C H A P T E R

1. This repository of slides is intended to support the named chapter. The slide repository should be used as follows: Copy the file to a unique name for your course and unit. Edit the file by deleting those slides you don�t want to cover, editing other slides as appropriate to your course, and adding slides as desired. Print the slides to produce transparency masters or print directly to film or present the slides using a computer image projector. Each slide includes instructor notes. To view those notes in PowerPoint, click left on the View Menu; then click left on Notes View sub-menu. You may need to scroll down to see the instructor notes. The instructor notes are also available in hard copy as the Instructor Guide to Accompany Systems Analysis and Design Methods, 5/ed.This repository of slides is intended to support the named chapter. The slide repository should be used as follows: Copy the file to a unique name for your course and unit. Edit the file by deleting those slides you don�t want to cover, editing other slides as appropriate to your course, and adding slides as desired. Print the slides to produce transparency masters or print directly to film or present the slides using a computer image projector. Each slide includes instructor notes. To view those notes in PowerPoint, click left on the View Menu; then click left on Notes View sub-menu. You may need to scroll down to see the instructor notes. The instructor notes are also available in hard copy as the Instructor Guide to Accompany Systems Analysis and Design Methods, 5/ed.

2. Feasibility Analysis and the System Proposal Identify feasibility checkpoints in the systems life cycle. Identify alternative system solutions. Define and describe four types of feasibility and their respective criteria. Perform various cost-benefit analyses using time-adjusted costs and benefits. Write suitable system proposal reports for different audiences. Plan for a formal presentation to system owners and users. No additional notes.No additional notes.

3. Chapter Map No additional notes.No additional notes.

4. Feasibility

5. Feasibility Analysis Feasibility is the measure of how beneficial or practical the development of an information system will be to an organization. Feasibility analysis is the process by which feasibility is measured. Creeping Commitment approach to feasibility proposes that feasibility should be measured throughout the life cycle. Sunk Cost � not considered when making cost/benefit feasibility No additional notes. No additional notes.

6. Feasibility Checkpoints No additional notes. No additional notes.

7. Checkpoints Scope Definition Measure of urgency First cut at development costs Rarely well defined Problem Analysis Determine benefit Minimally cost of the problem More refinement of development costs Still a SWAG Good measurable objectives Decision Analysis Requirements I/O methodology Data storage techniques Computer Hardware Software

8. Alternatives Do Nothing A baseline against which to measure other alternatives Reengineer the manual processes (BPR) Enhance the existing computer process Purchase OTS software Watch out for the NIH syndrome Design and Construct as new system

9. Five Tests For Feasibility Operational feasibility is a measure of how well the solution will work in the organization. It is also a measure of how people feel about the system/project. Technical feasibility is a measure of the practicality of a specific technical solution and the availability of technical resources and expertise. Schedule feasibility is a measure of how reasonable the project timetable is. Economic feasibility is a measure of the cost-effectiveness of a project or solution. Risk feasibility an evaluation of the probability of success Teaching Tips Emphasize that all candidates should be analyzed according to all of the above criteria. Students should understand that rarely will any one candidate solution be the most feasible candidate according to all criteria. Teaching Tips Emphasize that all candidates should be analyzed according to all of the above criteria. Students should understand that rarely will any one candidate solution be the most feasible candidate according to all criteria.

10. Operational feasibility Is the problem worth solving? PIECES Will the solution work? POLITICALLY based Based on organizational culture Measure of how well the solution will work in the organization Measure of how people feel about the system/project Does management support the effort? How receptive to change? How much change can be tolerated? Usability Ease of learning Ease of Use Satisfaction

11. Technical feasibility Is the proposed technology or solution practical? BLEADING edge Late adopter Is the necessary technology in house? Does it have the capacity? Can we obtain more? Are the necessary skills available?

12. Schedule feasibility How reasonable is the project timetable? Deadlines Mandatory Desirable Penalties Better to miss the deadline than to implement an inadequate / error prone solution

13. Cost-Benefit Analysis Techniques Costs: Development costs are one time costs that will not recur after the project has been completed. Operating costs are costs that tend to recur throughout the lifetime of the system. Such costs can be classified as: Fixed costs � occur at regular intervals but at relatively fixed rates. Variable costs � occur in proportion to some usage factor. Benefits: Tangible benefits are those that can be easily quantified. Intangible benefits are those benefits believed to be difficult or impossible to quantify. Teaching Tips Our experience suggests that students will need examples of each. The chapter includes several examples. Try providing the students with a list of items and ask them to classify them as a cost or benefit and to distinguish between the type of cost or benefit. While students tend to understand intangible benefits, they may have some difficulty in quantifying them. An exercise or two will help to reinforce the fact that intangible benefits can indeed be quantified.Teaching Tips Our experience suggests that students will need examples of each. The chapter includes several examples. Try providing the students with a list of items and ask them to classify them as a cost or benefit and to distinguish between the type of cost or benefit. While students tend to understand intangible benefits, they may have some difficulty in quantifying them. An exercise or two will help to reinforce the fact that intangible benefits can indeed be quantified.

14. Costs for a Proposed Systems No additional notes. No additional notes.

15. Four Popular Techniques to Assess Economic Feasibility Payback Analysis Return On Investment (ROI) Net Present Value (NPV) Internal Rate of Return (IRR) Teaching Tips While the textbook covers only the above popular techniques, it is important to stress that there may be others that organizations choose to use in assessing the economic feasibility of an investment. Stress the importance of determining the investment decision-making process or techniques used by the organization. It should also be pointed out that sometimes the techniques vary according to the individuals involved. Teaching Tips While the textbook covers only the above popular techniques, it is important to stress that there may be others that organizations choose to use in assessing the economic feasibility of an investment. Stress the importance of determining the investment decision-making process or techniques used by the organization. It should also be pointed out that sometimes the techniques vary according to the individuals involved.

16. Present Value Formula PVn = 1/(1 + i)n Where n is the number of years and i is the discount rate Present Value Interest Factor (PVIF) readily available from tables Discount rate � a percentage similar to interest rates that you earn on your savings. In most cases the discount rate for a business is the opportunity cost of being able to invest money in other projects or investments Teaching Tips While you may want your students to know this formula, be sure to emphasize that PV tables are available! Point out that the lifetime of an investment may be dictated by an organization and its investment decision makers. Point out that the interest rate is often dictated. Many companies choose to use the current prime rate.Teaching Tips While you may want your students to know this formula, be sure to emphasize that PV tables are available! Point out that the lifetime of an investment may be dictated by an organization and its investment decision makers. Point out that the interest rate is often dictated. Many companies choose to use the current prime rate.

17. Payback Analysis Payback analysis is a simple and popular method for determining if and when an investment will pay for itself. Payback period is the period of time that will lapse before accrued benefits overtake accrued and continuing costs. Biased against long lived projects No additional notes. No additional notes.

18. Return-on-Investment Analysis (ROI) Return-on-Investment compares the lifetime profitability of alternative solutions or projects. The ROI for a solution or project is a percentage rate that measures the relationship between the amount the business gets back from an investment and the amount invested. No additional notes. No additional notes.

19. ROI Formulas Lifetime ROI = (estimated lifetime benefits � estimated lifetime costs) / estimated lifetime costs Annual ROI = lifetime ROI / lifetime of the system No additional notes. No additional notes.

20. Net Present Value Analysis

21. Internal Rate of Return - IRR Sometimes called the Hurdle Rate The Discount Rate that results in a NPV = 0 Cannot be computed directly Iterative trial and error methodology Use software to perform iteration

23. Solutions Recognize others ideas and opinions Consult standards and methodologies Brainstorm Seek references Journals and professional publications

24. Candidate Systems Matrix Identifying Candidate Solutions Do Nothing Opinion of Others Brain Storming Standards References Research Candidate Systems Matrix documents similarities and differences between candidate systems; however, it offers no analysis. Stakeholders Knowledge Process Communications No additional notes. No additional notes.

25. Sample Candidate Systems Matrix No additional notes. No additional notes.

26. Sample Candidate Systems Matrix (continued) No additional notes. No additional notes.

27. Sample Candidate Systems Matrix (concluded) No additional notes. No additional notes.

28. Feasibility Analysis Matrix is intended to complement the candidate systems matrix with an analysis and ranking of the candidate systems.

29. Sample Feasibility Analysis Matrix No additional notes. No additional notes.

30. The System Proposal System proposal � a report or presentation of a recommended solution. Usually formal written report or oral presentation Intended for system owners and users No additional notes.No additional notes.

31. Length of Written Proposal Executive 1 � 2 pages Middle Managers 3 � 5 pages Supervisors < 10 pages Professional Staff < 50 pages 

32. Organization Primary elements The information report in intended to cover Introduction Conclusion Secondary elements Packaging for easy reading Identifying subjects etc Professionalism Factual format --- focuses on the facts Administrative format -- focuses on results

33. Formats for Written Reports No additional notes. No additional notes.

34. Secondary Elements for a Written report Letter of transmittal Title page Table of contents List of figures, illustrations, and tables Abstract or executive summary (The primary elements--the body of the report, in either the factual or administrative format--are presented in this portion of the report.) Appendices No additional notes. No additional notes.

35. The System Proposal Both include Introduction Methods and procedures Conclusion Letter of transmittal Executive summary / abstract Paragraphs � one single idea Avoid long complex sentences Active voice Watch out for jargon, big words, wordiness

36. System Proposal � formal presentations Formal presentations are special meetings used to sell new ideas and gain approval for new systems. They may also be used for any of these purposes: Sell new system Sell new ideas Head off criticism Address concerns Verify conclusions Clarify facts Report progress No additional notes. No additional notes.

37. The Formal Presentation Dress professionally Avoid using �I� Maintain eye contact Beware of your own mannerism Stop talking Ask questions Humor??? Use props Change voice level Do the unexpected Answer all questions � be honest  Practice, Practice, Practice Follow up

38. Typical Outline and Time Allocation for Presentation No additional notes. No additional notes.

39. Guidelines for visual aids No additional notes. No additional notes.