Project Management and Organization of RRR Computing Services - Example

Name: University: Course: Tutor: Date: Project Management and Organization of RRR Computing Services Introduction This research paper is based on the Business plan of “RRR Computing Services” which is authored by Diener, Ellen in 2004. This assignment is based on RRR computing services which is a company that offers computer and business services it is a one stop business services solutions to individuals and businesses. The company is based in Stevensville, Michigan and has a wide range of good and services which it offers to its clientele. The company goods and services range from training of computer applications, repair and maintenance, networking and connectivity of computer for both local and wide area networks it also sells computer parts. The services done include internet access to its clients, photocopies, binding and printing, photocopying and facsimile transmission. The company has also been licensed to sell branded products such as Microsoft software which is a leading brand in computing technology and Dish network sales. The company has recently opened a retail store which the project is to be based. Due to advancement of technology, the goods and services which are offered by the company are on high demand and the market is vey responsive to changing of technology hence there is good market for its goods and services. With such a vibrant market the project has high potentiality of succeeding if well managed for there is ready market. The main challenge which the project would face is its administration and allocation of resources. For the project to be successful all the resources which include time, money and labor needs to be well allocated to all the tasks which will be done. Executive summary RRR Computing Services project also serves as the project plan which the administrators of the company will use to make informed decisions on how they shall be able to manage the processes which they shall encounter. The project of the company shall mainly address on the needs of the customers and ensure that the computing services which will be done will focus on great customer service and be of high quality. Although, the local community knows the computing services which are offered by the company it shall be more beneficial for the company to maintain its standards and as well improve on the services they offer by diversifying their services to meet all the need of the customer. The project will contain estimates of the setup costs, operational costs and other resources which will be required such as labor and the duration for setting up and running the business to be able to breakeven. It will as well encompass on the short and long term goals of the company and the strategies on how the company shall be able to deliver the service. The project will have the revenue and cost generating elements of the project and the bases on which the actual and estimated costs are based on. The costs elements will include of the startup and operational costs and estimated revenue for one financial year. For the project to be successful as well it shall have the financial overview of the company for the goods in stock, operational cost and the sales prospects and the profits which the company shall realize within the period under review. The cost overview of the business will provide a financial guidance on how the business shall be done and provides insights on the viability of the business. The budget of the project will also be informational to the administrators as they will use it to manage and administer the business. Project structure The company project shall manage, plan and organize the project to be able to successfully meet project objectives and goals. This project shall be divided in to five sections the initiation of the project, design or plan, production or execution controlling and monitoring systems and finally completion. The project initiation stage shall include feasibility study which will evaluate on the viability of the project and what it shall need for the project to be successful. The findings of the project initiation are the one’s which will guide the project as it shall have the scope of the project. The plan and design of the project will be based on what is specified in the feasibility study. This forms the structure of the project which will as well include the different personnel’s duties in the project. While the production and execution of the project shall be the actual activities which will be undertaken in the project to make it successful. The company activities will need to be monitored and controlled until it is successfully implemented and even after implementation it shall be evaluated to ensure that its being done as it has been planned, any discrepancy on what is being done vis-à-vis what is supposed to be done is harmonized. It is also during such post implementation of the project one shall be able to indentify areas which are not well planned and change it to meet the goals. Requirements The project will require different resources for it to be successful which should include laborers, computers, computer desks, internet access, printers, facsimile machine and bidding tools for the company new branch to be functional. It is advisable the company source for new goods such as computers and other materials which they sources to start the business. Use of new materials enables the company to get warrant of the machines which they will buy and they will work on them for a longer duration before they start breaking down or incurring high costs in maintenance. The organization shall need to buy twenty computers to start with which they will increase based on the number of customers who they will be getting. The computers will be used for computing services by its clientele each of the computer will be costing approximately $ 700 and the specifications will be 160 GB hard disk capacity, 2.0 GHz processor speed and 2 GM RAM this computers will offer high connectivity speeds. Apart from the computers it will also need a high speed photocopying machines which each will cost approximately $ 1,200 to serve customers who will be photocopying their materials. The company will also need paper handling tools such as paper punch, paper binder and sampler. The students who are within the vicinity where the company is setting up a new company will mainly be getting their computing, photocopying and binding services at the company. Financial overview Moving in to the new store has made the business to be undercapitalized although the revenue had been at a rapid rate. Therefore, the company is seeking credit facility from the bank which should be equal to $ 140,000. The company is in need of $ 60,000 for capital expenditure in store and $ 90,000 for the existing debts. While, for the general working capital it will need $ 40,000 the capital which will be provided the company should use it as follows. Proceeds Application Amount Existing Debt Refinancing - $ 90,000 Working Capital - $ 60,000 Capital Inventory - $ 40,000 Total - $ 190,000 Once the company has been able to meet its financial obligations by securing financing from the bank then its performance for the three years planning should be as follows. The revenue for the first to third year should be as follows $ 339,475, $ 440,728 and $ 494,847 this is an increase of 45.8% in the third year as compared with the first year revenue. As the business operations keeps on increasing the operational costs will also keep on rising from $ 82,425 in the first year to $ 150,002 and $ 167,500 for the second and third year consecutively. This shall be an increase of 103.2% in the third year as compared to the expense incurred in the first year. The income of the business for the next three years will also increase tremendously due to increased investments done and in the operational cost which has in turn increased the revenue collected. The income in the next three years shall be $ 257,051, $ 290,725 and $ 327,347 in the third year. This tread of income will have increased by 27.3% in the third year compared with the income projected in the first year. This is a good improvement, however the business would end up earning more in the years which will follow as the amount which it had borrowed would have subsidized then. Financial assumptions which are done Assumptions in Revenue The business will assume that all its revenue will be increased by 20% each year but the business of Internet café because it is more prospective it will be increased by 30% for the first two years when it shall be penetrating the market. Then it will stabilize and thereafter it will be able to increase by 5% all thought, factors which are put into considerations are that the business environment and the number of clients after the third year will be stable as it would have exhausted penetrating the market in the first two years. It is also a fact to consider that most of the stores will be relatively new in the first two years therefore; they will attract high numbers of new customers during the implementation period which will contribute to high increase of revenue for the first two years. The company operations on installation of dish and wireless communication will earn the company commission of $ 700 and $ 100 respectively per each installation. Therefore the amount earned due to dish and internet will also increase on the revenue of the company depending on the aggressiveness of the sales team. But, it is anticipated that making sales of the dishes and wireless communication installation will be ease as they are in high demand as most people want to install them not only in the offices but also at homes and social gatherings as in hotels and cafeterias. The company also offers training on computing skills it is much difficult to assume on the number of students who will enroll to start with but the charges per person will be $ 80 and there will be having three classes per week with each class having a capacity of five people. The number of classes per week will depend on the growth and enrollment of the students. While, once the internet café is operational assumptions are made that for the duration when the café will be opened 33% of that time will be operational and it’s the one which will be used to calculate the earning based on the duration which the café will be active. Assumption of Expense The expense of the business needs to be controlled as much as it would be to ensure the cost of running the business is not high and it s profitable. All expenses which would be avoided should be done so to cut on operational costs of the business. However, there are those costs which must be incurred for operations of the business. The company will have to compensate its owner and the employee who will be on duty to ensure the company meets the needs of the customer. The owner will be paid an annul salary of $60,000 for the first two years then an increment of 20% yearly there after. The reason why for the first and second year the owner will not be increased the salary because it is at the implementation stage of the stores being opened. Although, the company is anticipated to increase on its sales it shall likewise incur more to set up infrastructure and stocking of goods to meet the increase demand by the customers. The company will be having part time employees who will be paid $ 10 per hour and they will work for 20 hours in a week. The number of part time employees will be determined by the duties which will need to be done based on the customer turn over. However, there are other technical employees who will be contracted when ever there is a customer who need a dish or installation of wireless internet connectivity. Such, employees will be paid on commission bases the more an employee market and makes sales the more they shall earn. This shall be a motivating factor for the employees to make more sales. Hence, the company will as well benefit from the same. The company operational cost will represent the amount available for amortization of the term loan repayment and the interest expense on the local operational costs which shall be incurred. Internet café is the type of business which will be the highest earner of the business for a projection of five years. The company will earn revenue of $155675, $222393, $233513, $280215 and $336258 for the next five years. The company will therefore realize a growth in revenue of 116% by the fifth year in comparison with the first year. This is a good growth of business and its promising for internet to be a worthwhile business which the company would even capitalize on it when opening future stores. The least earner of the product and services which they offer is Dish Monthly Royalties which it will earn $144, $173, $207, $249 and $299 for the five years. Although, the amount earned is small there is great improvement trends over the years with. The fifth year recording an increase of 107% as compared with the first year, this is an indicator that there is growth. The highest operational cost is advertisement of the goods and services which the company offers. It is projected in the next five years the company to spend $21856, $22949, $24096, $25301 and $26,566. The expense does not have many changes over the years because the advertisement will be planned of the same magnitude and the different is for factoring in raise in cost goods and services which are used for the advertisements. Over the five years the advertisement costs will have increased in the fifth year by only 21.6%, this is a reasonable increase of the expense over the years. The company least operational cost is accounting and legal charges which will be a standard figure of $2400 annually for the five years. Such costs do not change much the assumption done is that the accounting duties and legal matters will be similar for each of the five years. Performance of every business is measured by evaluation of the operating profit the company over a period of five years it is projected to earn as follows $257051, $290725, $327347, $402989 and $495242. The earning trend over the years is quit impressive as it shows an increase over the next five years by the end of fifth year the company would have increased its operational profit to 92.6% as compared to what the company would have earned in the first year. References Diener, Ellen. RRR Computing Services, LLC: Confidential Business Plan. 2004 Read More