Systems Analysis and Design 

ITC 240 TUTORIAL 5

Essay Questions
1. Briefly identify and define the six major categories of feasibility.

1. Economic Feasibility: tries to figure out what the project's financial advantages and
expenses are.
2. Technical Feasibility: seeks to determine if the organization is capable of developing the
new system.
3. Operational Feasibility: examines the degree of likelihood that the candidate system will be
able to solve the business problem or take advantage of opportunities.
4. Schedule Feasibility: examines the likelihood that all potential time frame and completion
date schedules can be met.
5. Legal and Contractual Feasibility: tries to assess the potential legal ramifications due to the
construction of the new system
6. Political Feasibility: determining stakeholder’s views of the candidate system is the intent of
political feasibility

2. Briefly identify three commonly used economic cost-benefit analysis techniques.

1. Net Present Value (NPV): NPV uses a discount rate determined from the company’s cost of
capital to establish the present value of a project. The discount rate is used to determine the
present value of both cash receipts and outlays.
2. Return on Investment (ROI): ROI is the ratio of the net cash receipts of the project divided
by the cash outlays of the project. Trade-off analysis can be made among projects competing
for investment by comparing their representative ROI ratios.
3. Break-Even Analysis (BEA): BEA finds the amount of time required for the cumulative
cash flow from a project to equal its initial and ongoing investment.

3. What is a Statement of Work and Baseline Project Plan? How are they different?
Baseline Project Plan (BPP) A major outcome and deliverable from the project initiation and
planning phase that contains the best estimate of a project’s scope, benefits, costs, risks, and resource
requirements
Statement of Work (SOW) Effectively, it defines the specific goals for a project; what needs to be
delivered, and the performance criteria. This is often confused with the scope of work as they’re both
abbreviated to SOW. With the scope of work, you’re looking at all the specific tasks that a particular
project manager has to perform to reach all the objectives. While both are important, the statement of
work is the more critical of the two.
SOW is a document represent a contract between the information system staff and consumer for
estimating time for system development project, but the BPP is a document intended to guide the
project development team and it mainly contains: - Introduction. - Project Description. - Assessment
and Feasibility.
Systems Analysis and Design ITC 240 TUTORIAL 5

4. Describe the differences between tangible and intangible benefits and costs, and between one-time
and recurring benefits and costs.

Tangible benefit: A benefit derived from the creation of an information system that can be measured
in dollars and with certainty.
Intangible benefit: A benefit derived from the creation of an information system that cannot be easily
measured in dollars or with certainty.

So in short, tangible benefits can be measured in dollars or monetary value and is certain but
intangible benefits cannot be measured in dollars or monetary value and is uncertain.

Tangible cost: A cost associated with an information system that can be measured in dollars or with
certainty.
Intangible cost: A cost associated with an information system that cannot be easily measured in terms
of dollars or with certainty.

The same way with tangible and intangible benefits, tangible costs can be measured in dollars or
monetary value and is certain but intangible costs cannot be measured in dollars or monetary value and
is uncertain.

One-time cost: A cost associated with project start-up and development or system start-up.
Recurring cost: A cost resulting from the ongoing evolution and use of a system.

So in short, one-time cost occurs only once when the system starts up but recurring cost can occur
multiple times usually in a year-round or month round or whatever the system evolution lifecycle is.

Matching Questions
Match each of the following terms with its definition.
a. economic feasibility
b. legal and contractual feasibility
c. operational feasibility
d. political feasibility
e. schedule feasibility
f. technical feasibility

1. A process of identifying the financial benefits and costs associated with a development project.
Economic Feasibility

2. 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.
Schedule Feasibility

3. The process of evaluating how key stakeholders within the organization view the proposed system.
Political Feasibility

4. The process of assessing the degree to which a proposed system solves business problems or takes
advantage of business opportunities.
Operational Feasibility
Systems Analysis and Design ITC 240 TUTORIAL 5

5. The process of assessing potential legal and contractual ramifications due to the construction of a
system.
Legal and Contractual Feasibility

6. A process of assessing the development organization’s ability to construct a proposed system.

Technical feasibility

Match each of the following terms with its definition.

a. tangible cost
b. intangible cost
c. one-time cost
d. recurring cost
e. tangible benefit
f. tangible cost

1. A cost associated with an information system that can be measured in dollars and with certainty.
Tangible cost

2. A benefit derived from the creation of an information system that can be measured in dollars and with
certainty.
Tangible benefit

3. A cost resulting from the ongoing evolution and use of a system.

Recurring cost

4. A cost associated with project startup and development, or system startup.

One-time cost

5. A cost associated with an information system that cannot be easily measured in terms of dollars or
with certainty.
Intangible cost

6. A benefit derived from the creation of an information system that cannot be easily measured in dollars
or with certainty.
Intangible benefit

Match each of the following feasibility criteria with its purpose.

a. economic
b. legal and contractual
c. operational
d. political
e. schedule
f. technical
Systems Analysis and Design ITC 240 TUTORIAL 5

1. To gain an understanding of the degree to which the proposed system will likely solve the business
problems or take advantage of the opportunities outlined in the systems service request or project
identification study.
Operational

2. To gain an understanding of the organization’s ability to construct the proposed system.

Technical

3. To provide an understanding of any potential legal ramifications due to the construction of the system.
Legal and contractual

4. To evaluate how key stakeholders within the organization view the proposed system.
Political

5. To provide an 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

6. To identify the financial benefits and costs associated with the development project.
Economic