The organization is hit with the instance of dealing with employee medical and insurance records for the organization to take care of the employee’s tax benefits. The system would ascertain the various medical claims and insurance policies that the organization requires to adjust with their pay-in slips to get them tax benefits. The proposed system is named as “TaxBenifitPlans” would be of great help to the organization. It requires building an information system that would capture employee data regarding their medical and insurance records.
Purpose The system would make sure that all the details pertaining to the employees and their dependents would be captured and the related medical claims, insurance and other similar forms are reflected in the system to ascertain the yearly tax benefits one can derive. In the present system the employee data is scattered and is in paper that is used by the accountant to collate data at the year end to avail special tax benefits to the employees in their pay slips.
With the help of the new system, the organization would be able to track the total tax benefits given to a person with respect to their income levels. 3. Benefits The benefits could be laid as follows: The employees would be able to record the information at their own will or at the moment of any such incident and would not require publishing details in paper to the accountant. Any change or updations to the medical or insurance records can be handled in the system with ease.
Systematic processing of the total claims to be made by the system which would be error free. Standardized principals would be set for getting the activity right. Tax files can be done with proper synchronization between all the records. No misappropriation of the accounts of the firm would be made which are quite probable with the present system. A great help to the auditors to check the accounts with full transparency of the employee details. 4. Solutions The various solutions could range from the following:
Building the software: The software development by the organization can be taking up by allocating a separate team to plan, build and operate the system so that the system security and privacy is retained and the organization is able to manage the system updations and future requirements (Hoffer, 2002). Allocation of new team or hiring for the purpose and effective management of the team is quite difficult. On the other hand understanding of the system requirements would be better performed by the people of the same organization.
Buying the software: The purchasing of generic software would be of great help as it would save time, costs and effort on the part of the organization. However the generic software’s are often expensive and includes a large array of functionalities that are often of no use to the organization in particular (Curtis, 2005). Outsource: The decision to outsource is the new trend of any organization wishing to develop a system to capture a business process. Laudon (2002) explains it as a mechanism to hire a third party vendor to get the job done.
The decision would be the best to outsource the software development of the proposed system to a firm so that effective management of costs, time and other resources are done. 5. Costs: The costs for the various solutions could be based on the following assumptions: Building the software: It would take around 4500$ to construct it.
Sommerville (2004) defines ROI = (Gain from Investment – Cost of Investment)/ cost of investment Here the gain from investment would be 250000$ for a period of 10 years, cost of investment would be 4500$, so ROI is calculated to be (250000 – 4500)/4500 = 54.56 Buying the software: The cost of the software package would be around 6000$. ROI = (Gain from Investment – Cost of Investment)/ cost of investment Here the gain from investment would be 250000$ for a period of 10 years, cost of investment would be 6000$, so ROI is calculated to be (250000 – 6000)/6000 = 40. 67. Outsourcing: Ii would incur a cost of 4000$. ROI = (Gain from Investment – Cost of Investment)/ cost of investment Here the gain from investment would be 250000$ for a period of 10 years, cost of investment would be 4000$, so ROI is calculated to be (250000 – 4000)/4000 = 61.5.
So we can conclude that outsourcing of the software to a third party vendor would yield affordable costs with high rate of ROI. 6. Schedule: The schedule of the proposed software would be 3 month duration. Planning, building and operating of the software would be done around this period only. Conclusion The proposed software would automate the operations and keep all the employee entries in proper synchronization. References Curtis, G. and Cobham, C. , (2005). Business Information Systems. 5th ed. London: Financial Times/Prentice Hall.