Financial Model for BILLS: Region X Business Case Analysis

This case study presents a financial model for the BILLS (Billing Interface Liability and Logistics Strategy) project in Region X. The project aims to standardize the billing process, replacing the existing system with a new technology and business component. The financial model analyzes the costs associat...Read More

Business Case
Financial Model
Standardize billing interface liability and
logistics for Region X.

BILLS
• BILLS denotes Billing Interface Liability and Logistics
Strategy.
• Improving the billing system within Region X is the
objective of the management.
• BILLS is expected to transform the billing process within
the organization.
•

Pre-Implementation stage of
BILLS
• In order to implement BILLS within the organization the
existing billing system has to be replaced.
• The useful life of the existing billing system is close to its
end.
• Thus, replacement of the existing billing system is
compulsory.
• The management has to decide which new system shall
replace the existing system.

BILLS
• Both technology and business components consist of the
new proposed billing system.
• Technology component will help in replacing the existing
billing system.
• Standardization of operating models, processes and
guidelines used in 20 bill centers is the responsibility of
business component of BILLS.

Objectives of BILLS.
• Improving the existing billing system within the
organization.
• Standardization of processes and procedures used in
billing system in all bill centers of the organization.
• Delivering BILL capabilities as per the industry standard.

Utility and benefits of BILLS
• The benefits and utility of BILLS can be primarily
segregated into business and IT benefits.
• Business benefits are benefits that will improve the
efficiency of business operations and help the
management to run the business operations with greater
control and effectiveness.
• IT benefits are mainly benefits which are directly
associated with the information and technology
infrastructure within the organization.

Business benefits of BILLS
• Successful implementation of BILLS would help in
reducing the number of agents and management FTEs.
• Reduction in error rate as the proposed system (BILLS) is
far more advanced and technologically sound compared to
the existing system.
• Training time is also expected to reduce significantly
subsequent to the successful implementation of BILLS.

IT Benefits of BILLS
• Successful implementation of BILLS would help the
organization in reducing the expenditures required on
maintenance as the proposed requires significantly less
maintenance as compared to the existing system.
• No temporary technology solution will be required
subsequent to the implementation of BILLS.

Additional Benefits of BILLS
• Consistent experience of members.
• Promotion of member acquisition.
• Promotion of member retention.
• Greater satisfaction of members.
• Huge benefit to the organization with greater emphasis on
reuse technology.

Business information
• In 2015 total number of bills handled were 5,222,075.
• In order to handle the above bills in 2015 the organization
used services of 5481 FTEs (For detailed calculation
please refer to attached excel sheet).
• Successful implementation of BILLS would result in
reduction of FTEs required to handle bills.
• Thus, operating expenditure will be reduced significantly
with the implementation of BILLS (Muller, Suhner & Iung,
2016).

Cost benefit analysis
• The implementation and administration cost of the project
is $1,500,000 in the year of implementation.
• The fines if the regulatory service level are not met is
$2,000,000 per annum.
• Thus, net benefit is $500,000 in the year of
implementation and $1,000,000 per annum subsequent to
the year of implementation (Ranney, 2016).
Note: For detailed discussion please refer to the attached
excel sheet.

References
• Muller, A., Suhner, M., & Iung, B. (2016). Formalisation of
a new prognosis model for supporting proactive
maintenance implementation on industrial
system. Reliability Engineering & System Safety, 95(4),
234-253. doi: 10.1016/j.ress.2006.12.004
• Ranney, M. (2016). The implementation of a new
system. New Directions For Philanthropic
Fundraising, 1996(11), 17-28. doi:
10.1002/pf.41219961104