Project Risks and Feasibility Assessment

Advanced Systems Analysis and Design

Project Risk Factors
Project Risk Classification
 Feasibility is the measure of how beneficial or practical
the development of an information system will be to an
organization.
 Feasibility analysis is the process by which feasibility is
measured.
 Feasibility should be measured throughout the life cycle.
 The scope and complexity of an apparently feasible project can
change after the initial problems and opportunities are fully
analyzed or after the system has been designed.
 Thus, a project that is feasible at one point in time may become
infeasible at a later point in time.
Feasibility Assessment
 Why feasibility assessment?
 Information systems are major investments
 IS projects are subject to the same cost justifications as any other
capital investments
 Business value paradox
 Avoid "black hole" projects
 1 2

Survey Study

Definition

End-users

Configuration

9 5 6

Support Design Procurement

8 7

Delivery Construction

Vendors
 Feasibility Analysis

 Feasibility Checkpoints During Analysis

 Systems Analysis -Survey Phase
 ``Do the problems (or opportunities) warrant the cost of a detailed study of the current

system?''
 Systems Analysis - Study/Definition Phase
 Better estimates of development costs and the benefits to be obtained from a new

system.
 Requirements often prove to be more extensive that originally stated.

 If feasibility is in question, scope, schedule, and costs must be rejustified.

 Systems Analysis - Selection Phase

 A major feasibility analysis evaluating options for the target systems design.

 Typical options that are evaluated include

• Do nothing! Leave the current system alone.

• Reengineer the (manual) business processes, not the computer-based processes.
• Enhance existing computer processes.
• Purchase a packaged application.
 Four Tests for Feasibility

 Operational feasibility is a measure of how well a specific solution will work in the
organization. It is also a measure of how people feel about the system/project.
 Does management support the system?

 How do the end-users feel about their role in the new system?

 What end-users or managers may resist or not use the system? Can this problem

be overcome? If so, how?

 Usability analysis

• Ease of use, Ease of learning, User satisfaction

 Technical feasibility is a measure of the practicality of a specific technical solution and the
availability of technical resources and expertise.
 Is the proposed technology or solution practical? Is the technology mature?

 Do we currently possess the necessary technology?

 Do we possess the necessary technical expertise, and is the schedule reasonable?

 Schedule feasibility is a measure of how reasonable the project timetable is.

 Economic feasibility is a measure of the cost-effectiveness of a project or solution. This is
often called a cost-benefit analysis.
 System Costs

Costs
Development cost
Consulting fees
Hardware/ software
Conversion/ installation
Training/ Documentation
Operation/ Production costs
Personnel costs
System usage/ maintenance cost
System upgrades
Supplies
 System Benefits

Benefits
Tangible benefits
Reduced processing errors
Increased throughput
Decreased response time
Manpower reduction
Cost elimination
Increased sales
Reduced credit losses
Intangible benefits
Improved customer satisfaction
Improved employee morale
Better decision making
 Cost Benefit Analysis

Payback analysis
Return on investment
Net present value
PV = 1(1+i)^n
Constructive Cost Model (COCOMO)

 Developed by Barry Boehm (1981)

 Predicts the effort & duration of a project
 Based on size of the system & a number of “cost drivers,”
 Constructive Cost Model (COCOMO)

CoCoMo Basic Equations

Mode Description Effort Schedule

Organic Small-Medium Size, WM= TDEV=

In-house Dev. 2.4(KDSI)1.05 2.5(MM)0.38
Semidetached Intermediate-Large Size, WM= TDEV=
Partial In-house & 3.0(KDSI)1.12 2.5(MM)0.35
contracted

Embedded Very Large Size, WM= TDEV=

Contractor developed 3.6(KDSI)1.20 2.5(MM)0.32
WM = Work-Months; TDEV = Time of Development
KDSI = Thousands of delivered source instruction
 Cost Drivers in COCOMO

 Product attributes
 software reliability, database size, software complexity

 Hardware/platform attributes
 execution time constraints, main storage constraints, virtual

machine volatility, turnaround time

 Personnel attributes
 Analyst capability, applications experience, programmer

capability, virtual machine experience, language experience

 Project attributes
 use of modern programming practices, use of software tools,

development schedule constriants

 Factors not Included in COCOMO

 Application type  Amount of documentation

 Language level
 Requirements volatility
 Personnel continuity
 Management quality
 Customer interface quality
 Hardware configuration
 Security and privacy
restrictions
 Function Point Analysis

 Developed by Allan Albrecht at IBM (1979)

 Based on estimation of inputs, outputs, queries, interfaces,
and files
 Main advantages
 Possible to estimate function points early in the

development life cycle

 Can be estimated by non-technical personnel
 Function Point Analysis

Basic Equation: FP = FC (PCA)

PCA = 0.65 + (0.01) Σci
PCA – Processing Complexity Adjustment; C – Complexity Factors
Simple Average Complex FC = Count
* Weight
Input 3 4 6

Output (eg, reports, screens) 4 5 7

Inquires 7 10 15

Files 5 7 10

Applications Interfaces 3 4 6
 Feasibility Analysis of Candidate Systems

 Candidate Systems Matrix

 The candidate systems matrix documents similarities and
differences between candidate systems; however, it offers no
analysis.
 The columns of the matrix represent candidate solutions.
 The rows of the matrix represent characteristics that serve to
differentiate the candidates. The breakdown is as follows:
 TECHNOLOGY

 INTERFACES

 DATA

 PROCESSES

 GEOGRAPHY
 Candidate 1 Name Candidate 2 Name Candidate 3 Name
Technology
Interfaces
Data
Processes
Geography
Characteristics Candidate 1 Candidate 2 Candidate 3 Candidate ...
Portion of System Computerized COTS package Platinum Member Services and Same as candidate 2.
Plus from Entertainment warehouse operations in
Brief description of that portion of the Software Solutions would be relation to order fulfillment.
system that would be computerized in purchased and customized to
this candidate. satisfy Member Services
required functionality.
Benefits This solution can be Fully supports user required Same as candidate 2.
implemented quickly business processes for
Brief description of the business benefits because its a purchased Soundstage Inc. Plus more
that would be realized for this solution. efficient interaction with
candidate. member accounts.
Servers and Workstations Technically architecture Same as candidate 1. Same as candidate 1.
dictates Pentium pro, MS
A description of the servers and Windows NT class servers
workstations needed to support this and Pentium, MS Windows
candidate. NT 4.0 workstations
(clients).
Software Tools Needed MS Visual C++ and MS MS Visual Basic 5.0 MS Visual Basic 5.0
ACCESS for customization System Architect 3.1 System Architect 3.1
Software tools needed to design and of package to provide report Internet Explorer Internet Explorer
build the candidate (e. g., database writing and integration.
management system, emulators,
operating systems, languages, etc.). Not
generally applicable if applications
software packages are to be purchased.
Application Software Package Solution Custom Solution Same as candidate 2.

A description of the software to be

purchased, built, accessed, or some
combination of these techniques.
Method of Data Processing Client/Server Same as candidate 1. Same as candidate 1.

Generally some combination of: on-line,

batch, deferred batch, remote batch, and
real-time.
Output Devices and Implications (2) HP4MV department (2) HP4MV department Same as candidate 2.
Laser printers Laser printers
A description of output devices that (2) HP5SI LAN laser (2) HP5SI LAN laser
would be used, special output printers printers
requirements, (e.g. network, preprinted (1) PRINTRONIX bar-code
forms, etc.), and output considerations printer (includes software &
(e.g., timing constraints). drivers)

Web pages must be designed

to VGA resolution. All
internal screens will be
designed for SVGA
resolution.
Input Devices and Implications Keyboard & mouse Apple “Quick Take” digital Same as candidate 2.
camera and software
A description of Input methods to be (15) PSC Quickscan laser
used, input devices (e.g., keyboard, bar-code scanners
mouse, etc.), special input requirements, (1) - HP Scanjet 4C Flatbed
(e.g. new or revised forms from which Scanner
data would be input), and input Keyboard & mouse
considerations (e.g., timing of actual
inputs).
Storage Devices and Implications MS SQL Server DBMS with Same as candidate 1. Same as candidate 1.
100GB arrayed capability.
Brief description of what data would be
stored, what data would be accessed
from existing stores, what storage media
would be used, how much storage
capacity would be needed, and how
data would be organized.
 Feasibility Analysis of Candidate Systems

 Feasibility Analysis Matrix

 This matrix complements the candidate systems matrix with an
analysis and ranking of the candidate systems. It is called a
feasibility analysis matrix.
 The columns of the matrix correspond to the same candidate

solutions as shown in the candidate systems matrix.

 Some rows correspond to the feasibility criteria presented in

this chapter.
 Rows are added to describe the general solution and a ranking

of the candidates.
 The cells contain the feasibility assessment notes for each

candidate.
 Feasibility Analysis of Candidate Systems

 Feasibility Analysis Matrix

 Each row can be assigned a rank or score for each criteria (e.g.,
for operational feasibility, candidates can be ranked 1, 2, 3,
etc.).
 After ranking or scoring all candidates on each criteria, a final

ranking or score is recorded in the last row.

 Candidate 1 Name Candidate 2 Name Candidate 3 Name
Description
Operational
Feasibility
Technical
Feasibility
Schedule
Feasibility
Economic
Feasibility
Ranking
 Feasibility Criteria
Operational Feasibility
Functionality. A description of to what
degree the candidate would benefit the
organization and how well the system
would work.
Political. A description of how well
received this solution would be from
both user management, user, and
organization perspective.
Technical Feasibility
Technology. An assessment of the
maturity, availability (or ability to
acquire), and desirability of the
computer technology needed to support
this candidate.
Expertise. An assessment to the
technical expertise needed to develop,
operate, and maintain the candidate
system.
Economic Feasibility
Cost to develop:
Payback period (discounted):
Net present value:
Detailed calculations:
Schedule Feasibility
An assessment of how long the solution
will take to design and implement.
Ranking
Wt. Candidate 1
30% Only supports Member
Services requirements and
current business processes
would have to be modified to
take advantage of software
functionality
Score: 60
30% Current production release of
Platinum Plus package is
version 1.0 and has only been
on the market for 6 weeks.
Maturity of product is a risk
and company charges an
additional monthly fee for
technical support.
Required to hire or train C++
expertise to perform
modifications for integration
requirements.
Score: 50
30%
Approximately $350,000.
Approximately 4.5 years.
Approximately $210,000.
See Attachment A.
Score: 60
10% Less than 3 months.
Score: 95
100% 60.5
Candidate 2
Fully supports user required
functionality.
Score: 100
Although current technical
staff has only Powerbuilder
experience, the senior
analysts who saw the MS
Visual Basic demonstration
and presentation, has agreed
the transition will be simple
and finding experienced VB
programmers will be easier
than finding Powerbuilder
programmers and at a much
cheaper cost.
MS Visual Basic 5.0 is a
mature technology based on
version number.
Score: 95
Approximately $418,040.
Approximately 3.5 years.
Approximately $306,748.
See Attachment A.
Score: 85
9-12 months
Score: 80
92
Candidate 3 Candidate ..
Same as candidate 2.
Score: 100
Although current technical
staff is comfortable with
Powerbuilder, management is
concerned with recent
acquisition of Powerbuilder
by Sybase Inc.
MS SQL Server is a current
company standard and
competes with SYBASE in
the Client/Server DBMS
market. Because of this we
have no guarantee future
versions of Powerbuilder
will “play well” with our
current version SQL Server.
Score: 60
Approximately $400,000.
Approximately 3.3 years.
Approximately $325,500.
See Attachment A.
Score: 90
9 months
Score: 85
83.5