Cost-Benefit Analysis Matrix for an Organization

Construct a Cost-Benefit Analysis matrix for an organization that is considering replacing its internal payroll system with a payroll outsourcing service. Include direct and indirect revenue enhancements and direct and indirect cost reductions.

For an organization which is considering replacing its internal payroll system with a payroll outsourcing service, the direct revenue enhancements and cost reductions for a company which is into internal payroll system may include increase in productivity of the company's employees since they can now focus on doing more productive things, and improve the profitability. For instance, this holds true for small businesses with employee strength of 10-20. Moreover, the other direct cost reduction could be avoiding IRS Penalties. According to the IRS, 40.00% of small businesses pay an average penalty of US$845.00 per year for late or incorrect filings and payments. Outsourcing of payroll may help the company to avoid the penalty notices. The other direct revenue enhancements could be reduction on transaction costs. The outsourcing company may enable the employees to claim reimbursement statements and other things online. The indirect revenue enhancements could be building brand in the other countries. For instance, the outsourced company features its partner's Logo Branding which enables the company to display the company name, and logo in all employee and client access pages. The other indirect cost reduction could be the use of best technology. This holds very true for small businesses which don't have technology strengths such as latest version of payroll software and the most recent tax table installed on their computer.

Assess the risks associated with integrating a new payroll system and suggest what the project management team can do to minimize those risks.

New payroll system has to be integrated in an organization with the advent of globalization, change in technology nod increasing competition.

Any implementation of new system carries with itself great risk because it has not been done before and may bring either loss or profit for the company; however these are measurable aspects of the businessman thus preventative measures can be taken by the management whenever required. And here comes the role of project management team because a project can be successful if project member can be assured that this risk can be overcome and result can be achieved. This can be done by effective coordination between the hr team and the project management team. Both the departments have to tactfully and skillfully decide how this risk can be controlled. People may not like the new payroll system find it difficult to use and find it irrelevant and may be reluctant to use it. Effective training programs should be organized, and project manager has to assure its members the functionality of the project is in accordance to the goal of the organization.

Compose the tasks that would be needed to complete a Gantt chart (project schedule) for outsourcing the company's payroll system. Compare the advantages and disadvantages of using a Gantt chart versus using the Performance evaluation and review technique (PERT) and critical path method (CPM) when managing projects.

Gantt chart is a kind of bar chart, which helps in scheduling the work within a project from start to finish. It is a step by step top-down approach, starting from the conceptual phase of the project to the termination phase of the project. A proper work breakdown structure (WBS), is constructed in this chart explaining the level of time; and resources required at each stage of execution of the project. We need to discuss what all task needs to be completed before making a Gantt chart of outsourcing the payroll system. First of all a flowchart of the steps needs to be designed, including three triple constraints in mind like time; resource; scope. Henceforth, the chart developed defines the upcoming tasks as well as the missing tasks, potential missed deadlines and bottlenecks to be removed for the smooth flow of the project according to the schedule.

Compose the tasks that would be needed to complete a Gantt chart (project schedule) for outsourcing the company's payroll system. Compare the advantages and disadvantages of using a Gantt chart versus using the Performance evaluation and review technique (PERT) and critical path method (CPM) when managing projects.

Advantages

* It is a wide-spread technique of bringing up the WBS of a project, across the world. The lack of a timeframe on most PERT/CPM charts makes it harder to show status although colors can help.

* Good for smaller projects, which can be presented on a single screen at a time. PERT is not easily scalable for smaller projects.

Limitations

* Not good for projecting large projects having more than 30 activities. The large amount of project data can be organized & presented in diagram for use in decision making.

* Gantt charts do not represent the size of a project or the relative size of work elements, therefore the magnitude of a behind-schedule condition is easily miss-communicated. PERT chart explicitly defines and makes visible dependencies (precedence relationships) between