A&D - Feasibility Analysis

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A&D - Feasibility Analysis

  1. 1. Feasibility AnalysisOrganized By: Vinay Arora Assistant Professor CSED, Thapar University www.slideshare.net/aroravinay
  2. 2. Disclaimer This is NOT A COPYRIGHT MATERIAL Content has been taken mainly from the following books:System Analysis and Design Methods By Jeffrey L Whitten & Lonnie D Bentley , Analysis & Design of Information Systems By James A. Senn, System Analysis & Design By Elias M. Awad,Modern System Analysis & Design By Jeffrey A. Hoffer, Joey F.George & Joseph S. Valacich Vinay Arora CSED
  3. 3. Feasibility Analysis Feasibility – The measure of how beneficial or practical an Information System will be to an organization. Feasibility Analysis – The Process by which feasibility is measured. Creeping Commitment – An Approach to Feasibility that proposes that feasibility should be measured throughout the life cycle. Vinay Arora CSED
  4. 4. CheckPoints CHECK POINTS Vinay Arora CSED
  5. 5. Feasibility Analysis – ChkPts. Systems Analysis — Scope Definition Systems Analysis — Problem Analysis Systems Design — Decision Analysis Vinay Arora CSED
  6. 6. Feasibility Analysis – 6 Tests Operational. Technical. Cultural (Political). Schedule. Economic. Legal. Vinay Arora CSED
  7. 7. Cost For a Proposed System Vinay Arora CSED
  8. 8. Three Popular Techniques to Assess Economic Feasibility Payback Analysis Return On Investment Net Present Value The Time Value of Money is a concept that should be applied to each technique. The time value of money recognizes that a dollar today is worth more than a dollar one year from now. Vinay Arora CSED
  9. 9. Payback Analysis Payback Analysis – A Technique for determining if and when an Investment will pay for itself. Payback Period – The Period of Time that will lapse before accrued benefits overtake accrued and continuing costs. Present Value – The Current Value of a dollar at any time in the future. PVn = 1/(1 + i)n Where n is the number of years and i is the discount rate. Discount Rate – A percentage similar to interest rates that you earn on your savings. In most cases the discount rate for a business is the opportunity cost of being able to invest money in other projects or investments Vinay Arora CSED
  10. 10. Payback Analysis for a Project Vinay Arora CSED
  11. 11. Payback Analysis for a Project Vinay Arora CSED
  12. 12. Pay Back Vinay Arora CSED
  13. 13. Return On Investment (ROI) Return-on-Investment (ROI) Analysis – A Technique that compares the Lifetime Profitability of alternative solutions. 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. Lifetime ROI =(Estimated Lifetime Benefits – Estimated Lifetime Costs) / Estimated Lifetime Costs Annual ROI = Lifetime ROI / Lifetime of the System Vinay Arora CSED
  14. 14. Net Present Value (NPV) Net Present Value – An Analysis Technique that compares the Annual Discounted Costs and Benefits of Alternative Solutions. Vinay Arora CSED
  15. 15. Reference List1. System Analysis and Design Methods By Jeffrey L Whitten & Lonnie D Bentley2. Analysis & Design of Information Systems By James A. Senn3. System Analysis & Design By Elias M. Awad4. Modern System Analysis & Design By Jeffrey A. Hoffer, Joey F.George & Joseph S. Valacich etc……. Vinay Arora CSED
  16. 16. Thnx… Vinay Arora CSED

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