Lecture 4

Feasibility Study
Objectives
The objective of this lecture is to introduce a feasibility study in software engineering
—a study that helps in determining whether the software production is possible to develop or
not with available technology and within budget and time. After this lecture, student will
■ understand what feasibility is and why it is important;
■ understand types of feasibility study;
■ understand feasibility study process;

Reference Reading
• William Y. Arms, ―Feasibility Studies‖, Computing and Information Science, Cornell
University
• Feasibility Study,
https://www.tutorialspoint.com/system_analysis_and_design/system_analysis_and_d
esign_planning.htm
• THAKUR, D. (2016). What is Feasibility Study? Types of Feasibility. Explain
Feasibility Study Process. Retrieved from http://ecomputernotes.com/software-
engineering/feasibilitystudy
• Diab, N. (2016). What are the main components of a feasibility study? - Bayt.com
Specialties. Retrieved from https://specialties.bayt.com/en/specialties/q/277098/what-
are-the-main-components-of-a-feasibility-study/
• Feasibility Study – Determining whether the Project is Feasible
https://www.w3computing.com/systemsanalysis/feasibility-study/

1. Introduction
A feasibility study is a study made before committing to a project. It can be
considered as preliminary investigation that helps the management to take decision about
whether study of system should be feasible for development or not. So it leads to a decision:
go ahead, do not go ahead or think again. In software production projects, it often leads to a
budget request. Feasibility study is the analysis of risks, costs and benefits relating to
economics, technology, and user organizations. The problem to be automated (the software
system) is analyzed in sufficient detail to ensure that all aspects of feasibility are evaluated.

The objectives of feasibility study are

• to establish the reasons to develop the software,

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 • to determine whether it would be financially and technically feasible to develop
the product that is accepted by all the users and can be modified easily as per the
requirements, i.e., adaptable to change.

Various other objectives of feasibility study are listed below:

• To analyze whether the software will meet organizational requirements.
• To determine whether the software can be implemented using the current
technology and within the specified budget and schedule.
• To determine whether the software can be integrated with other existing software.

Feasibility study identifies the possibility of improving an existing system,

developing a new system, and produce refined estimates for further development of system. It
is used to obtain the outline of the problem and decide whether feasible or appropriate
solution exists or not. The main objective of a feasibility study is to acquire problem scope
instead of solving the problem.

Define
Problem

Measure Project
Feasible System
Feasibility
Report Analysis

Alternative
Approaches

Figure 4.1 Feasibility Study Process

The output of a feasibility study is a formal system proposal act as decision

document which includes the complete nature and scope of the proposed system. It serves as
a rough understanding between the team members about estimate based on the client side
requirement. After over all discussion they search for variety of solution on the basis of
kind of resources and time requirement etc. Sometimes this feasibility assessment is carried
out in a detailed and systematic fashion; and sometimes it is carried out in a hurried and ad
hoc fashion; and sometimes it is not carried out at all.

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2. Steps Involved in Feasibility Analysis

Figure 4.2 Feasibility Study: Identify alternatives and Select the best one.

The following steps are to be followed while performing feasibility analysis −

1) Form a project team and appoint a project leader.
2) Develop system flowcharts.
3) Identify the deficiencies of current system and set goals.
4) Enumerate the alternative solution or potential candidate system to meet goals.
5) Determine the feasibility of each alternative such as technical feasibility,
operational feasibility, etc.
6) Weight the performance and cost effectiveness of each candidate system.
7) Rank the other alternatives and select the best candidate system.
8) Prepare a system proposal of final project directive to management for approval.

3. Identifying Scope of the Software

The Project Scope which is used to define the business problem and/or opportunity
to be addressed. The scope should be definitive and to the point. It is also necessary to
define the parts of the business affected either directly or indirectly, including project
participants and end-user areas affected by the project. Project started without a well-defined
project scope, consequently, have wandered in and out of their boundaries causing them to
produce either far too much or far too little than what is truly needed.
The Project Scope expresses the boundaries of the system. It defines a list of included
functions, a list of excluded functions, a list of dependencies, and a list of current systems to
be replaced. Without the project scope, confusion over scope is a common reason for clients
to be dissatisfied with a system. Client’s complaints can be as:
"Is that all you planned to do?" "But I assumed that you were going to do xyz." "I
can't use the system without abc."

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Example: A Government Repository (Confusion over Scope)

• A government organization, L, required a "repository system" to store and make

accessible very large amounts of highly varied material over long periods of time.
• An outside organization, C, built a repository system to store and manipulate
complex digital material.
• BUT... Nobody built the sub-‐systems needed to organize, validate, and to load
material into the repository.
• L expected the repository system to include these sub‐systems.
• C considered the sub-systems separate from the repository system.
• A good feasibility study would have seen this confusion.

The problem definition is produced after completing interviews, observations, and

document analysis with the users. The first step in producing the problem definition is to find
a number of points that may be included in one issue.

3.1 The Current Analysis

The current analysis is used to define and understand the current method of
implementation, such as a system, a product, etc. From this analysis, it is not uncommon to
discover there is actually nothing wrong with the current system or product other than
some misunderstandings regarding it or perhaps it needs some simple modifications as
opposed to a major overhaul. Also, the strengths and weaknesses of the current approach
are identified (pros and cons). In addition, there may very well be elements of the current
system or product that may be used in its successor thus saving time and money later on.
Without such analysis, this may never be discovered.
Analysts are cautioned to avoid the temptation to stop and correct any problems
encountered in the current system at this time. Simply document the findings instead,
otherwise you will spend more time unnecessarily in this stage.

4. Evaluate the Alternative Solutions

The recommended solution or course of action to satisfy the requirements are

evaluated. Here, various alternatives are considered along with an explanation as to why the
preferred solution was selected. In terms of design related projects, it is here where whole
rough designs (e.g., "renderings") are developed in order to determine viability. It is also at
this point where the use of existing structures and commercial alternatives are considered
(e.g., "build versus buy" decisions). The overriding considerations though are:
 Does the recommended solution satisfy the requirements?
 Is it also a practical and viable solution?
A thorough analysis here is needed in order to perform the next step.

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4.1 Identify the Risks

After the current problem domain is understood, alternative approaches to the

problems are developed. For each alternative approach, identify different configurations of
work, hardware, firmware, or software, benefits, and risks of each approach. Usually
between two and five alternatives are considered.
Risk assessment determines possible sources of events that might jeopardize
completion of the application. There are different types of risks involving: Technology;
People; Organization; Tools; and Requirements.
To over risk, we need a contingency plan which includes identification of tasks
designed to prevent risky events and tasks to deal with the events if they should occur. It is a
plan just in case the worst happens.
For Technical risks, there must be an outline plan with a rough timetable and staff
allocation. The plan must have a very large margin for contingencies. (Projects typically
require twice the staff and/or time envisaged in the feasibility plan.)
For External risk, every system interacts with others. Are the others committed to the
necessary efforts (e.g., potential users and customers)? Where are the external pressures and
obstacles? Plan for risk analysis narrows the business alternatives and enhance success rate
analyzing different parameters associated with proposed project development.

4.2 CASE STUDY for A Problem Definition Example: CATHERINE’S CATERING.

Catherine’s Catering is a small business that caters meals, receptions, and banquets
for business and social occasions such as luncheons and weddings. It was inspired by
Catherine’s love of cooking and her talent for preparing fine meals. At first it was a small
company with a handful of employees working on small projects. Catherine met with
customers to determine the number of people, the type of meals, and other information
necessary to cater an event. As their reputation for creating superb food and the quality of the
service began to blossom, the number of events started to increase. The building of a new
convention center, along with a prospering business community in the city, increased the
number of catering events.
Catherine was able to manage the business using spreadsheets and word
processing but found difficulty in keeping up with endless phone calls about what types of
meals were available, changes to the number of guests attending the event, and the
availability of specialty dietary items, such as vegan, vegetarian, low-fat, low-carbohydrate,
and so on. Catherine’s decisions to hire a number of part-time employees to cook and cater
the events meant that the complexity of scheduling personnel was becoming overwhelming to
the new human resources manager. Catherine decided to hire an IT and business consulting
company to help her address the problems her catering enterprise was facing.
After performing interviews and observing a number of key staff, the consultants
found the following concerns:

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 (1) The master chef ordered supplies (produce, meat, and so on) from suppliers for each
event. The suppliers would provide discounts if greater quantities were ordered at a
single time for all events occurring in a given time frame.
(2) Customers often called to change the number of guests for an event, with some changes
made only one or two days before the event was scheduled.
(3) It was too time-consuming for Catherine and her staff to handle each request for
catering, with about 60 percent of the calls resulting in a contract.
(4) Conflicts in employee schedules were occurring and some events were understaffed.
Complaints about the timeliness of service were becoming more frequent.
(5) Catherine does not have any summary information about the number of events and
types of meals. It would be helpful to have trend information that would help guide her
customers in their choice of meals.
(6) Events are often held at hotels or other meeting halls, which provide table settings for sit
down meals. There are problems with having sufficient wait staff and changes with the
number of guests.

The problem definition is shown in the illustration below. Notice the weights on the right,
representing an average of the weights assigned by each employee. Objectives match the
issues. Each objective is used to create user requirements.

Catherine's Catering

Problem Definition

Catherine’s Catering is experiencing problems with handling the number of routine calls with
customers, as well as coordinating with external partners such as suppliers and meeting facilities. The
growth in the number of part-time staff is leading to scheduling conflicts and understaffed events.

Issues

1. Customer contact takes an inordinate amount of time for routine questions.

2. Managing part-time employees is time-consuming and leads to scheduling errors.
3. It is difficult to accommodate last-minute changes for events.
4. Supplies are ordered for each event. Often shipments are received several times a day.
5. There are often problems communicating changes to event facilities.
6. There is little historical information about customers and meals.

Objectives

1. Provide a Web system for customers to obtain pricing information and place orders.
2. Create or purchase a human resources system with a scheduling component.
3. After customers have signed an event contract, provide them with Web access to their
account and a means for them to update the number of guests. Notify management of
changes.
4. Provide a means to determine overall quantities of supplies for events occurring within a
concurrent time frame.
5. Provide a system for communicating changes to key personnel at event facilities.

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 Catherine's Catering

6. Store all event data and make summary information available in a variety of formats.

Requirements

1. The system must be secure.

2. Feedback must be entered by event managers at the close of each event.
3. There must be a means for event facilities to change their contact person.
4. The system must be easy to use by nontechnical people.

Constraints

1. Development costs must not exceed $50,000.

2. The initial Web site for customer orders must be ready by March 1 to accommodate
requests for graduation parties and weddings.

User requirements are then used to create either use cases and a use case diagram or
data flow diagram processes. Each objective may create one or more user requirements or
several objectives may create one or perhaps no use cases (use cases are not often created for
simple reports), or each requirement may create one data flow diagram process. The user
requirements for Catherine’s Catering are to:

(1) Create a dynamic Web site to allow current and potential clients to view and obtain
pricing information for a variety of different products.
(2) Allow current and potential clients to submit a request with their catering choices,
with the request routed to an account manager.
(3) Add clients to the client database, assigning them a userID and a password for
access to their projects.
(4) Create a Web site for clients to view and update the number of guests for an event
and restrict changing the number of guests when the event day is less than five days
in the future.
(5) Obtain or create software to communicate directly with event facility personnel.
(6) Create or purchase a human resources system for scheduling part-time employees,
allowing management to add employees and schedule them using a number of
constraints.
(7) Provide queries or reports with summary information.

Each requirement may be used to create a preliminary test plan. Since scant details are
available at this time, the test plan will be revised as the project progresses.

A simple test plan for Catherine’s Catering is:

(1) Design test data that would allow clients to view each different type of product.
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 (2) Test to ensure that a catering request has been entered with valid data, as well as
each possible condition of invalid data (data will be defined later). Ensure that the
request is routed to the appropriate account manager.
(3) Test that all data fields pass all validation criteria for each field. Test good data to
ensure that clients are added to the client database, and that a userID and a
password are correctly assigned.
(4) Create a test plan that will test that clients are able to view event information. Test
that updates may not be made within five days of the event. Design test data that
will check to ensure correct updating of the number of guests for an event.
(5) Test that the software works correctly for communicating directly with event
facility personnel.
(6) Test the human resources system for scheduling part-time employees, checking that
employees have been correctly added and that all invalid values for each field are
detected and reported. Check scheduling software for valid updates and each invalid
entry.
(7) Check that all queries or reports work correctly and contain the correct summary
information.

5. Determine the Feasibility

This evaluation examines the effectiveness of the approach selected in terms of

different types of feasibilities such economically feasible, technically feasible, legally
feasible and timely feasible. This begins with an analysis of the estimated total cost of the
project. In addition to the recommended solution, other alternatives are estimated in order to
offer an economic comparison. For development projects, an estimate of labour and out-of-
pocket expenses is assembled along with a project schedule showing the project path and
start-and-end dates. After the total cost of the project has been calculated, a cost and
evaluation summary is prepared which includes such things as a cost/benefit analysis, return
on investment, etc.

5.1 Types of Feasibility Study

(1) Economic Feasibility

 It is evaluating the effectiveness of candidate system by using cost/benefit analysis

method. It demonstrates the net benefit from the candidate system in terms of
benefits and costs to the organization.
 The main aim of Economic Feasibility Analysis (EFS) is to estimate the
economic requirements of candidate system before investments funds are
committed to proposal.
 It prefers the alternative which will maximize the net worth of organization by
earliest and highest return of funds along with lowest level of risk involved in
developing the candidate system.

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(2) Technical Feasibility

 It investigates the technical feasibility of each implementation alternative.

 It analyzes and determines whether the solution can be supported by existing
technology or not.
 The analyst determines whether current technical resources be upgraded or
added it that fulfill the new requirements.
 It ensures that the candidate system provides appropriate responses to what extent
it can support the technical enhancement.

(3) Operational Feasibility

 It determines whether the system is operating effectively once it is developed and

implemented.
 It ensures that the management should support the proposed system and its
working feasible in the current organizational environment.
 It analyzes whether the users will be affected and they accept the modified or
new business methods that affect the possible system benefits.
 It also ensures that the computer resources and network architecture of
candidate system are workable.

(4) Behavioral Feasibility

 Sometime called, Organizational Feasibility.

 It evaluates and estimates the user attitude or behavior towards the
development of new system.
 It helps in determining if the system requires special effort to educate, retrain,
transfer, and changes in employee’s job status on new ways of conducting
business.

(5) Schedule Feasibility

 It ensures that the project should be completed within given time constraint or
schedule.
 It also verifies and validates whether the deadlines of project are reasonable or
not.

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 Operational Feasibility Economic Feasibility
 How well the proposed system supports  Cost savings
the business priorities of the organization  Increased revenue
 How well the proposed system will solve  Decreased investment requirements
the identified problem  Increased profits
 How well the proposed system will fit with  Cost/benefit analysis
the existing organizational structure
Technical Feasibility Human Factors Feasibility
 Hardware, software, and network  Employee, customer, supplier
capability, reliability, and availability acceptance
 Management support
 Determining the right people for the
various new or revised roles

Legal/Political Feasibility
 Patent, copyright, and licensing
 Governmental restrictions
 Affected stakeholders and reporting
authority

Figure 4.3 Operational, economic, technical, human and legal factors for feasibility study

Operational Feasibility Economic Feasibility

 How well a proposed e-commerce system  Savings in labor costs
fits the company’s plans for developing  Increased sale revenue
Web-based sales, marketing, and financial  Decreased investment in inventory
systems  Increased profits
 Acceptable return on investment
Technical Feasibility Human Factors Feasibility
 Capability, reliability, and availability of  Acceptance of Employee
Web store hardware, software and  Management support
management services  Customer and supplier acceptance
 Staff developers have necessary skills

Legal/Political Feasibility
 No Patent or copyright violations
 Software licensing for developer side only
 No Governmental restrictions
 No changes to existing reporting authority

Figure 4.4 Examples of how a feasibility study might measure the feasibility of a
proposed e-commerce system for a business.

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5.2 The Costs-Benefits Analysis
Evaluating the effectiveness of candidate system by using cost/benefit analysis
method demonstrates the net benefit in terms of benefits and costs to the organization.
Cost-benefit analysis compares the cost of developing the system with the money saved by
using it.
The costs include development, additional hardware, maintenance and training. In
this approach two quantities are calculated: (1) the cost of providing the system, (2) the
money saved or created by using the system – the benefit. If the benefit is greater than the
cost, the system is worthwhile; otherwise it is not. Costs and benefits are usually estimated
over a five year period. This means that the initial start-up costs are spread over the
expected useful life of the system. Benefits can be either tangible or intangible. Both
tangible and intangible benefits and costs must be taken into account when evaluating the
effectiveness of the systems are considered.
• Tangible Benefits are advantages measurable in terms of dollars, resources or time
saved that increase to the organization through the use of the information system.
Examples of tangible benefits are:
• Decrease operating cost by 10% in first year
• Increase market share by 5 % per year for three years
• Faster response time for inquiry requests from five minutes to 15 seconds

• Intangible Benefits are difficult to measure but are important for the organization.
Intangible benefits include:
• Improve company image
• Increase customer satisfaction
• Improve employee job satisfaction
• Provide faster and more accurate information to customer services
representatives

Tangible Benefits Example

 Increase in sales or profits  Development of IT-based products
 Decrease in information processing costs  Elimination of unnecessary documents
 Decrease in operating costs  Reduction in inventory carrying costs
 Decrease in required investment  Decrease in inventory investment required
 Increased operational efficiency  Less spoilage, waste and idle time
Intangible Benefits Example
 Improved information availability  More timely and accurate information
 Improved abilities in analysis  OLAP and data mining
 Improved customer service  More timely service response
 Improved employee morale  Elimination of burdensome job tasks
 Improved management decision making  Better information and decision analysis
 Improved competitive position  System that lock in customers
 Improved business image  Progressive image as perceived by customers,
suppliers and investors
Figure 4.5 Possible benefits of new information systems with examples
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5.2.1 The Cost
When considering the cost, the cost of study involves the cost incurred on the team of
the software development, cost of conducting feasibility study, estimated cost of software and
hardware and so on. It is also essential to consider expenses made on purchases (such as
hardware purchase) and activities required to carry out the software development.
Cost can also be measure in tangible and intangible costs. Tangible costs are the cost
of equipment such as computers, the cost of resources, the cost of system analysts’ time, the
cost of programmers’ time and other employees. Intangible costs are difficult to estimate and
may not be known. They include losing a competitive edge, declining company image due to
increased customer dissatisfaction, losing the reputation for ineffective or inaccessible
information.

The System Costs

Many evaluation criteria are common to all computer systems. The following system
costs are considered for software development:
(1) Development Costs
(2) Ongoing Operating Costs
(3) Fixed Costs
(4) Variable Costs

(1) Development Costs

• one time expenses for the project
• estimates improve as more detail is given
• Personnel Costs
o salaries of all individuals who develop the system
o also includes benefits
• User Time
• Training Costs
• Equipment Costs
• cost of acquiring all new hardware/software for project
o if the equipment is shared, then divide the total cost or compute it
proportional to its usage
o also cost of new furniture, chairs, etc. if needed
• Computer Usage Costs
• Supply and Materials Costs
o hardware, software and office supplies consumed
o costs of manuals and other documentation too
• Facility Costs
o expenditures necessary to prepare the site for the new system
• Overhead and Miscellaneous Expenses

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 o rent, utilities, training course fees, etc.
o cost of running two parallel systems

(2) Ongoing Operating Costs

• recurring costs for the operation of the system
• all of the development costs required on an ongoing basis: personnel, equipment,
maintenance, overhead, etc.

(3) Fixed Costs

• occur at regular intervals
• costs are not dependent upon the operation of the system
• constant, no matter how much or little the system is used
o eg. property taxes, lease payments must be paid monthly
o also, company benefit plans (ie hospital coverage)

(4) Variable Costs

• occur in proportion to the usage of the system
• CPU costs
• supply costs
• wage costs
• some maintenance costs

Example. Let’s consider some cost of construction for the software production as follows:

■ cost to buy equipment, principally the hardware

■ cost to develop the software
■ cost of training
■ cost of lost work during switchover
■ cost to maintain the system
■ cost to repair the equipment in the event of failure
■ cost of lost work in the event of failure
■ cost to upgrade, in the event of changed requirements

Software can be considered to be economically feasible only if it focuses on the issues listed
below:
• Cost incurred on software development to produce long-term gains for an
organization.
• Cost required on conducting full software investigation (such as requirements
elicitation and requirements analysis).
• Cost of hardware, software, development team, and training.

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 It is also studied that, can the software be made in the given budget? Because
sometimes the clients want many features to add in their software but are not willing to pay
the required amount. Hence, economic feasibility is used to study this. The upgrade cost is
part of the cost of some future system and not strictly part of the current costing, but is
worth bearing in mind at the evaluation stage. While all of these costs should be estimated
in advance of developing a system, it is in practice very difficult to estimate the cost of
construction and of maintenance.

Case Study Example: Examine carrying out a feasibility study of the software for an
ATM for over a five-year period. Let us assume that 200 ATM machines will be needed.
First look at cost of construction for each ATM:

(1) Costs of Construction - total hardware costs is $20,000 per ATM.

• cost of the hardware for each ATM at $10,000 for assume that 200 machines
• cost of installing the machines in a secure fashion with extra server capacity at the
bank
• Running costs include the telephone line charge, replacing printer paper, stocking
the ATM with cash

(2) Cost of Software – total software development cost is $100,000

• $500 per machine for s/w in each 200 ATMs & s/w at bank

(3) Cost of Maintenance – total software development cost is $40,000

• $4,500 per machine for 200 ATMs
• Two persons per year for the software (a single 24-hour ATM would replace two
full-time cashiers. A saving of, say, $40,000 each per year.)

Figure 4.6 The cost-benefit analysis for an ATM software

• Should the ATMs be developed? The conclusion speaks for itself.

• It is difficult to predict the cost of a system and therefore it is very difficult to carry
out a feasibility study.

The concerned business must be able to see the value of the investment it is thinking
before committing to an entire systems study. If short-term costs are not overshadowed by

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long-term gains or produce no immediate reduction in operating costs, the system is not
economically feasible and the project should not proceed any further.

5.2.2 Comparing Costs and Benefits

There are many well-known techniques for comparing the costs and benefits of the
proposed system. They include break-even analysis, payback, cash-flow analysis, and present
value analysis. All these techniques provide straightforward ways of yielding information to
decision makers about the worthiness of the proposed system.

(1) Break-Even Analysis

By comparing costs alone, the systems analyst can use break-even analysis to
determine the break-even capacity of the proposed information system. The point at
which the total costs of the current system and the proposed system intersect represents the
break-even point, the point where it becomes profitable for the business to get the new
information system.

Figure 4.7 – Break-even analysis for the proposed inventory system.

Total costs include the costs that recur during operation of the system plus the
developmental costs that occur only once (one-time costs of installing a new system), that
is, the tangible costs that were just discussed. Figure 4.7 is an example of a break-even
analysis on a small store that maintains inventory using a manual system. As volume rises,

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the costs of the manual system rise at an increasing rate. A new computer system would cost
a substantial sum up front, but the incremental costs for higher volume would be rather small.
The graph shows that the computer system would be cost effective if the business sold
about 600 units per week.
Break-even analysis is useful when a business is growing and volume is a key
variable in costs. One disadvantage of break-even analysis is that benefits are assumed to
remain the same, regardless of which system is in place.

Figure 4.8 – Break-even analysis showing a payback period of three and a half years.

Break-even analysis can also determine how long it will take for the benefits of
the system to pay back the costs of developing it. Figure 4.8 illustrates a system with a
payback period of three and a half years.

(2) Cash-Flow Analysis

Cash-flow analysis examines the direction, size, and pattern of cash flow that is
associated with the proposed information system. If you are proposing the replacement of an
old information system with a new one and if the new information system will not be
generating any additional cash for the business, only cash outlays are associated with the
project. If that is the case, the new system cannot be justified on the basis of new revenues
generated and must be examined closely for other tangible benefits if it is to be pursued
further.
Figure 4.9 shows a cash-flow analysis for a small company that is providing a
mailing service to other small companies in the city. Revenue projections are that only $5,000
will be generated in the first quarter, but after the second quarter, revenue will grow at a
steady rate. Costs will be large in the first two quarters and then level off. Cash-flow analysis
is used to determine when a company will begin to make a profit (in this case, it is in the third
quarter, with a cash flow of $7,590) and when it will be ―out of the red,‖ that is, when

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revenue has made up for the initial investment (in the first quarter of the second year, when
accumulated cash flow changes from a negative amount to a positive $10,720).
The proposed system should have increased revenues along with cash outlays. Then
the size of the cash flow must be analyzed along with the patterns of cash flow associated
with the purchase of the new system. You must ask when cash outlays and revenues will
occur, not only for the initial purchase but also over the life of the information system.

Figure 4.9 – Cash-flow analysis for the computerized mail-addressing system.

(3) Present Value Analysis

Present value analysis helps the systems analyst to present to business decision
makers the time value of the investment in the information system as well as the cash flow (as
discussed in the previous section). Present value is a way to assess all the economic outlays
and revenues of the information system over its economic life, and to compare costs today
with future costs and today’s benefits with future benefits.

Figure 4.10 – Without considering present value, the benefits appear to outweigh the costs

In Figure 4.10, system costs total $272,000 over six years and benefits total
$280,700. Therefore, we might conclude that benefits outweigh the costs. Benefits only
started to surpass costs after the fourth year, however, and dollars in the sixth year will not be
equivalent to dollars in the first year.

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 For instance, a dollar investment at 7 percent today will be worth $1.07 at the end of
the year and will double in approximately 10 years. The present value, therefore, is the cost or
benefit measured in today’s dollars and depends on the cost of money. The cost of money is
the opportunity cost, or the rate that could be obtained if the money invested in the proposed
system were invested in another (relatively safe) project.
The present value of $1.00 at a discount rate of i is calculated by determining the
factor ⁄( ) where n is the number of periods. Then the factor is multiplied by the
dollar amount, yielding the present value as shown in Figure 4.65. In this example, the cost of
money—the discount rate—is assumed to be .12 (12 percent) for the entire planning horizon.
Multipliers are calculated for each period: n = 1, n = 2, …, n = 6. Present values of both costs
and benefits are then calculated using these multipliers. When that step is done, the total
benefits (measured in today’s dollars) are $179,484, and thus less than the costs (also
measured in today’s dollars). The conclusion to be drawn is that the proposed system is not
worthwhile if present value is considered.

Figure 4.11 – Taking into account present value, the conclusion is that the costs are greater
than the benefits. The discount rate, i, is assumed to be .12 in calculating the multipliers in
this table.

Although this example, which used present value factors, is useful in explaining the
concept, all electronic spreadsheets have a built-in present value function. The analyst can
directly compute present value using this feature.

5.2.3 Guidelines for Analysis

The use of the methods/ techniques for comparing the costs and benefits of the proposed
system discussed in the preceding subsections depends on the methods employed and
accepted in the organization itself. For general guidelines, however, it is safe to say the
following:

(1) Use break-even analysis if the project needs to be justified in terms of cost, not
benefits, or if benefits do not substantially improve with the proposed system.
(2) Use payback when the improved tangible benefits form a convincing argument
for the proposed system.
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 (3) Use cash-flow analysis when the project is expensive relative to the size of the
company or when the business would be significantly affected by a large drain (even
if temporary) on funds.
(4) Use present value analysis when the payback period is long or when the cost of
borrowing money is high.

Whichever method is chosen, it is important to remember that cost-benefit analysis

should be approached systematically, in a way that can be explained and justified to
managers, who will eventually decide whether to commit resources to the systems project.
Next, we turn to the importance of comparing many systems alternatives.

5.3 Technical Feasibility – Determining Hardware and Software Needs

Assessing technical feasibility includes evaluating the ability of computer hardware and
software to handle workloads adequately. Figure 4.12 below shows the steps the systems
analyst takes in ascertaining hardware and software needs. First, all current computer
hardware the organization owns must be inventoried to discover what is on hand and what is
usable.

Figure 4.12 Determining the Hardware and Software Needs

The systems analyst needs to work with users to determine what hardware will be
needed. Hardware determinations can come only in conjunction with determining human
information requirements. Knowledge of the organizational structure of the organization and

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how users interact with technologies in an organizational setting can also be helpful in
hardware decisions. Only when systems analysts, users, and management have a good grasp
of what kinds of tasks must be accomplished can hardware options be considered.

5.3.1 Inventorying Computer Hardware

Begin by inventorying what computer hardware is already available in the

organization. As will become apparent, some of the hardware options involve expanding or
recycling current hardware, so it is important to know what is on hand.
If an updated computer hardware inventory is unavailable, the systems analyst needs
to set up one quickly and carry through on it. You need to know the following:

(1) The type of equipment: model number, manufacturer.

(2) The operation status of the equipment: on order, operating, in storage, in need of
repair.
(3) The estimated age of the equipment.
(4) The projected life of the equipment.
(5) The physical location of the equipment.
(6) The department or person considered responsible for the equipment.
(7) The financial arrangement for the equipment: owned, leased, rented.

Determining the current hardware available will result in a sounder decision-making

process when hardware decisions are finally made, because much of the guesswork about
what exists will be eliminated. Through your earlier interviews with users, questionnaires
surveying them, and research of archival data, you will already know the number of people
available for data processing as well as their skills and capabilities. Use this information to
project how well the staffing needs for new hardware can be met.

5.3.2 Estimating Workloads

The next step in determining hardware needs is to estimate workloads. Thus, systems
analysts formulate numbers that represent both current and projected workloads for the
system so that any hardware obtained will possess the capability to handle current and
future workloads.
If estimates are accomplished properly, the business should not have to replace
hardware solely due to unforeseen growth in system use. (Other events, however, such as
superior technological innovations, may dictate hardware replacement if the business wants
to maintain its competitive edge.) Out of necessity, workloads are sampled rather than
actually put through several computer systems. In workload sampling, the systems analyst is
taking a sample of necessary tasks and the computer resources required to complete them.
Table 4.1 illustration below is a comparison of the times required by an existing and
a proposed information system that are supposed to handle a given workload. For example,
consider the company which is currently using a legacy computer system to prepare a
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summary of shipments to its distribution warehouses, and a Web-based dashboard is
being suggested. The workload comparison looks at when and how each process is done,
how much human time is required, and how much computer time is needed. Notice that
the newly proposed system should cut down the required human and computer time
significantly.

Table 4.1 Comparison of the times required by an existing and a proposed information system
Existing System Proposed System
Compare performance of distribution
Compare performance of distribution
Task warehouses by running the summary
warehouses on the Web-based dashboard.
program.
Computer programs are run when
Updates occur immediately; processing is
Method needed; processing is done from the
done online.
workstation.
Personnel Distribution manager Distribution manager
Daily: Daily:
Enter shipments on Excel spreadsheet; Enter shipments on the Web-based system
verify accuracy of spreadsheet manually; using automatically backed up drop-down
and media. then write files to backup boxes. Data are to remote location.
When and how
Monthly: Monthly:
Run program that summarizes daily Compare warehouses online using the
records and prints report; get report and performance dashboard; print only if
make evaluations. needed.
Human time Daily: 20 minutes Daily:10 minutes
requirements Monthly: 30 minutes Monthly: 10 minutes

Computer time Daily: 20 minutes Daily:10 minutes

requirements Monthly: 30 minutes Monthly: 10 minutes

5.3.3 Evaluating Computer Hardware

Evaluating computer hardware is the shared responsibility of management, users,

and systems analysts. Although vendors will be supplying details about their particular
offerings, analysts need to oversee the evaluation process personally because they will have
the best interests of the business at heart. In addition, systems analysts may have to educate
users and management about the general advantages and disadvantages of hardware before
they can capably evaluate it.
Based on the current inventory of computer equipment and adequate estimates of
current and forecasted workloads, the next step in the process is to consider the kinds of
equipment available that appear to meet projected needs. Information from vendors on
possible systems and system configurations becomes more pertinent at this stage and should
be reviewed with management and users. In addition, workloads can be simulated and run on

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different systems, including those already used in the organization. This process is referred to
as benchmarking.
Criteria that the systems analysts and users should use to evaluate performance of
different systems hardware include the following:

(1) The time required for average transactions (including how long it takes to input data
and how long it takes to receive output).
(2) The total volume capacity of the system (how much can be processed at the same
time before a problem arises).
(3) The idle time of the CPU or network.
(4) The size of the memory provided.

Some criteria will be shown in formal demonstrations; some cannot be simulated and
must be gleaned from manufacturers’ specifications. It is important to be clear about the
required and desired functions before getting too wrapped up in vendors’ claims during
demonstrations.
Once functional requirements are known and the current products available are
comprehended and compared with what already exists in the organization, decisions are made
by the systems analysts in conjunction with users and management about whether obtaining
new hardware is necessary. Options can be thought of as existing on a continuum from using
only equipment already available in the business all the way to obtaining entirely new
equipment. In between are options to make minor or major modifications to the existing
computer system.

5.3.4 Computer Size and Use

The rapid advance of technology dictates that the systems analyst research types of
computers available at the particular time that the systems proposal is being written.
Computer sizes range all the way from miniature mobile phones to room-sized
supercomputers. Each has different attributes that should be considered when deciding how to
implement a computer system.

5.3.5 Software Evaluation

When upgrades to existing or legacy systems, analysts and organizations have to

make a decision to create, buy, or outsource the software projects. Some of the decision
making surrounding purchase of commercial off-the-shelf (COTS) software, “rental” of
the software from an application service provider (ASP), or creation of custom software
for the project is analogous to the hardware decision process.
As a system analyst, part of the expertise you are developing is to make sound
judgments regarding developing software versus the purchase of COTS software for new and
existing systems. The following sections discuss when to create your own software, when to

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purchase COTS packages, and when to use an ASP. Table 4.2 summarizes the advantages
and disadvantages of each of these options.

Table 4.2 Advantages and Disadvantages of Software Evaluation

Software Advantages Disadvantages
• Specific response to specialized business
needs • May be significantly higher initial cost
Creating • Innovation may give firm a competitive compared to COTS software or ASP
Custom advantage • Necessity of hiring or working with a
Software • In-house staff available to maintain development team
software • Ongoing maintenance
• Pride of ownership
• Refined in the commercial world • Programming focused; not business
• Increased reliability focused
Purchasing
• Increased functionality • Must live with the existing features
COTS
• Often lower initial cost • Limited customization
Packages
• Already in use by other firms • Uncertain financial future of vendor
• Help and training comes with software • Less ownership and commitment
• Loss of control of data, systems, IT
• Organizations that do not specialize in employees, and schedules
Using an information systems can focus on what • Concern over the financial viability and
Application they do best (their strategic mission) long-run stability of the ASP
Service • There is no need to hire, train, or retain a • Security, confidentiality, and privacy
Provider large IT staff concerns
(ASP) • There is no expenditure of employee time • Loss of potential strategic corporate
on nonessential IT tasks advantage regarding innovativeness of
applications

a) When To Create Custom Software

When COTS software does not exist or cannot be identified for the desired
application. Alternatively, the software may exist but it is unaffordable or cannot easily
be purchased or licensed. The advantages of creating own software include being able to
respond to specialized user and business needs, gaining a competitive advantage by creating
innovative software, having in-house staff available to maintain the software, and the pride of
owning something you have created. The drawbacks of developing your own software
include the potential for a significantly higher initial cost compared to purchasing COTS
software or contracting with an ASP, the necessity of hiring or working with a development
team, and you are responsible for the ongoing maintenance.

b) When to Buy COTS Software

Commercial off-the-shelf software includes such products as the Microsoft Office
suite, which includes Word for word processing, Excel for spreadsheets, Access for building
databases, and other applications. Other types of COTS software are for organizational level
systems which include popular (but costly) ERP packages such as Oracle and SAP. These
packages differ radically in the amount of customization, support, and maintenance required

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compared to Microsoft Office. COTS software can also refer to software components or
objects (also called building blocks) that can be purchased to provide a particular needed
functionality in a system.
When consider using COTS software, you can easily integrate the applications or
packages into existing or planned systems if the organization you are designing the system
for is unlikely to undergo major changes after the proposed purchase of COTS software.
The advantages of using COTS are that these products have been refined through the
process of commercial use and distribution, so that often there are additional functionalities
offered as add-on features, and the packaged software is extensively tested, and thus
extremely reliable. Additionally, analysts often find that the initial cost of COTS software is
lower than the cost for either in-house software development or the use of an ASP.
Another advantage of purchasing COTS packages includes their use by many other
companies, so analysts are not experimenting on their clients with one-of-a-kind software
applications. Lastly, COTS software boasts an advantage in the help and training that
accompanies the purchase of the packaged software.
There is a downside to the use of COTS software. Because it is not meant to be fully
customizable, COTS software may also include errors that could expose an organization to
liability issues. Users must live with whatever features exist in the software, whether they are
appropriate or not. Purchasing COTS software include the necessity of investigating the
financial stability of the software vendor, and the diminished sense of ownership and
commitment that is inevitable when the software is considered a product rather than a
process.

c) When to Outsource Software Services to an Application Service Provider

This third option is to outsource some of the organization’s software needs to an
application service provider (ASP) that specializes in IT applications. When an organization
uses an ASP, there is no need to hire, train, and retain a large IT staff and there is little or no
expenditure of valuable employee time on nonessential IT tasks (these are handled
professionally by the ASP).
There are drawbacks to the use of an ASP. The general loss of control over corporate
data, information systems, IT employees, and even processing and project schedules. There
have to concern over the financial viability of any ASP that is chosen. No control over the
security of the organization’s data and records, along with concern about confidentiality of
data and client privacy. Finally, when choosing an ASP, there is a potential loss of strategic
corporate advantage that might have been gained through the company’s own deployment of
innovative applications created by their employees.

d) Evaluation of Vendor Support for Software COTS and ASPS

Whether to purchase a COTS package or contract for ASP services, you will be
dealing with vendors who may have their own best interests at heart. You need to evaluate
software with users and not be unduly influenced by vendors’ sales pitches. Specifically,

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there are six main categories on which to grade software, as shown in Table 4.3: performance
effectiveness, performance efficiency, ease of use, flexibility, quality of documentation, and
manufacturer support.
Evaluate packaged software based on a demonstration with test data from the
business considering it and an examination of accompanying documentation. Vendors’
descriptions alone will not be sufficient. Vendors typically certify that software is working
when it leaves their supply house, but they will not guarantee that it will be error-free in
every instance or that it will not crash when incorrect actions are taken by users.
Obviously, they will not guarantee their packaged software if used in conjunction with faulty
hardware.
Table 4.3 Grading Software with Six Main Categories
No Software Requirements Specific Software Features
Able to perform all required tasks
Able to perform all tasks desired
1 Performance Effectiveness
Well-designed display screens
Adequate capacity
Fast response time
Efficient input
2 Performance Efficiency Efficient output
Efficient storage of data
Efficient backup
Satisfactory user interface
Help menus available
―Read Me‖ files for last-minute changes
3 Ease of use
Flexible interface
Adequate feedback
Good error recovery
Options for input
4 Flexibility Options for output
Usable with other software
Good organization
5 Quality of Documentation Adequate online tutorial
Web site with FAQ
Technical support hotline, Newsletter/email,
6 Manufacturer Support
Web site with downloadable product updates

6. Prepare the Feasibility Report

After all of the preceding elements are done, then assembled into a Feasibility Study
and a formal review is conducted with all parties involved. The review serves two purposes:
to substantiate the thoroughness and accuracy of the Feasibility Study, and to make a project
decision; either approve it, reject it, or ask that it be revised before making a final decision. If

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approved, it is very important that all parties sign the document which expresses their
acceptance and commitment to it; it may be a seemingly small gesture, but signatures carry a
lot of weight later on as the project progresses. If the Feasibility Study is rejected, the reasons
for its rejection should be explained and attached to the document.
The feasibility study makes recommendations, from which senior member(s) of the
client’s organization decide whether to begin a major software project. What information do
they needed to make the decision are listed below:

1. Client: Who is this project for?

2. Scope: What are the boundaries of the project?
3. Benefits: What are the benefits? Can they be quantified? If the software is a product,
what are the forecasts of likely sales?
4. Technical: Is the project possible? Is there at least one technical way to carry out the
project?
5. Resources: What are the estimates of staff, time, equipment, etc.?
6. Alternatives: What are the options if the project is not done

6.1 Software Feasibility Study Report Structure

The feasibility study output is a decision documents which contain a brief

explanation of problem definitions, current analysis, feasibilities study, alternative solutions
for the project. The following list the structure for preparing the report.

(1) Overview
In this section a brief overview description of the project and what the rest of the
Software Feasibility Study document contains.

(2) Purpose / Objectives

Describe clearly and briefly the objective of the project.

(3) Project Scope (or) System Problems

Describe the scope of the project, highlighting the aspects that will be and will not
be covered. Describe the system problems that are going to solve by the information
system. The information stated here, may be more high-level.

(4) Current Analysis

Describe the customer’s current situation. Inform if in the current environment there
is already a software product running that will be replaced or integrated into the
new solution. In this case, describe the software, its version, supplier, a brief
description of its characteristics and how it is used. Emphasize the current

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 environment and the difficulties of that environment. If he does not have any
software, indicate how he controls his business manually. Attach documents like
receipts, contracts, spreadsheets, reports and even take pictures if possible.

(5) Requirements
One of the most important items in the feasibility study document. Requirements
identify methods and technology that will solve the problems. It should identify the
system input and output requirements, identify the system’s processing requirements,
identify the system’s security, identify the interaction with other systems, identify the
physical environment (batch processing environment, interactive online transactions
and ad hoc reports, external and local communications).
Requirements also need to identify major performance objectives, such as reduced
staff, equipment costs, increased processing speed, increased productivity, improved
management information services, improved controls over automated decision-
making systems, and compliance with regulations.
Determine assumptions and constraints such as operational life of the proposed
system, input, output and processing requirements constraints; financial constraints;
changing hardware, software and operating environment; and availability of
information and resources.

(6) Proposed Alternatives

List all proposed alternatives for solving the problem, including the one that is
proposing. Search for similar solutions that already exist in the market, or academic
research in the area, etc. Consider the analysis time of the proposed tool, time of
implementation and training.
Describe the method or strategy employed (e.g., survey, weighting, modeling,
benchmarking and simulation) to evaluate the proposed system to arrive at a feasible
alternative.

(7) Recommended Alternative and Project Feasibility

Among the alternatives mentioned in the previous item, cite the one recommended by
the project’s authors, describing the reasons. Detail in the subsections the benefits of
the chosen alternative, its costs for implementation, ease of system use, development
time and the risks involved during development.

(8) Project Benefits

Cite the benefits expected to be achieved through the implementation of the system.
Tangible and intangible benefits. Describe the improvements of the system in terms
of the objectives. Describe any impacts of change in software, hardware, operation
and organization to the existing systems.

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 (9) Project Costs
Relate the costs for the implementation of the alternative, with the highest degree of
precision possible. Cite the source from which the costs were consulted. Outline the
time and resource costs, including the time and funding required for all activities of
the lifecycle, from definition through operation and system retirement. Describe new
equipment requirements and changes to currently available equipment.

(10) Project Risks

Identify possible risks associated with the alternative. Also identify prevention and
contingency actions. Consider the different types of risks involving: Technology;
People; Organization; Tools; and Requirements.

(11) Project Timeline

Presentation of preliminary activities, with dates and resources involved. Be based on
the stages of software development.

(12) Conclusions / Recommendations

Identify whether the project is viable or not, presenting the reasons that led it to such
finding, summarizing the previous topics of the document.

CASE STUDIES

To understand the Feasibility Report, here we add two sample feasibility study report
from internet. Those two files can be downloaded free from the Internet. Sample
feasibilities reports are prepared by student team for the project assignment. They
provide standard facts about the project. Although these two sample reports are not
good one, they included all necessary information for the report.

Students should prepare the feasibility report that provide the required information for
your selected project.

CASE STUDY One : “Online Examination System”

CASE STUDY Two: “Reference Statistics for Olin Library”

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CASE STUDY - One: Sample Feasibility Report

Online Examination System

Feasibility Study Report

TABLE OF CONTNETS

1. Introduction
1.1 Overview of the Project
1.2 Objectives of the Project
1.3 The Need for the Project
1.4 Overview of Existing Systems and Technologies
1.5 Scope of the Project
1.6 Deliverables

2. Feasibility Study
2.1 Financial Feasibility
2.2 Technical Feasibility
2.3 Operational Feasibility
2.4 Resources and Time Feasibility
2.5 Risk Feasibility
2.6 Social / Legal Feasibility

3. Considerations
4. References

1. Introduction

1.1 Overview of the Project

OES is an online examination system which automates the process of creating
question papers, performing online quizzes, file submissions and making criteria.
OES is a web based application that provides interfaces for various stake holders
(lecturers, students and teaching assistances).
Questions can be added to the system with their associated parameters (number of
allocated marks, time allowed), and the lecturer can create quizzes and assignments
using them. Moreover OES is capable of holding online quizzes and homework
assignments.
OES is capable of marking MCQ type questions, and has the ability to grade essay
type questions based on key words. Users can get statistical distributions of the
examination results as well as performance for each question in many forms
(graphs, tabular form).

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1.2 Objectives of the Project
The objectives of this project is to –
- Develop a central database of questions for each subject
- Automate the process of creating quizzes
- Provide an online examination platform
- Provide the ability to submit files (for homework and other detailed kind of
assignments)
- Automate the grading process of MCQ type questions
- Makes it easy to check essay type questions based on key words
- Provide statistical information regarding examinations, questions and
student performance in many forms (including graphs, tabular form).

1.3 The Need for the Project

Manual management of examinations is a cumbersome tasks when it comes to a
large audience like in a university. Project OES looks into this matter and
automates this process. Other than examinations, OES is capable of managing
assignments and other file submissions.
In the current context, getting statistical information about the performance of a
student and a set of students needs extra effort to do things separately. OES
provides a solution to this problem by providing automatically generated statistical
information in many aspects.
- student performance
- performance of a batch of students in an examination
- performance for an individual question
- overall statistical distribution for a particular subject over several years

1.4 Overview of Existing Systems and Technologies

University Moodle system: Moodle system consists some of the use cases that are
implemented in the OES. But OES is mainly concerned with examinations and
assignments, unlike the Moodle system which contains subject materials.
Main Technologies associated with OES.
- web programming technologies (JS, JSP, HTML, CSS)
- MySQL (Database)
- Diagram and design tools (Visio, Microsoft project)

1.5 Scope of the Project

Main actors of the OES system are:
- Lecturers
- Teaching Assistants
- Students

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 - Administrative Staff ( examination division, undergraduate division )

Main use cases associated:

1. Lecturer and Teaching Assistants can
1. Submit new questions
2. Create papers using existing questions
3. Schedule an online quiz
4. Schedule a homework assignment or a file submission assignment
5. Grade file submissions
6. View results in a quiz
7. View statistical details of students, a quiz, a section of a subject, a
subject
2. Student
1. Do an online quiz
2. Submit assignment files
3. View grades and performance (Statistical details)
3. Administrative Staff
1. View statistical details

1.6 Deliverables
A web based software system. This contains a central database and functionalities
for various stakeholders. Since many number of stakeholders are involved,
different GUIs will be provided to different users.

2. Feasibility Study

2.1 Financial Feasibility

Being a web application OES will have an associated hosting cost. Since the
system doesn’t consist of any multimedia data transfer, bandwidth required for the
operation of this application is very low.
The system will follow the freeware software standards. No cost will be charged
from the potential customers. Bug fixes and maintaining tasks will have an
associated cost. At the initial stage the potential market space will be the local
universities and higher educational institutes.
Beside the associated cost, there will be many benefits for the customers.
Especially the extra effort that is associated with paper making and marking will be
significantly reduced while the effort to create descriptive statistical reports will be
eliminated, since reports generation is fully automated.
From these it’s clear that the project OES is financially feasible.

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2.2 Technical Feasibility

Project OES is a complete web based application. The main technologies and tools
that are associated with OES are HTML, CSS, JSP, MySQL, JS, NetBeans,
Diagram tools (NCLASS, Microsoft Project, Visio, Draw.IO).
Each of the technologies is freely available and the technical skills required are
manageable. Time limitations of the product development and the ease of
implementing using these technologies are synchronized.
Initially the web site will be hosted in a free web hosting space, but for later
implementations it will be hosted in a paid web hosting space with a sufficient
bandwidth. Bandwidth required in this application is very low, since it doesn’t
incorporate any multimedia aspect.
From these it’s clear that the project OES is technically feasible.

2.3 Resource and Time Feasibility

(1) Resource feasibility
Resources that are required for the OES project include:
- Programming device (Laptop)
- Hosting space (freely available)
- Programming tools (freely available)
- Programming individuals

So it’s clear that the project OES has the require resource feasibility.

2.4 Risk Feasibility

Risk feasibility can be discussed under several contexts.

Risk associated with size.

(1) Estimated size of the product in line of codes:

Being a web application with many number of stakeholders, OES will contain
significant amount of code lines. As the system doesn’t contain any multimedia
aspect, the file sizes and the complete project size will not exceed 200MB.

(2) Estimated size of product in number of programs:

Exceed 200MB.
Though the application supports many stakeholders, it will be constructed as a
single web application with a single login page rather than having many number of
sites for different users. Depending on the access rights, the contents will be
showed or hidden.

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(3) Size of database created or used by the product:
Database size will not exceed the values supported by MySQL (65526 entries per
table). Number of relations and entities are minimized by using best practices of
normalization theories.

Users of the product:

Lecturers, Teaching assistants, Students and Administrative staff (examination
division, undergraduate division)

Number of projected changes to the requirements for the product? Before

delivery? After delivery:

The requirements are clearly identified before the implementation phase. Being a
general product (not specific to a single user) the requirements will be changed
only if new functionalities are added to the system.

Amount of reused software:

Though the main logics are implemented throughout the project, OES will use
some JSP libraries to incorporate additional functionalities such as to support file
uploads.

Business impact risks

(1) Effect of this product on company revenue;

OES can be implemented either as an individual system, or can be integrated to an
existing system such as university Moodle system. Since it automates some key
features associated in college education process, the users can increase the revenue.

(2) Reasonableness of delivery deadlines:

Being a 14 weeks project, the project OES will have several deadlines and
deliverables that are scheduled successively. Depending on the coding and
designing cost and effort, the deadlines are quite reasonable.

(3) Number of customers who will use this product and the consistency of
their needs relative to the product:
As mentioned above, we can categorize stakeholders into 4 main categories. This
system can support many number of users simultaneously due to the low
bandwidth requirements.

(4) Number of other products/systems with which this product must be

interoperable:

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This product can be integrated with current university Moodle system with slight
modifications. Doing so will add a significant value to both systems.

(5) Sophistication of end users:

OES is designed while maintaining the complexity at a very low level. Usability is
highly improved by providing help documents and making GUIs easy to use.

(6) Amount and quality of product documentation that must be produced and
delivered to the customer:
Customer will be provided with a complete online user manual. As the software is
implemented as a freeware and open source system, the code will be available for
free.

(7) Costs associated with delivery

At the initial stage the associated cost will be for the hosting cost.

Customer related risks:

OES is general type of product (not designed just for a single college). Before
implementing the system in an educational institute, there will be some basic
modifications required.

Development environment risks

Is a software project management tool available?
-Microsoft Project will be used as the main project management tool.
Are tools for analysis and design available?
-OES will require several designing software such as Draw.IO (database design),
NCLASS (class diagram), Visio (Software related diagrams)
Are compilers or code generators available and appropriate for the product to be built?
-JSP will be used as the main scripting language. All the libraries and interpreter
will be freely available.
Are testing tools available and appropriate for the product to be built?
-JUIT is the main testing tool that will be used. JUINT is freely available tool that
supports automated testing.
Are software configuration management tools available?
-Configuration management will be done using GIT that is freely available.
Does the environment make use of a database or repository?
-This is a database oriented system that will use MySQL.
Are all the software tools integrated with one another?
-Main deliverables will be packaged under a single project. All the stake holders
will have a single login page.

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 Process issue risks
OES will follow RUP software development process. This provides the flexibility
to accommodate changing software requirements of OES.
Technical issue risks
Are specific conventions for code documentation defined and used?
-Software code will be freely available and the code documentation will be provided.
Do you use a specific method for test case design?
-JUNIT will be used as the main testing tool that automates the testing process.
Are configuration management software tools used to control and track change
activity throughout the software process?
-GIT will be used throughout the software implementation process.

Technology risks
Is the technology to be built new?
-All the technologies are very well established and old enough (but not obsolete).
Do the system requirements demand the creation of new algorithms, input or output
technology?
-OES will have several algorithms to generate quizzes, marking of essay type
questions and to generate statistical distributions.

2.5 Social/ Legal Feasibility

OES use freely available development tools, and provide the system as an open
source systems. Only the maintenance cost will be charged from potential
customers. JSP software libraries that are used in this system are free open source
libraries. Since this new system eliminates the effort to make statistical
distributions, it will have a great impact in a university system.

3. Considerations

Performance:
OES requires a very low bandwidth, hence the performance wil not degrade with
increasing number of potential users. At the development stage, a free hosting
service will be used. But when installing the system to a real university
environment, it will be hosted in a much more reliable server to increase the
performance.
MySQL will provide the adequate speed for database transactions. Since no big
data analysis is done, MySQL is the ideal database for this project.
 Response time: less than 2 seconds
 Processing time: less than 2 seconds (no batch processing involved)
 Query and reporting times: yet to be tested
 Throughput: yet to be tested
 Storage: yet to be tested
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 Security:
Security measures are provided in many aspects in this system.
User authentication
Users will have to authenticate using the username and passwords. Depending on
the access level each user will gain functionality of the system. Passwords can be
changed by user.

Login details:
Each user’s login time and logout time will be recorded in the system, to make the
tractability process easy in case of a faulty action.

Usability and ease of use:

User will be provided with a complete user manual as a pdf file. The interfaces are
designed to make it easy for any potential user to get familiar with the system
within one hour. No additional training is required to use the system.

Capacity and Scalability

OES system can accommodate many simultaneous users. The system is desgned to
make it easy to integrate to an existing system like the Moodle System.

Availability:
System will be available throughout the 24 hours. Mean time to failure and mean
time to repair will be decided to increase the availability. With a paid hosting
space, the availability can be guaranteed to a great precision.

Maintainability:
OES is designed using the best practices of RUP and OOP. Since every single
segment in the system is very well structured, the system is highly maintainable.
4+1 view model will be used as the main architectural pattern in this system. Hence
the separation of each task is improved, hence maintainability improved.

4. References
(groups.engin.umd.umich.edu/CIS/course.des/cis375/projects/,n.d.)
(eyefodder.com/2011/06/,n.d.)

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CASE STUDY - Two: Sample Feasibility Report

Reference Statistics for Olin Library

Feasibility Report

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Exercises

1. What are the objectives of the feasibility study phase of software development?
2. Explain the important activities that are carried out during the feasibility study phase of
a software development project.
3. Who carries out the feasibility study activities?
4. Mention suitable phase entry and exit criteria for the feasibility phase.
5. Why is it important to identify the scope of the project?
6. Why do we need to study the existing / current system? Describe what factors should
we analyst in the existing system.
7. What types of risks are involved in the alternative solutions / approaches for the
problem?
8. Costs and benefits for the project are usually estimated over a five year period.
9. In cost-benefit analysis, both tangible and intangible benefits and costs must be taken
into account when evaluating the effectiveness of the systems. Define both tangible and
intangible benefits. What costs for the project are measured in the cost-benefit analysis?
10. Many evaluation criteria are common to all computer systems. What are the cost of
construction for the software production?
11. What are the well-known techniques for comparing the costs and benefits of the
proposed system?
12. Figure below shows a break-even analysis on a small store, when will the store get
benefit?

Answer: According to he graph, the store will gain benefit if the volume sold about
130 units per week.

13. Figure below shows the break-even point analysis for a small business, determine how
long it will take (the payback period) for the benefits for the system to pay back the
costs of developing it.

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14. What is determined by the Cash-flow analysis? Given cash flow analysis for using
software system in below table, calculate the cash flow and cumulative cash flow. Then
determine when will a profit be made? (in this case, it is in the third quarter, with a
cash flow of $7,590)

Year 1 Year 2
Quarter 1 Quarter 2 Quarter 3 Quarter 4 Quarter 1
Revenue $5000 $20000 $24960 $31270 $39020
Cost
S/W development 10000 5000
Personnel 8000 8400 8800 9260 9700
Training 3000 6000
Equipment lease 4000 4000 4000 4000 4000
Supplies 1000 2000 2370 2990 3730
Maintenance 0 2000 2200 2420 2660
Total Costs ? ? ? ? ?
Cash Flow ? ? ? ? ?
Cumulative Cash ? ? ? ? ?
Flow

15. What is determined by the present-value analysis? Given below, calculate present value
with the discount rate 0.03. Then what can we determine for a company purchasing an
information system if the present value is considered?

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total

Costs $40,000 42,000 44,100 46,300 48,600 51,000
Discount rate ? ? ? ? ? ?
Present Value ? ? ? ? ? ? ?
of Costs
Benefits $25000 31200 39000 48700 60800 76000
Discount rate ? ? ? ? ? ?
Present Value ? ? ? ? ? ? ?
of Benefits

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16. What are the steps in determining hardware and software needs in technical feasibility?
17. What types of software can be chosen for the software projects in software evaluation?
Define advantages and disadvantages of that software.
18. In what condition, should we deice to choose Commercial off-the-shelf (COTS)
package in software evaluation? What are the disadvantages of choosing COTS?
19. In what condition, should we deice to choose Application Service Provider (ASP) in
software evaluation? What are the advantages and disadvantages of choosing ASP?
20. What are the grading software categories in evaluating COTS package vs. ASP
services?
21. Consider the following Case Study: Feasibility Study.

A mining company named Galaxy Mining Company Ltd. (GMC Ltd.) has mines located at
various places in India. It has about fifty different mine sites spread across eight states. The
company employs a large number of miners at each mine site. Mining being a risky profession,
the company intends to operate a special provident fund, which would exist in addition to the
standard provident fund that the miners already enjoy. The main objective of having the
special provident fund (SPF) would be to quickly distribute some compensation before the PF
amount is paid. According to this scheme, each mine site would deduct SPF installments from
each miner every month and deposit the same to the central special provident fund
commissioner (CSPFC). The CSPFC will maintain all details regarding the SPF installments
collected from the miners.
GMC Ltd. requested a reputed software vendor Adventure Software Inc. to undertake the
task of developing the software for automating the maintenance of SPF records of all
employees. GMC Ltd. has realised that besides saving manpower on bookkeeping work, the
software would help in speedy settlement of claim cases. GMC Ltd. indicated that the amount
it can at best afford Rs. 1 million for this software to be developed and installed.

Adventure Software Inc. deputed their project manager to carry out the feasibility
study. The project manager discussed with the top managers of GMC Ltd. to get an
overview of the project. He also discussed with the field PF officers at various mine
sites to determine the exact details of the project. The project manager identified
two broad approaches to solve the problem. One is to have a central database which
would be accessed and updated via a satellite connection to various mine sites. The
other approach is to have local databases at each mine site and to update the central
database periodically through a dial-up connection. This periodic updates can be done
on a daily or hourly basis depending on the delay acceptable to GMC Ltd. in invoking various
functions of the software. He found that the second approach is very affordable and
more fault-tolerant as the local mine sites can operate even when the communication link
temporarily fails. In this approach, when a link fails, only the update of the central database
gets delayed. Whereas in the first approach, all SPF work gets stalled at a mine site for the
entire duration of link failure.
The project manager quickly analysed the overall database functionalities required,
the user interface issues, and the software handling communication with the mine
sites. From this analysis, he estimated the approximate cost to develop the software.
He found that a solution involving maintaining local databases at the mine sites
and periodically updating a central database is financially and technically feasible.
The project manager discussed this solution with the president of GMC Ltd., who indicated
that the proposed solution would be acceptable to them.

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From the case study of Galaxy Mining Company Ltd.(GMC Ltd.), answer the following
questions:

a) What are the objectives of the GMC Ltd. hiring a software vendor company to
develop software?
b) Describe the problem of the GMC Ltd. to be solved by software automation.
c) While conducting feasibility study, how many alternative solutions have identified to
solve the problem. Describe those solutions.
d) How does the project manager compare the cost and benefits analysis for those
alternative solutions?
e) Explain the feasibility of the project in terms of financial, technical and operational.

22. The Case Study: ―Catherine's Catering‖ described in the lecture, conduct a
feasibility study with your team members and write feasibility report based on the
problem definition.

********************* End of lecture 4 **************************

The more that you read, the more things you will know.
The more that you learn, the more places you will go.
Dr. Sesus

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