Cost and Benefits Analysis of Research and Community Services

Information System Development

Maksy Sendiang

, Marike Kondoj

and Jeannely Rangkang

Electrical Department, Manado State Polytechnic, Ds. Buha Kairagi, Manado-North Sulawesi, Indonesia

Civil Department, Manado State Polytechnic, Ds. Buha Kairagi, Manado-North Sulawesi, Indonesia

Keywords: Cost, Benefit, Information System, Research and Community Services.

Abstract: In this technological age, the availability of information systems that meet an organization's demands is

critical. Manado State Polytechnic is a community-based educational institution that continues to encourage

its members to develop in order to meet the demand for software infrastructure that can support each work

unit's performance. Polytechnics must identify and quantify linked costs and benefits in software development

in order to maximize the use of current financing resources. The expenses of research and service are

compared to the costs of system development in this study using the Cost and Benefit Analysis approach. The

results of the calculations show that the ratio is greater than 1, at 1.18, indicating that the value of the benefit

is greater than the resulting cost, indicating that the alternative is more profitable, accounting for

approximately 10% of the total investment if the information system is developed. We can get tangible

benefits from reducing operational costs and intangible benefits, namely increasing satisfaction and decision

making.

1 INTRODUCTION

In today's competitive climate, data digitization has

become one of the segments that determines an

institution's operational performance. Data is

essential for administrative management as well as

the development of existing and future institutional

policies.

Manado State Polytechnic, being a vocational

higher education institution, does not yet have fully

functional software to manage institutional data in an

integrated manner. Data digitization is still in its

infancy and has yet to be fully integrated into a single

client-server software system. Data synchronization

is challenging to establish since most existing data is

still a single entity that has not been coupled to other

data entities

This research was carried out with the aim of

optimizing in the form of a redesign of the proposal

submission system to the announcement stage of the

results of research selection and service to support the

services and main tasks of the Center for Research

and Community Service to the Manado State

Polytechnic The long-term goal of this research is the

creation of an integrated research and service system

that can provide services for lecturers, students and

other stakeholders. This certainly affects the

productivity and competence of lecturers in realizing

aspects of the tridharma, especially for the dharma of

research and service

Because it can give the most up-to-date facts, the

information system is an excellent tool for assisting

the organization's aims. As a result, analysis is

required for the creation of information systems to

ensure that no losses occur. Using the Cost-Benefit

Analysis Manado State Polytechnic can figure out

how much profit or loss there is and whether

establishing research and community service

information systems is feasible.

2 RESEARCH METHODOLOGY

This research employs a mixed method approach,

which combines qualitative and quantitative

methodologies. Researchers collected data and

conducted interviews with lecturers, as well as

conducting innovative investigations to produce

information system design

Sendiang, M., Kondoj, M. and Rangkang, J.

Cost and Beneﬁts Analysis of Research and Community Services Information System Development.

DOI: 10.5220/0010940400003260

In Proceedings of the 4th International Conference on Applied Science and Technology on Engineering Science (iCAST-ES 2021), pages 82-85

ISBN: 978-989-758-615-6; ISSN: 2975-8246

 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

3 COST ANALYSIS

The information system design, as shown in fig 1, is

used as a guide when conducting a cost-benefit

analysis. The system design that will be used to

calculate costs and benefits in fig 1 is a system

redesign that was created to meet the needs of the

relevant unit. The system design is depicted in fig 1

after conducting interviews with 50 researchers and

collecting data. System design is one of the tools used

in software development. System design can be

classified as problem-solving cognitive tools.

The system is separated into three steps based on the

developed system design: proposal, review, and

determination. Table 1 shows the costs incurred by each

proposer at each stage.

Table 1: Cost for system development.

Activity Cost

App development 30.000.000

Operator training 240.000

Documentation 300.000

Data collecting 250.000

Socialisation 1.500.000

System maintenance 1.800.000

Total 34.090.000

The value of the rupiah in table 1 is used as the

basis for calculating costs for the following year, with

special emphasis paid to applying the amount of the

inflation index acquired from the link

https://www.bi.go.id/id/statistik/indikator/data-

inflasi.aspx in the calculations.

Figure 1: System design.

Cost and Beneﬁts Analysis of Research and Community Services Information System Development

Figure 2: Data inflation.

From February to July 2021, the inflation rate

was 1.38 percent, 1.37 percent, 1.42 percent, 1.68

percent, 1.33 percent, 1.52 percent, resulting in a

number of 2 percent when rounding off the highest

inflation rate. Because of the The cost component is

computed as follows dependent on the year of use:

1. The year the system was first designed, or year0,

will be used to compute operational preparation

expenses.

2. Because there are various phases to a project,

such as analysis, data collecting, and technical

meetings before the establishment of

information systems, project expenses are

determined from year 0 or before year 0.

3. Because operational and maintenance costs are

used after the system is completed, they are

computed after year 0

A cost analysis of the investment can be done

using the cost and benefit analysis method. If the

profit value is less than the investment, the

investment is not profitable; if the profit value is

greater than or equal to the investment, the

investment is profitable. The benefit cost ratio

approach can be used to obtain these conclusions.

The rule Benefit Cost Ratio (BCR) =(PW B)/(PW

Details:

BCR = Comparison benefits toward cost

PW B = Present Worth of Benefit

PW C = Present Worth of Cost

If the costs are calculated and described above

for three years, the year 0 is Rp. 12,290,000, the

year 1 is Rp. 11,800,000, the year 2 is Rp.

11,800,000, and the year 3 is Rp. 1,800,000. The

effective cost for the first year, Rp. 12,150,000, Rp.

13,360,000 for the second year, and Rp. 14,570,000

for the third year was Rp. 12,150,000, Rp.

13,360,000 for the second year, and Rp. 14,570,000

for the third year.

In the first year, operational cost savings are

considered to have no training costs, and so on.

The rise in customer satisfaction is expected to

be 100 satisfied people at a cost of Rp. 120,000 per

year, with 10 persons becoming increasingly

satisfied each year.

So :

BCR = (PW B)/(PW C)

BCR = 40.080.000/34.090.000 = 1.18

BCR Value = Total of Benefits / Total of cost =

Rp 40.080.000/34.090.000 = 1.18 .

According to the findings of these calculations,

the ratio is greater than 1, or 1.18, indicating that the

value of the benefits is greater than the resultant

costs, implying that developing the information

system is more profitable by around 10% of the

overall expenditure.

Figure 3: Calculation of cost benefits.

iCAST-ES 2021 - International Conference on Applied Science and Technology on Engineering Science

Conducting a cost-benefit analysis or determining

the benefits achieved if the system is adopted is a

tough task, because there are intangible costs that are

difficult to quantify in addition to real costs. Then, as

shown in figure 3 (look at above), the strategy is to

develop an estimate of the increase in user activity.

In figure 3, the calculation of the cost-benefit

explains that system users feel intangible benefits.

Increasing satisfaction and decision-making has

strategic value in improving The performance of the

related units. In this research, the cost of servers and

internet access is no longer a problem, because they

are already available. It is undeniable that the

calculation of profits at the time of implementation is

quite complicated because there are intangible

benefits that are difficult to measure therefore, we use

a method to formulate the value of the benefits

obtained by the users.

4 CONCLUSIONS

The development of research and service information

systems is highly recommended based on the results

of cost and benefit analysis, which show that the

value of benefits is more dominant than the costs

incurred, and that it is more profitable about 10% of

the total investment if the information system is

developed and implemented.

ACKNOWLEDGEMENTS

The authors gratefully acknowledge the support from

State Polytechnic of Manado, Ministry of Education,

Culture, Research and Technology, Republic of

Indonesia.

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Cost and Beneﬁts Analysis of Research and Community Services Information System Development