Wood Grove BankBackground: Woodgrove Bank is a small regional bank that runs most of its financial applications on a mainframe computer. The current Accounts Payable (AP) application is a packaged client/server application that must use MS Windows 3.1 as the client operating system. The current AP application uses an older version of MS SQL Server as the database software. The old version of MS SQL Server is not certified to run on MS Windows NT 4.0. The current client computers have 8MB of memory. The AP department receives paper invoices from many different vendors. The format of the paper invoices varies widely. Problem Statement: Woodgrove Bank wants to upgrade and enhance its Account Payable (AP) application. Proposed Solution: Woodgrove Bank will upgrade the packaged client/server application to the new version, 5.0. Version 5.0 is certified to operate on only a 32-bit MS Windows client computer operating system, and on the latest release of MS SQL Server. Version 5.0 will also require more memory on the client computers. Both the current and new versions (5.0) of the Accounts Payable (AP) application use ODBC to connect to the database. Interfacing Systems:General Ledger (GL): The new Accounts Payable (AP) application must feed transactions to the General Ledger (GL) system on a monthly basis. Purchase Order (PO): The Purchase Order (PO) system tracks the status of each purchase order. A purchase order's status can be either open or closed. The new Accounts Payable (AP) application must validate that the invoice has an open purchase order. The AP application must close the purchase order on the PO system when the full amount of the purchase order has been paid. Check Issuance: Once an invoice is approved for payment, the new Accounts Payable (AP) application must transfer data to the Check Issuance system. Data Warehouse: The new Accounts Payable (AP) application must update the Data Warehouse system on a daily basis. Users:User Profile: Typical users have minimal exposure to the MS Windows environment. They are bit temperamental, and their willing acceptance of this new system will strongly impact the success of the implementation. Resource Requirements: Twenty Accounts Payable (AP) processors each handle an average of 15 invoices per day. They can barely keep up with the invoice activity for the existing business load. A new branch that is opening soon will increase the workload by 50 percent. The average AP processor earns $40,000 per year. Security Requirements: There are three job types in the Accounts Payable (AP) department: supervisor, proofer and processor. The processors enter the invoice data into the AP system. Managers outside of the AP department approve the invoices. The processors must make sure the manager has approved the invoice prior to processing the invoice. The proofers and supervisors review the invoices and data for accuracy. Only supervisors can post the invoices in the AP system. Requested Accounts Payable (AP) Enhancements:Payment Term Saving: Some of Woodgrove Bank's vendors discount the invoice amount if the invoice is paid early. The Accounts Payable (AP) department manager estimates that 30 of the vendors offer these terms. Each vendor bills an average of $25,000 per year to Woodgrove Bank. In almost all cases the discount is five percent. The AP department manager suggested adding a feature that would allow the early payment of these invoices. Cost to implement: $40,000 Invoice Approval by E-Mail: This feature would automate the approval of invoices. When an invoice is first entered into the system, the system will automatically send e-mail message to the appropriate manager requesting approval to pay the invoice. The manager will respond via e-mail and the system will update the invoice automatically as approved for payment. Currently, the Accounts Payable (AP) processors send a fax to the manager for approval, and update the invoice manually once it is approved. This feature would double the number of invoices an AP processor could handle in a day. Cost to implement: $100,000 Audit Control for Lost Invoices: This feature would virtually eliminate the problem of invoices being lost. Currently, about one percent of invoices are lost. As a result, these invoices are paid late. The average late fee is $10. Cost to implement: $20,000 |