CASE STUDY: Davis Humanics (DH)

CASE STUDY: Davis Humanics (DH)
You are a Professional Consultant with a professional consulting firm that has been chosen to study a specific situation and report your findings and recommendations.
Prepare an analysis that includes the following elements:
Introduction
An overview of the facts of the case.
Analysis
Any additional research to expand knowledge of the situation.
Recommendations
Make recommendations that consider the facts of the case, your additional research, analysis of the costs and benefits of your proposed solutions.
You may use the questions at the end of the cases as a format, but I want you to EXPAND on them to include the above as well.
CASE STUDY:
Davis Humanics (DH) is a company founded in 1982 that provides human resources services to about 7000 companies with a total of nearly 100,000 employees. These services include payroll processing, tax filing, health insurance and claims management, and retirement plan management. DH has annual sales of $2 billion and about 1000 employees. In 1997, DH launched a website that has since grown to include a variety of tools for connecting with customers. DH has expanded rapidly and has clients of all sizes, ranging from smaller companies with fewer than 50 employees to Fortune 500 companies.
As DH grows, it is having trouble maintaining a consistent quality of service. Account managers each must handle more clients, and it is becoming difficult for those account managers to maintain a high degree of personal contact with the human resources executive who control DH’s contracts. In the past, account managers worked with a small set of client contact people, but now account managers must work with more people, many of whom they have never met. In addition to account managers, client personnel have regular contacts with DH operations staff (who handle input tasks), DH system staff (who help customize the interfaces between DH systems and client systems), and DH professional staff (lawyers, actuaries, and human resources professionals who consult with DH clients and their legal counsel regarding the operation of their retirement and benefits plans).
Because DH’s clients are so different in size and how they operate, DH has to be flexible in handling input data. For example, DH’s payroll-processing service allows clients many different ways to send in time card data. The largest clients arrange for customized computer-to-computer transfer of information. Some large clients use EDI transfers. Most medium and smaller-sized clients email or fax the time card information, but a significant number of them mail paper lists that DH must scan into its systems. The health insurance claims-handling operation is even more troublesome. In addition to having clients send information in various formats, the insurance companies demand that information be submitted in specific formats, each of which is different.
The complexity of DH’s operations is growing as rapidly as the company adds new clients. Sandi Higbee, DH’s director of operations, asks for your help in outlining a web-based customer relationship management (CRM) system that will help manage the account manager’s ever-increasing levels of customer contact. Sandi reviewed the products offered by several leading CRM vendors and beeves that one might work as a base product, but no matter which product is chosen, she believes that substantial customization will be necessary because Dh’s operations are so complex and different from most companies that sell products or simple services to customers. A good CRM system for DH would need to monitor all types of customer interactions with DH account managers, operations staff, systems staff, and professional staff. In addition, the system’s web interface should allow DH’s clients to access parts of the CRM system so they can track DH’s follow-up on their work requests and pending inquiries.
DH evaluates all capital projects, including IT projects, using ROI. Sandi is worried about this because she believes that many of the benefits of this CRM project will be hard to quantify. On the other hand, the costs of the CRM project (software and hardware purchases and costs of consultants who will customize the CRM software to meet DH’s specific needs) will be very easy to quantify and will be large. Sandi expects the vendor-consultant teams to submit bids of between $1 million and $2 million for this project.
Required:
1. Prepare an outline of the benefits that DH might expect to obtain from this CRM project. Use categories to organize your list of benefits; for example, you might identify benefits that will accrue to Dh’s account managers, operations staff, IT staff, and professional staff. Because Dh’s clients will also benefit, you might be able to identify that will accrue to DH’s marketing and Sales departments or to DH’s new product development department. Be sure to include any long-term benefits that you think might occur after the CRM system has been in place for several years.
2. Prepare a one-page memorandum to the DH board o directions in which you argue against using ROI as the primary method for evaluating this project. Keep in mind that these directors have little time to review your arguments and are very much inclined to use ROI for all project evaluations.
 
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