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

Survey

2

Study

3

Definition

4

Configuration

5

Design

6

Procurement

7

Construction

8

Delivery

9

Support

End-users

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

CostsDevelopment cost

Consulting feesHardware/ software Conversion/ installationTraining/ Documentation

Operation/ Production costsPersonnel costsSystem usage/ maintenance costSystem upgradesSupplies

System Benefits

BenefitsTangible benefits

Reduced processing errorsIncreased throughputDecreased response timeManpower reductionCost eliminationIncreased salesReduced credit losses

Intangible benefitsImproved customer satisfactionImproved employee moraleBetter decision making

Cost Benefit Analysis

Payback analysisReturn on investmentNet present value

PV = 1(1+i)^n

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)

Constructive Cost Model (COCOMO)

WM = Work-Months; TDEV = Time of Development

KDSI = Thousands of delivered source instruction

TDEV=

2.5(MM)0.32

WM=

3.6(KDSI)1.20

Very Large Size,

Contractor developed

Embedded

TDEV=

2.5(MM)0.35

WM=

3.0(KDSI)1.12

Intermediate-Large Size,

Partial In-house & contracted

Semidetached

TDEV=

2.5(MM)0.38

WM=

2.4(KDSI)1.05

Small-Medium Size,

In-house Dev.

Organic

ScheduleEffortDescriptionMode

CoCoMo Basic Equations

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 Language level Requirements volatility Personnel continuity Management quality Customer interface quality

Amount of documentation 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

FC = Count * Weight

643Applications Interfaces

1075Files

15107Inquires

754Output (eg, reports, screens)

643Input

ComplexAverageSimple

Basic Equation: FP = FC (PCA)

PCA = 0.65 + (0.01) Σci

PCA – Processing Complexity Adjustment; C – Complexity Factors

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 NameTechnologyInterfacesDataProcessesGeography

Characteristics Candidate 1 Candidate 2 Candidate 3 Candidate ...Portion of System Computerized

Brief description of that portion of thesystem that would be computerized inthis candidate.

COTS package PlatinumPlus from EntertainmentSoftware Solutions would bepurchased and customized tosatisfy Member Servicesrequired functionality.

Member Services andwarehouse operations inrelation to order fulfillment.

Same as candidate 2.

Benefits

Brief description of the business benefitsthat would be realized for thiscandidate.

This solution can beimplemented quicklybecause its a purchasedsolution.

Fully supports user requiredbusiness processes forSoundstage Inc. Plus moreefficient interaction withmember accounts.

Same as candidate 2.

Servers and Workstations

A description of the servers andworkstations needed to support thiscandidate.

Technically architecturedictates Pentium pro, MSWindows NT class serversand Pentium, MS WindowsNT 4.0 workstations(clients).

Same as candidate 1. Same as candidate 1.

Software Tools Needed

Software tools needed to design andbuild the candidate (e. g., databasemanagement system, emulators,operating systems, languages, etc.). Notgenerally applicable if applicationssoftware packages are to be purchased.

MS Visual C++ and MSACCESS for customizationof package to provide reportwriting and integration.

MS Visual Basic 5.0System Architect 3.1Internet Explorer

MS Visual Basic 5.0System Architect 3.1Internet Explorer

Application Software

A description of the software to bepurchased, built, accessed, or somecombination of these techniques.

Package Solution Custom Solution Same as candidate 2.

Method of Data Processing

Generally some combination of: on-line,batch, deferred batch, remote batch, andreal-time.

Client/Server Same as candidate 1. Same as candidate 1.

Output Devices and Implications

A description of output devices thatwould be used, special outputrequirements, (e.g. network, preprintedforms, etc.), and output considerations(e.g., timing constraints).

(2) HP4MV departmentLaser printers(2) HP5SI LAN laserprinters

(2) HP4MV departmentLaser printers(2) HP5SI LAN laserprinters(1) PRINTRONIX bar-codeprinter (includes software &drivers)

Web pages must be designedto VGA resolution. Allinternal screens will bedesigned for SVGAresolution.

Same as candidate 2.

Input Devices and Implications

A description of Input methods to beused, input devices (e.g., keyboard,mouse, etc.), special input requirements,(e.g. new or revised forms from whichdata would be input), and inputconsiderations (e.g., timing of actualinputs).

Keyboard & mouse Apple “Quick Take” digitalcamera and software(15) PSC Quickscan laserbar-code scanners(1) - HP Scanjet 4C FlatbedScannerKeyboard & mouse

Same as candidate 2.

Storage Devices and Implications

Brief description of what data would bestored, what data would be accessedfrom existing stores, what storage mediawould be used, how much storagecapacity would be needed, and howdata would be organized.

MS SQL Server DBMS with100GB arrayed capability.

Same as candidate 1. Same as candidate 1.

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 NameDescriptionOperational FeasibilityTechnical FeasibilitySchedule FeasibilityEconomic FeasibilityRanking

Feasibility Criteria Wt. Candidate 1 Candidate 2 Candidate 3 Candidate ..Operational Feasibility

Functionality. A description of to whatdegree the candidate would benefit theorganization and how well the systemwould work.

Political. A description of how wellreceived this solution would be fromboth user management, user, andorganization perspective.

30% Only supports MemberServices requirements andcurrent business processeswould have to be modified totake advantage of softwarefunctionality

Score: 60

Fully supports user requiredfunctionality.

Score: 100

Same as candidate 2.

Score: 100Technical Feasibility

Technology. An assessment of thematurity, availability (or ability toacquire), and desirability of thecomputer technology needed to supportthis candidate.

Expertise. An assessment to thetechnical expertise needed to develop,operate, and maintain the candidatesystem.

30% Current production release ofPlatinum Plus package isversion 1.0 and has only beenon the market for 6 weeks.Maturity of product is a riskand company charges anadditional monthly fee fortechnical support.

Required to hire or train C++expertise to performmodifications for integrationrequirements.

Score: 50

Although current technicalstaff has only Powerbuilderexperience, the senioranalysts who saw the MSVisual Basic demonstrationand presentation, has agreedthe transition will be simpleand finding experienced VBprogrammers will be easierthan finding Powerbuilderprogrammers and at a muchcheaper cost.

MS Visual Basic 5.0 is amature technology based onversion number.

Score: 95

Although current technicalstaff is comfortable withPowerbuilder, management isconcerned with recentacquisition of Powerbuilderby Sybase Inc.MS SQL Server is a currentcompany standard andcompetes with SYBASE inthe Client/Server DBMSmarket. Because of this wehave no guarantee futureversions of Powerbuilderwill “play well” with ourcurrent version SQL Server.

Score: 60Economic Feasibility

Cost to develop:

Payback period (discounted):

Net present value:

Detailed calculations:

30%

Approximately $350,000.

Approximately 4.5 years.

Approximately $210,000.

See Attachment A.

Score: 60

Approximately $418,040.

Approximately 3.5 years.

Approximately $306,748.

See Attachment A.

Score: 85

Approximately $400,000.

Approximately 3.3 years.

Approximately $325,500.

See Attachment A.

Score: 90Schedule Feasibility

An assessment of how long the solutionwill take to design and implement.

10% Less than 3 months.

Score: 95

9-12 months

Score: 80

9 months

Score: 85Ranking 100% 60.5 92 83.5