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

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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) Avicenna System Analysis and Design System Analysis

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] Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

Completion of Systems Analysis Tasks To complete the systems analysis phase, you must prepare the system requirements document and your presentation to management Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis

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 Avicenna System Analysis and Design System Analysis