Case Detail

Case Summary

San Francisco International Airport and Quantum Secure’s SAFE for Aviation System: Making the Business Case for Corporate Security

Case Number: 5-312-503, Year Published: 2013

HBS Number: KEL720

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Authors: Daniel Diermeier; Evan Meagher

Key Concepts

Business Process Improvement, Cost Accounting, Financial Planning, Information Management, Information Technology, Nonprofit Management, Outsourcing, Regulation, Reputations, Security Management, Technology Management

Abstract

In 2008 San Francisco International Airport (known by its three-letter airport code, SFO) had announced a $383 million plan to renovate and reopen Terminal 2. Assistant deputy director of aviation security Kim Dickie and her team had selected Quantum Secure’s SAFE software suite as the new Terminal 2 credentialing system, but she needed to develop a business case quickly that would convince senior management to give the green light to fund the purchase.

The case describes a scenario that occurs frequently in the real world, in which a decision offers some real but qualitative value in ways that are difficult or impossible to quantify. The discussion and analysis gives students the opportunity to consider the factors that will drive the internal rate of return (IRR), net present value (NPV), and discounted payback period calculations without constructing comprehensive spreadsheet models. Analyzing the case suggests the limits of such approaches in cases where perceived value is difficult to quantify.

The case prepares students to evaluate and justify purchasing requests when interacting with financial gatekeepers such as CFOs and CEOs by introducing a framework to analyze the quantifiable benefits of a capital expenditure while keeping in mind important intangible benefits.

Learning Objectives

After analyzing the case, students should be able to:

  • Understand how return on investment (ROI) calculations work, with an emphasis on identifying incremental effects
  • Decide how to use results from similar entities making similar purchases to estimate the incremental benefit of a proposed solution
  • Identify and use the best data available in making assumptions
  • Justify the validity of benefits that are difficult to quantify in conjunction with the presentation of a traditional ROI analysis

Number of Pages: 12

Extended Case Information

Teaching Areas: Technology

Teaching Note Available: Yes

Geographic: San Francisco, California, United States

Industry: Aviation Security

Organization Name: Quantum Secure and San Francisco International Airport

Decision Maker Position: Assistant Deputy Director of Aviation Security

Decision Maker Gender: Female

Year of Case: 2008