Capital budgeting process – TJX

Assignment Details:

The intent of this assignment is for you to write the capital budgeting process works in the Retail Company: The TJX Companies INC. Your view of this process will vary significantly depending on the type function (IT Security Team) you have within the organization.   By gaining a better understanding of the overall process, you will be able to participate in the process more effectively. 

What I am looking for is not simply a description of the process.  Rather, the memo should contain a critical assessment of how capital investments are made in your organization (both the good and the bad) and potential improvements you may suggest

This assignment would involve you talking to others in your organization and tracking a capital project from its conception through to approval.  One way to complete this assignment is to take an example project (live or historical example) and for you to follow it through to the ultimate investment decision.  You should, of course, disguise any sensitive information.

The deliverable is a memo of no longer than 5 pages with single space.

Instructions to the writer:

I would request you to write the capital budgeting process based on below information, on top of this please build the process and your suggestions (Use of NPV/Payback period) at the end.

Capital investments process at my organization

I am an IT security manager in the Retail Company: The TJX Companies, Inc. Currently, I am implementing the ServiceNow vulnerability response (SVR) project. 

  • Identify the right tool to address the problem: Need for automation/orchestration tool to manage vulnerabilities in IT environment. (Among few vendors Jira/ServiceNow/etc., we have picked ServiceNow Vendor)
  • Cost of the project:

The cost of a 1-year license for SVR application is $250,000 , and the cost of a 3-month implementation is $180,000 (we have reviewed two implementation partners, quoting 180,000 and 250,000 respectively). 

  • Selection of implementation partner:

We have selected the implementation partner based on quoted price, previous experiences and also value they have added in some of our previous projects implemented in my organization.

  • We have calculated ROI based on ALE (Annual Expected Loss) and ServiceNow vulnerability response control costs, thus completing this project. Please find the ROI methodology explained at website: https://www.csoonline.com/article/3010007/how-to-calculate-roi-and-justify-your-cybersecurity-budget.html 

Please explain this methodology as part of your ROI calculation, provide enough justification for reasons to pick up this project. 

  • Finance budgeting team review ROI and make decision for IT-security related projects.
  • In last page of the memo, I would request you to provide pros/Cons of ROI approach and use of taking NPV (Net present value), payback period approach and supported calculations to prove your analysis.

Other instructions: 

  • In my company, IT security projects are selected based on ROI and a 12-month payback period. We don’t implement projects in multiyear investment (If required we slit projects in to smaller chunks and pick what we can complete in that financial year), 
  • We target to implement them in less than 12 months in an agile approach. Some of our regulatory requirements (PCI DSS) will also lead to the project selection (Compulsory requirements – TJX IT-GRC compliance team does this work).

Potential improvements you may suggest

In the end of the Memo, last page pages. I would request you to add any best practices/ potential improvements to the above mentioned process. Example: NPV and Payback period. Rather than choosing ROI, can you suggest using NPV and also calculations and accuracy of decision choosing NPV/IRR and payback period.

Notes to the writer:

I have provided two sample project written by other students: document name: project1 and Project2 pdf documents, these details may help you to complete this assignment.

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