CSE 405N

System Analysis And Design

Feasibility Analysis

CSE 405N System Analysis And Design Presentation 10

 Feasibility Analysis
Feasibility – the measure of how beneficial or
practical an information system will be to an
organization.

Feasibility analysis – the process by which feasibility

is measured.

Creeping Commitment – an approach to feasibility

that proposes that feasibility should be measured
throughout the life cycle.

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 Feasibility Checkpoints
• Systems Analysis — Scope Definition
• Systems Analysis — Problem Analysis
• Systems Design — Decision Analysis

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 Four Tests For Feasibility
Operational feasibility – a measure of how well a
solution will work or be accepted in an organization.
Usability analysis – a test of the system’s user
interfaces.
Technical feasibility – a measure of the practicality
of a technical solution and the availability of
technical resources and expertise.
Schedule feasibility – a measure of how reasonable
the project timetable is.
Economic feasibility - a measure of the cost-
effectiveness of a project or solution.
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 Cost-Benefit Analysis Techniques
Costs:
• Development costs are one time costs that will not recur
after the project has been completed.
• Operating costs are costs that tend to recur throughout the
lifetime of the system. Such costs can be classified as:
– Fixed costs — occur at regular intervals but at relatively fixed
rates.
– Variable costs — occur in proportion to some usage factor.
Benefits:
• Tangible benefits are those that can be easily quantified.
• Intangible benefits are those benefits believed to be difficult
or impossible to quantify.

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 Three Popular Techniques to
Assess Economic Feasibility
• Payback Analysis
• Return On Investment
• Net Present Value

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 Payback Analysis
Payback analysis – a technique for determining if
and when an investment will pay for itself.

Payback period – the period of time that will lapse

before accrued benefits overtake accrued and
continuing costs.

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 Present Value Formula

Present value – the current value of a dollar at

any time in the future.

PVn = 1/(1 + i)n

Where n is the number of years and i is the discount rate.

Discount rate –In most cases the discount rate for a

business is the opportunity cost of being able to
invest money in other projects or investments

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 Payback Analysis for a Project

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 Return-on-Investment Analysis (ROI)
Return-on-Investment (ROI) analysis – a technique
that compares the lifetime profitability of alternative
solutions.

The ROI for a solution or project is a percentage rate that

measures the relationship between the amount the business gets
back from an investment and the amount invested.

Lifetime ROI = (estimated lifetime benefits –

estimated lifetime costs) / estimated lifetime costs

Annual ROI = lifetime ROI / lifetime of the system

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 Net Present Value (NPV) Analysis
Net present value – an analysis technique that compares the
annual discounted costs and benefits of alternative solutions.

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 Sample Candidate Systems Matrix
Characteristics Candidate 1 Candidate 2 Candidate 3
Portion of System COTS package Platinum Member Services and Same as candidate 2.
Computerized Plus from Entertainment warehouse operations in
Brief description of that portion of Software Solutions would relation to order
the system that would be be purchased and fulfillment.
computerized in this candidate. customized to satisfy
Member Services required
functionality.
This solution can be Fully supports user Same as candidate 2.
Benefits implemented quickly required business
Brief description of the business because it’s a purchased processes for SoundStage
benefits that would be realized for solution. Inc. Plus more efficient
this candidate. interaction with member
accounts.
Technically architecture Same as candidate 1. Same as candidate 1.
Servers and Workstations dictates Pentium III, MS
A description of the servers and Windows 2000 class
workstations needed to support servers and workstations
this candidate. (clients).

MS Visual C++ and MS MS Visual Basic 5.0 MS Visual Basic 5.0

Software Tools Needed Access for customization System Architect 2001 System Architect 2001
Software tools needed to design of package to provide Internet Explorer Internet Explorer
and build the candidate (e.g., report writing and
database management system, integration.
emulators, operating systems,
languages, etc.). Not generally
applicable if applications software
packages are to be purchased. (Continued)
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 Feasibility Analysis Matrix
Feasibility Analysis Matrix – a tool used to
rank candidate systems.

Candidate 1 Name Candidate 2 Name Candidate 3 Name

Description
Operational
Feasibility
Technical
Feasibility
Schedule
Feasibility
Economic
Feasibility
Ranking

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 The System Proposal
System proposal – a report or presentation of a
recommended solution.
– Usually formal written report or oral presentation
– Intended for system owners and users

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 Organization of the Written Report
• Primary elements present the actual information
that the report is intended to convey.
• Secondary elements package the report so the
reader can easily identify the report and its primary
elements.
• Formats:
– The factual format is traditional and best suited to
readers who are interested in facts and details as well
as conclusions.
– The administrative format is a modern, result-
oriented format preferred by managers and executives.

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 Formats for Written Reports

Factual Format Administrative Format

I. Introduction I. Introduction

II. Methods and procedures II. Conclusions and

recommendations
III. Facts and details III. Summary and discussion of
facts and details
IV. Discussion and analysis of facts IV. Methods and procedures
and details
V. Recommendations V. Final conclusion

VI. Conclusion VI. Appendixes with facts and

details

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 Secondary Elements for a Written report

Letter of transmittal

Title page

Table of contents

List of figures, illustrations, and tables

Abstract or executive summary

(The primary elements--the body of the report, in either the factual

or administrative format--are presented in this portion of the report.)

Appendices

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 System Proposal – formal presentations

Formal presentation – a special meeting used to sell

new ideas and gain approval for new systems. They
may also be used for any of these purposes:
– Sell new system
– Sell new ideas
– Head off criticism
– Address concerns
– Verify conclusions
– Clarify facts
– Report progress
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 Typical Outline and Time Allocation for an
Oral Presentation
I. Introduction (one-sixth of total time available)
A. Problem statement
B. Work completed to date
II. Part of the presentation (two-thirds of total time available)
A. Summary of existing problems and limitations
B. Summary description of the proposed system
C. Feasibility analysis
D. Proposed schedule to complete project
III. Questions and concerns from the audience (time here is not to be
included in the time allotted for presentation and conclusion; it is
determined by those asking the questions and voicing their concerns)
IV. Conclusion (one-sixth of total time available)
A. Summary of proposal
B. Call to action (request for whatever authority you require to
continue systems development)

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