1. System Analysis and Design
- Mr. Ahmad Al-Ghoul
Hi students how are you doing
This the twenty one sequence from the analysis chapter
In this sequence we will discuss cost-benefit analysis, the differences between request for proposal (RFP) and a request for quotation (RFQ)
And the contents of the system requirements document

2. System Analysis and Design System Analysis
learning Objectives
Explain cost-benefit analysis and financial analysis tools
Explain the differences between a request for proposal (RFP) and a request for quotation (RFQ)
Describe the contents of the system requirements document
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3. Analyzing Cost and Benefits
Financial Analysis Tools
At the end of systems analysis phase, you must apply financial analysis tools and technique to evaluate development strategies and decide which alternative is better
Three popular tools, these tools can be used to determine total cost of ownership (TCO)
Payback Analysis: determines how long it takes an information system to pay for itself through reduce costs and increased benefits
Return on investment (ROI): is a percentage rate that compares the total net benefits received from a project to the total cost of the project
Net present value (NPV): is the total value of the benefits minus the total value of the cost, with both costs and benefits adjusted to reflect the point in time at which they occur
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4. Analyzing Cost and Benefits
Cost-Benefit Analysis Checklist
The best way to apply the financial analysis tools is to develop a cost-benefit checklist with the following steps:
List each development strategy being considered
Identify all costs and benefits for each alternative. Be sure to indicate when costs will be incurred and benefits realized
Consider future growth and the need for scalability
Include support costs for hardware and software
Analyze various software licensing options, including fixed fees and formulas based on the number of users or transactions
Analyze various hardware options including Purchasing, Leasing, or Renting
Apply the financial analysis tools to each alternative
Study the results and prepare a report to management
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System Analysis and Design System Analysis

5. The Software Acquisition Process
As an analyst, part of the expertise you are developing is to make sound judgments regarding developing software, or purchase, or customize a software
Although each situation is different.
There are some issues and tasks involved in software acquisition
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6. The Software Acquisition Process
Step 1: Evaluate the Information System Requirements
Identify key features: by using the data gathered during fact-finding. This information will be included in the system requirement document, which is the end product of the systems analysis phase
Consider network and web-related issues: you must decide whether the system will run on a network, the internet, or a company intranet, and build these requirements into the design, also you must determine the compatibility with other vendor or customers systems
Estimate volume and future growth: you need to know the current volume of transactions and forecast future growth. If you are considering in-house development, you must make sure that your software and hardware can handle future transaction volumes and data storage requirements. If you are considering outsourcing, analyze ASP fee structures and develop cost estimates
Specify hardware, software, or personnel constraints: you must determine whether existing hardware, software, or personal issues will affect the decision
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System Analysis and Design System Analysis

7. The Software Acquisition Process
Step 1: Evaluate the Information System Requirements
To obtain the information you need to make a decision, you should prepare a request for proposal or a request for quotation
Prepare a request for proposal or quotation
Request for proposal (RFP)
Request for quotation (RFQ)
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System Analysis and Design System Analysis

8. The Software Acquisition Process
Request for proposal (RFP): is a document that describes your company, lists the IT services or products you need, and specifies the features you require, and spells out the service and support levels you require
Based on the RFP, vendors can indicate if they have a product that will meet your needs
RFPs vary in size and complexity, just like the system they describe
[1]
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9. The Software Acquisition Process
Request for quotation (RFQ)
(RFQ) is a more specific than an RFP
When you use an RFQ, you already know the specific product or service you want and you need to obtain price quotations or bids
RFQ can involve outright purchase or a verity of leasing or renting options and can include maintenance or technical support terms
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System Analysis and Design System Analysis

10. The Software Acquisition Process
Step 2: Identify Potential Vendors or Outsourcing Options
The Internet is a primary marketplace for IT products and services
to locate vertical applications for specific industries, you can research industry trade journals or Web sites to find reviews for industry specific software
Another approach is to work with a consulting firm, the advantage of using a consultant is that you can tap into broad experience on IT products and services
Another resource is the Internet bulletin board systems that contains thousands of forums, called newsgroups.
Newsgroups are excellent sources of information and good places to exchange ideas with other analysts and IT professionals
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11. The Software Acquisition Process
Step 3: Evaluate the Alternatives
You should obtain information about the options from as many sources as possible including:
Existing users: ASPs and vendors typically supply user references, and try to find references users by your own. User references are important to know whether the product or service has worked well
Application testing: if a software package is one of the options, find out if it is possible for users in your organization to try the product
Benchmarking: is a test to determine whether a package can handle a certain transaction volume efficiently
Match each package against the RFP features and rank the choices
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12. The Software Acquisition Process
Step 4: Perform Cost-Benefit Analysis
Identify and calculate TCO for each option you are considering
When you purchase software, what you are buying is a software license be sure that the license is suitable for now and future growth of your organization
Consider user support issues
If you purchase a software package, consider a supplemental maintenance agreement, which offers additional support and assistance from the vendor
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13. The Software Acquisition Process
Step 5: Prepare a Recommendation
You should prepare a recommendation that evaluates and describes the alternatives, together with the costs, benefits, advantages, and disadvantages of each option
At this point, you may be required to submit a formal system requirements document and deliver a presentation
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14. The Software Acquisition Process
Step 6: Implement the Solution
Implementation tasks will depend on the solution selected
Before the new software becomes operational, you must complete all implementation steps, including loading, configuring, and testing the software; training users; and converting data files to the new system’s format
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15. Completion of Systems Analysis Tasks
To complete the systems analysis phase, you must prepare the system requirements document and your presentation to management
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16. Completion of Systems Analysis Tasks
System Requirements Document
The system requirements document, contains the requirements for the new system, describes the alternatives that were considered, and makes a specific recommendation to management
This document is like a contract that identifies what the system developers must deliver to the user
Format and organize it so it is easy to read and use
The system requirements document should include a cover page and a detailed table of contents
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17. Completion of Systems Analysis Tasks
Presentation to Management
After presentation, managers make key decisions that affect the future development of the system
Begin your presentation with a brief overview of the purpose and primary objectives of the system project, the objectives of this presentation, and what decisions need to made
Summarize the primary viable alternatives. For each alternative, describe the costs, advantages, and disadvantages
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18. Completion of Systems Analysis Tasks
Presentation to Management
Explain why the evaluation and selection team chose the recommended alternative
Allow time for discussion and for questions and answers
Obtain a final decision from management or agree on a timetable for the next step in the process
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19. Completion of Systems Analysis Tasks
Presentation to Management
Based on their decision, your next task will be one of the following
Implement an outsourcing alternative
Develop an in-house system
Purchase or customize a software package
Perform additional systems analysis work: management might want you to investigate certain alternatives further, explore alternatives not examined, develop a prototype, reduce the project scope because of cost constraints, or expand the project scope based on new development
Stop all further work: the decision might be based on your recommendation, a shift in priorities or costs, or for other reasons
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20. System Analysis and Design System Analysis
Sequence Summary
Financial analysis tools include payback analysis, which determines how long it takes for a system to pay for itself through reduced costs and increased benefits
Return on investment (ROI), which compares project’s total return to its total costs
Net present value (NPV), which analyzes the value of a project by adjusting costs and benefits to reflect the time that they occur
The process of acquiring software involves a series of steps: evaluate the system requirements, identify potential vendors or outsourcing options, evaluate the alternatives, perform cost-benefit analysis, prepare a recommendation, and implement the solution
The system requirements document is the deliverable, of the system analysis phase
The document details all system requirements and constraints, recommends the best solution, and provides cost and time estimates for future development work
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21. System Analysis and Design System Analysis
Sequence Summary
In this Sequence we have
Described financial analysis tools include payback analysis, which determines how long it takes for a system to pay for itself through reduced costs and increased benefits, return on investment (ROI), which compares project’s total return to its total costs, and net present value (NPV), which analyzes the value of a project by adjusting costs and benefits to reflect the time that they occur
Described the process of acquiring software which involves a series of steps: evaluate the system requirements, identify potential vendors or outsourcing options, evaluate the alternatives, perform cost-benefit analysis, prepare a recommendation, and implement the solution
Explained the differences between a request for proposal (RFP) and a request for quotation (RFQ)
Described the contents of the system requirements document
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System Analysis and Design System Analysis

22. System Analysis and Design System Analysis
Reference
[1] System Analysis and Design, Sixth Edition
Authors: Gary B. Shelly, Thomas J. Cashman and Harry J. Rosenblatt ,
Publisher: SHELLY CASHMAN SEWIES.
[2] system analysis and design, sixth edition
Authors: Kenneth E. Kendall and Julie E. Kendall
Publisher: Prentice Hall
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