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Systems Analysis – ITEC 3155 Feasibility Analysis

Systems Analysis – ITEC 3155 Feasibility Analysis. 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.

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Systems Analysis – ITEC 3155 Feasibility Analysis

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  1. Systems Analysis – ITEC 3155Feasibility Analysis

  2. 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 Systems Analysis and Design in a Changing World, 4th Edition

  3. Confirming Project Feasibility • Risk management • Economic feasibility • Cost/benefit analysis • Sources of funds (cash flow, long-term capital) • Organizational and cultural feasibility • Technological feasibility • Schedule feasibility • Resource feasibility Systems Analysis and Design in a Changing World, 4th Edition

  4. Risk Management Systems Analysis and Design in a Changing World, 4th Edition

  5. 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 Systems Analysis and Design in a Changing World, 4th Edition

  6. Supporting Detail for Salaries and Wages for RMO (Figure 3-16) Systems Analysis and Design in a Changing World, 4th Edition

  7. Summary of Development Costs for RMO (Figure 3-17) Systems Analysis and Design in a Changing World, 4th Edition

  8. Summary of Annual Operating Costsfor RMO (Figure 3-18) Systems Analysis and Design in a Changing World, 4th Edition

  9. Sample Benefits for RMO (Figure 3-19) Systems Analysis and Design in a Changing World, 4th Edition

  10. RMO Cost Benefit Analysis (Figure 3-20) Systems Analysis and Design in a Changing World, 4th Edition

  11. 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 Systems Analysis and Design in a Changing World, 4th Edition

  12. 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 Systems Analysis and Design in a Changing World, 4th Edition

  13. 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 Systems Analysis and Design in a Changing World, 4th Edition

  14. Schedule Feasibility • Estimates needed without complete information • Management deadlines may not be realistic • Project 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 Systems Analysis and Design in a Changing World, 4th Edition

  15. Resource Feasibility • Team member availability • Team skill levels • Computers, equipment, and supplies • Support staff time and availability • Physical facilities Systems Analysis and Design in a Changing World, 4th Edition

  16. Summary • Feasibility analysis • aims to determine whether an organization should proceed with a project; identify important risks. • Feasibility has many facets • technical, economic, organizational/cultural, schedule, resource. Systems Analysis and Design in a Changing World, 4th Edition

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