CHAPTER 5: Flashcards
feasibility study
Operational Feasibility
The process of assessing the degree to which a proposed system solves business problems or takes advantage of business opportunities.
Why is a feasibility study important?
to determine whether a project has a reasonable chance of success.
Technical Feasibility
Process of determining whether the organization has the technology resources to develop, purchase, install, and operate the system.
PIECES framework
Performance
Information
Economy
Control
Efficiency
Services
performance question
Does the current mode of operation provide adequate throughput and response time?
Is the new system going to be more efficient and high output?
Information question
Does the current mode provide end users and managers with timely, pertinent, accurate and usefully formatted information?
Economy question
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 then older system?
Control question
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?
Efficiency question
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?
Services question
Does the current mode of operation provide reliable service?
Is it flexible and expandable?
Schedule Feasibility
The process of assessing the degree to which the potential time frame and completion dates for all major activities within a project meet organizational deadlines and constraints for affecting change. there are many way to do this but the popular way is the Gantt chart
Schedule question
How much time is given for the project by customer?
How much time do you need to deliver the system?
If time insufficient, can we negotiate more from customer?
Economic feasibility
To concludes if the project can be done within the given budget and to determine the cost and benefit (including profit) from the project.
Economic question
Consists of 2 tests :
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?
Cost-Benefit Analysis
Process of identifying the financial benefits and costs associated with a development project
Is performed when:
Conducting a preliminary investigation.
Evaluating a project.
Making recommendations to management.
Cost-Benefit Analysis
Process of identifying the financial benefits and costs associated with a development project
Is performed when:
Conducting a preliminary investigation.
Evaluating a project.
Making recommendations to management.
Cost Classifications
Tangible / Intangible costs
tangible costs :
costs for which you can assign a specific dollar value
Example :
employee salaries
hardware and software purchases
office supplies
intangible costs :
costs whose dollar value cannot be calculated easily
Example :
customer dissatisfaction
lowered employee morale
reduced information availability
Cost Classifications Direct / Indirect costs
Direct costs
costs that can be associated with the development of a specific system
Example :
salaries of project team members
purchase of hardware
Indirect costs
overhead expenses / costs that cannot be attributed to the development of a specific system
Example :
salaries of network administrators
copy machine rentals
insurance expenses
Fixed / Variable costs
Fixed costs
costs that are relatively constant and do not depend on a level of activity or effort
Example :
salaries
hardware rentals
Variable costs
costs that vary depending on the level of activity
Example :
printer paper
supplies
telephone line charges
Developmental / Operational costs
Developmental costs
costs that are incurred only once at the time the system is developed or acquired
Example :
salaries of people involved in system
development
software purchases
initial user training
purchase of necessary hardware or furniture
Operational costs
costs that are incurred after the system is implemented and continue while system is in use
Example :
system maintenance
ongoing training
annual software license fee
communications expenses
Some costs apply to more than one category of expenses
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
Direct costs usually are easier to identify and predict than indirect costs
Positive / Cost-avoidance benefits
Positive benefits
Benefits that are a direct result of the new information system.
Example :
Increased revenues
Improved services
Higher morale
Better management
Cost avoidance benefits
Expenses that would be necessary if the new system is not installed.
Example :
Handling work with current staff instead of hiring
Not having to replace hardware and software
