Transcript Chapter 3
Systems Analysis – ITEC 3155
Feasibility Analysis
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What is Feasibility Analysis?
Feasibility
A measure of how beneficial or practical the development of
an information systems will be to an organization.
Feasibility Analysis
The process by which feasibility is measured.
The goal of feasibility analysis:
To enable the organization to determine whether or no to
proceed with a project
To identify any important risks associated with the project
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Confirming Project Feasibility
Risk
management
Economic
feasibility
Cost/benefit analysis
Sources of funds (cash flow, long-term capital)
Organizational
Technological
and cultural feasibility
feasibility
Schedule
feasibility
Resource
feasibility
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Risk Management
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Economic Feasibility
An
economic feasibility analysis (or cost-benefit
analysis) should be performed to identify the
financial risk associated with the project
Estimate project development costs
Estimate operational costs after project
Estimate financial benefits based on annual
savings and increased revenues
Calculate using table of costs and benefits
Uses
net present value (NPV), payback period,
return on investment (ROI) techniques
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Supporting Detail for Salaries
and Wages for RMO (Figure 3-16)
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Summary of Development Costs for RMO
(Figure 3-17)
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Summary of Annual Operating Costs
for RMO (Figure 3-18)
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Sample Benefits for RMO (Figure 3-19)
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RMO Cost Benefit Analysis (Figure 3-20)
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Intangibles in Economic Feasibility
Intangible
benefits cannot be measured in dollars
Increased levels of service
Customer satisfaction
Survival
Need to develop in-house expertise
Intangible
costs cannot be measured in dollars
Reduced employee morale
Lost productivity
Lost customers or sales
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Organizational and Cultural Feasibility
Each
company has own culture
New system must fit into culture
Evaluate
related issues for potential risks
Low level of computer competency
Computer phobia
Perceived loss of control
Shift in power
Fear of job change or employment loss
Reversal of established work procedures
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Technological Feasibility
The goal
to assess the extent to which the system can be
successfully designed, developed and installed
Does system stretch state-of-the-art technology?
Does in-house expertise presently exist for development?
Does an outside vendor need to be involved?
Solutions include
Training or hiring more experienced employees
Hiring consultants
Changing scope and project approach
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Schedule Feasibility
Estimates
needed without complete information
Management
Project
deadlines may not be realistic
managers
Drive realistic assumptions and estimates
Recommend completion date flexibility
Assign interim milestones to periodically reassess
completion dates
Involve experienced personnel
Manage proper allocation of resources
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Resource Feasibility
Team
member availability
Team
skill levels
Computers,
equipment, and supplies
Support
staff time and availability
Physical
facilities
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Summary
Feasibility
aims to determine whether an organization should
proceed with a project; identify important risks.
Feasibility
analysis
has many facets
technical, economic, organizational/cultural,
schedule, resource.
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