3Systems Analysis – ITEC 3155Feasibility Analysis
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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
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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
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Risk Management
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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
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Supporting Detail for Salaries and Wages for RMO (Figure 3-16)
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Summary of Development Costs for RMO (Figure 3-17)
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Summary of Annual Operating Costsfor RMO (Figure 3-18)
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Sample Benefits for RMO (Figure 3-19)
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RMO Cost Benefit Analysis (Figure 3-20)
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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
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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
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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
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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
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Resource Feasibility
Team member availability
Team skill levels
Computers, equipment, and supplies
Support staff time and availability
Physical facilities
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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.
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