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Feasibility Study
Feasibility Study
What resources are available for given candidate system? Is the problem worth
solving? What are the costs & savings of the alternatives?
3.
What are the likely impacts of the candidate systems on the organization? How
well does it fit within the organizations plan? What is recommended?
The above questions must be answered carefully. They revolve around investigation &
evaluation of the problem, identification & description of candidate system, specification
of performance & the cost of each system and final selection of the system.
This phase determines the objectives of the feasibility study and who this task belongs to
-- analysts or the project team? It lists out the steps required to complete a feasibility
study, identifies the scope of the current system, problems and unexploited opportunities
in the current system, which may be either manual or automated. It then discusses the
major objectives for the new system, and the various methods to gather data and
determine how to use the methods. It also helps to estimate the costs of each possible
solution, and develops estimates of the benefits and shortcomings of each solution. It
presents users and the management views on the above issues and their decision of
whether to commit to the analysis part of the project.
This phase may be included some related sub-phases:
Current physical model: The descriptions of the system as it is now, including the
mechanisms used to accomplish tasks (e.g., people, devices).
Current logical model: The system description in term of functions, processes, and
data with the mechanisms removed.
New Logical Model: The Current Logical Model with new features added.
New Physical Model: The Current Logical Model with the various processes allocated
to automation, manual procedures, other mechanisms. The rest of the feasibility study is
a formal proposal.
Factors that depend upon feasibility study are:
1. Statement of the problem: A carefully worded statement of the problem that led to
analysis.
2. Summary of findings & recommendations: A listed of the major findings &
recommendations of the study. It is deal for the user who requires quick access to
the results of the analysis of the system under study.
3. Details of findings: An outline of the methods & procedures undertaken by the
existing system, followed by coverage of the objectives & procedures of the
candidate system, including personnel assignments, costs, project schedules &
target dates is also discussed.
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Team consists of analyst & the user staff. An outside consultant & information
specialist may also join the team.
The senior system analyst, the most experienced analyst in the team, is appointed
as project leader. He has to conduct regular meetings to keep up the momentum
& accomplish the mission (selection of the best candidate system). A record is
kept of the progress made in each meeting.
Prepare system flowcharts:
The next step is to prepare generalized system flowcharts for the system. In the
initial investigation stage information-oriented charts & data flow diagrams
prepared & they are reviewed in this stage also. The main reason to prepare
system flowcharts is that they bring up the importance of inputs, outputs & data
flow among key points in the existing system. All the flowcharts needed for
detailed evaluation are completed at this point.
Technical knowledge & expertise in the hardware/software area are critical for
determining what each candidate system can & cannot do.
Determine & evaluate performance & cost effectiveness of each candidate system:
In this step the performance of each candidate system is evaluated against the
system performance requirements set prior to the feasibility study. There has to
be a close match as practicable, although the trade-offs is necessary to select the
best system.
The cost encompasses both designing & installing the system, which includes
user training, updating the physical facilities & documenting. System
performances are evaluated against the cost of each system to determine which
system is likely to be the most cost effective as well as meets the performance
requirements. Costs are more easily determined when the benefits of the system
are tangible & measurable. An additional factor to consider is the cost of study
design & development. The cost of the study phase is a fixed cost (sunk cost).
The analyst can plot the performance criteria & costs for each system to
determine how each fare.
Weigh system performance & cost data:
The performance & cost data of each candidate system show which system is
best choice. This outcome terminates the feasibility study. Some times the
performance/cost evaluation matrix is used to clearly identify the best system. So
in this step weight the importance of each criterion by applying a rating figure.
Finally the candidate system with the highest total is selected.
The procedure for weighting candidate system is as follows:1. Assign a weighting factor to each evaluation criterion based on the criterions
effect on the success of the system.
2. Assign a quantitative rating to each criterions qualitative rating.
3. Multiply the weight assigned to each category by the relative rating to determine
the score.
4. Sum the score column for each candidate system.
and desirable
for development.
The
Operational feasibility
Legal and Political Feasibility
Schedule Feasibility
Technical feasibility assesses whether the current technical resources are
sufficient for the new system. Focused on understanding the technical resources
and their applicability to the needs of the proposed system
If they are not available, can they be upgraded to provide the level of technology
necessary for the new system. The technical resources needed to develop,
purchase, install, or operate the system. The feasibility study has to ensure that
the company have the necessary hardware, software, and network resources,
have the needed technical expertise, the hardware and software environment be
reliable, the system should be able to handle future transaction volume and
company growth.
Economic feasibility determines whether the time and money are available to
develop the system. Economic Feasibility means that the projected benefits of the
proposed system outweigh the estimated costs usually considered the total cost of
ownership (TCO). Determine whether the proposed system will provide positive
economic benefits to the organization.
Economic feasibility analysis is the most frequently used method for evaluating
the effectiveness of a candidate system. Most commonly known as cost/benefit
analysis. This study is carried out to determine the benefits and savings that are
expected from a candidate system and compare them with costs. If the benefits
outweigh cost, then the decision is made to design and implement the system.
Otherwise further justifications or alterations have to be made to the proposed
system. This is an ongoing effort that improves accuracy at each phase of system
development life cycle.
Is there sufficient support for the system from management? From users? If
the current system is well liked and used to the extent that persons will not be
able to see reasons for a change, there may be resistance.
Are current business methods acceptable to users? If they are not, users may
welcome a change that will bring about a more operational and useful system.
Will the proposed system cause harm? Will it produce poorer results in any
respect or area? Will loss of control result in any areas? Will accessibility of
information be lost? Will individual performance be poorer after
implementation than before? Will performance be affected in an undesirable
way? Will the system slow performance in any areas?
This analysis determines whether the management or the users support the
projects, users see the need for change, the system result in a work force
reduction or not, the training is required for users to operate the system,
customers experience adverse effect in anyway, either temporarily or
permanently.
Legal and Political feasibility analyzes the potential legal ramification of the
new system. Understanding of the key stakeholders within the organization. In
this analysis consideration of legal issues like rules and regulations of
government, market issues, political factors etc. has to be done. Consulting legal
advisors during this process of the system development is must.
(ii)
salaries of computer operators and other data processing personnel who will
operate the new system,
(iii) salaries of system analysts and computer programmers who perform the system
maintenance function,
(iv) cost of input data preparation and control, (v) cost of data processing supplies,
(vi) cost of maintaining proper physical facilities including power, light, heat, air
conditioning, building rental or other facility charges and equipment and building
maintenance charges, overhead charges of the business firm.
Intangible costs are costs that cannot be easily measure. For example, the development
of a new system may disrupt the activities of an organisation and cause a loss of
employee productivity or morale. Customer sales and goodwill may be lost by errors
made during the installation of a new system. Such costs are difficult to measure in
rupees but are directly related to the introduction and operation of information system.
Benefits: The benefits which result from developing new or improved information
systems that utilise EDP can be subdivided into tangible and intangible benefits.
Tangible benefits are those that can be accurately measured and are directly related to
the introduction of a new system, such as decrease in data processing cost. Intangible
benefits such as improved business image are harder to measure and define. Benefits that
can result from the development of a computerised system are summarised below:
1. Increase in sales or profits (improvement in product or service quality).
2. Decrease in data processing costs (elimination of unnecessary procedures
and documents).
3. Decrease in operating costs (reduction in inventory carrying costs).
4. Decrease in required investment (decrease in inventory investment required).
5. Increased operational ability and efficiency (improvement in production ability
and efficiency; for example, less spoilage, waste, and idle time).
6. New or improved information availability (more timely and accurate information, and
new types and forms of information)
7. Improved abilities in computation and analysis (mathematical simulation).
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10. Improved management decision making (better information and decision analysis)
11. Improved competitive position (faster and better response to actions of competitors)
12. Improved business and community image (progressive image as
perceived by customers, investors, other businesses, government and the public).
Intangible though it is important to put a rupee and paise tag to each benefit for purposes
of