the Accounting Information System

The following paper examines the Return on Investment of San Francisco International Airport, which has faced difficulties due to a rise in the number of passengers using the airport as well as heavy competition from low-cost carriers such as South Airlines and Virgin America. Terminal 2 will be renovated and reopened as part of the expansion. Kim Dickie, the Assistant Deputy Director of Aviation Management, saw a chance to improve airport security. The first section of the paper provides context for the case scenario, while the second section examines the project that Dickie would explain. The third section highlights the assumptions made in the ROI analysis. Finally, there is a result and recommendation which suggest that the company should consider investing in the project since it is viable.

 

Contents
Executive Summary 2
Background 4
Airport Security 5
Results 7
Recommendation 7
References 8

 
Background
Kim Dickie is the Assistant Deputy Director of the Aviation Security of the San Francisco International Airport (SFO) and she met with her team January 22, 2008 to discuss the challenge that was facing SFO. Competition from rival airlines such as Southwest, Virgin America as well as JetBlue Airways had forced John martin the SFO’s Airport Director to reopen Terminal 2 which had been shattered around 8 years ago, after SFO opened an international. Before reopening the of Terminal 2 will require renovations that would cost SFO $383 million and it would enable SFO to cope with the increasing number of passengers as well as compete with the low-cost carriers. The project will involve installation of both heating and ventilation, an architectural design that is energy efficient and construction of four new gates. However, Dickie was more concerned with the security infrastructure that was necessary to the project. Besides, Henry Thompson the Associate Deputy Airport Director of Security and Safety who also happens to be Dickies boss, had an ultimatum to overhaul the security infrastructure of SFO thus tightening any loopholes that involve the passengers and employee security, physical identity, badge credentials, as well as airside operations. SFO sought to invest in technology automation of the Airports as well as intelligence to create a modern or a next generation model airport.
For Dickie, the reopening of terminal 2 was an opportunity to commence with an essential transition that in the long run would lead to an airport-wide credentialing as well as physical identity, and access management system that would allow SFO to meet the ever-increasing needs of the risks associated with an airport. That way, the company would be in compliance with the laid down regulations by the Transportation Security Administration. After months of handwork, Dickie and her team came up with a Quantum securer’s SAFE for the Aviation software suite as a new credentialing for Terminal 2. Although any upgrade of the infrastructures in SFO required by the renovation provided initial support and momentum for all the executives in the SFO, it was important for Dickie to justify the credentialing system that would address the security risks of the airport while complying with the regulations with the Transportation Security Administration.
Airport Security
SFO faces several challenges as far as security was concerned. Foremost, was the fact that more100,000 passengers used the facility every day in which they were ticketing, check-in-lines, security screens, gates as well as the baggage claim. On the other hand, there were thousands of tenants, vendors, airplane personnel, as well as third party contractors who needed authentication or verification before entering the facility. Besides, their physical access needs to be thoroughly controlled and managed systematically because of their roles in ensuring the security of the airport. The airport needed to execute a mission process that will include the following:
a) Performing background checks for new users as well as obtaining security clearance from the respective responsible such as the Transportation Security Authority
b) Use the messaging integration of the American Associations of the Airport Executive to communicate transportation security clearing house.
c) Physical identity proofing, enrolling and issuing badges including the management as well as the storage of storage documents
d) Create a flexible self-access rights so that the authorized personnel can go ahead and enroll their employees and subcontractors
e) Integrate with a wide range of physical access control systems, human resource and information technology system as well as biometric employees’ databases that will allow generation of a common work flow and consistency across all systems in the airport
f) Performance of regular audits of identity to ensure that the right people have access to the facility.
g) Issuance and tracking of infractions to identify and verify any violations.
Assumptions in ROI Analysis
The discounting rate was set at 10% while the purchase cost increased by $10,000 every year from $100,000 in year 0 of implementation of the project. the current time cost in labor hours was identified as 10 and the new one would be 12 allowing the company to save 2 hours after the implementation of the project. the hourly cost of labor is $8 meaning that the company will be saving $16 per use. The Toronto ID processing reduce by 6% and the existing cost for badge processing is $15 saving the company $0.9 per a badge processed. Users creased by 50 every year. There will be a reduction on labor time used in identification management of 5% thus saving the company $1.5 per user. Annual hour spent by one user of identity management. The cost of new badges will be $10 and the number of new badges avoided after implementation of SAFE products increased by 50 every year. hours spent in each moth on error detection is 10 and an hourly rate of $cost of labor. Cost of compliance variation was identified at $13 and the likelihood of a compliance violation was set at 1%. The savings from avoiding rip and replace implementation of the project increased by 500 every year.
Results
The NPV of the project is positive meaning that the project is a viable one and SFO should go ahead and invest in the project. the company will make considerable savings on monthly labor hours as well as savings on every badge processed. The project is viable since it has a positive NPV.
Recommendation
SFO should go ahead and implement the project. the project will allow the company to enhance security in the airport and transform it into a next generation model of an airport. It ensures integration of business operations and information system thus improve the efficiency of the Airport. Therefore, SFO should implement the project.
 
References
Damodaran, A. (2016). Damodaran on valuation: security analysis for investment and corporate finance (Vol. 324). John Wiley & Sons.
Diatmika, I. W. B., Irianto, G., & Baridwan, Z. (2016). Determinants of Behavior Intention Of Accounting Information Systems Based Information Technology Acceptance. Imperial Journal of Interdisciplinary Research, 2(8).