Terra Data Incorporation Recommendation Plan Harvard Case Solution & Analysis

Terra Data Incorporation Recommendation Plan Case Solution

Statement of purpose

The case illustrates an importance of utilizing new developments in G S T system for operations as well as to improve overall profits of the company by reducing the unnecessary costs associated with individual business units. However, the rubric to discuss is the fact that such large number of systems under different regions utilized additional cost of operations like administrative and other operating expenses.

The cost of systems like Oracle and other databases that were used in various areas of Terra data bore enormous cost and thus did not match with the company’s overall strategy. Therefore, to overcome these costs, a new system of “Enterprise Data Warehouse System” should be implemented to achieve an entire outcome. For that, five nodes of hardware and software are considered to be a potential investment to execute the operations in an integrated way.

Davis was a data warehouse technology provider who was considering the proposed system in exchange with the existing one. Thus, some additional cost would be incurred to transform the systems within three years. Mark Johnson and Jeff Richards (Chief financial officer and Chief executive officer of G S T) were not impressed with such a decision. They assessed various forms of risk associated with such change in technological perspective. Like the unstructured organizational change after the new proposal, the inability of the experts to manage the integrated system due to the high volume of customer’s data involved in it.

Also, other factors would have included increasing the risk of loss in operations as well as subjective criteria of the company. Therefore, to set the perfect scenario to the executive committee of G S T, Davis should prepare several levels of outcomes which would include different results related to the specified investment criteria. Furthermore, Terra data should manage the costs incurred in the new project’s initiation that would also involve control over the nodes being considered as the reference for extensive database system (Enterprise Data Warehouse).

With all these certain conditions, it is determined that the best possible scenario for the company is to make sure that it would meet the expected return on investment of 14% as proposed by Davis himself. If the return would exceed the expected one than this scenario would be considered as best for the company. If return would be less than the expected one, the situation would identify as worst for the enterprise. So, such benchmarks should be assessed by G S T to increase the chances of accepting the particular offer at the time of investment into the new technology.

Return on investment

Under the possible scenarios, Terra data should consider several levels of outcomes that would involve changes in the operational activities like various numbers of staff and other non-personnel support to judge the impact of cost over the entire project. The best case would involve highly technical staff with the numbers less than the expected one. The reason would be to minimize the costs to increase the return on investment. The other scenario would involve an increase in the technical staff to manage the projects.

Terra Data Incorporation Recommendation Plan Harvard Case Solution & Analysis


The reason for an increase would be the staff not able to administer the new initiatives and thus require other employees to support the project. Under that way, the annual costs would increase and reduce the overall return on the related investment. So, according to the analysis, it is determined that Davis proposed a return on investment rate of 14%. However, the results of best scenario indicate that the company could produce 19% of ROI as compared to the expected one. Whereas, the worst case means losses due to the high cost of operational activities that would not cover the planned outcome that a project wants. Therefore, it is concluded that the expected case is also suitable to achieve the company’s overall objective...........

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