1. Systems Analysis – ITEC 3155 Feasibility Analysis

2. What is Feasibility Analysis?
A measure of how beneficial or practical the development of an information systems will be to an organization.
Feasibility Analysis
The process by which feasibility is measured.
The goal of feasibility analysis:
To enable the organization to determine whether or no to proceed with a project
To identify any important risks associated with the project
Systems Analysis and Design in a Changing World, 4th Edition

3. Confirming Project Feasibility
Risk management
Economic feasibility
Cost/benefit analysis
Sources of funds (cash flow, long-term capital)
Organizational and cultural feasibility
Technological feasibility
Schedule feasibility
Resource feasibility
Systems Analysis and Design in a Changing World, 4th Edition

4. Risk Management
Systems Analysis and Design in a Changing World, 4th Edition

5. Economic Feasibility
An economic feasibility analysis (or cost-benefit analysis) should be performed to identify the financial risk associated with the project
Estimate project development costs
Estimate operational costs after project
Estimate financial benefits based on annual savings and increased revenues
Calculate using table of costs and benefits
Uses net present value (NPV), payback period, return on investment (ROI) techniques
Systems Analysis and Design in a Changing World, 4th Edition

6. Supporting Detail for Salaries and Wages for RMO (Figure 3-16)
Systems Analysis and Design in a Changing World, 4th Edition

7. Summary of Development Costs for RMO (Figure 3-17)
Systems Analysis and Design in a Changing World, 4th Edition

8. Summary of Annual Operating Costs for RMO (Figure 3-18)
Systems Analysis and Design in a Changing World, 4th Edition

9. Sample Benefits for RMO (Figure 3-19)
Systems Analysis and Design in a Changing World, 4th Edition

10. RMO Cost Benefit Analysis (Figure 3-20)
Systems Analysis and Design in a Changing World, 4th Edition

11. Intangibles in Economic Feasibility
Intangible benefits cannot be measured in dollars
Increased levels of service
Customer satisfaction
Survival
Need to develop in-house expertise
Intangible costs cannot be measured in dollars
Reduced employee morale
Lost productivity
Lost customers or sales
Systems Analysis and Design in a Changing World, 4th Edition

12. Organizational and Cultural Feasibility
Each company has own culture
New system must fit into culture
Evaluate related issues for potential risks
Low level of computer competency
Computer phobia
Perceived loss of control
Shift in power
Fear of job change or employment loss
Reversal of established work procedures
Systems Analysis and Design in a Changing World, 4th Edition

13. Technological Feasibility
The goal
to assess the extent to which the system can be successfully designed, developed and installed
Does system stretch state-of-the-art technology?
Does in-house expertise presently exist for development?
Does an outside vendor need to be involved?
Solutions include
Training or hiring more experienced employees
Hiring consultants
Changing scope and project approach
Systems Analysis and Design in a Changing World, 4th Edition

14. Schedule Feasibility Estimates needed without complete information
Management deadlines may not be realistic
Project managers
Drive realistic assumptions and estimates
Recommend completion date flexibility
Assign interim milestones to periodically reassess completion dates
Involve experienced personnel
Manage proper allocation of resources
Systems Analysis and Design in a Changing World, 4th Edition

15. Resource Feasibility Team member availability Team skill levels
Computers, equipment, and supplies
Support staff time and availability
Physical facilities
Systems Analysis and Design in a Changing World, 4th Edition

16. Summary Feasibility analysis Feasibility has many facets
aims to determine whether an organization should proceed with a project; identify important risks.
Feasibility has many facets
technical, economic, organizational/cultural, schedule, resource.
Systems Analysis and Design in a Changing World, 4th Edition