TO: HEAD OF IT - CDSC

FROM: DATABASE ADMINISTRATOR - CDSC

SUBJECT: JUSTIFICATION FOR PURCHASE OF A NEW STATEMENT MAILING SOLUTION

DATE: 26-05-2014

Background

A mechanism for sending out monthly statements to clients or account holders is one of the most important and at the same time, critical application for any organization that is in the business of banking or depository of share equities and debt securities. Such kind of a statement mailing solution will not only reduce manual labor on the IT resources but it will also help in cutting costs for the organization significantly.

Introduction

This justification paper tries to explain the importance of having an efficient, error free and totally automated email statement disbursement solution in reducing human intervention and cutting costs to CDSC.

The need for implementation of a new statement mailing solution is long overdue since what we have currently is running short of its expectations. What is in use now has an expired license and apart from that, it requires much human intervention for efficient run, which is subject to human errors. The expired license means that CDSC is going against ethical IT standards.

Cost reduction is also a factor that is considered in implementation of any application. A sample analysis of how cost can be reduced with the proposed solution is presented in the attached excel file. The analysis shows that we shall be saving costs worth kshs. 560,560/= annually from sending statements with multiple registrations. This figure is from year 2013 and if year 2014 is added upto March, we would be saving Kshs. 705,460/=, hypothetically, in a period of 5 years, our cost reduction on statement printing and mailing would be Kshs. 3,527,300/=.

We can also go further and make more reductions in cost, considering that we are making requests to investors to update their static details especially the email accounts which are important to our statement disbursements. In 2013, we used Kshs. 5,345,655 /= to print and send statements, with the proposed solution, we can half this to Kshs.2,6728,27/=, together with multiple registration prints, I foresee a reduction cost of Kshs. 3,233,387/=.

Proposition

I propose we implement a new statement disbursement solution and a quote from SimbaTech Solutions can be considered. The quote is attached below for review;

Kindly review and advice,

Andrew E. Okoth

Database Administrator

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