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Cost benefit analysis
In order to carry out a cost-benefit analysis, we must first calculate the expenses, which Hunter Institute of TAFE will incur in connection with this project. Overall, there are four deliverables that require investment: 1) acquisition of computers; 2) purchasing software; 3) furnishing the room; and 4) installation. Thus, we can single out the major costs; they can be presented in table format.
|Software||10, 200 $|
|Furniture||19. 600 $|
Total: 78,500 $.
In order to do these estimations, we needed to research pricing and discounts policies of various stores. There are several tangible and intangible benefits, which Hunter Institute of TAFE will derive from this project. First of all, we need to speak about increased students’ and teachers’ satisfaction, and they are the key stakeholders of this organization. Secondly, one should also mention this educational institution will be able to offer new advanced courses to students, for example, the courses in web design. Finally, this project may decrease the dropout rate in Hunter Institute of TAFE.
Nevertheless, it is still necessary to provide quantitative data in order to prove the cost-effectiveness of this project. For this purpose, we need to use such measurements as NPV (Net Present Value) and ROI (Return on Investment). These tools help management to estimate how much money the investment will bring them and evaluate the overall efficiency of the project. To calculate NPV one has to know time of the cash flow, in other words, that period during which the investment will bring profit (Brigham & Houston, 2009, p 338). Second, it is necessary to take into consideration the total amount of cash inflows and outflows.
We expect that this computer lab will generate profit within five years as this is the average serviceable life of a computer. By offering new courses in web design or other IT-related disciplines to students, Hunter Institute of TAFE will be able to receive twenty-five thousand dollars annually. The annual cost of maintenance is one thousand dollars. NPV is calculated according to this formula:
In this case CF means cash flow that can be either positive or negative, t means time, while R is the expected rate of return (10 per cent)
These calculations should better be presented in table format.
The sum of these values or NPV is $ 17, 500, which means that this project is profitable in its nature. Furthermore, the payback period constitutes three and a half years. Another measurement which should be used by the project managers is ROI (Return on Investment). The key purpose of this tool is to assess the efficiency of the investment. It is a ratio of net program benefits and program costs (Phillips, 2003, p 199). The following formula is used to calculate ROI.
R = * 100 %
V1 denotes the sum of money gained from investment, whereas V2 is the total expenditures of the organization.
R = *100 = 21,2 %
Still, we have to stress an idea that the main benefits of this project are intangible, and they cannot be measured by quantitative means.
Re-design of the process
At this point we need to create a flowchart that would illustrate the benefits of the new project. In particular, it is necessary to show how the interactions between educators, students, and administrator of Hunter Institute of TAFE will improve, if they have a new computer lab. In this case, it will take the form of a use case diagram.
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This diagram shows what kind of activities this project will support. Modern educational institution cannot be imagined without appropriate use of informational technologies, and Hunter Institute of TAFE is not an exception from this rule.
At this point we need to work out a detailed schedule of those activities, involved in this project. We can present them in the following way.
|Project Activity||Start Date||End-date.|
| ||October 24th||October 25th|
| ||October 25th||November 5th|
| ||October 28th, |
|November 10th |
| ||November 10th||November 20th|
| ||November 20th||November 25th|
| ||October 26rd||October 29th,|
| ||November 25th||November 29|
| ||November 29th||December 1st|
| ||December 2nd||December 5th|
The project team will include the following participants:
- team coordinator;
- an IT specialist, the person who will choose hardware and software, moreover, he will be responsible for the selecting suppliers;
- an educator, who examine the curriculum of Hunter Institute of TAFE and identify what kind of technologies and programs are usually used for the courses;
- interior designer, the person, who will do the furnishing,
- cost manager;
- maintenance personnel.
The resources and funding for this project will be provided by Hunter Institute of TAFE.
This network diagram will show the sequence of tasks and their interdependence. This tool is particularly useful, as it helps to understand which tasks are the most crucial.
In this network diagram, arrows we have shown the sequence of tasks and their relations. There are two pairs of tasks that are connected with one another, they have highlighted in red and green colors.
Stakeholder analysis and communication plan
Hunter Institute of TAFE and this project have two types of stakeholders internal and external. The first group includes the administration, teachers, students, parents and the project team. The second group (external stakeholders) comprises suppliers of hardware and software solutions. In this analysis, we also need to discuss the stakeholder’s needs and interests in relation to this project.
- Students: successful completion of this project will provide students with an opportunity to improve their professional skills.
- Educators: this project will offer enable them to better tailor lessons and offer a wider range of training to the students
- Administration: these stakeholders want Hunter Institute of TAFE to acquire the reputation of one of the best educational institutions,
- Parents: they want their children to obtain the best possible education that is available to them.
- Suppliers: these companies want to attract new customers, and Hunter Institute of TAFE will be a very important client for them.
- Project team: these people bear the primary responsibility for the completion of this project.
On the basis of this analysis, we can map out communication plan, which would specify the methods of communicating news to the stakeholders.
|Stakeholder||What King of Information||Means of Communication||Frequency||Provider of Information|
|Administration||Milestone report, receipts and checks, team status, main decisions of the team||Both hardcopy and e-mail||Weakly||Project office|
|Teachers||News about project,||Bimonthly||Project office|
|Students||News about project,||Bimonthly||Project office|
|Parents||News about project,||Bimonthly||Project office|
Risk assessment and risk management plan
In this section, we need to identify the key risks, associated with the project, evaluate their probability and seriousness, and develop strategies for avoiding and managing these risks. The impact of the risk and its probability will be measured on a scale from 0 to 10.
|Insufficient Funding||6||7||This problem can be minimized by reducing the capacity of the computer lab, for instance, it may host 25 computers instead of sixty.|
|Inability to find an appropriate location for the computer lab||6||5||In this case, the computer lab should be located in two or three rooms|
|Lack of suppliers in the area||2||5||For this purpose, the team should research on-line shops that sell both hardware and software|
|Inappropriate selection of hardware and programs||4||9||This is one of those cases, when there is virtually no contingency plan. This challenge can only be avoided if the project team carefully studies the curriculum and evaluates student’s needs.|
Brigham. E. & Houston. J. 2009. Fundamentals of Financial Management. NY: Cengage Learning.
Lock. D. 2004. Project management in construction. London: Gower Publishing, Ltd.
Philips. J. 2003. Return on investment in training and performance improvement programs. New Jersey: Butterworth-Heinemann.
Rico. D. 2004. ROI of software process improvement: metrics for project managers and software engineers. J. Ross Publishing.
Schwalbe. K. 2006. Introduction to project management. New Jersey Cengage Learning.