Part 1: Project Integration Management

Manage Your Health, Inc. (MYH) is a Fortune 500 company that provides a variety of
healthcare services across the globe. MYH has more than 20,000 full-time employees and
more than 5,000 part-time employees. MYH recently updated its strategic plan; key goals
include reducing internal costs, increasing cross-selling of products, and exploiting new
Web-based technologies to help employees, customers, and suppliers work together to
improve the development and delivery of healthcare products and services. Below are some
ideas the IT department has developed for supporting these strategic goals:

1. Recreation and Wellness Intranet Project: Provide an application on the current

intranet to help employees improve their health. A recent study found that MYH, Inc.
pays 20 percent more than the industry average for employee healthcare premiums,
primarily due to the poor health of its employees. You believe that this application will
help improve employee health within one year of its rollout so that you can negotiate
lower health insurance premiums, providing net savings of at least $30/employee/year for
full-time employees over the next four years. This application would include the
following capabilities:

 Allow employees to register for company-sponsored recreational programs, such as

soccer, softball, bowling, jogging, and walking.
 Allow employees to register for company-sponsored classes and programs to help
them manage their weight, reduce stress, stop smoking, and manage other health-
related issues.
 Track data on employee involvement in these recreational and health-management
programs.
 Offer incentives for people to join the programs and do well in them (e.g., incentives
for achieving weight goals, winning sports team competitions, etc.).

2. Health Coverage Costs Business Model: Develop an application to track employee

healthcare expenses and company healthcare costs. Healthcare premiums continue to
increase, and the company has changed insurance carriers several times in the past 10
years. This application should allow business modeling of various scenarios as well as
tracking and analyzing current and past employee healthcare expenses and company
healthcare costs. This application must be secure and run on the current intranet so
several managers and analysts can access it and download selected data for further
analysis. The new application must also import data from the current systems that track
employee expenses submitted to the company and the company’s costs to the insurance
provider. You believe that having this data will help you revise policies concerning
employee contributions to healthcare premiums and help you negotiate for lower
premiums with insurance companies. You estimate that this application would save your
company about $20/employee/year for full-time employees over the next four years and
cost about $100,000 to develop.

3. Cross-Selling System: Develop an application to improve cross-selling to current

customers. The current sales management system has separate sections for major product
and service categories and different sales reps based on those products and services. You
see great opportunities to increase sales to current customers by providing discounts when
they purchase multiple products and services. You estimate that this system would
 increase profits by $1 million each year for the next three years and cost about $800,000
each year for development and maintenance.
4. Web-Enhanced Communications System: Develop a Web-based application to
improve development and delivery of products and services. There are currently several
incompatible systems related to the development and delivery of products and services to
customers. This application would allow customers and suppliers to provide suggestions,
enter orders, view the status and history of orders, and use electronic commerce
capabilities to purchase and sell their products. You estimate that this system would save
your company about $2 million each year for three years after implementation. You
estimate that the system will take one year and $3 million to develop and require 20
percent of development costs each year to maintain.

Tasks
1. Summarize each of the proposed projects in the Running Case section using a simple
table format suitable for presentation to top management. Include the name of each
project, identify how each one supports business strategies, assess the potential
financial benefits and other benefits of each project, and provide your initial
assessment of the value of each project. Write your results in a one- to two-page memo to
top management, including appropriate back-up information and calculations.
Answer:
Project Support Business Financial Benefits Other Benefits
Description strategies
Recreation and Reducing health $2.4M over 4 years improve heath
Wellness insuarnce costs less costs and productivity,
Intranet Project lower premiums

Health Reducing healcare costs $1.6M over 4 years less Negotiate lower
Coverage Costs costs premiums
Business Model
Cross Selling Increase cross selling $3M over 3 years less Increased sales, better
System costs customer
Web-Enhanced Develop a web-based $6M lover 3 years Improve
Communicatio application communucation
n System

2. Evaluate the four projects in the Running Case section by preparing a weighted scoring
model using the template provided on the companion Web site for this text. Develop at
least four criteria, assign weights to each criterion, assign scores, and then calculate the
weighted scores. Print the spreadsheet and bar chart with the results. Also write a one-
page paper that describes this weighted scoring model and the results.
Answer:

Recreation Health
Web-Enhanced
and Coverage Cross
Communicatio
Criteria Weight Wellness Costs Selling
n
Intranet Business System
System
Project Model
Satisfies business 35%
objective 25 8.75 25 8.75 25 8.75 25 8.75
 Provides positive
NPV 30% 100 30 70 21 25 7.5 50 15
Can be
implemented in 1
year or less 15% 100 15 100 15 30 4.5 100 15
ROI within 3
years 20% 80 16 100 20 0 0 25 5
 
Weighted 20.7
100% 69.75 64.75 43.75
Project Scores 5

Project Weighted Scoring Model

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Series 1
3. Prepare a business case for the recreation and wellness intranet project. Assume that the
project will take six months to complete and cost about $200,000. Use the business case
template provided on the companion Web site for this text.

Business Case for Recreation and Wellness Project

Project Name: Business Case for Recreation and Wellness Project
1.0 Introduction/ Background

MYH, Inc. currently pays 20

percent more than the industry
average for employee health care
premiums,
primarily due to the poor health of
its employees. Improving employee
health can reduce premiums and
provide other benefits to the
company and individuals
MYH, Inc. currently pays 20
percent more than the industry
average for employee health care
premiums,
primarily due to the poor health of
its employees. Improving employee
health can reduce premiums and
provide other benefits to the
company and individuals
MYH, Inc. currently pays 20
percent more than the industry
average for employee health care
premiums,
primarily due to the poor health of
its employees. Improving employee
health can reduce premiums and
provide other benefits to the
company and individuals
MYH, Inc. currently pays 20
percent more than the industry
average for employee health care
premiums,
primarily due to the poor health of
its employees. Improving employee
health can reduce premiums and
provide other benefits to the
company and individuals
MYH, Inc. currently pays 20
percent more than the industry
average for employee health care
premiums,
primarily due to the poor health of
its employees. Improving employee
health can reduce premiums and
provide other benefits to the
company and individuals
MYH, Inc. currently pays 20
percent more than the industry
average for employee health care
premiums,
primarily due to the poor health of
its employees. Improving employee
health can reduce premiums and
provide other benefits to the
company and individuals
MYH, Inc. currently pays 20
percent more than the industry
average for employee health care
premiums,
primarily due to the poor health of
its employees. Improving employee
health can reduce premiums and
provide other benefits to the
company and individuals
MYH, Inc. currently pays 20
percent more than the industry
average for employee health care
premiums,
primarily due to the poor health of
its employees. Improving employee
health can reduce premiums and
provide other benefits to the
company and individuals
MYH, Inc. currently pays 20
percent more than the industry
average for employee health care
premiums,
primarily due to the poor health of
its employees. Improving employee
health can reduce premiums and
provide other benefits to the
company and individuals
MYH, Inc. currently pays 20
percent more than the industry
average for employee health care
premiums,
primarily due to the poor health of
its employees. Improving employee
health can reduce premiums and
provide other benefits to the
company and individuals
MYH, Inc. currently pays 20
percent more than the industry
average for employee health care
premiums,
primarily due to the poor health of
its employees. Improving employee
health can reduce premiums and
provide other benefits to the
company and individuals
MYH, Inc. currently pays 20
percent more than the industry
average for employee health care
premiums,
primarily due to the poor health of
its employees. Improving employee
health can reduce premiums and
provide other benefits to the
company and individuals
MYH, Inc. currently pays 20
percent more than the industry
average for employee health care
premiums,
primarily due to the poor health of
its employees. Improving employee
health can reduce premiums and
provide other benefits to the
company and individuals
MYH, Inc. currently pays 20
percent more than the industry
average for employee health care
premiums,
primarily due to the poor health of
its employees. Improving employee
health can reduce premiums and
provide other benefits to the
company and individuals
MYH, Inc. currently pays 20 percent more than the industry average for employee health care premiums,
primarily due to the poor health of its employees. Improving employee health can reduce premiums and
provide other benefits to the company and individuals.

2.0 Business Objective

MYH, Inc. provides a variety of health care services to people across the globe. Unfortunately, we have
been neglecting the health of our own employees. We pay 20 percent more than the average for employee
health care premiums, which is unacceptable. By improving employee health, we can negotiate lower
premiums and improve productivity

3.0 Current Situation and Problem/Opportunity Statement

The company currently does not have a coordinated program to promote employee wellness. It was not
until the CFO reviewed our increasing costs for employee health care benefits that we discovered that our
own employees were less healthy than average. By developing a comprehensive program to promote
wellness, track employee involvement and progress, and provide incentives for improved health, MYH,
Inc. can negotiate lower premiums and have a more productive workforce.

4.0 Critical Assumption and Constraints

The proposed solution is to organize current services and provide easy access to new services via a
Recreation and Wellness Intranet Project. The new system must run on existing hardware and software,
and it should require minimal technical support. It must be easily accessible by employees yet secure from
unauthorized users.

5.0 Analysis of Options and Recommendation

Therer are three options for addressing this opportunity:
1. Do nothing. We can continue to operate without this new project.
2. Require employees to pay even higher rates for insurance themselves.
3. Design and implement the new intranet capabilities in-house using mostly existing hardware and
software.
4. Outsource the work involved in providing a system to track and manage employee progress toward
improving health.

6.0 Preliminary Project Requirements

The main features of Recreation and Wellness Intranet site include the following:
 Allow employees to register for company-sponsored recreational programs, such as soccer,
softball, bowling, jogging, walking, and other sports.
 Allow employees to register for company-sponsored classes and programs to help them manage
their weight, reduce stress, stop smoking, and manage other health-related issues.
 Track data on employee involvement in these recreational and health-management programs.
 Offer incentives for people to join the programs and do well in them (i.e., incentives for achieving
weight goals, winning sports team competitions, etc.).

7.0 Budget Estimate and Financial Analysis

A preliminary estimate of costs for the entire project is $200,000, based primarily on the costs for internal
staff to develop the new system. After the project is completed, maintenance costs of $50,000 are included
for each year, primarily to update the information and provide necessary changes.
Projected benefits are based on reducing the insurance cost per employee by $30 each year for four
years. Total projected benefits, therefore, are about $600,000 per year for four years.
Exhibit A summarizes the projected costs and benefits and shows the estimated net present value
(NPV), return on investment (ROI), and year in which payback occurs. It also lists assumptions made in
 performing this preliminary financial analysis. All of the financial estimates are very encouraging. The
estimated payback is within one year. The NPV is over $1.6 million, and the discounted ROI based on a
four-year system life is excellent at 444 percent.

8.0 Schedule Estimate

The sponsor would like to see the project completed within six months, but there is some flexibility in the
schedule. We also assume that the new system will have a useful life of at least four years.

9.0 Potential Risks

There are several risks involved with this project. The foremost risk is a lack of interest in the new system
by employees as well as the risk that we may not be able to negotiate lower insurance premiums. We also
need to provide useful programs and incentives to realize improved employee health. The main business
risk is investing the time and money into this project and not being able to recoup the costs.

10.0 Exhibits
Exhibit A: Financial Analysis

Discount rate 8%
Year
0 1 2 3 4 Total
Cost 200.000 50.000 50.000 50.000 50.000
Discount factor 1.00 0.93 0.86 0.79 0.74
Discounted costs 200.000 46.296 42.867 39.692 36.751 365.606

Benefits 0 600.000 600.000 600.000 600.000

Discount factor 1.00 0.93 0.86 0.79 0.74
Discounted benefits 0 555.556 514.403 476.299 441.018 1.987.276

Discounted benefits - costs 200.000 509.259 471.536 436.608 404.266 1.621.670 NPV
Cumulative benefits – costs 200.000 309.359 780.796 1.217.403 1.621.670
Payback before end of year 1
ROI 444%
Assumptions
Assumed ongoing costs to support the system of 25% of total development cost each year
Entered benefits in year 1
Used estimated costs as provided
Benefits based on $30$/employee, 20.000 employees, each year for 4
years

4. Prepare a project charter for the recreation and wellness intranet project. Assume that the
project will take six months to complete and cost about $200,000. Use the project charter
template provided in this text and the sample project charter provided in Table 4-1 as
guides.
2. Project Charter
Project Title: MYH Recreation and Wellness Intranet Project
Project Start Date: Feb. 1 Projected Finish Date: Aug.1
Budget Information: $200,000 is the estimated project cos

Project Manager: Dinh Thi The, [email protected], 0344569766

Project Objectives:
By providing this application on our current Intranet, we can help employees improve their health, resulting
in lower health care costs and improved productivity. The system will allow employees to register for
company-sponsored recreational programs and wellness classes, track data on involvement in these
programs, and offer incentives for people to join the programs and do well in them.

Success Criteria:
 Approach:
1.Select the project team
2.Determine project requirements
3.Develop the application followingcorporate standards and using a prototyping approach
4.Use good testing procedures
5.Provide training and develop support process

Roles and Responsibilities

Name and Signature Role Position Contact Information
Project sponsor Manager X MYH, senior manager [email protected]
Project manager Dinh Thi The MYH, manager [email protected]
Project team members Nine, Pattrick, MYH IT, HR, finance
Karry, John
CIO Manager Y Senior manager
CFO Manager Z Senior manager

Comments: (Handwritten or typed comments from above stakeholders, if applicable)

1. Prepare a change request for the recreation and wellness intranet project, using the
template provided on the companion Web site for this text. Be creative when making up
information.