ABC Insurance Company: Feasibility Study for New System Implementation

This report presents a comprehensive feasibility study for ABC Insurance Company, examining the potential implementation of a new system. The study assesses three key areas: technical feasibility, economic feasibility, and organizational feasibility. The technical analysis evaluates the existing infrastructure's capacity to support the new system, including network upgrades and hardware requirements. Economic feasibility involves a cost-benefit analysis, projecting costs for hardware, software, staff training, and implementation against anticipated benefits like improved efficiency and increased revenue. The organizational feasibility assesses the impact on the company's structure, including staff roles, training needs, and potential restructuring. The study includes an executive summary, detailed cost breakdowns, and recommendations for the company's management. The report concludes with findings and recommendations, suggesting that the new system acquisition is highly beneficial due to its high probability of success and significant advantages across all three feasibility dimensions. The report also includes a project plan with goals, objectives, scope, budget, risk assessment, and timelines.

ABC Insurance Company 1
ABC Insurance Company
Your Name
School-Affiliated

ABC Insurance Company 2
QUESTION A
Feasibility Study
Technical Feasibility
A bigger portion of resource determination has to do with the assessment of the technical
feasibility. This assessment is done to consider the technical needs of the project that was
proposed. These technical needs are made in comparison to the organization's technical
capability. In this feasibility study, the systems project is looked into to consider its technical
feasibility whether the capability of the internal technology is enough to support the
requirements of the project. The system analyst will be required to identify whether the technical
resources currently used are upgradable in a way that can fulfill the request being considered.
Here, the expertise and experience are important due to the experience of working with many
vendors who can easily answer questions regarding technical feasibility.
The important questions that will be used in testing the system’s technical feasibility will
include;
Based on the operational technology currently used, is the project visible?
Does the technology exist in ABC Insurance at all?
Is technology available within the limits of the resources applied?
Does enough manpower exist to help in setting up programs, through testing and debugging?
Are the technical resources currently available enough for the new system?
Is the technology available enough to support the new system?

ABC Insurance Company 3
Is the technology able to fit the current problems?
Is the necessary technical expertise available for a reasonable schedule?
Is the technology applied able to adequately handle the new system?
Will the technology be easily upgraded to provide the technology needed to support the new
system?
Economic Feasibility
This could also be called the Cost/Benefit analysis. This is often used for evaluation of the
system's effectiveness. In the analysis of economics, the pathway is to find out the benefits and
the savings that will be expected from the new system and compare the benefits and savings with
the costs that will be incurred. In the normal case, if the benefits of the new system outweigh the
costs to be incurred, then a new method is decided like designing and implementing a new
system. In the economic feasibility, the entrepreneurs need to be precisely accurate to weigh the
option of incurring the costs versus the benefits that shall be reaped before any action is taken.
The economic feasibility involves the review of the expected costs to see whether they are in line
with the budget that has been projected or whether the new project does have returns that are
acceptable to the investment made.
The possible questions to be inquired for economic analysis are;
Is the new system cost-effective?
Do the benefits receive outweigh the costs incurred?

ABC Insurance Company 4
What is the cost of performing a full study of the system?
What is the cost of the time of a business employee?
What is the estimated hardware cost required?
What is the estimated software costs when purchased?
What is the estimated software costs when developed?
With the current resource constraints, in the project possible?
What will be the resultant savings from the new system?
What is the employees' time cost for the study of this system?
How would you select among the financing arrangements alternative (Rent/Lease/Purchase)
Organizational Feasibility
This feasibility study defines the legal and the business's corporate structure. It is often the
professional background information that focuses on the skills and expertise of the staff and their
contribution to the business.
The questions that are asked include;
What is the description of the business structure?
What is the description of the organizational structure?
What is are the internal principle and the external principles and practices of the organization?
What professional resumes and skills exist amongst the staff?

ABC Insurance Company 5
QUESTION B
Feasibility Executive Summary
Executive Summary
ABC Insurance Company refers to a mid-size company that deals with pharmaceutical insurance
that helps in the prescription of patients' insurance. This company uses many systems for
reporting purposes, these systems are; SAP for accounting and finance operations of the
organization. They use Salesforce as the CRM tool, the company uses the Virtual Benefits
Administrator for claims processing, they do have functional SQL Server, and they have a
business objects system for reporting and other systems like one for human resource, payroll, MS
Outlook and that of Office systems.
Description of the System
ABC insurance company has many systems that function in different business parts. The
separated systems have made the operations in the company not to be smooth. This is because
each system has unique ways of patient identification hence providing the claims of the data that
are conflicting. The data that needs to be accessed by one department has to be manually
retrieved and manually manipulated for that department to get what they exactly needed. Often
the data that is retrieved in one department does not belong to the provider to whom they refer to
in another system of another department. At present, for the management to obtain information,
they must be obtained from the business object reports or the standard and ad-hoc reports.
Therefore, the organization fails to administer its mandate well.

ABC Insurance Company 6
By offering the system needs, the organization will have a common data across many
applications, they will be able to manage their reference data, they will have the ability to build
the data integrations between the applications, they will be able to perform data quality
management hence dealing with the inconsistencies, issues of quality and the data gaps. Finally,
they will be able to access the data sets in multiple areas of the organization and confidently
know the data that is complete, consistent and current.
Technical Considerations
The networking systems that were used in the previous systems had low bandwidths and
therefore there will be a need for changes of the cabling for the transfer of information from
senders and receivers of information. Most of the systems that are used in the company are
outdated and slow, they will not be able to support the new system meaning the old systems will
be replaced with new systems.
The security and confidentiality of the information will be ensured only through online mass
storage of the information. This will require an internet connection and the leasing of cloud
providers.
Cost Benefit Analysis
Costs
Category Item Quantity Price Total
New Computer Server system 2 $3000 $6000

ABC Insurance Company 7
Systems Cable
installation
1 $6200 $6200
Software license 1 $20000 $20000
System
Maintenance
Software 10 $625 $6250
Tools 15 $100 $1500
Total $39950
Benefits
Higher quality
databases
$45000 $45000
Workflow
efficiencies
$28000 $28000
Enhanced
productivity
$30,000 $30000
Total $103000
If the technical considerations are adhered to, the company is likely to receive more income per
year compared to the total expenses that will be used in maintenance.
Economic Considerations
The economic projections for the acquisition of a new system are highlighted in the table below.
These figures reflected project the cost of the new system, the additional staffing, staff training,
shipping, network installations and cloud provider services costs.

ABC Insurance Company 8
The assumptions for the projections below are;
All transactions are done yearly with no carry over to the subsequent year.
All the milestones are done as per the schedule provided.
Costs
Measure Year 1 Year 2 Year 3
additional staffing $60000 $62000 $67000
staff training costs $10000 $10000 $10000
Shipping costs $5000 $0 $0
Total per Year $75000 $72000 $77000
Benefits
Total per Year $80000 $150000 $200000
If the cost benefit analysis is done on this considerations, it means that the benefits will outdo the
costs that will be incurred over the years and even add more to the profit that will be earned.
Organizational Considerations
The organizational structure of the building will remain unchanged. The organizational
structuring of staff will be expected to change significantly. Most of the staff are technologically
unskilled hence they will be reshuffled and departments be filled with new staff who are
competent and experts in the technological operations.

ABC Insurance Company 9
The staff that was relied upon in the past systems were outdated. This will require training and
outsourcing of more competent start to help in the management of the new system. This will
include the networks expert, the database experts, and the communications expert to help in
ensuring that the new system is smoothly operations.
Staff position #1: Network Manager- this position shall be needed to help in the network-related
issues. An expert will be outsourced for such purpose
Staff position #2: Expertise trainer: this position shall be needed for the staff to be trained and
coached thoroughly until the company is running well.
Cost Benefit Analysis
Costs
Category Number Quantity Price Total
Staff addition 2 staffs 2 people 50000 $100000
Infrastructure
addition
10 offices 15 items $1000 $15000
Total $115000
Benefits
Expertise
operations
$60000 $60000
Precise accuracy
in duty
operations
$50000 $50000

ABC Insurance Company 10
Enhanced
productivity
$30,000 $30000
Total $140000
When compared, the benefits of adhering to the proposed organizational structure will ensure
more income to the organization than the costs that will be incurred.
Findings and Recommendations
Following the feasibility study information provided, it is recommended to the ABC insurance
company to approve the new system acquisition. The findings of the new system according to the
feasibility study shows that the new system will be of high benefit and the probability of success
is high. The key findings in this study include;
Technical:
The networks will be installed a new.
The computer systems will be purchased.
Once the new system is acquired, the storage of information will be cloud-based.
Economic:
A three-year projection shows that the accounting will be reducing over the years.
ABC will be able to become more productive and efficient in its operations in the offices.

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Organizational:
New staff will join the rest of the staff.
Staff training sessions will be done.