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  • Planning Available Technology--May not be currently available
  • Post-Implementation Review seeks both output and process (SDLC) feedback.
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    1. 1. SDLC Phase 2 – Initiating and Planning Projects In which the reader will find included a discussion of the All-Important Feasibility Analysis Hmmmm
    2. 2. Initiating and Planning SD Projects is the second phase of the SDLC.
    3. 3. In the second phase each potential project will be scrutinized more carefully
    4. 4. The “deliverables” at the end of this second phase include: <ul><li>A Feasibility Analysis </li></ul><ul><li>A Recommendation of whether and how to proceed </li></ul>
    5. 5. <ul><li>Feasibility Assessment </li></ul><ul><ul><li>Economic </li></ul></ul><ul><ul><li>Technical </li></ul></ul><ul><ul><li>Operational </li></ul></ul><ul><ul><li>Legal and Contractual </li></ul></ul><ul><ul><li>Political (Stakeholder) </li></ul></ul><ul><ul><li>Schedule </li></ul></ul>That’s the “all important” one, isn’t it?
    6. 6. Economic Feasibility <ul><li>Identify tangible $ benefits </li></ul><ul><li>Identify intangible benefits </li></ul><ul><li>Identify costs </li></ul><ul><li>Specify benefits and costs as “up-front” or “recurring” </li></ul><ul><li>In situations involving multiple years, use the net present value (NPV) approach </li></ul>
    7. 7. Tangible benefits <ul><li>Can be measured </li></ul><ul><li>Have a high degree of certainty </li></ul>
    8. 8. Intangible benefits – include such things as: <ul><li>Competitive necessity </li></ul><ul><li>More timely information </li></ul><ul><li>Improved organizational planning, learning, understanding </li></ul><ul><li>Better information </li></ul><ul><li>Better decision making </li></ul><ul><li>Better control over resources </li></ul><ul><li>Positive impact on society </li></ul><ul><li>Better employee morale </li></ul>I bet that gets management’s blood flowing
    9. 9. N et P resent V alue The value of D dollars n years from now when i is the discount rate is: PV n = D X 1 __________________ (1 + I) n
    10. 10. NPV example: Suppose one of the benefits of a new project is that three years in the future it will save $10,000 during that year. Suppose the organization believes its investments should earn at least 12% per year. What is the present value of that benefit? PV 3 = $10,000 X 1 / (1 + .12) 3 PV 3 = $10,000 X ( .71178) = $7,178
    11. 11. Suppose in the prior example, the mentioned benefit is the only benefit. Now suppose the only cost is to pay $5,000 immediately to obtain that benefit. What is the Net Present Value of this project? Present value of benefits = $7,178 Present value of costs = -$5,000 Net Present value of project = $7,178 - $5000 = $2,178
    12. 12. Electronic spreadsheets are ideal for NPV analysis when there are one-time and recurring costs and benefits.
    13. 13. Technical Feasibility is Threatened when: <ul><li>Projects are large </li></ul><ul><li>The development group is not familiar with the technology </li></ul><ul><li>The user group is not familiar with the application area </li></ul>
    14. 14. Operational Feasibility threatened when the proposed system: <ul><li>Does not fit the existing IS plan </li></ul><ul><li>Does not fit existing organization structure and procedures </li></ul>
    15. 15. Legal and Contractual feasibility Copyright Antitrust International law Labor laws and unions Software licenses Contracts
    16. 16. Political Feasibility Who are the stakeholders? What power do they have? Do you think all of this stuff should be in writing?
    17. 17. Schedule Feasibility <ul><li>What tasks have to be done? </li></ul><ul><li>Who will do the tasks? </li></ul><ul><li>When will they get done? </li></ul><ul><li>What happens if you miss the deadline? </li></ul>
    18. 18. As much as you may love the project, if it is not feasible, don’t do it!
    19. 19. Initiating and Planning <ul><li>Feasibility Analysis </li></ul><ul><li>A recommendation of whether and how to proceed </li></ul>
    20. 20. Feasibility Analysis A Closer Look
    21. 21. Project Initiation <ul><li>Projects begin when someone sees an opportunity to create business value from using information technology. </li></ul><ul><li>“ System request” </li></ul>
    22. 22. System Request <ul><li>Lists key elements of the project </li></ul><ul><ul><li>Project name </li></ul></ul><ul><ul><li>Project sponsor </li></ul></ul><ul><ul><li>Business need </li></ul></ul><ul><ul><li>Functionality </li></ul></ul><ul><ul><li>Expected value </li></ul></ul><ul><ul><li>Special issues or constraints </li></ul></ul>
    23. 23. Project Initiation & Planning <ul><li>Understand project scope </li></ul><ul><li>Determine system feasibility </li></ul><ul><li>Reconcile conflicting stakeholder views of system </li></ul><ul><li>Transform vague request into tangible project description (“ Baseline Project Plan” ) </li></ul>
    24. 24. Elements of Project Initiation <ul><li>Establish project team </li></ul><ul><li>Establish relationship with customer </li></ul><ul><li>Establish management procedures </li></ul><ul><li>Establish project management environment </li></ul>
    25. 25. Feasibility Analysis <ul><li>Feasibility analysis is used to aid in the decision of whether or not to proceed with the IS project. </li></ul><ul><li>Detailing Expected Costs and Benefits </li></ul><ul><ul><li>Technical feasibility </li></ul></ul><ul><ul><li>Economic feasibility </li></ul></ul><ul><ul><li>Organizational feasibility </li></ul></ul><ul><ul><li>Schedule </li></ul></ul><ul><ul><li>Legal/contractual </li></ul></ul><ul><ul><li>Political </li></ul></ul>
    26. 26. Technical Feasibility/Risk <ul><li>Project size </li></ul><ul><li>Project structure </li></ul><ul><li>Development group experience </li></ul><ul><li>User group experience </li></ul>
    27. 27. Project Risk Assessment
    28. 28. Economic Feasibility – Cost-Benefit Analysis <ul><li>Tangible benefits </li></ul><ul><ul><li>Cost and error reduction, increase in sales… </li></ul></ul><ul><li>Intangible benefits </li></ul><ul><ul><li>Improved morale, reduction of waste, positive impact on society… </li></ul></ul><ul><li>Tangible Costs </li></ul><ul><ul><li>H/w, s/w, development costs, new personnel, stationary </li></ul></ul><ul><li>One-time v Recurring Costs </li></ul><ul><li>Intangible Costs </li></ul><ul><ul><li>Loss of goodwill, reduced morale </li></ul></ul>
    29. 29. Cash Flow Method for Cost Benefit Analysis
    30. 30. Common Cost-Benefit Analysis Techniques <ul><li>Net Present Value (NPV) </li></ul><ul><ul><li>determines the present value of cash receipts and outlays </li></ul></ul><ul><li>Return on Investment (ROI) </li></ul><ul><ul><li>ratio of cash receipts to outlays </li></ul></ul><ul><li>Break-Even Analysis (BEA) </li></ul><ul><ul><li>determines time required for cash flow to equal initial and ongoing investment </li></ul></ul>
    31. 31. Return on Investment Calculation Total (benefits - costs) Total costs RETURN ON INVESTMENT EQUALS Divided by
    32. 32. Organizational Feasibility If we build it, will they come? <ul><li>Stakeholder analysis </li></ul><ul><ul><li>Project champion(s) </li></ul></ul><ul><ul><li>Organizational management </li></ul></ul><ul><ul><li>System users </li></ul></ul><ul><li>Relationship to IS plan </li></ul><ul><li>Impact on orgnl. structures and procedures </li></ul>
    33. 33. Other (Important) Feasibility Criteria <ul><li>Schedule </li></ul><ul><ul><li>Ability to meet deadlines </li></ul></ul><ul><li>Legal / contractual </li></ul><ul><li>Political </li></ul><ul><ul><li>Views of key stakeholders </li></ul></ul>
    34. 34. Baseline Project Plan <ul><li>Project overview and scope </li></ul><ul><li>System description </li></ul><ul><li>Feasibility assessment </li></ul><ul><li>Management issues </li></ul><ul><li>Recommendation </li></ul><ul><li>Preliminary project schedule </li></ul>
    35. 35. Summary Feasibility study <ul><li>All projects are feasible! </li></ul><ul><ul><li>Given unlimited resources and time </li></ul></ul><ul><li>Scarcity of resources! </li></ul>
    36. 36. Feasibility study- Primary areas of interest <ul><li>Economic feasibility </li></ul><ul><li>Technical feasibility early stage </li></ul><ul><ul><li>Development risk </li></ul></ul><ul><ul><li>Resource availability </li></ul></ul><ul><ul><li>Technology </li></ul></ul><ul><li>Legal feasibility </li></ul><ul><li>Alternatives </li></ul>
    37. 37. Feasibility analysis - Economics <ul><li>Cost-benefit analysis </li></ul><ul><ul><li>Cost of the system </li></ul></ul><ul><ul><li>In $ measurable benefits </li></ul></ul><ul><ul><li>Intangible (not measurable) benefits </li></ul></ul><ul><ul><ul><li>better design </li></ul></ul></ul><ul><ul><ul><li>better business decisions by actual information </li></ul></ul></ul><ul><ul><ul><li>increased customer satisfaction </li></ul></ul></ul><ul><li>Cost-benefit analysis often the vehicle to get management approval </li></ul>
    38. 38. Feasibility study outline <ul><li>Introduction </li></ul><ul><ul><li>Statement of the problem </li></ul></ul><ul><ul><li>Implementation environment </li></ul></ul><ul><ul><li>Constraints </li></ul></ul><ul><li>Management summary & recommendations </li></ul><ul><ul><li>Important findings </li></ul></ul><ul><ul><li>Comments </li></ul></ul><ul><ul><li>Recommendations </li></ul></ul><ul><ul><li>Impact </li></ul></ul><ul><li>Alternatives </li></ul><ul><ul><li>Alternative system configurations </li></ul></ul><ul><ul><li>Criteria used in selecting the final approach </li></ul></ul><ul><li>System description </li></ul><ul><ul><li>Abbreviated statement of scope </li></ul></ul><ul><ul><li>Feasibility of allocated elements </li></ul></ul>
    39. 39. <ul><li>FEASIBILITY (in information systems development) is the measure of how beneficial the development or enhancement of an information system will be to the business </li></ul><ul><li>FEASIBILITY ANALYSIS is the process by which feasibility is measured </li></ul>FEASIBILITY ANALYSIS
    40. 40. <ul><li>OPERATIONAL FEASIBILITY is the measure of how well a particular information system will work in a given environment </li></ul><ul><li>TECHNICAL FEASIBILITY is the measure of the practicality of a specific technical information system solution and the availability of technical resources </li></ul><ul><li>ECONOMIC FEASIBILITY is the measure of the cost-effectiveness of an information system solution </li></ul>FEASIBILITY TYPES
    41. 41. <ul><li>Fewer processing errors </li></ul><ul><li>Increased throughput </li></ul><ul><li>Increased response time </li></ul><ul><li>Elimination of job steps </li></ul><ul><li>Reduced expenses </li></ul><ul><li>Increased sales </li></ul><ul><li>Faster turnaround </li></ul><ul><li>Better credit </li></ul><ul><li>Reduced credit losses </li></ul><ul><li>Reduction of receivables </li></ul>TANGIBLE BENEFITS
    42. 42. <ul><li>Improved customer goodwill </li></ul><ul><li>Improved employee morale </li></ul><ul><li>Improved employee job satisfaction </li></ul><ul><li>Better service to the community </li></ul><ul><li>Better decision making </li></ul>INTANGIBLE BENEFITS
    43. 43. Break
    44. 44. Reasons for New Systems <ul><li>Unfulfilled User Requirements </li></ul><ul><li>New Technology </li></ul><ul><li>Competition </li></ul><ul><li>But most of all--Strategic business planning that considers how systems can help the organization achieve comparative advantage </li></ul>
    45. 45. The Systems Development Life Cycle <ul><li>Systems Analysis </li></ul><ul><li>Systems Design </li></ul><ul><li>Systems Development </li></ul><ul><li>Systems Implementation </li></ul><ul><li>Systems Operation and Maintenance </li></ul>
    46. 46. Systems Analysis <ul><li>Requirements Analysis--Interviews, surveys, observations, examine documents and reports </li></ul><ul><li>Systems Survey--Strengths and Weaknesses </li></ul><ul><li>Feasibility Analysis </li></ul><ul><ul><li>Economic </li></ul></ul><ul><ul><li>Technical </li></ul></ul><ul><ul><li>Organizational </li></ul></ul>
    47. 47. Systems Design <ul><li>Logical Design </li></ul><ul><ul><li>Data Model -- What data needs stored </li></ul></ul><ul><ul><li>Process Model -- How does the data get stored? </li></ul></ul><ul><ul><li>Model Integration </li></ul></ul><ul><li>Physical Design </li></ul><ul><ul><li>Convert Logical Model to physical model (tables, forms and report layouts ) </li></ul></ul><ul><li>Documentation </li></ul><ul><li>Feasibility Analysis </li></ul><ul><li>NOTHING AT THIS STAGE IS DONE ON THE ACTUAL SYSTEM </li></ul>
    48. 48. Systems Development <ul><li>Creation of Data Structures </li></ul><ul><ul><li>Tables </li></ul></ul><ul><ul><li>Primary Keys and Foreign Key Relationships </li></ul></ul><ul><ul><li>Referential Integrity, Entity Integrity, Validation Rules </li></ul></ul><ul><li>Detailed Programming </li></ul><ul><li>Testing </li></ul><ul><ul><li>Realistic data </li></ul></ul><ul><ul><li>Realistic data volumes </li></ul></ul><ul><li>User Training </li></ul><ul><li>Feasibility Analysis </li></ul>
    49. 49. Systems Implementation <ul><li>Data Conversion </li></ul><ul><li>Systems Conversion </li></ul><ul><ul><li>Sudden Switch Conversion </li></ul></ul><ul><ul><li>Parallel Conversion </li></ul></ul><ul><ul><li>Phased-In Conversion </li></ul></ul><ul><li>Documentation -- Program and User </li></ul><ul><ul><li>User Manuals </li></ul></ul><ul><ul><li>Program Documentation </li></ul></ul><ul><ul><li>DBMS -- Data dictionary </li></ul></ul>
    50. 50. Data Conversion Process <ul><li>Document data in the old system </li></ul><ul><li>Convert data to a form readable by the new system </li></ul><ul><li>Adapt data to new codes and categories if necessary </li></ul><ul><li>Input data into the new system </li></ul><ul><li>Test to assure data has been converted properly </li></ul>
    51. 51. Systems Operation and Maintenance <ul><li>Operation </li></ul><ul><li>Maintenance </li></ul><ul><ul><li>Corrective Maintenance </li></ul></ul><ul><ul><li>Perfective Maintenance </li></ul></ul><ul><li>Post-Implementation Review </li></ul><ul><ul><li>Of the System </li></ul></ul><ul><ul><li>Of the Development Process </li></ul></ul>
    52. 52. Speeding the SDLC <ul><li>Computer Assisted Software Engineering (CASE) </li></ul><ul><li>ICASE </li></ul><ul><ul><li>Develop logical data and process models </li></ul></ul><ul><ul><li>Convert logical model into physical model </li></ul></ul><ul><ul><li>Generate DBMS-specific database schema (table layouts) </li></ul></ul><ul><li>Increased User Involvement </li></ul><ul><ul><li>Rapid Application Development (RAD) -- Perform steps concurrently </li></ul></ul><ul><ul><li>Joint Application Development (JAD) -- Use group interaction tools/group systems to facilitate cooperation between developers and users </li></ul></ul><ul><ul><li>Prototyping </li></ul></ul>
    53. 53. Software Selection <ul><li>Requirements Analysis and Criteria Specification </li></ul><ul><ul><li>Systems Analysis </li></ul></ul><ul><ul><li>Begin Systems Design and Development, Plan for Implementation, Operation and Maintenance </li></ul></ul><ul><li>Information Collection -- Request for Proposals </li></ul><ul><li>Evaluation of Alternatives and Package/Vendor Selection </li></ul><ul><li>Installation </li></ul><ul><ul><li>Systems Design </li></ul></ul><ul><ul><li>Systems Development -- Program modification </li></ul></ul><ul><ul><li>Systems Implementation – Especially Data conversion </li></ul></ul><ul><li>Systems Operation and Maintenance </li></ul>
    54. 54. Feasibility Analysis and the System Proposal <ul><li>Identify feasibility checkpoints in the systems life cycle. </li></ul><ul><li>Identify alternative system solutions. </li></ul><ul><li>Define and describe four types of feasibility and their respective criteria. (Technical, Operational, Schedule, Economic – TOES) </li></ul><ul><li>Perform various cost-benefit analyses using time-adjusted costs and benefits. </li></ul><ul><li>Write suitable system proposal reports for different audiences. </li></ul><ul><li>Plan for a formal presentation to system owners and users. </li></ul>
    55. 55. Feasibility Analysis <ul><li>Feasibility – the measure of how beneficial or practical an information system will be to an organization. </li></ul><ul><li>Feasibility analysis – the process by which feasibility is measured. </li></ul><ul><li>Creeping Commitment – an approach to feasibility that proposes that feasibility should be measured throughout the life cycle. </li></ul>
    56. 56. Feasibility Checkpoints <ul><li>Systems Analysis — Scope Definition </li></ul><ul><li>Systems Analysis — Problem Analysis </li></ul><ul><li>Systems Design — Decision Analysis </li></ul>
    57. 57. Four Tests For Feasibility <ul><li>Operational feasibility – a measure of how well a solution will work or be accepted in an organization. </li></ul><ul><ul><li>Usability analysis – a test of the system’s user interfaces. </li></ul></ul><ul><li>Technical feasibility – a measure of the practicality of a technical solution and the availability of technical resources and expertise. </li></ul><ul><li>Schedule feasibility – a measure of how reasonable the project timetable is. </li></ul><ul><li>Economic feasibility - a measure of the cost-effectiveness of a project or solution. </li></ul>
    58. 58. Cost-Benefit Analysis Techniques <ul><li>Costs: </li></ul><ul><li>Development costs are one time costs that will not recur after the project has been completed. </li></ul><ul><li>Operating costs are costs that tend to recur throughout the lifetime of the system. Such costs can be classified as: </li></ul><ul><ul><li>Fixed costs — occur at regular intervals but at relatively fixed rates. </li></ul></ul><ul><ul><li>Variable costs — occur in proportion to some usage factor. </li></ul></ul><ul><li>Benefits: </li></ul><ul><li>Tangible benefits are those that can be easily quantified. </li></ul><ul><li>Intangible benefits are those benefits believed to be difficult or impossible to quantify. </li></ul>
    59. 59. Payback Analysis <ul><li>Payback analysis – a technique for determining if and when an investment will pay for itself. </li></ul><ul><li>Payback period – the period of time that will lapse before accrued benefits overtake accrued and continuing costs. </li></ul>
    60. 60. Return-on-Investment Analysis (ROI) <ul><li>Return-on-Investment (ROA) analysis – a technique that compares the lifetime profitability of alternative solutions. </li></ul><ul><ul><li>The ROI for a solution or project is a percentage rate that measures the relationship between the amount the business gets back from an investment and the amount invested. </li></ul></ul><ul><li>Lifetime ROI = (estimated lifetime benefits – estimated lifetime costs) / estimated lifetime costs </li></ul><ul><li>Annual ROI = lifetime ROI / lifetime of the system </li></ul>
    61. 61. The System Proposal <ul><li>System proposal – a report or presentation of a recommended solution. </li></ul><ul><ul><li>Usually formal written report or oral presentation </li></ul></ul><ul><ul><li>Intended for system owners and users </li></ul></ul>
    62. 62. VI. Appendixes with facts and details VI. Conclusion V. Final conclusion V. Recommendations IV. Methods and procedures IV. Discussion and analysis of facts and details III. Summary and discussion of facts and details III. Facts and details II. Conclusions and recommendations II. Methods and procedures I. Introduction I. Introduction Administrative Format Factual Format
    63. 63. Organization of the Written Report <ul><li>Primary elements present the actual information that the report is intended to convey. </li></ul><ul><li>Secondary elements package the report so the reader can easily identify the report and its primary elements. </li></ul><ul><li>Formats: </li></ul><ul><ul><li>The factual format is traditional and best suited to readers who are interested in facts and details as well as conclusions. </li></ul></ul><ul><ul><li>The administrative format is a modern, result-oriented format preferred by managers and executives. </li></ul></ul>
    64. 64. Secondary Elements for a Written report <ul><li>Letter of transmittal </li></ul><ul><li>Title page </li></ul><ul><li>Table of contents </li></ul><ul><li>List of figures, illustrations, and tables </li></ul><ul><li>Abstract or executive summary </li></ul><ul><ul><li>(The primary elements--the body of the report, in either the factual or administrative format--are presented in this portion of the report.) </li></ul></ul><ul><li>Appendices </li></ul>
    65. 65. Steps in Writing a Report
    66. 66. System Proposal – formal presentations <ul><li>Formal presentation – a special meeting used to sell new ideas and gain approval for new systems. They may also be used for any of these purposes: </li></ul><ul><ul><li>Sell new system </li></ul></ul><ul><ul><li>Sell new ideas </li></ul></ul><ul><ul><li>Head off criticism </li></ul></ul><ul><ul><li>Address concerns </li></ul></ul><ul><ul><li>Verify conclusions </li></ul></ul><ul><ul><li>Clarify facts </li></ul></ul><ul><ul><li>Report progress </li></ul></ul>
    67. 67. Typical Outline and Time Allocation for an Oral Presentation <ul><li>I. Introduction (one-sixth of total time available) </li></ul><ul><ul><li>A. Problem statement </li></ul></ul><ul><ul><li>B. Work completed to date </li></ul></ul><ul><li>II. Part of the presentation (two-thirds of total time available) </li></ul><ul><ul><li>A. Summary of existing problems and limitations </li></ul></ul><ul><ul><li>B. Summary description of the proposed system </li></ul></ul><ul><ul><li>C. Feasibility analysis </li></ul></ul><ul><ul><li>D. Proposed schedule to complete project </li></ul></ul><ul><li>III. Questions and concerns from the audience (time here is not to be included in the time allotted for presentation and conclusion; it is determined by those asking the questions and voicing their concerns) </li></ul><ul><li>IV. Conclusion (one-sixth of total time available) </li></ul><ul><ul><li>A. Summary of proposal </li></ul></ul><ul><ul><li>B. Call to action (request for whatever authority you require to continue systems development) </li></ul></ul>