ROI is one of the most common financial measuring tools. Being able to calculate the ROI, or expected ROI, allows us to make the best decisions about where to invest our funds for the most return on our investment over time.
Using the numbers in Course Scenario: Phoenix Fine Electronics, which was provided in Week 1, perform the following tasks:
- Calculate the estimated ROI for an ERP implementation.
- Calculate the estimated productivity as a result of implementing ERP system.
Note: If you need help calculating ROI, review this week’s activity, LinkedIn Learning: Content Marketing ROI by Honigman.
Complete your business case to present to the management team of Phoenix Fine Electronics. Incorporate your analysis and instructor feedback from the previous weeks' assignments.
Include the following:
- Executive summary
- High-level overview of business needs and desired outcomes
- Scope of the project
- Measurable values of the new system
- An explanation of the strategic alignment
- Estimated ROI and productivity (from Part 1)
- Final recommendation
Read the following scenario, and refer to it when you complete the weekly assignments:
· Wk 1: Business vs. IT Strategy Presentation
· Wk 2: System Recommendation
· Wk 3: Measurable Values
· Wk 4: Strategic Sourcing Plan
· Wk 5: SWOT Analysis
· Wk 6: ROI Calculation and Business Case
Phoenix Fine Electronics (PFE) is a medium or mid-sized company, which is growing rapidly each year selling technology products to retail consumers. The company has an annual revenue of $15 million in sales. PFE started with one store, but has grown to 25 stores and has expanded into a second state.
PFE has one store in a town with a population of 100,000 and three stores in towns with populations exceeding 200,000. The goal of the company is to continue expansion into an additional 3 neighboring states within the next 5 years. PFE wants to utilize the same population numbers to determine the number of stores it should open. It would also like a marketing firm to do an analysis of each town that meets the population criteria in order to determine the best cities in which to open new stores.
Each store employs a store manager and an IT manager, who both directly report to the Chief Executive Officer (CEO).
The current IT plan for each store is to utilize technology to support the store; increase sales; track inventory; secure store customer data; perform payroll; and report all sales, inventory, and payroll data to the main office. 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 main office. The store manager is responsible for all staffing, inventory, and sales functions within the store.
With the expansion and acquisition of smaller independent stores, the CEO is worried about how department and customer data can be aggregated to allow the company to make better, timely business decisions. Even with such a wide footprint, the company must ensure unique, outstanding customer service and provide value to the consumer base. The CEO lacks IT experience and has been hesitant to adopt the suggestions of the store and IT managers, which is to give the company an online presence and advance it into national competition with other consumer electronics stores.
The CEO hired a Chief Financial Officer (CFO) and Chief Information Officer/Chief Technology Officer (CIO/CTO). The CFO will oversee the company finances for the expansion. The CIO/CTO will oversee the consolidation of the disparate 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.
Your job is to help the new CIO/CTO move PFE toward the future.