After reading the case, you ought to realize that our protagonist, Seamus Reynolds, is between the proverbial “rock and a hard spot” and you are probably thinking “I would hate to be him”.
You are going to be him in this assignment.
There is quantitative data in the case that we can analyze; however, we are also going to “quantify” the qualitative data provided – think of it as reducing numerical and non-numerical data to a set of numbers we can use to make a decision. Yes, you read that correctly, attach numbers to data without numbers. Exhibit 3 of the case will accomplish this for us and is called a Scorecard. A bit of history on this method from your “long in the tooth” Instructor.
Scorecard analysis was made popular by a Kepner Tregoe decision making model dating back to the 1950’s. In essence, a decision is made by gathering information, prioritizing it and then evaluating it. The following link provide a quick primer on the method:
Kepner Tregoe Decision Making
We are going to use a scorecard to assist in the decision about which of the 3 information systems Seamus should recommend to upper management.
One of the scorecard inputs (called “NPV” in Exhibit 3) involves the cost for each system (capital cost and operating costs). Here we will take the present value of the Year 1 to Year 5 operating costs and add them to the Year 0 capital cost (if applicable) to get a TCO. In these calculations we will be ignoring sunk costs (hint: Google sunk cost).
In addition to the above decision making criteria we will take a look at the human side of “sunk costs”, learn from IS implementations, IS “make vs. buy” and determine who should be making a crucial IS decision for an entire company.
Lab Assignment Questions 146 Marks in Total
1. Open the Excel file “Lab Assignment 6 PV and Scorecard Template.xlsx” and select the “PV Costs” worksheet. After inputting the table data (6 marks), calculate the PV to Operate System for all 3 scenarios provided (30 marks). 36 marks total 2. Select the “Scorecard” worksheet. Assign a Weight to ? scorecard items, then calculate the scores for the 3 IS options. 45 marks
Answer the following questions on a new worksheet in the above Excel file and when done, upload to the designated Sharein folder.
3. Based on your calculations in (1) and (2) above, which IS Option would you recommend that Seamus select? 5 marks 4. Should the decision to select an IS option be left solely to Seamus? Explain. 10 marks 5. The concept of sunk costs is simple to apply in theory. Explain applying this theory to the calculations in (1) above from a Capital Cost and People point of view. 10 marks 6. Read the “Qualifiers vs. Competes.pdf” file. In light of what the file says, comment about the scorecard that the Ivey case writers compiled. 10 marks If you believe there an alternative or 4th solution that Seamus might recommend, what might it be?
Explain. 10 marks 7. Read the “IT Value Metrics_ How to Communicate ROI to the Business.pdf” file, in particular the chart on Page 5/6. Next, open the file named “Investing in the IT That Makes a Competitive Difference.pdf”, go to Page 5 and study the charts and their message (and any accompanying prose in the article). Based on these 2 files and the case data, is it crucial that Canadian Shield Insurance “keep up with/get ahead of the Jones’s” (i.e., keep up/get ahead of the competition)? Explain. 20 marks