Case 1 – Project Initiation

Think-Design-Test-Create

 

• Description

Your supervisor, Mr. Miller, has taken you aside and asked you to begin a preliminary analysis on an online video game rental system. Mr. Miller has outlined his vision of the system by saying that it should be very user-friendly, providing customers the ability to search for specific games by platform, age and gender appropriateness, customer reviews, and so on. Registered customers must be able to track orders, returns, and payments. However, Mr. Miller also explained that this is just his gut feel is that he wants to distribute the games using the mail system like movie rentals. He has asked you to take do some additional research and come back with your recommendations and a draft project charter at the end of the week. He also wants to know what kind of skills and knowledge you would want in your other team members.
Your preliminary estimate shows that in the best case this project will take twelve months to complete and cost about $500,000, and monthly operating costs would be about $50,000 per month for year one and $60,000 per month for years two and three. Estimated benefits are about $1 million the first year after implementation and $2 million the following two years. You assume a 7% discount rate.
You decide to ask Alan your former project lead to take a look at your estimate and he says your numbers are probably fair for a high end estimate. However, he asks you whether Mr. Miller said anything about the movie streaming service that he proposed last year and points out that a download only option might be a more profitable model for this situation. You sit down together and come up with an estimate of eighteen months to complete and a cost of $1 million, and monthly operating costs of $40,000 per month for year one and $45,000 per month for years two and three. The estimated benefits are about $1.5 million the first year, $3 million the second year and $3.5 million the third year. You know that Mr. Miller has been involved with similar dot-com era projects that were axed when they failed to live up to the profit projections.

• Deliverables
  1. A business case proposal
  2. A proposed team description
  3. A draft project charter
  4. A similar case
• Resources
  1. Textbook Chapters 2(pp. 32-47) and 3(pp. 73-79)
  2. How to write a business case
  3. Building a successful project team
  4. Chartering projects