Project Funding Request

Classified Pagination System Upgrade

 

 

Prepared For:

School of Professional Studies Class Assignment

 

 

Prepared By:

Linda Botkin

Publications Coordinator Communications Class II

School of Professional Studies

               


 

 

Background:

The Classified EdIT application is a key component for producing the Classified pages and sections of our weekly publication. It has been used by our Advertising Production Department for more than 7-years. During this time, it has performed to our expectations and has enabled us to fully automate the page pagination process; an otherwise, labor intensive and manual process. We currently produce 10 different zones (versions) of our printed weekly product. These individual zones are distributed across the United States and account for approximately $2M in annual revenue. The Classified EdIT application is provided by the Mind Solutions Software Company, a leading software provider in the industry.

 

Problem/Description:

The current version of Classified EdIT does not allow for section zoning beyond 10 zones. Our Advertising sales team has proposed expanding our zoning options from 10 to 50 zones. This change in zoning strategy will generate additional, incremental revenue, in excess of $1M. In order to accommodate their zoning requirements, we will need to upgrade the Classified EdIT application to the latest version, ClassEDIT2.

 

Justification:

This upgrade is necessary in order to enable our Advertising Sales team the opportunity to expand revenue and meet the organizations yearly revenue projections.  Without this software upgrade we will not be able to add any additional zone products. This would have a negative, long-term impact on our organizational goals and objectives, stifling the efforts of our sales team. Approval of this request will ensure that the operations and sales staff are able to move forward with a worthwhile effort that will expand our Advertising revenue, this year and in the upcoming years. 

In addition, the new software will offer several other efficiencies:

1.                                      Newsprint Cost & Consumable Costs – Since the new application will allow you to produce only pages that change between zones, complete sections will no longer need to include all ads for each zone.  This will allow us to produce small size classified sections. We will save approximately $50.00 per page reduction in newsprint reduction. There will also be an additional savings of $25.00 per page reduction for consumable materials.

2.                                      Automation Cost – The improved automation tools will save approximately 10 minutes per page for every page we produce. We anticipate a staff reduction of 1-part-time position as a result of this upgrade.

Upgrade Cost:
Please see below for an outline of all upgrade costs. The upgrade cost is minimal compared to the $1M per year increased revenue:


Hardware (Primary and Backup Servers)                                                           $25,000

Software (Operating System)                                                                 $  5,000

Application Software                                                                             $50,000
                                          Sub Total Project Cost                                         $80,000          
            5% Expense Contingency                                                                      $  4,000
                                         Total Hardware & Software  Expense……..         $84,000

            Internal Technical Labor Cost:

       Hardware procurement, installation, setup                                        3 Days
                   Operating System Installation                                                          1 Day

       Application setup and configuration                                                  10 Days
                   Application User testing (3 People @ 2-days per person)                  6 Days                        

       Application unit and functionality testing                                           10 Days
                                                              Total Internal Labor…………....30 Days

      
                                                           

Projected Revenue Growth:

                                    2011 – Y1 -                              $1M

                                    2012 – Y2 -                              $1.1M

                                    2013 – Y3 -                              $1.2M

 

Timeline:

            Project Approval                                                                                   3/10/2011

Hardware (order, setup and installation completion)                                 04/01/2011       
Software (order, installation and Configuration completion)                       05/01/2011
Training, functionality testing, acceptance completion                               06/15/2011                   
Ready for Production Zoning                                                                  07/01/2011

 

Project Risks:

Before the sales team can begin their new zoning campaign the ClassEdIT2 project must be completed. Their launch date is dependent upon approval of this request by March 1, 2011. If this project is not approved by that date then a July 1 go-live date for expanded zoning could be jeopardized.  We have allowed 6-weeks for training, functionality testing and acceptance of the application.  If any unknown production threatening application bugs should surface a readjustment of the timeline might be required.  The success of this project is dependent upon operational effectiveness; therefore, 2-days per employee in the operations group must be scheduled for adequate self-training on the application.

Measurable Results:

The success of this project will be measured by the following criteria:

  1. Timeline – the above timeline will be achieved unless unforeseen bugs threaten production.
  2. The total cost of this project will not exceed $84,000
  3. The operational staff will be prepared to paginate the first zone production on 7/1/2011
  4. There will be no loss to revenue due to application unavailability, functional bugs or unfamiliarity with the application.
  5. All 50-zones will be successfully paginated
  6. Items 1 & 2 under the Justification area of this project proposal will be verified by the Production and Operational staff and validated by the Accounting department.

A Project follow-up session will be scheduled for 7/7/2011, following the first production cycle to determine if there are any additional project actions required. A  Post-Project review session will be scheduled for September 1, 2011 to determine if all the cost savings criteria have been achieved.