Systems Analysis & Design 1

10th Edition

CHAPTER 2
Analyzing The Business Case
 IS Development
2

 PLANNING
 ANALYSIS
 DESIGN
 IMPLEMENTATION
 SYSTEMS OPERATION, SUPPORT &
SECURITY
 Content
3

 Reasons for IS Projects

 Factors affecting IS Projects
 IS Project Evaluation
 Feasibility
 Steps in Preliminary Investigation
 Introduction
4

 Business case must be strong in order for

a proposal to be accepted

 Business case – reasons/justification for a

proposal

 Analyzing business case requires

understanding of company’s mission,
objectives and IT needs
 Strategic Planning
5

 Process of identifying long-term

organizational goals, strategies, and
resources
 SWOT analysis
 Strategic Planning Process
6

 Mission statement
 Company description
for stakeholders
 Purpose, products,
services & values

 Stakeholders
 Anyone affected by
company’s operations
 Main reasons for IS Projects
7

 Improved service
 Support for new products and services
 Better performance
 More information
 Stronger control – secure and accurate
 Reduced costs
 Factors Affecting IS Projects
8

 Internal Factors
 Strategic plan
 Top managers
 User requests
 Information technology department
 Existing systems and data
 Legacy systems
 Information Systems Projects
9

 External Factors
 Technology
 Electronic product code (EPC)
 Suppliers
 Just-in-time (JIT)
 Customers
 Customer Relationship Management (CRM)
 Competitors
 The economy
 Government
 Information Systems Projects
10

 All IT projects, large and small, must be

managed and controlled

 Project management begins with a systems

request, and continues until the project is
completed or terminated

 Risk management – identify, evaluate, track

and control risks
 Evaluation of Systems
Requests
11

 Systems review committee

 Computer resources committee
 Systems Requests Forms
 Evaluation of Systems
Requests
12

 Systems Review Committees

 Most large companies use a systems review
committee to evaluate systems requests
 Many smaller companies rely on one person to
evaluate system requests instead of a
committee
 The goal is to evaluate the requests and set
priorities
 Feasibility Study
13
 Tests conducted on a system request to
determine whether it is worthwhile to
proceed further
 Technical Feasibility
14

 Technical resources needed to develop,

purchase, install, or operate the system
 Hardware
 Software
 People – experts

 Consider:
 Availability,
integration, reliability,
performance
 Operational Feasibility
15

 Effectiveness of proposed systems

 Consider
 Management/users support
 Workforce reduction

 Retraining – costs, time

 Company’s image
 Economic Feasibility
16

 Projected benefits outweighs the

estimated costs
 Total cost of ownership (TCO)
 Maintenance & acquisition costs

 Benefits
 Tangible – can be measured with money
 Intangible – important advantages difficult to
measure with money
 Schedule Feasibility
17

 Project can be implemented in an

acceptable time frame

 Consider
 Factors affecting schedule can be
controlled?
 Firm timetable

 Risks of accelerated schedule – costs, etc

 Steps In Evaluating Feasibility
18

1. Take out systems requests that are not

feasible
2. Take out unnecessary feasible request
3. Establish priorities among the remaining
requests

 Feasibility analysis is an ongoing task

that must be performed throughout the
systems development process
 Factors Affecting Priorities
19

 Discretionary Projects
 Management has a choice in implementing
them
 Eg. Creating a new report for a user

 Nondiscretionary Projects
 Projects where no choice exists
 Adding a report required by federal law
 Preliminary Investigation
20

 Preliminary investigation – study system

request and recommend specific action
 Interaction with Managers and Users
 Preliminary Investigation
21
Steps
1. Understand problem/opportunity
2. Define project scope and constraint
3. Perform fact finding
4. Evaluate feasibility
5. Estimate project development time and
cost
6. Present results and recommendations to
management
 1: Understand the Problem or
Opportunity
22

 Develop business profile

 Fishbone diagram, or Ishikawa diagram
 A popular technique for investigating causes
and effects
 Pareto chart
 Tool for visualizing and prioritizing issues
 2: Define the Project Scope and
Constraints
23

 Scope – Define project boundaries

 Payroll is not being produced accurately
 Overtime pay is not calculated correctly for
production workers on the second shift
 Project creep – a process where projects
are at risk of expanding gradually

 Constraint – Req or conditions system

must satisfy or outcome it must achieve
 Website must be operational my 1st october
 2: Define the Project Scope and
Constraints
24

 Constraint characteristics:
 Present versus future
 Internal versus external
 Mandatory versus desirable
 Regardless of the type, all constraints should
be identified as early as possible to avoid
future problems and surprises
 3: Perform Fact-Finding
25

 Analyze organization charts

 Techniques:
 Conduct interviews
 Review documentation
 Observe operations
 Conduct user survey
 3: Perform Fact-Finding
26

 Conduct interviews
 Determine the people to interview
 Establish objectives for the interview
 Develop interview questions
 Prepare for the interview
 Conduct the interview
 Document the interview
 Evaluate the interview
 4: Evaluate Feasibility
27

 Evaluate the project’s operational,

technical, economic, and schedule
feasibility
 5: Estimate Project
Development Time and Cost
28

 Develop specific time and cost for next

development phase
 Provide estimate for overall project

 Determine information type, information

sources, costs of analyzing and preparing
report
 6: Present Results and
Recommendations to
29 Management
 The final task in the preliminary
investigation is to prepare a report to
management
 The format of the preliminary
investigation report varies from one
company to another
 6: Present Results and
Recommendations to
30 Management
 Report Format
 Introduction
 overview, description, investigator, initiator
 Systems request summary
 Basis of systems request
 Findings
 Scope, constraint and feasibility
 Recommendations
 Project Roles
 Time & cost estimates
 Expected benefits
 Appendix
 Chapter Summary
31

• Strategic planning allows a company to examine

its purpose, vision, and values and develops a
mission statement, which leads to goals,
objectives, day-to-day operations, and business
results that affect company stakeholders
• Systems projects are initiated to improve
performance, provide more information, reduce
costs, strengthen controls, or provide better
service
 Chapter Summary
32

• Various internal and external factors affect

systems projects, such as user requests, top
management directives, existing systems, the IT
department, software and hardware vendors,
technology, customers, competitors, the
economy, and government
• During the preliminary investigation, the analyst
evaluates the systems request and determines
whether the project is feasible from an operation,
technical, economic, and schedule standpoint
 Chapter Summary
33

• Analysts evaluate systems requests on the basis

of their expected costs and benefits, both
tangible and intangible
• The steps in the preliminary investigation are to
understand the problem or opportunity; define
the project scope and constraints; perform fact-
finding; analyze project usability, cost, benefit,
and schedule data; evaluate feasibility; and
present results and recommendations to
management
 Chapter Summary
34

 The last task in a preliminary investigation is to

prepare a report to management
 The report must include an estimate of time,
staffing requirements, costs, benefits, and
expected results for the next phase of the SDLC

 Chapter 2 complete