A Quality Improvement

EnterpriseIdeas for Today and Tomorrow

Presented by LSRV Solutions

Team Members : Lokeshwara Rao T (94)

Shalini B (429)

Vanitha A Kiran

Radhika PC (277)

Purpose: Introduce LSRV Solutions

LSRV Solutions (LSRVS), a consulting firm, is in the process of being

formed as a joint proprietorship owned and operated by four

industrious entrepreneurs from Bangalore East

Our Objective Support customers to address their outstanding pile-of- work by

providing business and technical solution to small and medium

Information Technology (IT) and Information Technology enabled

service (ITES) companies

Analyze the process, identify areas of slack that results in delay of

work completion, and thereby reduce accumulation of project

backlogs, improve the quality, and timely delivery of the products to

their customers

Picture is Bright!

Various Market studies we conducted shows that

average change request backlog in the company’s

database at a given interval of time is about 200%,

growing at an average of 15 % per year

How Did We Get Here? The transformation of the entire world into a boundary-less global village

resulted in increased competitiveness in providing quality, competitive

pricing, and timely delivery. As a result, the impact of backlogs and

turnaround time degradations can be far more damaging than in prior days

when products had advantageous and unique features.

Unfortunately, most of the time, the solution applied is a boilerplate

combination of overtime, temporary labor, and temporary work

redistribution to other departments. This common strategy brings with it a

litany of problems, including reduced quality, inconsistent service, increased

errors, staff burnout often enough.

Avoiding the problem by mandating that there will never be a backlog may

be ideal in concept, but is unlikely in practice due to the dynamic nature of

the IT and ITES industry and unpredictable nature of individuals.

Need for Project Management….

Exploratory Research to generate basic knowledge, uncover

environmental variables associated with a problem. Indicates backlog

is dynamic in nature at a given point of time. The additional work is

out sourced to other business location or service provider

Some of the benefits estimated are :

Establishes accountability

Manages cost

Ensures on-time delivery

Provides a conduit for communications

Reduce scope creep

Manages risk

Increased quality of the delivery

x (t) y (t)

Where

x (t) Represents the set of inputs to the system.

y (t) Represents the set of outputs from the system.

f Represents system parameters or the transfer function.

E (t) Represents the environmental parameters.

t Represents any independent variable.

SYSTEM APPROACH

LSRV

Solutionsf

Controllable Inputs: •Human ResourcesSkilled, Semi skilled, Man hours

• Non Human ResourcesComputer Hardware, Stationary,

Capital, Technology, office space

Uncontrollable Inputs: 1.Inflow of Change requests

2.Quality of Communication

3.Business driven demands

4.Statutory rules and regulation

5.Client Specific requirements

Environmental FactorsFixed Constraints: Variable Constraints :

1. Budget 1. Client’s Affordable service charges

2. Client’s statutory rules 2. Lack/Change in manpower

and regulations 3. Inflation

4. Govt. Export/ Import Policy

5. Market driven surge in requirement

6. Availability of Backlog

7. Currency Exchange rate

Desired Output: •Streamlining of existing functional

process

•Manage backlog effectively

•Provide consultation services

•Manage Human Resources

•Total revenue generated

Undesired Outputs: •Quality error rate

•Super cession of requirements

•Non conformance to client’s

specific requirement

E(t)

y (t) = f [ x (t), E (t) ]

Available Options Consultation services are the simplest business

model and have the fewest barriers to entry. We will be

providing solution for client’s requirements at client’s

location.

Onsite – Offsite services where business consultants

will be located at the client’s office, work alongside with

the clients requirements prepare feasible solutions. In-

house team will co-ordinate closely the trials, develop

customized model, perform testing, quality assurance

checks and transition the project for implementation.

The above alternative solutions meet the basic need,

however with varying degrees of efficiency in terms of

cost, time and resources requirements.

Feasibility Study for

Launching LSRV Solutions

WBS

Final Findings &

Recommendations Market Feasibility: The impact of backlogs is about 200% when

compared to desired backlog levels of 25%. LSRV solutions would position

statically for exploring the bigger portion of the Pie.

Business model: Consultation services are the simplest business model

and has the fewest barriers to entry, with higher profit margins

demonstrated.

Management Model: Based on the organization structure and financial

budget constraint, LSRVS attempts to use method driven by six P’s.

Technologies /Technical feasibility: Focus will on using available

technologies and techniques of the client.

Financial feasibility: Investors of LSRVS mainly are the director board.

The estimated capital of Rupees 20,00,00 is required which is funded by

the director board and with little support from Bank loans.

"Joy is the holy fire that keeps our purpose warm and

our intelligence aglow." -Helen Keller

Backup Slides

Business Model Feasibility

Option 1

Option 2

• The simplest and have the

fewest barriers to entry

• The solutions tend to be

lower than other business

models.

• We may tend to get

maintenance work, which

may dictate the tools we

may have to use.

• Owing and Reuse of

solution

• Creating solution

Modules for future

products development.

• Buying tools to match

with the customer

requirements etc.,

Management Model

Option 1: Management method would be driven by six P’s

Option 2: The "Arrow" diagram Management method

Financial feasibility

Investment costs

Item Category Unit cost Quantity Total value

(`) Months (`)

Materials

Infrastructure 6,45,000

Rent Office Space about

500 Sq. ft./per monthFixed cost

10000 12 120000

Furniture Fixed cost 30000 - 30000

Interiors Fixed cost 200000 - 200000

Computer Hardware Fixed cost 30000 4 Units 120000

Computer networking Fixed cost 20000 - 20000

Software licenses Fixed cost 10000 4 40000

Air Conditioner 2 Ton Fixed cost 25000 2 50000

Electrical fitting Fixed cost 5000 - 5000

UPS Fixed cost 50000 - 50000

Printer Fixed cost 10000 1 10000

Company Registration Fixed cost 10000 - 10,000

Logistics Variable cost 20000 - 20,000

Labor/Personnel 11,10,000

Critical resources -2 People Variable cost 30000 12 750000

Offshore resouces-2 People Variable cost 15000 12 360000

TOTAL 17,85,000

Capital Requirements and strategy

Break Even Analysis

Option: 1. Calculate number projects to execute at break-even based on Man hours.

Selling price (SP) = ` 150 per Man hour.

SP = ` 12, 96,000/ Year

Fixed Costs (FC) = 1, 30,000

Variable Costs(VC) = ` 11,30,000 per year

The Number of projects executed (X) = FC / (SP – VC)

= 1, 30,000/ (12, 96,000 - 11,30,000) = 1 Project / Year (Approximate)

Break-even revenue (` ) = Break-even units X Selling price.

= 1 X 12, 96,000 = ` 12, 96,000

Option 2: Selling price (SP) = ` 16,00,000 per year

Variable Costs(VC) = ` 11,30,000 per year

Fixed Costs (FC) = = ` 6, 55,000

The Number of projects executed (X) = 6, 55,000/ (16,00,000-11,30,000)

= 2 Projects / Year. (Approximate)

Break-even revenue (` ) = 2 X 16, 00,000 = ` 32, 00,000.

• Selling Price (SP) - Selling Price of services is arrived at customer affordable

price.

• Based on exploratory research and considering discount to enter market.

• Fixed Costs (FC) – These costs are considered those that remain constant

within the projected range of sales level.

• Variable Costs(VC) - Consists of costs that vary in proportion to sales level.

• The Number of projects executed (X) = Represents the number of projects

to be executed. For the purpose of a break-even calculation, it is assumed that

number of projects Billed during a period is equal to the number projects

executed upon during the same period.

• Break-even revenue ( ) = Break-even units X Selling price.