Question

CASE STUDY DATAIN DATAIN is a company that was started by two students who was opportunity to make some money and help pay for their education. As an increasing number of organizations today survey their customers and employees, the two students a need for data input and analyses. With a loan from their parents, they rented space, purchased 20 used com puters, and set up shop. They hired ocher students to do data input and analyses and began advertising their services Within a relatively short period of time they were having trouble keeping up with demand. In fact, business was so good they had to hire more students and purchase more computers After about six months, however, they began to notice some problems. The data files were often full of mistakes, and the data analysis was often incomplete and incorrect. As a result, almost 40 percent (20 jobs per month) of all jobs had to be completely redone. This turned out to be a rather costly problem. Each jo took approximately 10 hours and cost the company 5150 students were paid 515 per hour),| To make matters worse, they began to notice that their new hires were quitting after only a few months on the job. In the last six months, they had lost an average of four employees a month. Every time an employee quit, they had to replace him her and the cost of this was beginning to get very expensive. The cost of advertising interviewing, and hiring a new employee was estimated to be about 55.000 In order to cut down on these anticipated costs, DATAIN decided to invest in a training program to reduce the mistakes and emosin data input and analyses and to improve employee retention. They contacted a training co m e to conduct a needs analysis, design and deliver a training program, and conduct the training evaluation

Using the details from the case study complete the following for your report:

a. Provide a cost benefit analysis for each option.

b. Recommend one option and explain why you feel it is the best solution.

c. Provide ROI data for the option you are recommending.

Answer 1

a.

TRAINING PROGRAM Calculation 20 hours each at a cost of $100 per hour Particulars Cost of Analysis & Training Evaluation Fees to purchase training program Consultant Fees Employee Cost Cost of Classroom space Administrative assistance 8 hours at cost of $200 per hour 25 employees for 8 hours at a cost of $75 (10+15+50) Amount 4000 5000 1600 15000 100 240 25940 2 days of 8 hours at cost of $15 per hour Costs Involved Monthly Anticipated Benefits 80% savings in rework 90% reduction in hiring of employees 80% of (20 jobs @ of $150 each) 90% of (4 employees @ $5000 each) 2400 18000 20400 Monthly Benefits E-LEARNING PROGRAM Calculation Particulars Cost of Designing E-learning Program Amount 25000 25000 Cost Involved Monthly Anticipated Benefits 90% savings in rework 90% of (20 jobs @ of $150 each) 60% reduction in hiring of employees (60% of (4 employees @ $5000 each) Monthly Benefits 2700 12000 14700
b. Option I is recommended because it will result in higher Monthly Benefits as compared to the second option at a slightly higher cost in comparison with the second option.

c. Return on Investment for the selected option is

Monthly Benefit = $20,400

Initial Investment= $25,940

Return on Investment = Monthly Benefit / Initial Investment

= $20,400 / $25,940

= 78.64%