Mike Falkenstein
FINA 4210
Dr. Matt Blasko
8 February 2013

Chocolate Confections Corporation Case Study

(1) Provide an Executive Summary (2-3 paragraphs, overview) of the situation and the issues.
The Human Resource Department of the Chocolate Confections Corporation has enlisted the services of the Forrester Consulting Group in selecting a new software package that will place them at the forefront of the human-resources/payroll computing community. With the implementation and integration of a new software system, the HR Department hopes to gain a more user-friendly system that will streamline HR and payroll business processes. The vice president of the Human Resources Department, Monica A. Bentz, appointed a “working committee” to review the issue of replacing the HR department’s software package.
Based on a cost-benefit analysis conducted by Working Committee and the representatives from the Forrester Consulting Group, the decision has been made to replace HR’s existing software with a package offered by HumanAssets Incorporated. Rather than installing new equipment, HumanAssets has created a plan for integrating the new software into HR’s existing system at a reduced cost in comparison to the other potential software packages. Over its five-year life, the project is estimated to have a net present value of $2.7 million. The vice president of HR approved the project. Thus, the project was approved without corporate scrutiny because its cost was less than $500,000, the benchmark requiring approval from the vice president of Finance.

(2) The Memo of Justification identifies numerous costs and benefits. Please comment on the following items: a) Managers’ time savings of $750,000 – One of the primary goals of purchasing a new software package is to facilitate all of the processes in the HR department. Thus, the time savings cannot be considered to be an