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Systems Analysis IFeasibility & Project Management
ISYS 200
Glenn Booker
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Feasibility
Every organization which performs system development, or has it done for them, needs a way to choose which projects are worth the effort
Feasibility study is a common approach to make such decisions thoughtfully
Basis for feasibility study is generally the problems and opportunities analysis
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Problems & Opportunities
We can look for problems and opportunities in many parts of our organization, and the existing systems which are supported Track maintenance costs for existing systems Measure existing processes to determine their
cost, and compare to industry standards Monitor availability of support for existing
system components Look for signs of unhappy employees
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Problems & Opportunities
Check quality of work products (outputs) Listen to customers, vendors, and suppliers
Both complaints and suggestions Measure customer satisfaction Monitor competitor’s offerings and plans Monitor changes in technology which could help Don’t forget obvious measures of success, like
sales, profit, or number of contracts awarded
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Project Selection
Selection of projects is based on many factors – cost, urgency, the systems affected, etc.
From the organization’s perspective, choosing projects is kind of like shopping There’s generally a limited amount of funds
and people available to work on the possible projects, and management needs to choose which projects to support
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Project Selection
There are five typical requirements for a project to be supported Management support for the project Appropriate timing of commitment to the project Relevance to helping meet organizational goals Project must be practical and feasible Project must be worthwhile compared to other
possible expenditures Are we getting enough ‘bang for our buck?’
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Project Objectives
Based on the problems and opportunities identified for a project, we can set objectives for the project These not only help the feasibility study which
follows, but set goals against which we can later test the system
Objectives should not only address the type of improvement sought, but set a desired level of improvement
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Project Objectives
Examples of objectives might include Improve customer satisfaction 10% within 1 year Reduce the response time for customer
complaints by 15% Get a new feature to market before competitors Reduce error rate for data entry from 2% to 0.5% Improve sales to new customers by 5% Reduce voluntary employee turnover by 10%
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Feasibility Analysis
Feasibility consists of several types we want to assess for each candidate project Technical feasibility
Can the project be done with existing technology? Are people available to use the technologies needed?
Economic feasibility How much does the system cost to develop?
Maintain? How long will it be usable? Some add schedule feasibility – how long will it take
to create the system?
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Feasibility Analysis
Operational feasibility What impact will the new system have on how we do
business? Will there be changes to where or how processes are performed?
Will there be changes to employee skills needed? Changes to employee training?
Are existing users amenable to a new system?
These types of feasibility can be measured for each project, and compared to determine which is most feasible
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Feasibility Analysis
Like voting or buying a car, feasibility analysis is rarely completely logical or quantifiable
Many other issues can also affect it Political climate State of the US and/or global economy Preferences of the decision makers – favored
vendors, technologies, types of projects, etc.
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Planning Activities
Once a project has been selected for funding, its detailed planning generally begins
Key project management perspective is to look at a project in terms of a set of tasks to be accomplished, and managing the resources (people, tools) needed to perform those tasks Management focuses on effort (by people),
(calendar) schedule, cost, and resources
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Planning Activities
Cost for software-related system development is mostly due to the labor effort of the people needed to create it Other costs, such as hardware, software, training,
etc. are relatively small for most systems The start of planning for a project is to identify
the time needed for various activities needed to create the system
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Planning Activities
To help structure development activities, we use a life cycle model to identify the major sets of activities, called life cycle phases
There are many kinds of life cycle models The Waterfall model is the oldest, and uses
phases like Requirements Analysis, High Level Design, Low Level Design, Coding, and Testing
The Rational Unified Process has Inception, Elaboration, Construction, and Transition phases
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Planning Activities
The life cycle used here has three phases The Analysis phase includes data gathering,
data flow and decision analysis, and proposal preparation activities
The Design phase includes data organization, and design of data entry, inputs, and outputs
The Implementation phase includes creating the system (implementation) and evaluation (testing)
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Planning Activities
Each life cycle phase is broken down into more and more specific activities, until the time needed for each activity can be reliably estimated
Then the tasks are put into a Gantt chart or Pert chart to show when they occur relative to each other Tasks might occur sequentially, have to start
or end together, or wait for some other tasks to be completed
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Planning Activities
Tasks for a project often include the acts of creating specific documents or work products, approving things or making decisions; such as ‘Prepare system test plan’ ‘Approve system release’ ‘Conduct user satisfaction survey’ ‘Approve system requirements specification’
So the life cycle model provides guidance on the types of activities needed, but the tasks provide authority for people to do them
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Gantt Chart
The Gantt chart shows tasks graphically Time moves forward from left to right Each task is a bar, whose length is the task
duration, and position shows when it starts and stops
Above the bars are 1-3 timelines, which can show actual time (e.g. calendar weeks and months) or relative time (weeks or months since the start of the project)
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Gantt Chart
Decisions are shown by a milestone diamond – they are tasks of zero duration
Tasks and decisions are grouped together into activities and life cycle phases The higher level tasks are shown as summary
tasks – a different style of bar Once the project starts, another style of bar
can be used to show progress toward completing tasks
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Gantt Chart Excerpt
Notice that tasks 3-5 are sequential, tasks 7 and 8 end together, tasks 1, 2, 6, and 9 are summary tasks, and tasks 12 and 15 are decisions.
Detailed activities of design and implementation phases are not shown.Each level of indenting task names indicates a new level of detail.
ID Task Name Duration Start Finish
1 Analysis Phase 30 days Mon 8/18/03 Fri 9/26/03
2 Data Gathering 10 days Mon 8/18/03 Fri 8/29/03
3 Plan interviews 5 days Mon 8/18/03 Fri 8/22/03
4 Conduct interviews 3 days Mon 8/25/03 Wed 8/27/03
5 Analyze interview results 2 days Thu 8/28/03 Fri 8/29/03
6 Data Flow and Decision Analysis 20 days Mon 9/1/03 Fri 9/26/03
7 Conduct data flow analysis 20 days Mon 9/1/03 Fri 9/26/03
8 Conduct decision analysis 10 days Mon 9/15/03 Fri 9/26/03
9 Proposal Preparation 8 days Mon 8/25/03 Wed 9/3/03
10 Write Proposal 6 days Mon 8/25/03 Mon 9/1/03
11 Review proposal 2 days Tue 9/2/03 Wed 9/3/03
12 Approve proposal 0 days Wed 9/3/03 Wed 9/3/03
13 Design Phase 20 days Mon 9/29/03 Fri 10/24/03
14 Implementation Phase 50 days Mon 10/27/03 Fri 1/2/04
15 Approve system release 0 days Fri 1/2/04 Fri 1/2/04
9/3
1/2
Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul AugQ3 '03 Q4 '03 Q1 '04 Q2 '04 Q3 '04
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PERT Diagrams
PERT diagrams, or PERT charts, are primarily used to help identify the critical path for a project The critical path is the sequence of tasks which,
if any tasks were changed, would also change the completion date of the project
Tasks on the critical path tend to get preferential treatment for getting resources
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PERT Diagrams
A PERT diagram consists of labeled circles, connected by lines (other formats exist)
The circles are points in time on the project schedule (not tasks); the labels are sequential tens (10, 20, 30, etc.)
Each line is a task, labeled with the task identifier and its duration in some consistent units (weeks in the text, days here)
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PERT Diagrams
A split in tasks after some circle means that two or more tasks start at the same time
Conversely, two or more lines entering a circle means that ALL of those tasks have to finish before the project can move forward
‘Dummy’ lines can be added to connect tasks which have no previous or following task
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Sample PERT Diagram
This is the Gantt example on slide 20, omitting the lowest level tasks. Tasks 13 and 14 are, for example, the design and implementation phases.
10
20 40
30
50 60
2, 10d
6, 20d
9, 8d
13, 20d 14, 50d
Dummy
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PERT Diagrams
PERT is therefore useful for Identifying the order in which tasks take place Finding the critical path Finding slack time (open areas in the schedule)
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Timeboxing
Timeboxing refers to creating short, well defined iterations in which to perform project tasks Each time box has clearly stated objectives and
deliverables (work products due) Used to avoid long, ill-defined tasks which
don’t produce anything The Rational Unified Process uses
timeboxing throughout the life cycle
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Teamwork
Teams are groups of people who 1) are working to achieve a common goal, and 2) whose activities are interdependent
Teams need to have clear objectives Teams need a way to resolve conflicts Teams may have specifically defined roles,
and one or more leaders Teams should set their own goals
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E-Commerce Management
Management of e-commerce projects are frequently similar to any other development effort Might have greater geographic range of locations Typically need diverse skill sets May be very politically driven projects with
tight schedule And obvious security concerns
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Systems Proposals
Many organizations obtain new work by bidding on projects using some kind of proposal document Proposals could be used internally within your
organization, or sent to an external customer A proposal outlines their proposed solution to
the customer’s problem, and gives estimates of the cost, schedule, and risks associated with the project
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Candidate Solutions
Key to a good feasibility analysis is to choose an appropriate set of candidate solutions Each candidate solution is one way to approach
structuring the solution They might differ in the
Type of network architecture (# of tiers), Extent of automation (which processes are
automated vs. stay manual), Use of push vs. pull technologies
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Candidate Solutions
Brand of commercial components (UNIX vs VMS operating system),
Types of hardware technology (e.g. typed vs. RFI vs. barcode input devices),
Use of custom vs. commercial vs. outsourced software components
For each candidate solution, need to Identify the hardware and software needs to
implement it Estimate the labor effort to implement it
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Candidate Solutions
Estimate the maintenance costs Select appropriate options for buying vs leasing
equipment, and options for commercial software maintenance contracts
Determine facility needs for each solution Then you can choose the tool for making the
choice among the candidate solutions
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Decision Tools
Tools for making decisions include The spreadsheet approach – assign a value to
each aspect of feasibility, and rate each solution on those aspects
More formal tools can use analytical hierarchy processing (AHP), neural nets, expert systems, or other techniques
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Cost-Benefit Analysis
As part of the cost feasibility, a formal cost-benefit analysis can be performed This is weighing the costs of developing and
maintaining a new system, against the benefits that system should provide
This is why quantifying system objectives was important
The tangible benefits of the new system can be the value of improvements
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Cost-Benefit Analysis
For example, the benefit from saving four minutes on generating a form that’s used 50,000 times per year might be (4 min/form)/(60 min/hr)*(50000 form/yr)*$40/hr Equals $100,000 per year, assuming the cost of
an employee, with benefits, is $30/hr Similar approaches can be used to estimate
benefits of bringing in new customers, increasing sales, reducing errors, etc.
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Cost-Benefit Analysis
Analytical approaches for predicting trends from past behavior can use several methods Regression analysis (statistical curve fitting) Moving averages Graphic judgment (visual curve fitting)
Intangible benefits are also important – improved employee morale, good company reputation, customer satisfaction
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Cost-Benefit Analysis
Costs associated with creating a system are also tangible or intangible Tangible costs include the development and
maintenance costs of the new system Intangible costs are hard to measure, e.g. the
cost of making poor decisions All costs over the life of the system should
first be converted to their present value
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Time Value of Money
All cost benefit analyses assume that money is worth more over time, since it can be invested
As a result, these analyses depend
VERY STRONGLY on the interest rate which could be obtained from saved money –
a critical assumption
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Present Value
The present value of money, some time in the future, is $1 of money today = $(1+i)-n Where ‘i’ is the interest rate, and ‘n’ is the number
of time periods over which that rate was collected The interest rate is how much you could earn on
investing that money some way other than this system The number of time periods is generally in years,
but the formula still works if you divide the interest rate accordingly
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Present Value
So the present value of $30,000 five years from now at an 8% interest rate is$30,000 * (1 + 0.08)-5 = $20,417 That means if we invest $20,417 at 8% interest
for five years, we’d have $30,000 The same problem with months used instead
of years gives us a slightly different answer PV = $30,000*(1 + 0.08/12)-60 = $20,136 How often the interest is obtained is a small factor
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Present Value
Notice that the present value of $1.00 is always less than or equal to $1.00 If you invest 50 cents now, at some point in
the future it will be worth $1.00 When that happens depends on how well that
50 cents could be invested (the interest rate) Very short term projects don’t need to use
present value analysis, but most information systems are long term investments
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Break Even Analysis
One way to analyze cost effectiveness is to determine how much business volume is needed for the new system to pay for itself Determine the costs and benefits as a function
of system output Look for when benefits exceed costs – that’s
the breakeven point A good method if cost is the main concern,
not benefits
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Return On Investment (ROI)
Lifetime ROI is a percentage comparing the total costs and benefits from a project:Lifetime ROI=(total benefit - total cost)/(total cost)
Lifetime ROI may be divided by project duration to get a ROI per year (annual ROI) Want high ROI (lifetime and annual) A low ROI (~ under 10%/yr) might indicate
the benefits are too little to be worthwhile
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Cash Flow Analysis
Look at the costs and benefits from the system over time (e.g. each year) Convert costs and benefits to present value Add up the total costs and total benefits When the total benefits are greater than total
costs, you have reached the breakeven point (“out of the red”)
Good for projects that are a substantial investment for the organization
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The Systems Proposal
Based on all the nifty stuff we’ve covered, we can now put together a systems proposal Executive summary (execs don’t read much) Describe the methods used to study the existing
system and the business environment Describe the candidate solutions and the
feasibility analysis results for each Provide a recommendation on the preferred
solution
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The Systems Proposal
Most people who receive a systems proposal are looking at many of them and need to choose the ones to receive funding
Hence there’s a noticeable amount of sales pitch in many proposals
Consider appropriate graphics to make the data more interesting
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Types of Graphs
Pie chart Bar or column graph
Bars can be stacked, or clustered next to each other
Line graph Scatter plot Histogram
A bar chart with ranges of X values, like ages 15-24, 25-39, 40-54, etc.
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The Systems Proposal
An oral presentation may be needed for the systems proposal Make sure your voice is loud enough to be heard Look at your audience – they won’t bite! Keep visual aids large enough to be read Avoid filler words: errr, um, y’know
A little silence can be a good pause between topics, and give you time to think