ITCC 47

INFORMATION MANAGEMENT
SYSTEM ANALYSIS
and DESIGN
topic objectives
confirming project feasibility
and producing project schedule
• Understand how projects are initiated and selected
• Define a business problem
• Identify the concepts and activities of project initialization
• Explain the project feasibility concepts and consideration for IS
development.
• Describe the Project Planning scheduling diagrams.
system analysis
system initialization
is this even necessary? am I doing it right?
when to start?
how start?
project initialization concerns
what to start?
where to start?
am I asking the necessary
questions?
TOPIC #3
SYSTEM ANALYSIS INITIALIZATION
& FEASIBILITY
System Development Initialization
Project Feasibility for Information System development
Feasibility for Information System development
Feasibility Analysis
Project Planning for designing an Information System
system analysis
system initialization

Information system development projects

are initiated for several reasons.
To respond to an To resolve a To conform to a
opportunity problem directive
system analysis
system initialization
PROJECT INITIALIZATION ACTIVITIES
1. Project initiation
2. Determining project feasibility
3. Activity planning and control
4. Project scheduling
system analysis
system initialization
PROJECT INITIALIZATION
Problems in the organization
Problems that lend themselves to systems solutions

Opportunities for improvement

Caused through upgrading, altering, or installing new
systems
system analysis
system initialization
system analysis
system initialization
PROBLEM DEFINITION
Problem statement
Paragraph or two stating the problem or opportunity

Issues
Independent pieces pertaining to the problem or opportunity

Objectives
Goals that match the issues point-by-point
system analysis
system initialization
PROBLEM DEFINITION

Requirements
The things that must be accomplished along with the possible
solutions

Constraints
The limitation of the system development
TOPIC #3
SYSTEM ANALYSIS INITIALIZATION
& FEASIBILITY
System Development Initialization
Project Feasibility for Information System development
Feasibility for Information System development
Feasibility Analysis
Project Planning for designing an Information System
system analysis
feasibility concern

According to Pressman, all projects are feasible given

unlimited resources and infinite time.
Unfortunately, most of the projects must be
developed within tight budgetary and time
constraints.
system analysis
feasibility

capable of being done, effected, or accomplished

- [Link]

capable of being done or carried out

- MERRIAM-WEBSTER
system analysis
feasibility
During project feasibility, the project manager
answers questions:
“Are the expected benefits reasonable?”
“Are the assumed costs realistic?”
system analysis
feasibility
A required activity for all information system projects
is to assess project feasibility. The objective of this
activity is to determine whether a development
project has a reasonable chance of success.

Feasibility analysis identifies all the risks of

failure
TOPIC #3
SYSTEM ANALYSIS INITIALIZATION
& FEASIBILITY
System Development Initialization
Project Feasibility for Information System development
Feasibility for Information System development
Feasibility Analysis
Project Planning for designing an Information System
system analysis
areas of feasibility
There are several areas of risk that a project team
considers for a new system when confirming
project feasibility
Economic Feasibility
Technical Feasibility
Operational Feasibility
Schedule Feasibility
Resource Feasibility
system analysis
economic feasibility
Economic feasibility is the process of identifying the
financial benefits and costs associated with a
development project.

Is the anticipated value of the benefits greater

than projected costs of development?
Does the organization have adequate cash flow to
fund the project during the development period?
system analysis
economic feasibility
A determination of the economic feasibility of the
project always requires a thorough cost-benefit
analysis.

COST-BENEFIT ANALYSIS
is the analysis to compare costs and benefits to see
whether investing in the development of a new
system will be beneficial.
system analysis
economic feasibility
3 STEP PROCESS for COST-BENEFIT ANALYSIS

Estimate the anticipated development and

operational costs.
DEVELOPMENT COSTS
are those that are incurred during the development of
the new system – hardware, software & development cost
OPERATIONAL COSTS
are those that will be incurred after the system is put
into production.
system analysis
economic feasibility
3 STEP PROCESS for COST-BENEFIT ANALYSIS

Estimate the anticipated financial benefits.

FINANCIAL BENEFITS
are the expected annual savings or increases in
revenue derived from the installation of the new system.
system analysis
economic feasibility
3 STEP PROCESS for COST-BENEFIT ANALYSIS

Cost-benefit analysis is calculated based on

the detailed estimates of costs and
benefits. Frequent error that most
inexperienced analysts make during cost-
benefit analysis. Try to do the calculations
before thoroughly defining costs and
benefits.
system analysis
economic feasibility
Tangible benefits refer to items that can be measured
or estimated quantitatively and that accrue to the
organization.
Examples of tangible benefits include reduced
personnel expenses, lower transaction costs, or
higher profit margins.
system analysis
economic feasibility

Intangible benefits may have direct organizational

benefits, such as the improvement of employee
morale, or they may have broader societal
implications, such as the reduction of waste creation
or resource consumption.
system analysis
techniques to assess economic feasibility
Net Present Value (NPV)
The two concepts behind NPV are that all benefits
and costs are calculated in terms of today’s present
value and that benefits and costs are combined to
give a net value.

The objective of NPV is to determine a specific value

based on a predetermined discount rate.
system analysis
techniques to assess economic feasibility
Payback Period
Also called the breakeven point, is the point in time
at which the increased cash flow (benefits) exactly
pays off the costs of development and operation.
system analysis
techniques to assess economic feasibility
Payback Period
system analysis
techniques to assess economic feasibility
Return On Investment (ROI)
This is a measure of the percentage gain from an
investment such as a new system. The objective of
the ROI is to calculate a percentage return (like an
interest rate) so that the costs and the benefits are
exactly equal over the specified time period.
system analysis
technical feasibility
The purpose of assessing technical feasibility is to
gain understanding of the organization’s ability to
construct the proposed system.
Technical feasibility should include an assessment of
the development group’s understanding of the
possible target hardware, software, and operating
environments to be used as well as system size,
complexity, and the group’s experience with similar
systems.
system analysis
operational feasibility
Operational feasibility is the process of assessing the
degree to which a proposed system solves business
problems or takes advantage of business
opportunities.

This is a measure of how well the solution will work in

the organization. Also, this is a measure of how
people feel about the system/project.
system analysis
operational feasibility
Operational feasibility is dependent on the human
resources available for the project and involves
projecting whether the system will operate and be
used once it is installed.
system analysis
schedule feasibility
The purpose of assessing schedule feasibility is for
systems analyst to gain understanding of the
likelihood that all potential time frames and
completion date schedules can be met and that
meeting these dates will be sufficient for dealing with
the needs of the organization.
Schedule feasibility is a measure of how
reasonable the project timetable is.
system analysis
resource feasibility
The project team must assess the availability of
resources for the project. The most important
resource consists of the members of the team.
In developing projects, it requires the involvement of
systems analysts, system technicians, and users. At
necessary times, some required people may not be
available to the team.
system analysis
resource feasibility
Another risk to consider in resource feasibility is that
the people who are assigned may not have the
essential skills for the project.
TOPIC #3
SYSTEM ANALYSIS INITIALIZATION
& FEASIBILITY
System Development Initialization
Project Feasibility for Information System development
Feasibility in Information System development
Feasibility Analysis
Project Planning for designing an Information System
system analysis
feasibility analysis
Feasibility analysis is the process by which feasibility
is measured. It is designed to determine whether or
not a project will be successful.
It is a determination as to the likelihood of success
and a description of how that determination was
achieved.
system analysis
areas of feasibility analysis
NEED ANALYSIS
This implies recognition of a need for the project. The
need may affect the organization itself, another
organization, the public, or the government. A
preliminary study is then conducted to confirm and
evaluate the need.
A proposal of how the need may be satisfied is
then made.
system analysis
areas of feasibility analysis
PROCESS WORK
This is the preliminary analysis done to determine
what will be required to satisfy the need. The work
may be done by a consultant who is an expert in the
project field. The preliminary study often involves
system models or prototypes.
A simulation of the proposed system can be
carried out to predict the outcome before the
actual project starts.
system analysis
areas of feasibility analysis
ENGINEERING AND DESIGN
These involve a detailed technical study of the
proposed project. Written quotations are obtained
from suppliers and subcontractors as needed.
Technology capabilities are evaluated as needed. If
necessary, product design should be done at this
time.
system analysis
areas of feasibility analysis
COST ESTIMATE
This involves estimating project cost to an
acceptable level of accuracy. Both initial and
operating costs are included in the cost estimation.
system analysis
areas of feasibility analysis
FINANCIAL ANALYSIS
This involves an analysis of the cash flow profile of
the project. This should consider rates of return,
inflation, sources of capital, payback periods, and
residual values.
Moreover, this analysis determines whether or not
and when funds will be available to the project.
system analysis
areas of feasibility analysis
PROJECT IMPACTS
This provides an assessment on how much impact
the proposed project has. Some of the factors that
will determine how a project is perceived by the
public include environmental, social, cultural,
political, and economic impacts.
Also, the value added potential of the project should
be assessed.
system analysis
areas of feasibility analysis
CONCLUSIONS AND RECOMMENDATIONS
The feasibility study should end with the overall
outcome of the project analysis.
This may indicate an endorsement or disapproval of
the project.
A recommendation on what should be done is
included in the feasibility report.
TOPIC #3
SYSTEM ANALYSIS FEASIBILITY
& SCHEDULING
System Development Initialization
Project Feasibility for Information System development
Feasibility for Information System development
Feasibility Analysis
Project Planning for designing an Information System
system analysis
project development planning

Project scheduling determines the order in which

activities will be performed, setting start and end
times for each activity, and assigning specific tasks to
team members.
The activity of developing project schedule is one of
the most difficult efforts of the project planning
phase, yet it is one of the most important.
system analysis
tools in project development planning

Work Breakdown Structure

Gantt Charts
system analysis
tools in project development planning

work breakdown structure

A work breakdown structure (WBS) is a hierarchy of
phases, activities, and individual tasks that are
required to complete the project.
system analysis
tools in project development planning
work breakdown structure using block diagram

PROJECT

TASK 1 TASK 2 TASK 3

SUBTASK 1 SUBTASK 2

Work 1 Work 2
system analysis
tools in project development planning

work breakdown
structure using
outline form
system analysis
tools in project development planning

GANTT CHART
Developed in 1917 by Henry Gantt, a Gantt chart is a
bar chart that represents the tasks and activities of
the project schedule.
This chart is good for monitoring the progress of the
project as it moves along.
system analysis
tools in project development planning
GANTT CHART

The major advantage of the Gantt chart is its simplicity. The

systems analyst will not only find this technique easy to use,
but also it lends itself to worth-while communication with
end users.
Another advantage of Gantt chart is that the bars
representing activities or tasks are drawn to scale—that is,
the size of the bar indicates the relative length of time it will
take to complete each task.
system analysis
tools in project development planning

GANTT
CHART
system analysis
tools in project development planning

GANTT
CHART
system analysis
project initialization
DELIVERABLES

Feasibility Analysis Documentation

Gantt Chart for System Development
system analysis
references
• Kendall, Kenneth E. and Kendall, Julie E., (2010), Systems analysis and design
(8th ed.), Pearson Education, Inc.
• Satzinger, John W., Jackson, Robert B., Burd, Stephen D., (2004), Systems
analysis and design in a changing world (3rd ed.), Course Technology
• Hoffer, Jeffrey A., George, Joey F., Joseph S., (2005), Modern systems analysis
and design (3rd ed.), Upper Saddle River, N.J. : Prentice Hall
• Whitten, Jeffery L., Bentley, Lonnie D., Dittman, Kevin C., (2004), Systems
analysis and design methods (6th ed.), Boston : McGraw-Hill Irwin