Chapter 4 : Feasibility Study Flashcards
Why is feasibility study important?
- To determine whether a project has a reasonable chance of success
When are all project feasible?
- No tight budgetary
- No time constraints
List out the steps of prelimnary investigation overview
- Understand the problem and opportinity
- Define the project aim, objectives and scopes
- Perform fact-finding ( interview, questionnaire/ survey, observation, document review or research )
- Perform Feasibility Study ( Technical Economic, Schedule, Operational )
- Present the recommendation to the management
List out the question will be asked in operational feasibility?
- Will it be easy to learn and use
List out the question will be asked in economic feasibility?
- Will benefits exceed costs
List out the question will be asked in technical feasibility?
- Do we have the tech resources
List out the question will be asked in schedule feasibility?
- Can we do it in time
What is the process for technical feasibility?
- Process of determining whether the organization has the technology resources to develop or purchase, install, and operate the system
- Examples
1. Is the proposed technology or solution practical?
2. Do we currently possess the necessary technology?
3. Do we possess the necessary technical expertise, and is the schedule reasonable?
4. If the technology is not available, can it be acquired?
What is the process for operational feasibility?
- The process of assessing the degree to which a proposed system solves business problems or takes advantage of business opportunities
What does operational feasibility refers to?
- Refers to a system that users will accepts and use effectively to support business objectives
What framework can help identify operational problems to be solved and their urgency?
- PIECES
What does PIECES stand for?
- Performance
- Information
- Economy
- Control
- Efficiency
What will be asked in Performance of the PIECES framework?
- Does the current mode of operation provide adequate throughput and response time?
- Is the new system going to be more efficient and high output?
What will be asked in Information of the PIECES framework?
- Does the current mode provide end users and managers with timely, pertinent, accurate
and usefully formatted information?
What will be asked in Economy of the PIECES framework? ( 3 )
- Does the current mode of operation provide cost-effective information services to the business?
- Could there be a reduction in costs and / or an increase in benefits?
- Does the proposed system save more cost than older system?
What will be asked in Control of the PIECES framework? ( 2 )
- Does current mode of operation offer effective controls to protect against fraud?
- Does current mode of operation guarantee accuracy and security of data and information?
What will be asked in Efficiency of the PIECES framework? ( 3 )
- Does the current mode of operation make maximum use of available resources, including
people, time, flow of forms? - Do you need to hire / let-go people for the new system?
- Do we have enough time to print daily report like before?
What will be asked in Services of the PIECES framework? ( 2 )
- Does the current mode of operation provide reliable service?
- Is it flexible and expandable?
What is the process of Schedule Feasibility?
- The process of assessing the degree to which the potential time frame and completion datas for all major activities within a project meet organizational deadlines and constraints for affecting change
- Questions
1. How much time is given for the project by customer?
2. How much time do you need to deliver the system?
3. If time insufficient, can we negotiate more from customer?
List out 1 of the popular method for Time Estimation
- Gantt Chart
What does Economic Feasibility concludes?
- To concludes if the project can be done within the given budget and to determine the cost and benefit ( including profit ) from the project
List out 2 tests for Economic Feasibility
- Is the anticipated value of the benefits greater than projected costs of development? (cost / benefit analysis)
- Does the organization have adequate cash flow to fund the project during the development period?
What is the process of cost-benefit analysis?
- The process of identifying the financial benefits and costs associated with a development project
When is cost-benefit performed?
- Conducting a preliminary investigation
- Evaluating a project
- Making recommendations to management
What is Tangible Costs?
- Costs for which I can assign a specific dollar value
What is the example of Tangible Costs? ( 3 )
- Employee Salaries
- Hardware and Software Purchases
- Office Supplies
What is Intangible Costs?
- Costs whose dollat value vannot be calculated easily
What is the example of Intangible Costs ( 3 )
- Customer Dissatisfaction
- Lowered Employee Morale
- Reduced Information Availability
What is Direct Costs?
- Costs that can be associated with the development of a specific system
What is the example of Direct Costs? ( 2 )
- Salaries of project team members
- Purchase of Hardware
What is Indirect Costs
- Overhead expenses / costs that cannot be attributed to the development of a specific system
List out example for indirect costs ( 3 )
- Salaries of network administrators
- Copy machine rentals
- Insurance Expenses
What is Fixed Costs?
- Costs that are relatively constant and do not depend on a level of activity or effort
List out the example for Fixed Costs
- Salaries
- Hardware Rentals
What is Variable Costs?
- Costs that vary depending on the level of activity
List out example for Variable costs ( 3 )
- Printer Paper
- Supplies
- Telephone Line Charges
What is Developmental Costs?
- Costs that are incurred only once at the time the system is developed or acquired
List out developmental costs ( 5 )
- Salaries of people involved in system
- Development
- Software purchases
- Initial user training
- Purchase of necessary hardware or furniture
What is Operational Costs?
- Costs that are incurred after the system is implemented and continue while system is in use
List out example for Operational Costs ( 4 )
- System Maintenance
- Ongoing Training
- Annual Software License Free
- Communications Expenses
List out some examples for some costs apply to more than one category of expenses ( 2 )
- Overtime pay for clerical staff during the systems analysis phase would be
classified as developmental, variable, and direct - A monthly fee for maintaining the company’s Web site would be regarded as
operational, fixed, and indirect
Which costs are usually easier to identify and predict ( Direct / Indirect Costs ) ?
- Direct Costs
What is the benefits of Positive Benefits? ( 4 )
- Increased Revenues
- Improved Services
- Higher Morale
- Better Management
- Benefits that are a direct result of the new information system
What is the benefits of Cost-Avoidance Benefits?
- Handling Work with current staff instead of hiring
- Not having to replace hardware and software
- Expenses that would be necessary if the new system is not installed
