M0084 – Sistem Informasi dalam Manajemen Running Case – Group Assignment

M0084 – Sistem Informasi dalam Manajemen
Running Case – Group Assignment
Analyzing the Return on Dirt Bikes’ New System Investment
Software requirements:
1. Spreadsheet software
2. Word processing software
3. Electronic presentation software
Dirt Bikes management would like to analyze the return on its investment in its employee
training and skills tracking system. The system runs on the human resources specialists’
PCs using PC database software. Since the entire corporate administrative staff recently
received new desktop PC systems with database and other productivity software, there
are no additional hardware and software purchase costs. The main costs are the initial
cost of designing and implementing the database (business staff cost of $5,000;
information systems staff cost $15,000), gathering and adding employee educational,
performance rating, and training data to the database ($5500 initial data conversion cost
plus $1000 annual data entry costs) and ongoing maintenance and support ($3000
annually). Human resources staff members believe the new application could save each
of them two hours of work per week. (Their annual salaries are $37,000 and $42,000
each.) The company would also save about $ 11,000 annually in employee recruiting
costs because it would be able to fill many vacant positions with existing employees and
thereby reduce its costs for recruiting outside the company.
1. Prepare a report for management analyzing the return on the investment for this
system over a five–year period using the following capital budgeting models: Net
present value, return on investment (ROI), internal rate of return (IRR), costbenefit ratio, profitability index, and payback method. Assume a 5% interest rate
for your net present value calculations. The system will not be installed until the
end of 2003 so benefits should only be calculated for 2004-2008. Use spreadsheet
software for your calculations.
2. Use electronic presentation software to summarize your findings for