Transcript Feasibility Analysis OH's, Whitten Ch. 9

Feasibility
Analysis
Martha Grabowski
LeMoyne College
Feasibility
• Measure of how beneficial or practical the
development of an information system
will be to an organization.
• Feasibility Analysis
 Process by which feasibility is measured
Continuing process of feasibility
assessment
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Tests of Feasibility
• Operational Feasibility
• Technical Feasibility
• Schedule Feasibility
• Economic Feasibility
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Tests of Feasibility
• Operational Feasibility
 How well will the solution work in the
organization?
• Technical Feasibility
 How practical is the technical solution?
How available are technical resources and
expertise?
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Tests of Feasibility
• Schedule Feasibility
 How reasonable is the project timetable?
• Economic Feasibility
 How cost-effective is the project or
solution?
Cost-benefit analysis
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Operational Feasibility
• Questions to Ask
 Is the problem worth solving?
Will the solution to the problem work?
How do end users and management feel
about the solution?
Has a usability analysis been conducted?
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Technical Feasibility
• Questions to Ask
Is the proposed solution practical?
Do we possess the necessary technology?
Do we possess the necessary technical
expertise?
Is the schedule reasonable?
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Economic Feasibility
• Cost-benefit analyses
How much will the system cost?
Development costs
Operation costs
Maintenance and support costs
Do we possess the necessary technology?
Do we possess the necessary technical
expertise?
Is the schedule reasonable?
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Cost Analysis
Project Budget Template
Author's Name
Organization Name, Date
Assumptions
Personnel/Infrastructure assumptions
Infrastructure assumptions
--Initial network and remote access upgrades covered in ZYX project
Programmatic assumptions
--Budget currently contains expenses only
--Revenues to be estimated upon completion of market survey
Worksheet and expense assumptions
--Average manager salary (2002$$)
--Annual expense increase
--Benefits and indirect costs changes per year
--Benefits (as a percentage of wages)
Expenses
$75,000
3%
0%
32%
Year 1
Year 2
Year 3
Year 4
Year 5
Personnel
Benefits (at 32%)
Hardware
Software
Computer Usage Costs
Training Costs
Library Resources
Program Maintenance and Upgrade Costs
Travel Costs
Administrative Costs
Administration
Postage, Fedex
Communications
Publication costs
Total Administrative Costs
Total Direct Cost
Indirect Costs (at 54.5%)
Yearly Project Costs
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Benefit Analysis
•Benefit analyses
Tangible benefits can be easily quantified.
Measured in terms of monthly or annual
savings, or of profit to organization
Intangible benefits more difficult to
quantify.
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Benefit Analysis
Tangible Benefits
• Fewer processing errors
• Increased throughput
• Decreased response time
• Elimination of job steps
• Increased sales
• Reduced credit losses
• Reduced expenses
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Intangible Benefits
• Improved customer goodwill
• Improved employee morale
• Better service to community
• Better decision-making
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Economic Feasibility
• Payback analysis
How long will it take to recoup the costs of
this project?
Return on investment (ROI) analysis
Net present value analysis
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Feasibility Analysis
• Compare candidate systems on basis of
several characteristics
Better analysts always consider multiple
solutions
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Candidate Systems Matrix
Candidate Systems Matrix
Characteristics
Portion of System Computerized
Brief description of portion of
system that would be computerized
in this candidate.
Solution can be
implemented
quickly.
Servers and Workstations
Description of the servers and
workstations needed to support this
candidate.
PIV, MS Windows
2000 class servers
and workstations
Application Software
Description of software to be built,
purchased, accessed or some
combination of the above.
Method of Data Processing
On-line, batch, deferred batch, real-time
Output Devices and Implications
Output devices that would be used (e.g.,
network, preprinted forms, etc.) as well
as output considerations (timing constraints)
Input Devices and Implications
Description of input methods to be used
(e.g., keyboard, mouse, etc.), special
input requirements (new or revised forms),
input considerations (timing of actual inputs)
Storage Devices and Implications
Description of what data would be stored,
what data would be accessed from existing
stores, what storage media would be used,
how much storage capacity needed, how
that data would be organized.
Candidate 2 Candidate 3
COTS package
Platinum Plus
from Entertainment
Solutions, Inc.
Benefits
Brief description of business benefits
that would be realized for this
candidate
Software Tools Needed
Software tools needed to design and
build the candidate solution (e.g.,
DBMS, operating systems,
languages)
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Candidate 1
10.13.01
MS Visual C++
MS Access for
customization
of package for
report writing.
Package solution
Client-server
HP4MV dept
laser printers
keyboard & mouse
MS SQL DBMS
with 100G arrayed
capability
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Feasibility Analysis Matrix
Feasibility Analysis
Feasibility Criteria
Weight
Operational Feasibility
Functionality: To what degree does the
candidate solution benefit the organization?
Political: How well will the solution be
received by users? Management?
30%
Technical Feasibility
Technology: Assessment of maturity,
availability, ability to acquire, and
desirability of computer technology needed
to support the candidate.
Expertise: Assessment of the technical
expertise needed to develop, operate,
and maintain the candidate system
30%
Economic Feasibility
Cost to Develop
Payback period (discounted)
Net Present Value
Detailed Calculations
30%
Candidate 1
Candidate 3
Same as
Candidate
#2
Score: 100
Current release of
Current technical
Platinum Plus is
staff only has
1.0; only on market Powerbuilder
6 weeks
experience.
Staff thinks Access
app is simple.
Score: 50
Score: 95
Score: 60
$350,000
$418,040
$400,000
4.5 years
3.5 years
3.3 years
$210,000
$306,748
$325,500
See attachment A See Attachment A See Attachment A
Score: 85
Score: 90
10%
Less than 3 months
Score: 95
Ranking
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Candidate 2
Only supports
Fully supports
Members Services
required
requirements and
functionality
current business
processes would
have to be modified
Score: 60
Score: 100
Score: 60
Schedule Feasibility
Assessment of how long the solution will
take to design and implement.
10.13.01
9-12 months
Score: 80
Whitten,
Bentley & Dittman
2001,
60.5
92
Chapter 9
9 months
Score: 85
83.5
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