ROI of Implementation
Journey50
Plagiarizedpaper.docx
1 ROI CALCULATION AND BUSINESS CASE 1
ROI CALCULATION AND BUSINESS CASE 3
Katherine Askew
CMGT/583
David Conway
This research paper mostly focuses on the calculation of Return on Investment in Phoenix Fine Electronics enterprise; it also covers the overall needs and desires outcomes of the business. The scope of the project, measurable values of the new system, description of the latest strategies and recommending either continue or stop with project establishment; all concepts described below.
3 High-level overall business needs and desired outcomes
Business needs refer to the gaps found in the current business and its objectives. The most important driving factors in most enterprises are business or enterprise needs. We have so many different types of needs; some of them include talent, infrastructure, facilities, systems, applications, and many more. For Phoenix enterprise to succeed, it should focus on several business needs that can help it accelerate and speed up the achievement of its goals. Here are some examples of business needs that should be met for the enterprise to acquire the desired outcome.
Clients. The enterprise has a responsibility of satisfying customers by providing them with suitable and needed goods and services(Yeganeh, 2019). Despite maintaining and retaining customers, it is its responsibility of the company to bring in new clients to enhance the expansion and growth of the company hence the need for the company to locate and bring in the right customers for product purchase and maximizing profits. Through having the right audience, the enterprise will be able to build a scalable business that will lead to better results.
4 Retention of employees. Despite ensuring that the business has a continuous flow of clients, having consistent employees to work on the proposed project is a great deal. Creates the need for the enterprise to ensure that it has steady workers who can aid in carrying out general enterprise tasks, working on products to improve them, and giving customer services, care, and help. Doing these will reduce the business turnover hence easier to manage.
Marketing Phoenix enterprises should make sure that they are conversant with the essential roles of marketing in an organization. They should always work to ensure that any marketing strategy employed is always equated to profit; however difficult it may be for an excellent strategized plan, and planned advertisement budget for thriving both online and offline.
The scope of this project is to help Phoenix Fine Electronics maximize and increase profits by increasing sales and also increasing the number of customers present. Companies achieved this by expanding business through investing and building other new business in different locations. For example, when Phoenix Fine Enterprises decides to initiate and implement its newly suggested project of investing in three separate stores of good five years, the projected end goal of this plan is to generate higher revenue compared with the past.
Customer satisfaction. Since Phoenix Fine Electronic has a large population of customers in the current stores, opening other branches will help it reduce congestion during service provision hence satisfying customers’ wants. Through doing this, the enterprise will be able to hook customers’ trust, therefore, turning into loyal customers of an organization.
Job creation. Opening of the other three stores by Phoenix Fine Electronics creates room for new job employment. Through this, jobs are created, such as store manager and Information Technology, which on the other side, help in curbing the employment crisis. 6 The IT manager is responsible for managing the IT systems, making decisions on what technology and software are needed, and implementing the systems while ensuring accurate reporting to the primary office. 7 The store manager is responsible for all staffing, inventory, and sales functions within the store.
Proper utilization of technology. Phoenix Fine should ensure structured information technology plans for supporting stores, increasing sales, inventory tracking, secure store customer data; perform payroll; 7 and report all sales, inventory, and payroll data to the primary office.
8 To hire Chief Financial Officer and Chief Information Officer. 6 The CFO will manage the company finances for development. The CIO will manage the consolidation of the different systems and technologies that exist between the stores, streamline the information gathering and reporting to the main office, and develop an online presence that will catapult the company into a competitive position on a national level.
Measurable Values
Introduction Phoenix Fine Electronics, being one of those organizations doing well, needs to be incorporated by different departments to increase its productivity. 9 Furthermore, the decisions made by one head of department also influence the other departments. Due to this understanding, the chief information officer affects the establishment of management plans and needs. However, there is a need for collaboration between the chief financial officers and the chief information officer to incorporate the functions of the ERP system. The roles of the mentioned systems help in the expansion of the organization’s branches and client base. The desired results from the incorporation depend on the seriousness of the functions and the implementation level (Mehta, 2016). Among the desired results is securing customer satisfaction scorecard that will enhance the expansion of the new establishments. Also, the organization will have a well laid-out plan when it comes to the development of the branches, as well as the resources needed.
Moreover, the other outcome is increased profits due to increased sales. The success of the system hinges on the results achieved and on the flow of the functions. A sufficient flow of outcomes leads to the achievement of the outcomes hence the success of the system.
The Current Project Phoenix Fine Electronics has several stores; each store employs an IT manager and a store manager who reports to the chief executive officer. The organization has an IT project that focuses on utilizing technology in the store; the expected benefits include an increase in sales, tracking inventory, securing customer data, reporting all sales, payroll data, and account to the primary office. The IT manager in the organization is mandated to manage the IT system and make decisions related to technology in the organization. 7 The store manager is responsible for inventory, sales, and staffing functions within the store. 9 Due to the nature of the IT project, the chief executive officer is concerned about the aggregation of departmental and customer data to enable the organization to make timely and better business decisions. However, because the CEO is not knowledgeable about IT-related issues, the organization hired the chief information officer and the chief financial officer to oversee the organization’s finances and expansion. The two new employees are required to monitor the systems and technologies that exist between the different stores, streamline the process of gathering information, and to report to the headquarters.
Organizational Values Brought by the System Due to the benefits of the system to the organization, three outcomes would arise because of using the system. They are; 9 increased customer satisfaction scorecard that will lead to expansion of the customer base, good plan for the development of the branches, and increased profits due to increased sales. The three benefits lead to the following organizational values · Cherishing customer satisfaction · Well-planned expansion strategy · Increasing organizational performance Cherishing customer satisfaction With cherishing customer satisfaction, the system enables the organization to be rated by the different customers that use its products. The feedback and reviews by customers allow potential customers to assess the quality of the products offered by the organization hence attract more customers. Furthermore, the positive feedback from clients is beneficial, particularly to the new stores that need to attract many new customers. Based on the input, the organization may strategize on ways of improving customer satisfaction.
Well-planned Expansion Strategy The organization will establish an expansion strategy useful for the current situation. A well-planned expansion strategy will ensure that adequate resources allocated to the new stores. Furthermore, it will streamline the linkage between the headquarters and the new stores such that inventory is sufficient to meet the demand at the new stores.
Improving Organizational Performance The system will lead to improved organizational performance because of increased efficiency in inventory control, communication with the headquarters, and prompt feedback from customers. All organizations value performance because it enhances their competitive advantage; therefore, the new system will be a source of competitive advantage that will lead to higher profits Benefits of the Values to the Organization The above three mentioned organizational values that will arise a result from adopting the system are beneficial to the organization because it is a source of competitive advantage. Notably, the competitive advantage of the organization lies in the ability of the organization to use the existing resources to achieve the desired outcomes cost-effectively (Lahovnik & Breznik, 2014). As a source of competitive advantage, the organization will penetrate the market in the new locations without investing heavily in marketing.
Effective planning for expansions helps the organization to optimize the available processes and resources to maximize output. That means the organization can expand without substantial capital investment because of the optimization of processes. To increased organizational performance, the system is beneficial because the higher the profits, the higher the rate of return on investment. The high rate of return on investment attracts investors to the organization. The money from investors helps the organization to expand to new geographical regions and products offered.
How the Values will differentiate the Business to Customers The organizational values differentiate one organization from the other. However, by adopting the system, the communication between the different stores and the organization’s headquarters will be expanded. Furthermore, the system will enhance the internal capabilities of Phoenix Fine Electronics in terms of customer relations management. One of the differences that will arise due to the values resulting from the use of the system is enhanced customer relations management. The organization will be known for being customer-focused because the feedback received from the system will influence the decisions made in terms of service delivery and product innovation (Lahovnik & Breznik, 2014). The customer base will differentiate from others based on the promptness with which it addresses their concerns. The system enables a connection between the business and the customers; therefore, the concerned employees within the company will be able to receive clients’ interests and respond to them promptly (Lahovnik & Breznik, 2014).
Risks of Doing the Project Engaging in the project has some underestimated risks. As an IT-oriented system, there is a risk of not achieving the desired outcomes in terms of performance. According to Lahovnik and Breznik (2014), information technology may not attain the desired results in terms of organizational performance; therefore, the organization invests heavily in IT but receives little in return. That means among the risks of adopting the system is a higher amount on investment and a lower rate of return on investment due to the lack of changes in organizational performance.
Furthermore, the project may face resistance from the organization’s employees. Resistance arises when there is inadequate preparedness for change. Resistance may lead to a boycott of the system leading to non-performance. Furthermore, the system will lead to a collection of vast customer and employee data. The privacy of the data may be a breach by the cybercriminals who may sell the data to the organization’s competitors or use it for other malicious activities. For instance, they may use a customer’s financial information to defraud them.
Risks of Not Doing the Project Creative and innovative products and processes as a way of reducing costs, increasing efficiency and attracting more clients mar the current business environment. Therefore, not carrying out the project means that the organization will be stagnant; it will not be able to handle the changes in the business environment. For example, the organization will not be to gather and respond to the different customer concerns on time; as such, the challenge reduces its competitive advantage and loses its market share to competitors that adapt technology (Lahovnik & Breznik 2014).
Strategic Alignment
Strategic alignment refers to the process done to make sure that the strategies enacted are in place. Phoenix Fine Electronic strategic alignment will ensure concerns raised by the shareholders, workers, and other concerned bodies of the enterprise are functioning accurately. Achieving business goals on time will ensure business plans have their proper strategies, which lead to success when well executed and implemented.
Strategic alignment helps in easing employee workload by ensuring that employees that work with only stated strategies(Thompson, 2017). Since some employees and other staff members of Phoenix Fine Electronic may not understand well the suggested strategies, aligning them makes it easier for them to follow and provide positive or intended feedback. Proper strategic alignments help businesses in achieving their set goals in a secure and timely mode.
Estimated ROI and productivity (from Part 1) ROI is the short form of Return on Investment. It is mostly carried out by both big and small business enterprises to help them make decisions on the next type of business they should invest in them. Through the information provided by ROI, team businesses can decide to either invest in the new company or not. Below is the ROI calculation of Phoenix Fine Electronics basing on the information earlier provided in week one.
ROI = Net Profit / Total Investment * 100
Revenue=$15 million for 25 stores
If 25 stores generate revenue of $15 million for one year, what about (1) one store?
(1 x 15)/25=0.6m
1 store = 0.6m 0.6x100=60% 60%=0.6
100%=? 100 x 0.6/60=1m
ROI=(0.6/1)x 100%=60% The return on investment per year= 60% Final recommendations
I highly recommend that shareholders of Phoenix Fine Electronics should invest and expand more on the business sense, according to the RIO analysis, shareholders will enjoy more and good profit with a fully implemented plan.
Implementing this project will highly help in solving the unemployment crisis in the world hence saving the lives of many people. People such as Information Technology managers, stock managers, Chief Financial Officer (CFO), and Chief Information Officer will be able to secure employment. Faster execution and implementation of the project will help Phoenix Fine Electronics to utilize its population as early as possible. I also recommend that Phoenix Fine Electronics should embrace and practice business needs in its projects.
References
9 Lahovnik, M and Breznik, L (2014), Technological Innovation Capabilities as a Source of Competitive Advantage: a Case Study from the Home Appliance Industry. Transformations in Business & Economics, Vol. 13, No 2 (32), pp. 144-160
9 Mehta, A (2016). BI, SCM, CRM, and ERP in a Nutshell and their Relationship. Medium. Web. 9 Accessed on 16/2/2020.
Thompson, J. (2017). 10 Principles of Marketing. 4 New York, NY: 10 Larsen and Keller Education.
Yeganeh, K. (2019). 11 Major Business and Technology Trends Shaping the Contemporary World (1st ed.). 4 New York, NY: 11 Business Expert Press.
https://www.essaysforu.com/it-business-partnership/IT Business Partnership
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