600 per insurance company per and/or ask existing professionals to work automated day will be incurred until the extreme overtime. Claim submission training accounting system is accounting system is restored would occur only in the event of a malicious restored) (medical professionals' time) attack 2. "Cold Spot" site in which 48 days until $2,000 per year The Business Continuity Planning team would data, processing tech, and accounting system is need to select a site with suitable utilities, personnel would need to be restored within an appropriate distance, and.... transferred to restore the accounting system 3. "Mirrored Hot Spot\" site in 15 days until $4,500 per year ????? which data and processing accounting system is tech are available, but restored personnel would need to be transferred to restore the accounting system 1 Note that you could recommend a partial implementation of Alternative #1
