Case Number: 5-404-764, Year Published: 2006
HBS Number: KEL149
ROI, Technology, Web, Risk, Return on Investment, Financial Analysis, Sensitivity Analysis
The purpose of the case is to teach ROI analysis best practices for technology project investments. As part of the case questions, students must decide if B&K Distributors should implement a Web-based customer portal with an integrated marketing campaign, and are assigned to assist Jim Anfield, business development director for JDA Consulting, and Nancy O’Neil, B&K Distributor’s sales VP, in determining the feasibility of this project. They must build the final ROI projections and develop recommendations for B&K’s senior management team. Completion of this case will give the students a framework for analyzing similar investment decisions. This case is designed to be a self-contained introduction to ROI analysis and is based on a real life management decision for a mid-sized firm. The technology involved in the project—the implementation of a Web-based customer portal—was selected specifically since students find it easy to understand. In addition, ROI spreadsheet templates are provided so that the basic analysis follows a simple format. However, significant learnings are built into the case. The key learning of this case is that ROI analysis for technology and marketing projects is not a straight forward activity—several factors need to be analyzed in order to conduct a thorough review of the feasibility of the investment. For example, financial elements such as payback period, sensitivity analysis, and outcome ranges are essential to the decision-making process. The case discussion emphasizes the importance of assumptions and the range of possible outcomes.
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