Analyzing the Business Case

LESSON 03
Lesson Outline:

 SWOT Analysis
 Requests for an information system
 Business Case
 Preliminary Investigation
 Feasibility study

Last
 - S y s t e m s
Le sson 0 2
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Strategic Planning

 It is the process of identifying long-term

 organizational goals,
 strategies,

 and resources.
 Itfocus on the long-term goals of the organization rather
than looking at day-to-day activities.
SWOT Analysis

 Strategic planning begins with a SWOT analysis,

 Stands for strengths, weaknesses, opportunities, and
threats.
 Foundation for the strategic planning process because it
examines a firm’s technical, human, and financial
resources.
 What are our
What are our
Internal
strengths, and how to
utilize them to reach
business goals?
weaknesses, and how
to eliminate them?
S
W
What are our
What are our threats,
O
External

opportunities, and
how to take advantage
of them?
and how to assess, and
respond to them? T
Group Activity – Conduct a SWOT analysis for
following scenario.
“FoodChain” supermarket chain is in the business for the last 30 years.
FoodChain has 50 supermarkets island-wide. FoodChain is owned by a group
of businessmen who formed it 30 years ago. Foodchain is financially very
stable and have a strong brand name. Their prices are aimed at the middle-
income group of society. They have semi-loyal customers. Customers today
are aware of prices offered by other supermarkets and are sensitive to changes
in quality and price.

Contd.
Due to the very heavy competition among the supermarkets and shops, the
top management wants to create a positive difference in the area of customer
experience at FoodChain. They want to adopt online shopping and
collaborations with other businesses to enhance the service they provide.

At the moment, FoodChain has a website which gives prices of all the
products they offer at their supermarkets. No online ordering is possible. At
present, FoodChain has a network that links all their branches through the
Internet to handle their internal financial matters. They want to upgrade it to
link all their supermarkets island-wide to allow online shopping and delivery
of goods. Furthermore FoodChain wants to have a system where they can
monitor the trends of their offline and online shoppers to provide them a
better service according to their buying trends.
 Strengths Weaknesses
Experience Customer base
-30 Years in the business -Semi loyal customers
Growth Online Capabilities
-50 Supermarkets island wide -No online ordering facility
Stability and Reputation
-Financially stable, having a brand name and owned by
group of businessmen
Target Segment
-Middle income group which is highest in population
Online Presence
-Having website showing product catalogue with prices
Digital Network
-Having a VPN to handle internal financial matters
among branches
 Opportunities
Online Shopping Trend
-High demand for online shopping and
delivery
Information Systems
-High availability in SCM softwares
for collaborations with other
businesses
Data Mining
-Evolvement for data mining
technologies to identifying buying
patterns
Threats
Customer Behavior
-Customers are aware of prices offered
by other supermarkets
and, sensitive to changes in quality
and price
Competition
-Heavy competition among the
supermarkets and shops
Request for a Information System
Types of Request for Information
Systems
 A systems request might propose
 Improvements for an existing information system
 Replacement of an legacy system with a new one
 A new system working together with another system or
legacy system
 Automating an existing manual system
Wh
y?
Request for: Improved Customer
Service
 Systems requests are coming with the idea of improving
service to customers of the information system.

Phone Call

Vehicle Reservation System

Request for: IT Support for New
Products and Services
 New products and services often require new types or
levels of IT support.
 For example with starting to distribute/offer a
product/service worldwide, could introduce a new online
platform for customers to make inquiries, as that is the
most convenient approach for both the parties.
Request for: Better performance

 Ifthe existing systems are not meeting the performance

requirements, the organizations will lose their
customers.
 For example, it might respond slowly to data inquiries at
certain times, or it might be unable to support customer
base growth.
 Performance limitations also result when a system that
was designed for a specific hardware configuration
becomes obsolete when new hardware is introduced.
Request for: More information

 The existing system might produce information that is

insufficient, incomplete, or unable to support the
company’s changing information needs.
 For example, a system that tracks customer orders might
not be capable of analyzing and predicting marketing
trends.
Request for: Stronger controls

 Theexisting system might not have effective controls to

ensure that data is secure and accurate.
 Some common security controls include passwords,
various levels of user access, and encryption, or coding of
data to keep it safe from unauthorized users.
Request for: Reduced cost

 Thecurrent system could be expensive to operate or

maintain as a result of technical problems, design
weaknesses, or the changing demands of the business.
 Itmight be possible to adapt the system to newer
technology or upgrade it.
Business Case

 Business cases are used for a variety of purposes.

 Main purpose : communicating to management the value of
the project and its expected costs and benefits.
 Two other types of documents that are closely associated
with business cases: the feasibility study and the project
plan.
Project Proposal, Business Case,
Feasibility Study and Project Plan
 Feasibilitystudy answers the broad question: “Is this
project doable?”
 Ifthe answer to the above question is “Yes”, then the
business case for the project comes into play.
 Businesscase refers to the reasons, or justification, for a
proposal.
 Assuming the business case was acceptable to management
and the project is authorized, then the next step is to prepare
a project plan.
Writing a Business Case - Example

• Problem: A growing company is struggling under the

weight of calls to its sales lines.
• Symptoms: This is resulting in lost sales when calls go
unanswered, it also leads to customer dissatisfaction
when customers are having to wait a long time for their
call to be answered. This means that customers are
more likely to switch to a competitor in future.
• Solution: Because of this the
company determines that it
wants to rectify the situation.
Eventually it decides to
introduce an Intelligent voice
response (IVR) telephone
system to ensure that
everyone’s call is handled
efficiently.
Preliminary Investigation
Role of System Analyst

 A systems analyst should conduct an initial investigation

to analyze the systems request and advise the required
actions.
 The analysts' task is to collect information about the
problem, project benefits, project scope, and
constraints.
 At the end of the preliminary investigation, a report will
be provided to the management.
Preliminary Investigation
Step 1: Understand the Problems and
Opportunity
 Inmost of the situations, the systems request does not
reveal the exact problem, just the symptoms.
 E.g.
 A request for a system to analyze the complaints of the
customers
 Mentioned Problem: sales representatives getting so many
complaints and unable to handle them manually
 Actual Problem: Issue with the product.
Ishikawa Diagram

 A fishbone diagram, also called a cause and effect

diagram or Ishikawa diagram, is a visualization tool for
categorizing the potential causes of a problem/effect in
order to identify its root causes.
3. Causes

1. Problem/Effect
Start from here.

2. Categories
Group Activity –
Draw a Ishikawa Diagram for the effect : “Photo
captured from a camera is blurred”
Step2: Define the Project Scope and
Constraints
Scope:
 Define the specific boundaries, or extent, of the project.
 Projects with very general scope definitions are at risk of
expanding gradually without specific authorization, in a
process called project creep.
 Toavoid this problem, you should define project scope as clearly as
possible.
Step2: Define the Project Scope and
Constraints
Constraint:
 Requirement or condition that the system must satisfy
or an outcome that the system must achieve.
 A constraint can involve hardware, software, time, policy,
law, or cost.
 Forexample, if the system must operate with existing
hardware, that is a constraint that affects potential solutions.
 System constraints also define project scope.
Step 3: Perform Fact-finding

 During fact-finding, you might;

 Review organization documents,
 Conduct interviews,
 Observe operations,
 Conduct a user survey.
 You should obtain organization charts to understand
how the department functions and identify individuals
you might want to interview.
Step 4: Analyze Data on Project
Usability, Cost, Benefit and Schedule
 Beforeyou can evaluate feasibility, you must carefully
analyze all data gathered with previous step.
 Ifyou conducted interviews or used surveys, you should
tabulate the data to make it easier to understand.
 Step 5: Evaluate Feasibility

Technical Economic Operational Schedule

Feasibility Feasibility Feasibility Feasibility

Continue the Project only if, the studies of above aspects proved the
project is feasible. Otherwise Stopped the project or find alternative
options.

The most popular model of feasibility study is “TELOS”, which stands for Technical, Economic, Legal, Operational, and
Schedule.
Step 6: Present Results and
Recommendations to Management
 Develop a report to management and present it.
 The report includes an evaluation of the systems
request, an estimate of costs and benefits, and a case
for action, which is a summary of the project request and
a specific recommendation.
Feasibility Study
Effort for Feasibility Study

 Depends on the request.

 Ifa department wants an existing report sorted in a
different order, the analyst can decide quickly whether
the request is feasible.
 A proposal by the marketing department for a new
market research system to predict sales trends requires
more effort.
Technical Feasibility

 Technicalresources (hardware, software, network

resources; technical expertise) needed to develop,
purchase, install, or operate the system.
Economical Feasibility

 Whether projected benefits (tangible and intangible) of the

proposed system outweigh the estimated costs.
 Cost

• People, including IT staff and users • Consulting expenses

• Hardware and equipment • Facility costs
• Software, including in-house • The estimated cost of not developing
development as well as purchases the system or postponing the project
from vendors
• Formal and informal training
• Licenses and fees
Operational Feasibility

 Whether proposed system will be used effectively after it

has been developed.
 Ifusers have difficulty with a new system, it will not produce
the expected benefits.
Schedule Feasibility

 Whetherproject can be implemented in an acceptable

time frame as stakeholder expectations.
 When assessing schedule feasibility, a systems analyst
must consider the interaction between time and costs.
 Theschedule data will be incorporated into the project
plan in the form of tasks, durations and milestones.
 “ Thank You

ANALYZING THE BUSINESS CASE - OBJECTIVES

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Requirements Modeling