CO7218 Financial Services Information Systems Assessment and Tutor Proposal
University of Leicester
Financial Services Information Systems
Assessment No: 1
Student’s Score cards
The assignment is inspired by a real-life case. In particular, you are introduced to a kind of a non-technical problem solving task that IT professionals often have to deal with in practice. The assignment develops the students’ skills in problem solving, analysis and reporting.
Imagine that the bank you work for is about to buy a software product for a new application. After researching the market, it has been concluded that there are 3 alternatives: a commercial package (Product A), a cloud based SaaS product (Product
B) and a commercially supported open source software (Product C). Your manager has asked you to perform a comparative study of the 5-year costs of the 3 products, based on the variation of number of users that will have access to the application and prepare a power-point presentation that summarizes your findings and conclusions.
After contacting the products’ vendors, talking to your colleagues at the bank and researching the market you have identified the following facts:
Product A Product A consists of 5 components (sub-products) that are all required for the new application, however, they are licensed independently:
- Sub-product A1 that is licensed on a per user basis, costing 200£ per end-user that will have access to the application.
- Sub-product A2 that is licensed on a per user basis, costing 120£ per end-user that will have access to the application.
- Sub-product A3 that is also licensed on a per user basis, costing 400£ per end-user will have access to the application.
- Sub-product A4 that is licensed based on the number of CPUs that are installed on the application server that the product will “run”, with a cost of 6000£ per installed CPU.
- Sub-product A5 that is licensed based on the number of CPUs that are installed on the application server that the product will “run”, with a cost of 9000£ per installed CPU.
It is estimated that in order to be able to perform adequately in the production environment, Product A requires 4 CPUs for up to 300 Users, 6 CPUs for 301 to 600 Users and 8 CPUs for 601 to 1000 Users. Additionally, the new application will have a disaster recovery site for which the license cost for product A is calculated as 40% of the license fee of the production site assuming that the production site license fee is calculated with 0 (zero) Users. Note that, given its purpose, the disaster site still needs to have the appropriate processing power in order to be able to accommodate the same number of users as the production environment.
Additionally, starting from the second year, for Product A, the bank will have to pay the product vendor an annual 21% maintenance fee over the final product license fee (where the final product license fee includes both the production and the disaster recovery sites).
Product B The cloud based SaaS product (Product B) uses a hybrid license and subscription based pricing. The license for Product B is based on the number of different Users and the respective roles that will have access to the product. The facts for Product B are as follows:
- The initial license fee for end-users (i.e. business users) is 400£ per end-user.
- The initial license fee for super-users (e.g. administration roles) is 1000£ per super-user.
- The subscription based fee, is due on an annual basis, starts from the first year, with a cost of 800£ per end-user and 1500£ per super-user. There is no disaster recovery site cost for Product B, given that this is a cloud-based solution.
Product C The commercially supported open source product (Product C) license is subscription- based (i.e. maintenance only), starts from the first year and costs 30,000£ per year, per CPU installed on the application server that the product will run. It is also estimated that in order to be able to perform adequately in the production environment, Product B requires 4 CPUs for up to 400 Users, 8 CPUs for 401 to 600 Users and 10 CPUs for 601 to 1000 Users. The cost of the disaster site for Product C is zero.
Hardware Each CPU (H/W) of the production and disaster environments is acquired at a cost of £6,000 and has an annual maintenance fee of 10% over the acquisition cost. The CPU’s (H/W) maintenance fee starts from the second year.
Questions Based on the facts above, in order to prepare the presentation to your manager, you should perform the following tasks:
- Devise the mathematical formulas that calculate the 5-year costs for each of the 3 products above (the 5-year costs should include all costs involved).
- Based on the previous formulas and using MS Excel or by developing your own application (in which case you are free to use any programming language/technology of your choice), implement the formulas you devised and also build a diagram to show (in the same diagram) the 5-year costs of each of the products as a variation of the number of end-users, in other words the vertical axis is the 5-year cost (in £) , whereas the horizontal axis is the number of end-users ranging from 100 to 1000, in intervals of 50 end-users. For Product B, assume that, in all cases, the number of super-users is constant and equal to 30. In other words, the super-users should not be considered as part of the end-users variation.
- Prepare a concise power point presentation to your manager (in a presentation form suitable for your manager). The slides of the presentation should include at least the following:
the facts you have identified (already described above), o the graph you have prepared (as defined above) o your own conclusions from this analysis you performed i.e. what does your analysis show that your manager needs to be aware of? e.g., which of the 3 products is more cost-effective and in which cases? If you wish, you may include other calculations in order to reach conclusions on the comparison (e.g. the 7-year or the 10-year costs of each product) o A list and brief explanations of five additional cost factors that you believe the previous analysis does not take into account, but should nevertheless be considered in order to be able to calculate with more precision the final total 5 year-cost of the application. For example, the cost 3 of telecom lines for the production and disaster environments of is one such factor.
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CO7218 Financial Services Information Systems