1. 1 We have seen how a systems development project can be divided into the phases of the Systems/Software Development Life Cycle (SDLC):  Problem Definition  Feasibility Study  Systems (and Requirements) Analysis  Systems Design  Implementation  Maintenance DR:Saleh Feasibility Study

2. 2 Most organisations will have a list of applications which are candidates for projects. We need decide on which applications should be developed. Decisions about applications to be developed are made in systems planning. Systems planning is an activity that goes on outside of the SDLC (i.e. outside of any project) and is performed by a systems planning team. Before the Feasibility Study

3. 3 Once a system has been selected for development (by systems planning), and once it ’ s defined in the problem definition stage, a Feasibility Study (FS) must be conducted. The objectives of the FS are: Determine the feasibility of a project. Re-evaluate the factors which determine its priority. Define the intended interfaces between this project and others being/going to be/have been developed. Establish the terms of reference of the project. Feasibility Study

4. 4 The FS involves assessing an outline project/problem definition, with regard to a number of criteria and determining whether or not the project should go ahead. The FS is conducted by a team of employees with suitable experienced. This team must produce a Feasibility Report which is the deliverable or output from the FS. The FS aims to establish that there are good sound reasons for developing the project. Feasibility Study

5. 5 The FS will address a number of key issues: Overall feasibility of the proposed project. Investigation of current system/s, and their key processes. Identification of interfaces between other projects/systems in the organisation. Development of outline designs of possible new systems that will satisfy requirements. Evaluation of the outline designs developed. Establishment of the terms of reference of the proposed project. Feasibility Study

6. 6 To address these key issues, the FS will involve carrying out three stages:  The definition of the problem.  The development of outline systems.  The evaluation of the outline systems. Feasibility Study

7. 7 This stage concentrates on investigating current practices to: Uncover problems and how they manifest themselves. Clarify requirements. Determine opportunities for improvement. The key activities that must be undertaken are: Establishment of system boundaries. Examination of information flow and internal/external interfaces. Identification of strategies capable of realising the known requirements. Problem Definition

8. 8 This stage focuses on developing alternative strategies uncovered in stage 1, into outline systems which can be evaluated further. For each outline system we look at the following areas: Approaches to data collection, storage, and retrieval. General specification of equipment requirements. Clarification of activities composing the system (i.e. the processes). Planning system development and integration (into the organisation). Availability of resources necessary to support the implementation of the outline systems. Development of Outline Systems

9. 9 In this stage, we measure the outline proposals against the objectives for the project. In this stage, we must decide on the best outline proposal in relation to the objectives. To evaluate the outline proposals, we must consider each in terms of 4 categories: Technical Feasibility. Social Feasibility. Economic Feasibility. Legal Feasibility. Evaluation of Outline Systems

10. 10 Can the technology required for the proposed system be acquired or developed, and successfully introduced to the organisation? Must identify technical requirements such as: System Features: outputs, inputs, data and file structures, program requirements, equipment and data storage needs, training, etc. System Development: in-house development or contract outside software houses/engineers; tailoring available packages to meet requirements; co-operation with other organisations with common requirements. System Processing: in-house processing/outsourcing; batch/ real-time processing; online/offline/local/remote data input. Technical Feasibility

11. 11 Can the proposed system be reconciled with current organisational and staff expectations? Must think about staff attitudes to the proposed system: How will it effect their work environment? Can they adapt to it? Will they understand proposals put forward? How will communication with staff be facilitated so they can give their views, suggestions, and opinions. Without thinking about these things, a technically excellent system can fail. Social Feasibility

12. 12 Can the proposed system operate within current data protection and privacy laws? Legal aspects can make a system illegal e.g. payroll system that eliminates cash handling; breach of copyright involved in using software for certain purposes, etc. Legal Feasibility

13. 13 Can the proposed system be delivered within the budget allowed and will it bring financial benefits? In other words, will there be a return on investment from the proposed project; if it ’ s not economically feasible (if it won ’ t bring financial benefits to the organisation) it will be rejected. To assess economic feasibility of project, must assess cost of implementing/operating system, against benefits it will bring. Calculating economic feasibility = cost-benefit analysis Economic Feasibility

14. 14 CBA involves assigning values (where possible) to all the costs and benefits associated with a project. CBA is carried out in two stages: Produce estimates of costs (i.e. development and operating costs) and benefits (i.e. increased revenue, decreased costs). Determine whether the project is worthwhile based on these estimates. In a CBA, calculate if total benefits > or < total costs. This helps us decide whether to proceed with a project or not. Cost-Benefit Analysis (CBA)

15. 15 There are four main types of costs and benefits:  Tangible Costs - easy to assign monetary values to these.  Intangible Costs - difficult to assign monetary values to these.  Tangible Benefits (also called tangible savings) - easy to assign monetary values to these.  Intangible Benefits (also called intangible savings) - difficult to assign monetary values to these. Cost-Benefit Analysis (CBA)

16. 16 Include:  Equipment costs: buy/rent/lease? peripherals; comms cables.  Personnel costs: salaries/allowances of IT staff; recruitment, relocation; training costs (e.g course fees, accommodation).  Consumable material costs: printer stationery, print ribbons, printer toners, floppy disks, magnetic disks and tapes, etc.  Operating costs: maintenance of equipment/computer h/w; depreciation of equipment and h/w.  Conversion costs: file conversions; direct/phased/parallel/pilot conversion.  Installation costs: structural alterations to the existing building; re-siting existing departments; special floors. Tangible Costs

17. 17 Include: Lost opportunities due to meetings: work not done because of staff time taken up with the project ’ s development. Loss of goodwill: dealing with complaints; lost orders. Cost of maintaining staff morale: computers can be seen as a threat - staff hostility; reduced job satisfaction; increased staff turnover; lowered staff productivity. Conversion costs: tangible costs associated with conversion, but are also factors such as unexpected delays etc. to which it is not easy to attach a figure; disruption; difficult user relations; adverse customer relations. Intangible Costs

18. 18 Include: Staff reductions: reducing staff numbers; lowering skill requirements; reducing overtime and need for extra staff. Equipment savings: initially more expensive computing equipment needs to be acquired, but long-term benefits of using this more efficient machinery are great; savings can be made in other equipment (typewriters, etc.) which won ’ t be needed when the computer is introduced. Consumable material savings: office stationery, ledgers, stock cards, etc. Space economics: less people, less storage space are needed, etc., which means savings in rent, rates, maintenance and cleaning, heating, electricity, and insurance charges. Tangible Savings

19. 19 Include: Better management and planning information: computer takes over day-to-day tasks, allowing more time for gathering information for planning and decision-making; more sales statistics are available for sales forecasting; better cash flow projections. Better control information: more rapid collection of debts through more efficient invoicing; quicker, accurate preparation of all types of operational information such as profit/loss accounts; improved stock control. Improved customer service: improved turnaround time between placed orders and the customer receiving goods. Survival of company may depend on use of computers. Intangible Savings

20. 20 There are three common techniques used to carry out CBA:  Payback Method  Return on Investment  Discounted Cash Flow Techniques - there are two of these:  Net Present Value  Internal Rate of Return Cost-Benefit Analysis (CBA)