Interim Report

Running Head: PROJECT EVALUATION 1

Project Evaluation

Name:

Institution:

Date:

Project Evaluation

Background

CMS Bank is one of the major mutual funds located in New York, which offers financial services to the corporate and individual clients. The mutual fund sector has lately been facing intense competition as clients become more sensitive to the investment decision undertaken due to the recent financial crises that saw some investors lose their capital investments in the mutual funds. Thus, customers in the investment banking are becoming more demanding in receiving frequent and timely information on the market trends and the response that has been undertaken by the respective mutual fund. Consequently, CMS Bank is considering investing in a communication software system that will be sending short messages to the clients automatically on the major trends in the market and company’s response. The software can be sourced from various developers in the capital depending on the returns and efficiency it promises. Thus, a capital budgeting type of decision-making mechanism has been adopted in selecting the best supplier of the software system.

Problem Statement

The problem under consideration by the management of the CMS Bank is selecting the communication software system that promises optimal services to the consumers. The problem revolves selecting the software system promising savings compared to the current system and delivering the message efficiently to the targeted customers.

Objectives

1. Enhance customer confidence

2. Retain customer loyalty

3. Enhanced communication service

4. Reduce communication costs

5. Attract more clients

Decision Alternatives

The CMS Bank has considered the communication software system can be procured from three alternative suppliers. The three decision alternatives of acquiring the system include Cisco communication software, Oracle communication software, and the IBM communication software. Thus, the evaluation decision on the optimal communication software system that CMS Bank should invest will be from the three alternative suppliers in the market.

Evaluation Considerations and Evaluation Measures

In evaluating the optimal communication software system that CMS Bank should decide to invest through, various evaluation considerations will be involved. One of the considerations in the decision process is the recovery of the capital invested in the project considered from savings accumulated compared to the current communication system employed (Khatua, 2011). Thus, the project investment promising the least recovery period will be considered for implementation by the bank. The second consideration in the decision process is the flexibility of the technology with new advancements in the market (Meredith & Mantel, 2012). The software system that is more flexible to the new developments in the market will be considered for implantation by the CMS Bank. Accordingly, various evaluation measures will be employed in determining the communication software that CMS Bank will acquire. The various evaluation measures that will be employed include the payback method, the net present value (NPV), benefit-cost analysis, and the accounting rate of return. The payback period entails determining the recovery period the bank will take to recover the capital that has been utilized (Meredith & Mantel, 2012). The net present value will measure the discounted value of each investment after considering the time value of the saving cash flows expected in the future (Khatua, 2011). The benefit-cost analysis will involve measuring the strengths and weaknesses of each software system presented to determine the option promising the best outcome. The accounting rate of return (ARR) will involve determining the returns generated from the project's income without considering the time value of money (Khatua, 2011). Consequently, the evaluation process will be intensive to ensure the best investment project is selected.

Resources

The diverse resources that will be involved in the decision-making process include evaluation software and the human resource at the project management department.

References

Khatua, S. (2011). Project management and appraisal. Oxford: Oxford University Press.

Meredith, J. R., & Mantel, S. J. (2012). Project management: A managerial approach. Hoboken, NJ: Wiley.