Please answer only #2

CASE: MANAGE YOUR HEALTH

Note

-

the

d

iscount rate

associated with the exercises below is

9%

Week 2

Chapter 4

: Project Integration Management

Manage Your Health, Inc. (MYH) is a Fortune 500 company that provides a variety of

healthcare servic

es across the globe. MYH has more than 20,000 full

-

time employees and more

than 5,000 part

-

time employees. MYH recently updated its strategic plan; key goals include

reducing internal costs, increasing cross

-

selling of products, and exploiting new Web

-

base

d

technologies to help employees, customers, and suppliers work together to improve the

development and delivery of healthcare products and services

. Below are some ideas the IT

department has developed for supporting these strategic goals:

A.

Recreation and

Wellness Intranet Project: Provide an application on the current intranet to

help employees improve their health. A recent study found that MYH, Inc.

pays 20 percent

more than the industry average for employee healthcare premiums, primarily due to the

poor

health of its employees

. You believe that this application will help improve employee

health within one year of its rollout so that you

can negotiate lower health insurance

premiums, providing net savings of at least $30/employee/year for full

-

time empl

oy

ees over

the

next

four years.

Assume that the project will take six months to complete and cost

about $200,000.

This application would include the following capabilities:

Allow employees to register for

company

-

sponsored recreational programs

, such as

socc

er, softball, bowling, jogging, and walking.

Allow employees to register for

company

-

sponsored classes and programs

to help them

manage their weight, reduce stress, stop smoking, and manage other health

-

related

issues.

Track data on employee involvement in

these recreational and health

-

management

programs.

Offer incentives for people to join the programs and do well in them (e.g., incentives for

achieving weight goals, winning sports team competitions, etc.).

B.

Health Coverage Costs Business Model: Develop an

application to

track employee

healthcare expenses and company healthcare costs

. Healthcare premiums continue to

increase, and the company has changed insurance carriers several times in the past

10 years. This application should allow business modeling of

various scenarios as well as

tracking and analyzing current and past employee healthcare expenses and company

healthcare costs. This application must be secure and run on the current intranet so

several managers and analysts can access it and download sel

ected data for further

analysis. The new application must also import data from the current systems that track

employee expenses submitted to the company and the company's costs to the insurance

provider. You believe that having this data will help you rev

ise policies concerning

employee contributions to healthcare premiums and

help you negotiate for lower

premiums with insurance companies

. You estimate that this application would save your

company about $

20/employee/year for full

-

time employees over the

ne

xt

four years

and

cost about $100,000 to develop

.

Schwalbe Additional Cases 2015

2

C.

Cross

-

Selling System: Develop an application to improve cross

-

selling to current customers.

The current sales management system has separate sections for major product and service

categories and different s

ales reps based on those products and services. You see great

opportunities to increase sales to current customers by providing discounts when they

purchase multiple products and services. You estimate that this system would

increase

profits by $1 million

each year for the next three years

and cost about

$800,000 each year

for development and maintenance

.

D.

Web

-

Enhanced Communications System: Develop a Web

-

based application to improve

development and delivery of products and services. There are currently seve

ral

incompatible systems related to the development and delivery of products and services to

customers. This application would allow customers and suppliers to provide suggestions,

enter orders, view the status and history of orders, and use electronic c

om

merce

capabilities to purchase and sell their products. You estimate that this system

would save

your company about $2 million each year for three years after implementation. You

estimate that the system will

take one year and $3 million to develop and req

uire 20

percent of development costs

for the

next

three years for maintenance/upgrades

.

Tasks

1.

Evaluate the four projects in the Running Case section by preparing a weighted scoring

model. Develop at least four criteria, assign weights to each criterion, as

sign scores, and

then calculate the weighted scores.

Embed a bar chart to allow for visualization of the

comparison.

Print the spreadsheet and bar chart with the results.

W

rite a

paragraph

explaining the

weighted scoring model and the results.

2.

Calculate th

e ROI as justification (e.g.

business case

)

for

pursuing

the recreation and

wellness intranet project

(option A)

.

Write a paragraph explaining results.