2015_03_26 ISM Flagship Final Business Case PDF

FLAGSHIP SOLUTIONS GROUP, INC.

980 NORTH FEDERAL HIGHWAY, SUITE 420

BOCA RATON, FL. 33432

BUSINESS CASE PROJECT

XYZ BANK INC.

Dr. J. Goo

Florida Atlantic University

ISM 6026

MARCH 26, 2015

Courtney Fenwick

Brendan McCauley

Carl Schachter

Eric Risi

Business Case Project XYZ Bank Inc.

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TABLE OF CONTENTS

1. EXECUTIVE SUMMARY

1.1. Issue

1.2. Anticipated Outcomes

1.3. Recommendation

1.4. Justification

2. BUSINESS CASE ANALYSIS TEAM

3. PROBLEM DEFINITION

3.1. Problem Statement

3.2. Organizational Impact

3.3. Technology Migration

4. PROJECT OVERVIEW

4.1. Project Description

4.2. Goals and Objectives

4.3. Project Performance

4.4. Project Assumptions

4.5. Project Constraints

4.6. Major Project Milestones

5. STRATEGIC ALIGNMENT

6. COST BENEFIT ANALYSIS

7. ALTERNATIVES ANALYSIS

8. APPROVALS


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1. EXECUTIVE SUMMARY

1.1. Issue

The scope of work for XYZ Bank to be provided by Flagship Solutions Group (FSG) crosses several

multi-functional regions of IT. Due to the separation of physical banking server processor locations by

distance and three distinct business divisions (Wealth Management, Life Insurance, and Bank Operations),

the segmentation and corralling of data and information is prevalent at XYZ Bank. The complex nature of

the tasks differentiated by compartmentalized job criteria and expectations, combined with the need for

top- flight security and data recovery capabilities (physical and virtual), necessitates on the job experience

and a positive track record of handling these disaster scenario issues. XYZ Banks numerous business

departments have become fragmented siloes, requiring security (physical and virtual), traceability,

accountability, and expert handling for sensitive client financial information. XYZ Bank desires the

development and maintenance of reliable back-up systems that can operate during, and quickly recover

from, a hurricane or other similar natural/man-made disaster. No down time, or at minimum a quick

recovery, is crucial in the banking industry. The bank also requires significant system optimization

services, data collection & correlation, virtual dashboard creation for ease of executive and managerial use

as the business scales up, and complete aggregation of all collected and stored information for the

formation of a common data pool on the cloud. This data pool needs the ability to be accessed

simultaneously from many locations at once, XYZ believes the cloud provides an optimal platform from

which to manage this problem. XYZ must utilize efficient operational processes for its system

maintenance and to monitor the repair/trouble ticket network that is constantly called upon in the banks

day to day operations. XYZ believes that the cloud will provide the perfects mobile platform to

disseminate selected data metrics which may signal business opportunities within the information

currently scattered throughout its fragmented systems. XYZ Bank needs the experience of field experts

and has minimal time for recruiting, training, and maintaining (or expanding) a new IT workforce as no

CIO currently exists within the company. Furthermore, a refinement and installation of processes for

ticket/problem resolution is necessary to continue with normal daily operations as the business grows and

scales up and to ensure that trouble tickets are handled and processed in a timely and acceptable manner.

1.2. Anticipated Outcomes

XYZ Bank will benefit from FSG, a tier 2 IBM partner, through the implementation of proprietary IP,

strategic IBM partnerships, access to IBM Global Services (IGS), creation of an interactive dashboard,

managed troubleshooting services (SDC “Help Desk”), system optimization, and proprietary IP. “FSG can

provide you with the best of IBM while shielding you form the worst”-Doug Paton, CFO of FSG.

Through the use of “Infralytics”, a term coined and copy-written by FSG, XYZ will have the best that

technology has to offer in the form of data aggregation and desired metric selection. Infralytics is the

systematic computational analysis of the basic physical and organizational information technology

structures needed for the operation and continuation of an enterprise, resulting from the analysis of data or

statistics. FSG software will find and utilize the specific data metrics requested by XYZ Banks’

management and business divisions, to help optimize business processes and to, in turn, more efficiently

serve the customers of XYZ Bank. Optimization will serve to increase revenues, bank reputation, and their

industry standing.

FSG will optimize XYZ’s current infrastructure, systems, and oversee the changeover to updated and

more efficient hardware from IBM/Lenovo. Through monitoring and Managed Services, FSG will

configure, deploy, and test all hardware, operating system software, and applications (Solution

Components) as well as apply routine and critical maintenance requirements for the entire system.

Through Engagement Management, Incident Management, Problem Management, Systems Management,

Ongoing support, and regular Reporting FSG will implement and oversee all critical and ancillary system

requirements for the life of the contract. Service Desk implementation by FSG will streamline, monitor,


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log, and track tickets & dispute resolution solutions. The system will ensure quality and the timeliness of

conflict resolution within XYZ banking systems (Wealth Management, Life Insurance, and Bank

Operations). FSG will also oversee all security, back-up systems management, and inter-silo data

aggregation for dashboard creation and information dissemination.

1.3. Recommendation

Through the use of Cloud based systems, FSG will aggregate all silos of data into one pool from which to

apply bots, applications, and tools to glean information for metrics desired by management for custom

dashboard displays. FSG utilizes United States government guarded server rooms in dedicated locations in

Miami exploiting Terra-Mark’s fortified network internet crossroads connections to ensure the safety of

data (physical and virtual) as well as timely restoration of services in the event of a disaster. FSG’s

experienced personnel will facilitate a quick and effortless changeover from XYZ’s current inadequate

legacy systems to IBM/Lenovo based hardware and operating platforms which will facilitate the cloud

based network that XYZ desires. FSG will implement a tested Help Desk 24x7 (Service Delivery Center;

SDC), tech support, and back-up systems for archiving & contingency planning will ensure XYZ

operations stay efficient and up to date. Through regular scheduled maintenance, on-boarding, and

incident reporting FSG will keep XYZ’s management abreast of all key issues at regular pre-determined

intervals as well as by addressing key issues on a request basis. Shifting the responsibility and

accountability of IT, archives, and information aggregation to FSG will free up XYZ management to focus

on bank operations and key issues ensuring an increased operational efficiency due to management’s

involvement in key business details. The freedom provided through accountability and peace of mind,

with FSG covering 3 locations with 6 distinct servers across 3 co-locations, supporting Capital Wealth

Management, Life Insurance, and Bank Operations will allow XYZ to save time, money, and to lower

operational costs thereby making the firm more profitable. By clearly stating objectives and through

achieving pre-set milestones, the project is ensured to be operational per agreed upon scheduling and

timeline constraints.

1.4. Justification

Undertaking this project through the utilization of FSG’s skills would allow XYZ Bank to realize both

significant short and long term savings through items such as hardware and software upgrades, data and

hardware migration oversight, implementation of proprietary applications, system development &

management, system maintenance & reporting, and a sizable reduction in overhead costs. The overhead

will be reduced through cloud based storage and networking models with proven processes and systems

supported by IBM. Another way is through the reduction of selling and general administrative expenses

by supplying all the necessary manpower, which saves XYZ the costs of recruitment, training, bonuses,

downtime, increases in management staff, and other expensive aspects associated with employee

procurement. The projected initial costs for XYZ Bank will include the following: initial on-boarding fee

and monthly contract charges totaling the entire agreed upon amount over the duration of 36 months. This

project represents the most savings in time and cost amongst the various alternate options. Choosing not to

implement FSG’s recommendations or going with a different, less experienced, or unsupported company

would cost XYZ Bank exponential amounts of time, money, and operational efficiency. FSG has

experienced double digit growth since its inception, with a 40% increase last year alone. FSG has the

experience, the knowledge, and the technical capabilities to streamline XYZ Bank’s system migration

with the greatest ease and least intrusive impact to normal company operations.


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Initial estimates for the project are:

Costs:

● On-Boarding Costs - $30,000

● Monthly Service Charges - $20,000 per month (36 months)

● 3-year Contract Totaling - $750,000

Savings:

● Migration assistance from existing infrastructure to IBM/Lenovo infrastructure - $283,495

● SDC (24x7) implementation resolves the root cause of an issue to lessen the impact of problems

created within the IT infrastructure and to inhibit the recurrence of such issues. - $471,744

● Archival and security services - $242,000

● CIO – Managerial oversight, accountability, and reporting - $450,000

● Manager under CIO - $270,000.00

● Reduce employee (technician) overhead expenses - $250,000

Net Savings - $1,217,239.00

2. BUSINESS CASE ANALYSIS TEAM

The following individuals comprise the business case analysis team. They are responsible for the analysis and

creation of the project business case.

Courtney Fenwick

Eric Risi

Carl Schachter

Brendan McCauley

3. PROBLEM DEFINITION

3.1. Problem Statement

Flagship Solutions group plans to address XYZ bank’s physical and virtual security issues associated with

out of date and inefficient legacy systems. FSG will provide a software service that includes back-up of

client data, monitoring agents, Service Desk, and administrative utilities. Currently XYZ bank’s wealth

management, life insurance, and bank operations information is consolidated in silos where FSG intends to

convert the fragmented information into a common aggregate program under a proprietary IP code on the

cloud.

3.2. Organizational Impact

The Flagship Solutions Group project will impact XYZ bank in several ways. Implementation of the XYZ

bank project by Flagship and the roles and responsibilities associated with:

Engagement Management, Incident Management, Problem Management, Systems Management and

Ongoing Support, Reporting, Change Management, and the On Boarding processes.


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Engagement Management: The role of an Engagement Manager will be created by FSG for ensuring the

setup of both operational and technical processes covered in the statement of work (SOW). This position

will be the point of contact to ensure the project parameters are met with regular meetings encompassing

open issues and environment reports.

Implementation of the Service Delivery Center (“SDC”) Service Desk will give XYZ bank a single central

location for any and all system issues and service tickets. The Service Desk also provides an interface for

other activities such as: maintenance contracts, software licenses, service-level management, configuration

management, and availability management.

Incident Management: Normal service operations will be supplemented with incident management,

ensuring optimized levels of service quality and maintenance to insure business continuity. Addressing

incidents will be prioritized by the degree of severity and duration.

Severity Levels are categorized as follows:

A-Critical: A work stoppage has been cause or has the ability to cause a stoppage of essential business

functions. Response time is within an hour of occurrence.

B-High: No work stoppage has occurred but the user’s ability to perform normal business operations have

occurred. A working alternative is not available and response time will be within 2 hours.

C-Medium: No work stoppage has occurred but has impaired the user’s ability to perform normal business

operation. A working alternative is available. Response time is within 8 hours.

D-Low: Service has not been impaired or disrupted and is classified as more of an inconvenience.

Response Time is within 24 hours.

Problem Management: Application of problem management resolves the root cause of an issue to lessen

the impact of problems created within the IT infrastructure and inhibit the recurrence of such issues.

Problem management is more preventative whereas incident management intends to return service back to

normal operational levels as fast as possible. This process is also designed to reduce the quantity and

frequency of incidents. FSG will evaluate all incidents with the intention to uncover underlying issues on a

monthly basis.

Systems Management and Ongoing Support: FSG will provide a continual system administration,

problem identification, technical assistance and management support services for the new datacenter

environment. These services include the monitoring and logging of operational events, alerts, and defined

system thresholds.

IT Infrastructure: XYZ Bank’s IT Infrastructure monitoring and management will be delivered with the

implementation of the Service Delivery Center (“SDC”). This system is maintained constantly with

manual health checks and monitoring processes while communicating with specified systems and report

conditions. This updating of IT monitoring and management will not only increase XYZ Bank’s security,

but its level of efficiency will be increased exponentially.

Response Management and Reporting: FSG will construct regular reports via the Engagement Manager

to review any changes and improvements that require to be made to the existing reporting systems and

developments. Such reports will have the ability to identify any trends, track recurring problems and

interpret technician notes.


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Conversion Management: should XYZ Bank require any changes within the newly designed operations

environment the following protocol will take place:

-XYZ Bank will complete a Project Change Request (“PCR”) that will establish the need for any

alterations. The PCR will state the change, reasons and overall effects on monitoring, system management

and or the monthly price of services provided.

-Both XYZ Bank and FSG will review and agree to any proposed changes recommended for further

research or to reject the proposal.

3.3. Technology Migration

Phase I: Project Acceptance

Initial meeting with XYZ Bank to understand and address current system issues at hand. Flagship will

present statement of work to XYZ to detail all general terms and delivery of solution components.

Phase II: Hardware/Software agreement

FSG will implement IBM platform systems as an upgrade over XYZ Banks’ legacy systems. This

includes the pre-installation of any hardware or managed devices in association with the delivery of

service.

Phase III: Hardware/Software Installation …

30 days

Phase IV: Dashboard Configuration/Implementation …

60 days

Phase V: Monitoring/Assessment/Evaluation/Monitoring

Monitoring of incidents will be categorized by severity level that will determine the priority of addressing

issues. 90 days and forward to contract renewal or cessation.

4. PROJECT OVERVIEW

4.1. Project Description

FSG shall provide systems monitoring and remote administration services for the Customer’s data centers and

computing environments. The detail of these services is contained below, and consists of:

Engagement Management

Incident Management

Problem Management

Systems Management and Ongoing Support

Change Management

Reporting

On Boarding


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1. Engagement Management

a. Engagement Manager – FSG will assign a specific Engagement Manager responsible for the setup of all the

operational and technical processes encompassed in the Statement of Work (SOW). This resource will be

the primary point of contact to ensure that the SOW terms are met. This includes a regular review of open

issues and environment reports.

b. SDC Help-Desk – Provides a single central aggregation point for any and all system alarm condition and

corresponding trouble tickets. The Service Desk reviews, logs, and manages all incidents, service requests

and provides an interface for all other Service Delivery Center (SDC) processes and activities. Throughout

the process, the Customer is informed at regular intervals about their incidents’ status. The Service Desk

not only handles incidents, problems, and questions but also provides an interface for other activities such

as change requests, maintenance contracts, software licenses, service-level management, configuration

management, and available management.

2. Incident Management

Incident Management restores normal service operation as quickly as possible and minimizes the adverse

effect on business operations, thus ensuring that the best possible levels of service quality and service

availability are maintained.

a. Escalation

If an incident cannot be resolved by Level 1 support within the agreed time, then more expertise or

authority will become involved as a result of the escalation. The net effect of escalation is to raise the

priority of the incident. The escalation of incidents depend upon:

Degree of severity of an incident

Duration of an incident

The priority of a call is determined by its severity. All incidents are handles in priority order. The

escalation procedures are determined during the on-boarding process or the change control process.

The incident management process is responsible for resolving incidents and restoring services. An incident

is created via:

Threshold being breached by a monitored event

Incoming call

E-mail

Text message

In the event of an incident being reported (via any method, manual, or automated) the Service Desk will

open a trouble ticket, assess & document the situation, and begin remediation. As part of the assessing the

issue, the service desk determines the Severity and the level of support required.


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3. Problem Management

Problem Management resolves the root cause of an issue to minimize the adverse impact of problems that

are caused by errors within the IT infrastructure, and to prevent the recurrence of incidents related to these

errors. A ‘problem’ is an unknown underlying cause of one or more incidents, and a ‘known error’ is a

problem that is successfully diagnosed and for which either a work-around or a permanent resolution has

been identified.

4. Systems Management and Ongoing Support

a. Task Summary

FSG will perform ongoing system administration, problem determination, technical assistance, and

management support services for the datacenter environment. This is to include monitoring and reporting

of the operations events, alerts, log events and defined thresholds, and performance of predefined actions

for associated conditions. These task areas may include but not be limited to the following:

Server hardware monitoring and alerts

Migration assistance from existing infrastructure to IBM/Lenovo infrastructure

System message (OS) monitors and alerts – “VMWare”

Dashboard Creation and Maintenance/Support/Updating

Virtualization layer

Storage layer

Backups (tapes rotates by Customer)

SDC will manage the systems “from VMWare down”

Patch management

On premises tasks

b. Proactive Monitoring: Definition and Clarifications

Proactive monitoring and management of Customer’s IT infrastructure will be delivered through the Service

Delivery Center (“SDC”), which is maintained 24x7x365. In addition to manual health check and monitoring

processes, FSG will deploy a monitoring and management system that will communicate with each of the

specified systems and report on their conditions. Each system will have a set of determined rules and alarm

thresholds, which will be defined during the on boarding process. Monitoring events may include but are not

limited to:

Ping response to monitored device

CPU, disk, memory utilization and health

Patch compliance

Core operation system errors

Data replication statuses


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c. Patch Management: Definitions and Clarifications

Patch management involves acquiring, testing, and installing multiple patches. Patch management tasks

include: maintaining current knowledge of available patches, deciding what patches are appropriate for

particular systems, ensuring that patches are installed properly, testing systems after installation, and

documenting all associated procedures and specific configurations.

d. Backup and Recovery: Definitions and Clarifications

Participate in developing the policies for managing backups and will be responsible for ensuring the

backups complete successfully.

Coordinate with Customer to implement recommendations, if needed.

Assist with system restore should a catastrophic event occur.

Monitor and respond to system messages related to backup processes.

e. External support coverage: FSG requires the Customer to maintain current hardware and software support

agreements with all vendors applicable to the environment, including coverage for 24x7 operations. FSG

requires the Customer to allow it to assess this external support should it be necessary to maintain or

remediate an incident within the hosted environment. FSG maintains an extended IBM support network

including IBM personnel and certified IBM Business Partners which it may engage to support portions of

the environment should it become necessary.

5. Change Management - Process to be followed if a change to the Customer’s environment is required:

A project Change Request (PCR) will be the vehicle for communicating change. The PCR will

describe the change, the rationale for the change and the effect the change will have on the

monitoring, systems, or monthly price of the service

Both parties will review the proposed change and agree to it, or recommend it for further

investigation, or reject it. Authorization must come from both parties and a PCR must be dual

signed to affect a change.

A written Change Authorization and/or PCR must be signed by authorized representatives from

both parties to authorize implementation of the investigated changes. Until changes are agreed

upon in writing, both parties will act in accordance with the agreed upon SOW.

6. Reporting: FSG will provide regular reports. FSG Engagement Manager will meet with Customer Key

contact on a regular basis to go over the reports and understand any changes and improvements that may

need to be made to the reporting system and/or process.

Provide a status of the current state of the production site environment

Provide details and a monthly summary of the thresholds being monitored

Provide details and a monthly summary of the utilization of server components such as CPU,

memory, and disk monitoring

Provide details of trouble and their status and action taken to resolve the trouble ticket

Provide device availability statistics for managed components


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7. On Boarding Process

Install any software tools or agents required to monitor and manage the base components as

mutually agreed between FSG and the XYZ Bank. From the effective date of this agreement the

process will take approximately 90 days for full functionality

Monitoring configurations will be discussed with customer to determine the proper thresholds

relative to established best practice and prior successful deployments

Begin discovery assessment phase wherein FSG will obtain inventory, performance, and usage

data from the datacenter components to validate the optimal system architecture

Establish monitoring portal with entry dashboard to display key performance and availability

metrics

4.2. Goals and Objectives

Managed system services for datacenter hardware and software components. 3 locations and 6 distinct

server systems across 3 co-locations. The businesses that are supported are Wealth Managed (Capital),

Life Insurance, and Bank Operations. Software includes FSG proprietary IP, Back-up and archiving,

monitoring agents, administrative utilities, and data mining. Systems management and On-going support

include Server hardware monitoring and alerts; Migration assistance from existing infrastructure to

IBM/Lenovo; System Message (OS) monitors and alerts – VMWare; Visualization layer; Storage Layer;

Back-ups; Patch management; On premises tasks; SDC will manage systems from “VMWare Down”.

These services are intended to assist XYZ Bank by creating a common platform for all business silos and

to retrieve key metrics for the intended use of data analytics and business advancement. Through the use

of bots, FSG will create custom Dashboards consisting of client specified custom metrics in order to

streamline processes, establish ease of use, and allow communication throughout the entire company

platform.

4.3. Project Performance

Key Resource / Performance measure

Engagement Manager – Primary point of contact to ensure all SOW terms are met. Regular review

of open issues and environment reports.

SDC Service Desk – Reviews, logs, manages all incidents, service requests, and provides an

interface for all SDC processes and activities. Customer is informed at regular intervals and on

request about incidents and their ticket status. Escalation of incidents – Degree of severity and

duration of incident. Problem Management Statement – Problem management resolves the root

cause of an issue to minimize the adverse impact of problems that are caused by errors within the IT

infrastructure and to prevent the recurrence of incidents related to these errors.

Proactive monitoring – In addition to manual health checks and monitoring processes, FSG will

deploy a systems monitoring and management system that will communicate with each of the

specified systems and report conditions. Each system will have a set of determined rules and alarm

thresholds which will be defined during the on boarding process.

Reporting –FSG engagement manager will also meet with XYZ Banks’ key contact on a regular

basis (monthly) to analyze reports, understand any changes. Reports will be run on demand in order

to analyze trends, track problems, and read technician notes. FSG will provide regular reports on the

following:


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1. A status of current state of the production site environment

2. Details and a monthly summary of the thresholds being monitored

3. Details and a monthly summary of the utilization of server components

4. Details of trouble tickets and their status and actions taken to resolve trouble ticket.

5. Device availability statistics for managed components

Change management – Project Change Request (PCR), Dual review from FSG and XYZ, signed

authorization from both parties

On-Boarding Process – 90 days for full functionality

4.4. Project Assumptions

SOW covers the services in section 1 and 2 as defined in SOW intro section

Customer must provide security credentials needed to access XYZ systems

Some work may be performed by FSG techs remotely when appropriate, if agreed by XYZ and

appropriate VPN access is provided

FSG normal hours are 8am to 6pm (EST) M-F except holidays. Managed service hours are

24x7x365 when specified in section 2.

FSG will provide technicians on a best effort, first available basis. Techs are NOT “on call” unless

otherwise specified

Prices do NOT include any applicable local sales taxes

FSG will not be liable for delays in shipment or implementation caused by events not under

immediate control

Customer must maintain current hardware and software technical support and maintenance

agreements with all applicable product manufacturers (ex. IBM, Lenovo, VMWare, Microsoft, etc.)

FSG is not providing a dedicated resource tech. Services may be performed by a group of techs so

assigned by FSG and may change at any time without notice

If any assumptions change or become invalid, the changes, estimated dates, or other terms and

conditions may change through invocation of the Project Change Request Procedure (PCR)

1. Special Note – FSG will coordinate pre-installation datacenter evaluation including:

Evaluation of electrical requirements and environmental conditions prior to deployment

in each location according to IBM specs and requirements for the equipment being

installed. Customer will be responsible for remediation of any deficiencies found by this

evaluation.

4.5. Project Constraints

Within 90 business days of the execution of this service agreement, including all general terms, and

the delivery of the Solution Components (Commencement Date). FSG will make the solution

components and/or system ready (Activation Date), provided that customer supplies all customer

materials and necessary info.

XYZ will provide, at no charge, prompt and reasonable access to information, documentation,

equipment, and personnel as requested by FSG to facilitate the performance of services under this

agreement

Statement of Work (SOW) will be valid for 36 months from the activation date (Date of signed

SOW). SOW will automatically renew for a successive 12 month term unless XYZ submits a notice

to cancel 90 days in advance.


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4.6. Major Project Milestones

Table 1

Milestones/Deliverables Target Date

Project Proposal 01/15/2015

Project Plan Review and Change Procedure 03/01/2015

Project Acceptance - Start Date 03/10/2015

Phase I – Hardware/Software agreement - Complete 04/10/2015

Phase II - Hardware/Software Installation - Complete 05/10/2015

Phase III - Dashboard Configuration/Implementation - Complete 06/10/2015

Phase IV – Fully Operational - Complete 07/01/2015

Service Renewal/Closeout 03/10/2018

5. STRATEGIC ALIGNMENT

Flagship Solutions Group is in support of XYZ Bank Inc.’s Strategic Plans through Datacenter Infrastructure

Monitoring and Management Services. Performing these strategic plans will help improve XYZ Bank Inc.

business and streamline operations.

Table 2

Plan Goals/Objectives Relationship to Project

Flagship Solutions Group

Datacenter Infrastructure

Monitoring and Management

Services for XYZ Bank Inc.

Provide systems

monitoring and remote

administration services

for computing

environments

This project will allow for real-time analytics via

customized system networking and customized

dashboard creation





Management of data

hardware and software

services

Single data warehousing allowing for

consolidation, recovery, and protection of

customer’s private information





Provide a smoother

work flow inclusive of

multiple types of

management

New software and hardware infrastructure aims to

streamline the following: Engagement

Management, Incident Management, Problem

Management, Systems Management, and Ongoing

Support, Reporting, Change Management, On-

Boarding, and Exclusions





Creation of Service

Desk Center

Provide a 24x7 helpdesk, optimization of ticket

resolution, and timeliness of performance


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6. COST BENEFIT ANALYSIS

This section illustrates the associated costs of the project and compares them with the benefits and savings to

determine if the project is worth pursuing. The following table captures the cost and savings actions associated

with the project, descriptions of these actions, and the costs or savings associated with them through the first

year. At the bottom of the chart is the net savings for the project.

Table 3

Action Action Type Description Project Costs

Implementation of the Service Delivery Center (SDC)

“Service Desk” will give XYZ bank a single central

location for all system issues and service tickets.

Cost

The Service Desk also provides an interface for other activities such as: maintenance contracts,

software licenses, service-level management, configuration management, ticket resolution, and

reporting.

($125,000)

FSG will provide continual system administration,

problem identification, technical assistance and

management support services for the new datacenter

environment.

Cost

These services include the monitoring and logging of operational events, alerts & defined system

thresholds, key system upgrades and process implementation, dashboard creation, and data

aggregation.

($205,000)

XYZ bank’s IT Infrastructure (physical and virtual) will

be upgraded and supported through IBM/Lenovo

hardware & support, government on site protection, and

Verizon’s Terra-Mark.

Cost This system is maintained constantly with manual system checks and monitoring processes while

communicating with specified systems, 24x7 security & monitoring, and reporting. ($274,500)

Archive & recovery services with with 24x7 ongoing

support and access to IBM IGS Cost

Such reports will have the ability to identify any trends, track recurring problems and interpret

technician notes while implementing solutions and strategies used by successful fortune 500

companies.

($145,500)

Migration assistance from existing infrastructure to

IBM/Lenovo infrastructure Savings Increase efficiency from hardware migration, partnership support, and cloud data networking $283,495

SDC (24x7) implementation resolves the root cause of

an issue to lessen the impact of problems created within

the IT infrastructure and to inhibit the recurrence of such

issues.

Savings

Problem management is more preventative whereas incident management intends to return service

back to normal operational levels as fast as possible. This process is also designed to reduce the

quantity and frequency of incidents. FSG will evaluate all incidents with the intention to uncover

underlying issues on a monthly basis.

$471,744

Archival and security services Savings Less frequent use of IT resources working on non-value added tasks results in approximately $142,000

savings per year. $242,000

CIO – Managerial oversight, accountability, and

reporting

Savings Technical oversight in regard to software/hardware transition, data migration, XYZ Bank back-up

systems & security.

$450,000

Manager under CIO

Savings

Managerial oversight of operational efficiency, provide direct report to CIO regarding day-to-day

operations.

$270,000.00

Reduce employee overhead expenses Savings Savings in cost to out-source existing employee and recruit, hire, and train new employees is

approximately $250,000 in the first year. $250,000

NPV Present Value Net present value, assuming 1.6% (FY 2014 inflation rate) $42,871.40

NPV Present Value Net present value, assuming 3% (Historic inflation rate) $12,187

IRR Return Rate Internal rate of return (Minimum required return to break even) 8%

Gross Savings Value Added to

XYZ

Total project savings over a 36 month period. XYZ Bank will save on future expenses such as data

migration, application management, system maintenance, employee turnover, and cyber security $1,967,239

Total Costs Total

Costs Total project cost over a 36 month period. ($750,000)

Net Savings $1,217,239.00

*approximate figures

**Table used to illustrate examples, not meant to be an exhaustive list


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Based on the cost benefit analysis above we see that by authorizing the project, XYZ Bank will save $1,967,239

over the course of the contract. This represents a significant improvement in XYZ Bank’s operating costs and is

a clear indicator of the additional value this project will have on the firm. Please note, these savings are only a

reasonable projected estimate as XYZ Bank is responsible for its own best practices, contract negotiations, and

final expense approvals.

7. ALTERNATIVES ANALYSIS

The following alternative options have been considered to address XYZ Bank’s IT related issues. These

alternatives were not considered, or dismissed, for a number of reasons (See table below for explanations), not

limited to but including:

.

No Project (Status Quo) Reasons For Not Selecting Alternative

Maintain current information system

infrastructure and implement

necessary changes/fixes when

possible.

● Unnecessary expenditure of funds for increased staffing overhead

● Continued occurrence of a high number of data errors

● Poor and untimely reporting

● Lack of automation and essential business metrics

Alternative Option Reasons For Not Selecting Alternative

Outsource the implementation of a

web-based platform to an outside

vendor in order to improve current

infrastructure flaws.

● Significantly higher cost

● Expertise would have to be assembled from multiple independent sources

● Vendor’s lack of familiarity with XYZ internally generated requirements

● Lack of support from major industry software and hardware developers

Alternative Option Reasons For Not Selecting Alternative

Develop software internally and

recruit, train, and maintain staff to

implement necessary

changes/upgrades to improve

information system, operations,

archiving, security, and efficiency.

● Lack of qualified resources

● Significant cost associated with software design

● Timeframe required is too long

● Excessive employee overhead

● Lack of operational knowledge, experience, and implementation

● Lack of cutting edge software accessibility, knowledge, and application

8. APPROVALS

The signatures of the people below indicate an understanding and acceptance in the purpose and content of this

document by those signing it. By signing this document you indicate that you approve of the proposed project

outlined in this business case and that the next steps may be taken to create a formal project in accordance with

the details outlined herein.

Approver Name Title Signature Date

Goo, J. President and COO

Board of Directors Chairman

2015_03_26 ISM Flagship Final Business Case PDF

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