PRST241: Project Management Essentials - Call Center Upgrade Project

This document presents a project management report focusing on a call center upgrade project. It includes a project charter outlining the project's purpose, objectives, and success criteria, along with a summary milestone schedule and development budget. Critical questions regarding the project's timeline, budget, and risk assessment are addressed. The report also features a cost-benefit analysis, detailing project costs, revenue impact, and expense impact, culminating in calculations of net present value, payback period, and internal rate of return (IRR). The underlying benefits driving the IRR are discussed, including the payback period, revenue estimation, and time value of money, with a validation of the benefit assumptions through feasibility analysis. Desklib provides a platform to access this and similar solved assignments for students.

Running Head: ESSENTIALS OF PROJECT MANAGEMENT
Project Management
Name of the Student
Name of the University

1ESSENTIALS OF PROJECT MANAGEMENT
Answer to B1
The project charter that has been forwarded is shown below.
PROJECT CHARTER OF THE CALL CENTER UPGRADE PROJECT
Assignment:
(PM name) is authorized as a project manager within the One Company Service
strategic effort. (PM name) is designated to ensure customer satisfaction and to guide
the project to a successful conclusion as described in this charter.
Project Name:
Call Center Upgrade Project
Project Purpose and Justification:
This project directly supports the one company service strategic tenet, by delivering
enhanced call center capability, required to ensure that customers from all business
areas of the Burlington Insurance Company receive routinely excellent service from
the company’s call centers.
High-Level Description:
The call center upgrade project makes improvements to the cross-selling skills of call
center operators, provides enhanced billing service capabilities, expands service
operations to 24x7, and enables the call center operations team to implement remote
worker programs, allowing selected call center operators to work from dedicated home
office locations.
Project Objectives and Success Criteria:
Objectives Success Criteria
1. Improved cross-sell
 Increase in cross-sell% by 5%
2. Enhanced billing
service capabilities
 Ability to accept real time credit card payments over
the phone
 Provision of detailed billing information to call center
operators
 Implementation of three most in demand additional
payment plans
3. 24x7 service
operations
 24x7 call center coverage
 24x7 billing support coverage
4. Remote worker
capabilities in place
 Ability to reroute inbound calls to remote home offices
 Full tracking and QA recording of remote routed calls
Project Risk Profile:

2ESSENTIALS OF PROJECT MANAGEMENT
Medium risk – 20% development contingency
Summary Milestone Schedule:
2009 July – Begin project
2010 July – Implement countrywide cross sell enhancements
2011 Jan – Implement enhanced payment plans
July – Implement remote worker program
2012 July – Implement 24x7 call center operations
2013 July – Closeout project
Summary Development Budget:
2009 $ 420,000
2010 $ 540,000
2011 $ 325,000
2012 $ 210,000
2013 $ 150,000
Total $1,645,000
Authority:
[PM name] is authorized to direct project team & control budget.
Based on the review of the charter, three critical questions that can be asked are as
follows.
i. Molson, you have specified that the project will be completed by July 2013. Now,
are you sure that the project will be completed within that deadline? Have you
considered schedule tradeoffs while developing the project schedule?
ii. As per the budget that you have shown, have you considered any contingency
budget and budget increase factor due to change in market prices of the products?
iii. What are the risks that you have identified and how did you find the 20%
development contingency?

3ESSENTIALS OF PROJECT MANAGEMENT
Answer to B2
The cost benefit analysis is shown in the following table.
Total 2009 2010 2011 2012 2013
PROJECT COSTS
Development Costs 1,300,000.00$ 350,000.00$ 450,000.00$ 250,000.00$ 150,000.00$ 100,000.00$
Contingency 1 345,000.00$ 70,000.00$ 90,000.00$ 75,000.00$ 60,000.00$ 50,000.00$
Total Development Costs 1,645,000.00$ 420,000.00$ 540,000.00$ 325,000.00$ 210,000.00$ 150,000.00$
Production Support Costs 300,000.00$ -$ 30,000.00$ 75,000.00$ 95,000.00$ 100,000.00$
Total Project Costs 1,945,000.00$ 420,000.00$ 570,000.00$ 400,000.00$ 305,000.00$ 250,000.00$
PV of Future Project Costs 1,845,807.43$ 420,000.00$ 552,325.58$ 375,578.39$ 277,498.57$ 220,404.89$
PROJECT BENEFITS Note 4 Note 5,7 Note 6
Revenue Impact 2 1,700,000.00$ -$ 150,000.00$ 300,000.00$ 450,000.00$ 800,000.00$
Expense Impact 2 525,000.00$ -$ -$ 150,000.00$ 175,000.00$ 200,000.00$
Total Benefits 2,225,000.00$ -$ 150,000.00$ 450,000.00$ 625,000.00$ 1,000,000.00$
PV of Future Project Benefits 2,018,138.68$ -$ 145,348.84$ 422,525.69$ 568,644.61$ 881,619.55$
PROJECT INCOME
Net Income 172,331.25$ (420,000.00)$ (406,976.74)$ 46,947.30$ 291,146.04$ 661,214.66$
PROJECT PAYBACK
Net Present Value 3 172,331.25$
Payback (Years) 3.00 Years
Internal Rate of Return 9.34%
NOTES
1-Contingency is 20% of development cost (per project risk profile)
2-Cross-sell implemented in July 2010, payment plans in Jan 2011, remote working in July 2011, 24x7 in July 2012
3-Corporate discount rate is 3.2%
4-Cross sell upgrade increases sales by 6%
5-Enhanced payment plans reduce customer delinquency by 3%
6-24x7 operations increase customer satisfaction by 5%, leading to increase in customer retention of 3%
7-Home working costs 25% less per FTE for call center operators
The three underlying benefits that drive the internal rate of return (IRR) for the project
are as follows.
I. The payback period of the project is 3 years i.e. given the IRR, the company will
be able to complete the payback of the initial investment within 3 years time
period.
II. The internal rate of return helps the project manager to develop an estimate of the
revenue and the profit that can be earned in the course of next few years.

4ESSENTIALS OF PROJECT MANAGEMENT
III. The internal rate of return will also help in determining the time value of the
money that is very much essential for the project.
The benefit assumptions made above are very much reasonable as they are the most
common expectations from any business related project. All business organisations seek high
value of IRR such that the underlying benefits are maximized and they help the company to grow
over the months and years.
For validating and refining the benefit assumptions, it is required to undertake a
feasibility analysis of the estimated values i.e. the project manager needs to ensure the estimated
values are realistic and are in line with the scope of the project. The positive results come up
from the analysis, then only, the benefit assumptions will be validated and refined to proceed
further.