Feasibility Report for Senior Management:

Semester 1, 2017
Background to the study and the assignment task
In 2008 San Francisco International Airport (known by its three-letter airport code, SFO) had
announced a $383 million plan to renovate and reopen Terminal 2. Assistant deputy director of
aviation security Kim Dickie and her team had selected Quantum Secure’s SAFE software suite as the
new Terminal 2 credentialing system, but she needed to develop a business case quickly that would
substantiate the feasibility of the purchase.
Given the time constraints, Kim Dickie decided to outsource the task of developing a business case to
an external consultant (You). To facilitate the analysis of Return-on-Investment (ROI) into Quantum
Secure’s SAFE software, a junior staff member of your consulting team created a template called
‘ROI_analysis_template.xlsx’.
Your task as a consultant is to use the template prepared by the junior staff member of your
consulting team to run ROI analysis, and based on the results, to create a feasibility report that Kim
Dickie could present to the senior management of SFO.
Rationale and learning objectives assessed:
The purpose of this assignment is to give you practice in developing a business case for senior
management, that would provide an independent opinion on whether it is feasible for the company
(SFO) to invest in the new product.
In this individual assessment, you will have to show your understanding of how return-on-investment
(ROI) calculations work, with an emphasis on identifying incremental effects. You are expected to
decide how to use results from similar entities making similar purchasing decisions to estimate the
incremental benefit of a proposed solution. To address this goal, you will have to identify and use the
best data available in making assumptions. It is important to note that certain decisions in this
assessment piece will require your judgement rather than a simple ‘search & input’ exercise. You will
the have to substantiate your choices in the report for senior management.
In terms of the learning outcomes shown in the unit guide, this assessment task tests your
achievement of all objectives of this unit, i.e.:
Objective1: examine the role of business processes and the use of accounting information systems in
capturing and managing information that support the needs of stakeholders;
Objective2: analyse and evaluate the design of business processes and accounting information
systems;
2
Objective 3: explain the importance of internal controls and recommend internal controls that cover
key business processes and support the achievement of goals;
Objective 4: synthesise design principles to develop financial models that assist in decision making
(this objective is covered only to a certain extent as you are not supposed to design a financial model
per se, but to populate an existing model with the data from the case (sometimes using your
judgement) and to use the resulting model for the purposes of analysis and decision making);
Objective 5: apply problem solving and communication skills to analyse, evaluate and interpret
accounting data.
Required
1. Determine the correct inputs into the Quantum Secure ROI Calculations Spreadsheet (use
the file ROI_analysis_template.xlsx).
2. The cells of the spreadsheet have been protected by the junior member of your consulting
team to prevent them from altering the formulas that are set up to streamline calculations.
When filling in the spreadsheet, you were advised by the member of your team to focus on
inputting those cells with double-line borders and a grey fill. When inputting figures into
those cells, they should appear in blue italicised font, you’ve been told, and the green font
cells will automatically recalculate based on their inputs.
While you are generally happy to follow those rules for the sake of time, and concentrate on
ROI calculation based on the material presented in the case, you decide to check the
calculations in the logic of the template once again. Hence, before populating the template
you run a quick check to notice that while the formulas used to calculate each line of savings
seem to be correct and properly implemented, you have certain doubts for the last section of
the spreadsheet (raws 59-64). You have a clear sense that something is not quite right in this
section of the spreadsheet, so the first thing that you put in your diary is to double-check
whether this part of the spreadsheet contains any errors (you will have to do it before
moving to the next part of the spreadsheet).
3. After the spreadsheet is checked, you are required to populate the entries into the
spreadsheet based on your knowledge of the business case, communicated to you by Kim
Dickie. A complete account of the background knowledge available to you can be found by
following this link:
https://cb.hbsp.harvard.edu/cbmp/pl/62326725/62326727/a530e4987652006ff3b63eb1cff1a09
7
4. Based on the results obtained in your ROI analysis, you are required to produce a feasibility
analysis report, structured around the expected labour cost savings, material cost savings,
recordkeeping accuracy savings, and increased compliance and compatibility cost savings
expected after the Quantum Secure’s SAFE software suite is introduced. The following
bottom-line measures (from the spreadsheet) would be also highly useful in making up the
business case:

3
Structure of the Feasibility Analysis Report for Senior Management

Marks:
Criteria for marking*: This assignment is worth 20% of your total marks. A large part of the
assignment mark will be attributed for the quality of your analysis performed in the spreadsheet, the
ability to substantiate the input choices, and the output results presented in the Feasibility Report for
Senior Management. The mark breakdown per high-level tasks (your work on the spreadsheet & the
report) is as follows:

• See the last section of this document (“Marking rubrics”) for a more detailed outline of the marks.
  ** See the last of the marking rubrics at the end of this document for more details.
  Word limit:
  Feasibility Report for Senior Management: 1250 words. Please note, going slightly below the word
  limit (~1100 words) or above the word limit (up to 1500 would not result in any mark reductions).