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Alternative Solutions Case Study Of SFO Airport

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Question:

Discuss about the Alternative Solutions Case Study of SFO Airport.
 
 

Answer:

Identification of Alternatives

Determining the solution

In context to the SFO Airport, the alternative solutions that has been identified is incorporation of various wireless technology within the airport. The wireless technology solutions that can be implemented to generate revenue in the airport are listed as below:

  • Selling Wi-Fi service to passengers for accessibility of internet from their devices.
  • Wireless EFTPOS payments at retail outlets to avoid cash transactions.
  • Bluetooth based security cameras to reduce the costs required for security.
  • Installation of wireless display in the airport for the users to connect with the display on demand and have a bigger gaming experience using miracast technology.
  • Streaming live music using a Bluetooth radio station that can be accessed on demand by the customer will help in raising fund for the airport authority.

The implementation of the mentioned solutions with wireless technology in SFO Airport will also facilitate internal communications and better security within the airport besides generating revenue.

Views of stakeholders on the initiative

The various stakeholders associated with implementation of the solution for SFO Airport supports the initiative as it will help to uplift present conditions of the airport to generate more revenue by selling Wi-Fi access to the passengers and implementing the other mentioned solutions. The employees especially the security managers will be benefited from Bluetooth based security cameras as it will facilitate creation of policies and procedures to maintain better security within the airport facility by internal communications. The business partners will be delighted with this initiative as it could be eventually mean generation of more profit from the services and improvements in security infrastructure of the airport without replacement of existing systems, hardware or other products. 

Effect of initiative upon the opinions of stakeholders

The solution will be implemented considering the opinions of the stakeholders as they will be directly affected with incorporation of the initiative. The stakeholders will be benefited upon implementing the wireless technology to offer Wi-Fi services to the passengers that will generate revenue. However, the security managers of the airport may require to undertake training due to the implementation of new wireless technology. The business partners may think that implementing the new solution will not be beneficial in terms of the required costs.

Credence to be given by the organization on the opinions/values of stakeholders

The views of the various stakeholders associated with implementing the new solution must be taken into account prior to incorporation of the initiative. The stakeholders must be involved in every phase of the work so that they can participate as well as maintain ownership. The knowledge of the stakeholders have to be incorporated as it may prove to be invaluable to avoid mistakes while implementing the new solution. Hence, the stakeholder’s opinions or values have to be protected at all cost for successful implementation of a new solution within the organization.

Approach to reduce possible alternatives

In context to SFO airport, the existing physical access systems will be combined together with the help of wireless technology for selling Wi-Fi services to the passengers and facilitating wireless EFTPOS payments at retail outlets. The wireless EFTPOS payments at retail outlets will eventually lead to ease of the passengers for making payments thus it will generate revenue for the airport. The installation of wireless display for the users to connect their device for entertainment will attract more passengers and eventually increasing the revenue and profit. The combining of the existing system with the mentioned wireless technology will help to reduce the costs for replacement of old hardware or systems within the facility. The integration of new solution with existing system will also facilitate reduction in material costs.  

Analyzing the Alternatives: Feasibility of the solution

The wireless technology solution for SFO airport that has been identified will be feasible in terms of overcoming the technical and operational challenges. The new solution will help to improve the operational activities being carried out within the facility as well as upgradation of the existing physical access systems that require manual operations for processing payments and maintaining security within the airport facility.

 

Benefits of the solution

The benefits that will be achieved upon implementation of the solution are listed as below:

  • Reduction in costs for labor and materials.
  • Increased efficiency in the processing of payments.
  • Improvements in compliance with safety regulations.
  • Avoiding the costs required for replacement of old systems.

Costs associated with the solution

The cost required for installation and implementation of wireless technology within the airport is $ 250,000.00 and the annual maintenance cost required for the solution will be $25,000.00.

Comparing feasibility and cost-benefit analysis of the solution

Feasibility of the solution

The solution is economically feasible in terms of the associated costs and benefits. The solution is also practically feasible as it will provide the benefits that are required by the associated stakeholders.

Cost benefit analysis of the solution

Tangible Benefits

Category

In $US

Material costs

 $                 216,000

Total Tangible Benefits

 $            216,000.00

Tangible One-Time Costs

Category

In $US

Total Development Cost

 $            250,000.00

Total Tangible One-Time Costs

 $            250,000.00

Tangible Recurring Costs

Category

In $US

Maintenance cost

 $              25,000.00

Total Tangible Recurring Costs

 $              25,000.00

Payback Analysis

Benefits of option

2009

2010

2011

2012

2013

Material costs

 $ 18,000.00

 $36,000.00

 $72,000.00

 $90,000.00

 $          -  

Total Benefits

 $     18,000

 $    36,000

 $     72,000

 $     90,000

 $          -  

Costs of option

2009

2010

2011

2012

2013

Development costs

 $   250,000

 $           -  

 $           -  

 $           -  

 $          -  

Maintenance costs

 $     25,000

 $    25,000

 $     25,000

 $     25,000

 $   25,000

Total Costs

 $   275,000

 $    25,000

 $     25,000

 $     25,000

 $   25,000

Net benefits/costs

 $  (257,000)

 $    11,000

 $     47,000

 $     65,000

 $  (25,000)

Cumulative benefits/costs

 $  (257,000)

 $  (246,000)

 $  (199,000)

 $  (134,000)

 $(159,000)

Break Even Period

2.31325301

       

The cost benefit analysis illustrates that it will require 2.31 years to return the investment done to implement the solution.

Risks associated with the solution

The major risk that is associated with incorporation of the solution is incorporation of wireless technology may require the existing employees to upgrade their technical skills and expertise. This in turn will require the organization to arrange for training of the employees that may lead to increase in cost. Hence the organization may think replacing the existing employees with new skilled workers that may affect the operational activities within the facility.

 

Bibliography

Bazargan, M., Lange, D., Tran, L. and Zhou, Z., 2013. A simulation approach to airline cost benefit analysis. Journal of Management Policy and Practice, 14(2), p.54.

Galliers, R.D. and Leidner, D.E., 2014. Strategic information management: challenges and strategies in managing information systems. Routledge.

Hastings, N.A.J., 2015. Cost–Benefit Analysis. In Physical Asset Management (pp. 239-248). Springer International Publishing.

He, H.R., Kotlarsky, J. and Gholami, R., 2014. Towards Understanding IT Value Co-creation in Crowdsourcing: the Multiple Stakeholders’ Perspective.

Mishan, E.J., 2015. Elements of Cost-Benefit Analysis (Routledge Revivals). Routledge.

Tarhini, A., Ammar, H. and Tarhini, T., 2015. Analysis of the critical success factors for enterprise resource planning implementation from stakeholders’ perspective: A systematic review. International Business Research, 8(4), p.25.

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