Feasibility Report

Terms of reference/ overview

This feasibility report is focused on a small scale construction company which builds around
15-20 houses per annum depending upon the market conditions. Since it is a small company so
it cannot afford to have many employees. Centralized organizational structure is empowered to
make company work efficiently. The owner of the company own more companies in some
other countries due to which he has hired a trust worthy person (chief finance officer) to make
sure a continue stream of finance is available throughout the year even when the owner is not
in the country.

Business plan of the company is simple, firstly it purchases land in a good society having all the
basic living facilities available. After purchase, houses are build onto the land which are sell to
end users and profit is earned. The construction of house involves masonry, plumbing, electrical
and other essential works. Each house usually takes 4-5 months to complete. Annual target is
achieved by running many projects simultaneously.

The number of employees are very few because of its centralized structure. There are three key
positions of employees.

1. Sales executive
2. Supervisor
3. Manager
4. Chief Finance officer (high level)

Management structure is as following for better understanding:-

Company Owner
Finance Details Reporting & other info.

Chief Finance Officer Finance Manager

` Sales info. Tasks & stock info

Sales Executive Supervisor

Page 1 of 13
The company started with few houses 3-4 per year, as it grew it became more challenging to
manage resources. Manual hand-written systems are being used since the first day. whenever a
report is acquired by the company owner for analysis and overview, all the transactions are
calculated to make final reports (which takes so much time) Reports involves income, expenses,
Account statement of buyers, vendors and contractors etc..There has been always some
mistakes in the accountability of transactions which would result discrepancies in the reports &
results due to human error because there is bulk of data to process every time i.e. data of many
months to process in order to calculate total expenses over a single project (house).

A complete feasibility report is designed to improve the efficiency of work and save the time
and energy of employees. It includes automation of old manual system by introducing new
technologies such as advanced inventory control, reporting and cash-flow system.

**********************************************************

Description Of Existing System

The company under consideration is a centralized company having four key persons in office
and all the other work is outsourced to the contractors. The key persons are:

1. Chief Finance officer (high level)

2. Supervisor
3. Manager
4. Sales & information provider.

Chief Finance officer Role & related processes

The Chief Finance officer pays the manager some major amounts each week in order to run
other process such as purchase, contractor wages, salary etc.. Record of amount given to the
manager is kept safe in a manual diary. By the end of month, Chief Finance officer and
manager's records are compared to close monthly expenses. Chief Finance officer only provides
money to the manager and when a sale is made, money is returned to the Chief Finance officer
custody which is utilized in further projects.

Supervisor role & related processes

The supervisor oversees operational management and he is liable to provide raw material for
the construction work and make sure construction work is going on smoothly and quality of
work is retained without any waste of time and material. The Supervisor also controls the
warehouse in which some material is stocked to fulfill the demands in time. Contractors are

Page 2 of 13
informed to register their demand of material prior 1 week so internal process such as:
availability of finance, ease of supervisor & vendor etc. , can be completed.

Supervisor takes money from the manager >> buys material from the market >> update manual
inventory>>provide expenses details to the manager .

Material is provided to the contractors and inventory is updated for each project which is later
on used by the manager in the calculation of total cost of a project.

Manager

Manager is the main person who oversees all the tactical management. The owner of the
company provides strategic management facility to the manager. All the reports move from
manager to the owner for decision making and analysis. Reports involves stock list (monthly),
project expenses (weekly basis) , cash-flow details as per need. Manager is also involved in all
the clerical work such as making agreements with buyers, contractors, etc.. Manager records
the data in cash memo and make account statements for each buyer & contractor. Raw
material records are also managed by the manager while the supervisor only provides the data
to record in system when any material is bought or utilized by a project.

Sales & information provider

Sales person only provides information to walk-in customers and operates phone query. It takes
information from the manager such as current project completion date, sale prices and other
information to help queries. Deal is finalized and documented by the manager.

Summary

Very few employees controls the company by doing multiple type of jobs. Chief Finance officer
finances manager on weekly basis as per the demand of material raised and pay contractors fee
and other expenses. All the records of income (from the Chief Finance officer) and expenses (by
the manager) are written in manual day book. Supervisor takes the money from manager and
spend in purchasing of raw material .Once an item is purchased, bills, invoices/receipts are
given to the manager for record keeping. Supervisor also controls the warehouse such as
movement of material in or out for specific project and manager updates stock list of
warehouse using the purchase invoices and information by the supervisor. Supervisor informs
the manager by the end of each day about the material used by each project. Manager adds its
relevant price and details in the expenses of specific project. Multiple projects are running
simultaneously which involves many contractors to provide their services using raw material
from the company. Expenses and inventory systems are checked time to time for the
generation of reports. Sales & information provider gives the general details about the projects

Page 3 of 13
and operates phone inquiries. The Manager finalizes the deal and prepare documentation.
Once a deal is completed, amount in return of sale of house is handed over the Chief Finance
officer for the financing of company expenses.

**********************************************************

Problems Of Existing System

The problems are outlined in the following points:-

1. Lengthy Process
2. Includes a lot of paperwork, difficult to handle.
3. Records are full of errors like missing , wrong pricing etc..
4. Less efficiency & more errors in each process.
5. Auditing and Report generation take few days.
6. Interdepartmental conflicts over records i.e. Chief Finance
officer-manager-supervisor conflicts.
7. Accurate costing for each project is rarely achieved.
8. System is manager and supervisor dependant in many processes.
9. Owner waste his time in competing conflicts and helping manager in daily
processes.
10. Employees are over-burdened by the office work.
11. Employees spend daily extra few hours to complete their work.
12. No backup of Data is available.
13. Less job satisfaction by the employees.
14. Contractors account statement sometimes miss an entry result in loss of
money.
15. Contractors do not trust their accounts managed by the company.
16. Customers Record is kept on papers, difficult to send reminders of payment
/ other information on specific date.
17. Quality of work is disturbed due to lack of attention by the supervisor.
18. Time is not managed well result in delay of construction work.

**********************************************************

Page 4 of 13
 Investigation Report

The investigation report involves the main processes ,interviews and user-story of some key
authorities directly or indirectly involved in the use of system.

Some of the main members are:

1. Company owner
2. Chief Finance officer
3. Supervisor
4. Manager
5. Sales person
6. Contractors
7. Customers
Interview summary and user story is as following for each member:-

Company Owner

The Owner has multiple businesses in many countries he does not have enough time to
overview the company. Manager sends reports through fax/email. The reporting is not as
accurate as needed. Sometimes there are missing, wrong and duplication of records. Systems is
becoming hard to manage as the number of projects (houses) are increasing due to the growth
of company. It is difficult to have an errorless record of each house during its months of
construction since thousands of transaction takes place simultaneously. Whenever report is
needed, it takes days to collect data and generate report.

Chief Finance officer

There is less involvement of Chief Finance officer but he also has to be accountable to the
owner of the company. Chief Finance officer expense account is not synchronized with the
manager's account of income which result in discrepancies of date and amount sometimes
missing of an entry which results in conflicts. Chief Finance officer has to verify his entries with
the manager's account by the end of each month for data correction. Reporting of finance to
the owner also takes time since accounts must be balanced i.e. income= expenses + balance.

Page 5 of 13
Supervisor
Supervisor is the key person for operational work. He has to buy material at good prices but
unfortunately he does not remember prices of last purchase one each time of purchase. There
is no verification of prices at the time of purchase. Warehouse keeping is additional duty which
is to be fulfilled. It involves following processes:

Purchase of material.
Purchase return if material is not used/damaged.
Issuance of material to each project.
Return of issued material from project.

By the end of each day, warehouse transaction information is provided to the manager to keep
it recorded. Much time is spent in keeping track of material rather than other works.
Contractors do not work efficiently because of unavailability of supervisor. Many conflicts raise
each time when stock report is created, report does not balances the material purchased,
issued and in stock. Since each material costs money, discrepancy in record results in loss of
money.

Manager

All the clerical work is done by the manager. Account Keeping, Report generation for owner,
stock report, expenses details which consumes a lot of time in each process and very limited
time is left for other tactical works. Manager has to repeat same process over and over again to
verify accounts and transaction but there always been some errors which are hard to find out.
It is very annoying to spend many hours over report generation and owner finds out some
discrepancies in values. 3-4 houses were easily manageable but 15-20 houses record is very
hard to be kept by the manager.

Sales person

Information is not provided timely by the manager which results in loss of customer confidence.

There must be updated details of each project at which stage it resides and how much time and
expenses it needs to be finished.

A payment schedule is to be made manually whenever a customer asks to pay total money in
installments.

Page 6 of 13
 Contractors
Company has long process to complete before making a decision thing results in wastage of
time. Account statement is not always correct. Many times there are missing entries or
duplication result in money loss. Quality of work is not checked in time by the supervisor since
he is busy in other processes.

Customers
There must be a platform where it would be easy to get all the important information at home.
Phone call does not fully satisfy a customer. Sometimes sales person does not have sufficient
knowledge which wastes time in acquiring information.

**********************************************************

Page 7 of 13
 Possible Solution

Solution A

A specific purpose software must have following features:-

1. Cash-flow system for daily expenses.

2. Automation of warehouse
3. Automation of documentation.(sale agreement, contractor agreement etc.)
4. Daily task list interface
5. one click Reporting systems
6. Auto-backup facility .
7. Analytical and decision making tools for owner.
8. Manage budget for each project.
9. Website development for providing Online information and take customers
feedback.
10. Project management facilities.

Solution B

Use spreadsheet program to record data.

Manually input data using keyboard

It offers to apply formulas and create some statistical charts using data from the tables.

Solution C

Improve manual systems,

involvement of paper forms.
update of records daily which are grouped by weeks then months to calculate total
expenses after 4-5 months.

Page 8 of 13
 **********************************************************

Benefits of new system

Benefits of Solution A specific purpose software .

1. cash-flow system: It will record all the entries on the time of making transaction
and project expenses files will be automatically updated.
2. Automation of warehouse: This will involve a thorough bar code system. New
products are input and on the time of issuance they are just scanned at barcode
scanner once specific project is selected from the list to add pricing automatically
to expenses of specific project.
3. Automation of Documentation: It will create documents automatically using a
predefined format. Manager only has to input basic details and values.
4. Daily task checklist : It will provide a screen to show a list of work assignment to
make supervisor work more productive.
5. One click reporting: All the data is being updated in real time. Whenever a report is
acquired, it would be generated in few seconds without any errors.
6. Auto-Backup facility: User can use this option to backup data at multiple locations.
7. Analytical and decision making tools: The owner does not have time to go through
the reports thoroughly. Presenting the information in different statistical charts
would help the owner to understand fast and take decisions more quickly.
8. Manage budget: The system would keep track of expenses and allows user to see
budget allocated for each project.
9. Website: It would attract and facilitate more audience without any over workload
since a single platform will be used to provide details to many users at the same
time.
10. Project management facilities: To save time, manage resources and construct more
houses annually with much ease.

Some other benefits include:

Accuracy in data.
Process Improvement.
Reporting Made easy.
Auto-update warehouse inventory and project expenses.
Less involvement of Staff.

Page 9 of 13
 Time Saving.
Employee Satisfaction.
Customer Satisfaction.
Analysis made easy for executive/owner

Remote monitor/Online access to the system.

Benefits of Solution B

1. Helpful in daily office work.

2. Auto-calculation of selected data.
3. Offers generation of Statistical graphs.
4. Data easy to share using e-mail.
5. backup could be made easily.

Benefits of Solution C

1. Improve day to day working to some extends.

**********************************************************

Page 10 of 13
 Costing of the New system

Costing Of Solution A

Software:

Job Description Cost ()

Cash Flow system It will manage all the financial accounts 1760
Automation Of warehouse Stock & inventory Control 2900
Automation Of
Documentation Creation 890
documentation
Daily Task Checklist Daily task list for supervisor 600
One Click Reporting For Executive Reports 1285
Auto-backup Backup all the data automatically 900
Analytical & Decision tools Strategic and analytical assistance 1690
Website Online presence for customers 2500
Advanced Features
Budget management system Real-time budget control for projects 1200
Project Management Tools Manage projects professionally. 2500

Total () 12525
Hardware:

Device Description Quantity Cost () Subtotal

Desktop
To run software systems 2 2500 5000
Computer
Network attached
NAS 1 300 300
server
Barcode devices To read/write code 1 1700 1700

Page 11 of 13
 Laser Printer Print Documents 1 250 250
Cabling & utilities Other minor hardware - 200 200

Total:() 7450

*******************************************************************

Costing For solution B

Package Description Cost Quantity Sub Total
General purpose Includes multiple
800 1 800
software software
Desktop Computer
To run software 2500 2 5000
system
Laser Printer To print Documents 250 1 250
Cabling & utilities Minor hardware 150 1 150
Total (): 6200

*******************************************************************

Costing For solution C

Deep analysis and some printed forms: 2500.

*******************************************************************

Other details:

Solution A Solution B Solution C

Time for dev. & 1.5 months 2 week 1 week
implementation
Training time 10 Days 5 Days 3 days

*******************************************************************

Page 12 of 13
 Recommendations
Solution A- A specific purpose software is best suitable for the company because it includes
a lot of specialized programs which will meet the demands of company and every
stakeholder who are directly or indirectly involved in the system.
The system is highly customized which is to be designed after a deep analysis of each
process and their problems. User-story is included in the making of this system.
This system has capacity to manage huge data transactions.
A well managed software with maintenance and upgradeable programs.
Provides internet identity by website since internet is fastest growing network. It will help
worldwide clients to access your information and contact you with ease.
Users safe their time and fulfill their core duties more efficiently.
Data can be shared easily.
Data is more secure since user access control feature will be included.
System is no more dependent on users for retrieval of data.
As the company is growing, more and more projects will be managed easily without any
contradiction & clash in data.
One time cost is mentioned in the costing, while the operational costs are very minor as
compare to the benefits it offer.
Other two solutions are not as efficient as this. They have great limitations while this system can
be upgraded with time to time as per the requirement.

The complete package includes many programs such as program management, budget
management system etc. If any of the systems is not required at this time it can be
deselect form the package and total cost will be reduced. It all depends upon the
decision of company.

*******************************************************************
End of report. Thank you.

Page 13 of 13