FINANCIAL PLAN

Financial Plan: Offshoring Amazon's Customer Service to India

Financial Plan

Unit Quantity

Cost per Unit

Annual Recurring*

Unit Label

One-Time*

3-Year Total

Client Hardware

PCs

PCs

2,500

$1,000

$150

$3,625,000

PC Upgrades

PCs

2,500

$200

$30

$725,000

Mobile Devices

-

$200

$30 $ -

Other

-

$200

$30 $ -

Sub Total

 

 

$3,000,000

$450,000

$4,350,000

Server Hardware

Servers

Servers

1.7

$15,000

$2,250

$36,250

Storage (including backups, redundancy, power supplies, etc.)

Terabytes

0.5

$10,000

$1,500

$7,250

Network Equipment

- $ - $ -

Other

- $ - $ -

Sub Total

$30,000

$4,500

$43,500

Total

 

 

$3,030,000

$454,500

$4,393,500

* One-Time costs are typically incurred at the beginning of the project. Annual Recurring costs are on-going costs necessary throughout the life of the project.

Offshore customer service unit will require major investment in equipment (essentially computers) and human resource. We planned to procure a total of 5000 units of desktop computers from international computer vendor of branded computer. Cost distribution is mentioned below:

Table 1: Cost Distribution of Equipment

License Quantity

One-Time (License)

Annual Recurring (Maintenance)

3-Year Total

Application A

1,500

$300

$69

$760,500

Application B

-

$100

$23 $-

Desktop Operating System

2,500

$100

$23

$422,500

Client Access Licenses (CALs)

1,500

$10

$2

$25,350

Other

$-

Sub Total

 

$715,000

$164,450

$1,208,350

Server Operating System

1.7

$2,000

$460

$5,633

Database

2

$8,000

$1,840

$22,533

Server Application

2

$10,000

$2,300

$28,167

Utilities

- $- $-

Other

$-

Sub Total

$33,333

$7,667

$56,333

Total

 

$748,333

$172,117

$1,264,683

IT Training

Formal (Classroom) Training

Internal Training

Independent Learning (Self-Study)

3-Year Total

Staff trained with this type of training

11.2

56

56

Hours of training per staff member

32

16

40

Labor Cost per Hour

$64

$64

$64

Training time (labor cost)

$2,044

$1,022

$2,555

Class and Additional Fee Cost per trainee

$1,500

$300

$75

Cost per Employee Trained

$3,544

$1,322

$2,630

Total Cost

$39,689

$74,022

$147,255

$260,966

Software Costs

The outsourcing unit will have capacity to accommodate a maximum of 5000 customer service staff at any single time. So a total of 15000 staff will be employed over the period of 3 years who will get necessary training. The unit will work in three shifts accommodating the entire staff.

Projected Profit ...