1University of TorontoDepartment of Computer Science© Easterbrook 20041Lecture 4, Part 1:the Feasibility StudyÜ What is a feasibility study?Ä What to study and conclude?Ü Types of feasibilityÄ TechnicalÄ EconomicÄ ScheduleÄ OperationalÜ Quantifying benefits and costsÄ Payback analysisÄ Net Present Value AnalysisÄ Return on Investment AnalysisÜ Comparing alternativesUniversity of TorontoDepartment of Computer Science© Easterbrook 20042Why a feasibility study?Ü Objectives of a feasibility study:Ä To find out if an system development project can be done:Ø ...is it possible?Ø ...is it justified?Ä To suggest possible alternative solutions.Ä To provide management with enough information to know:Ø Whether the project can be doneØ Whether the final product will benefit its intended usersØ What the alternatives are (so that a selection can be made in subsequent phases)Ø Whether there is a preferred alternativeÜ A feasibility study is a management-oriented activityÄ After a feasibility study, management makes a “go/no-go” decision.Ä Need to examine the problem in the context of broader business strategyUniversity of TorontoDepartment of Computer Science© Easterbrook 20043Content of a feasibility studyÜ Things to be studied in the feasibility study:Ä The present organizational systemØ Stakeholders, users, policies, functions, objectives,...Ä Problems with the present systemØ inconsistencies, inadequacies in functionality, performance,…Ä Goals and other requirements for the new systemØ Which problem(s) need to be solved?Ø What would the stakeholders like to achieve?Ä ConstraintsØ including nonfunctional requirements on the system (preliminary pass)Ä Possible alternativesØ “Sticking with the current system” is always an alternativeØ Different business processes for solving the problemsØ Different levels/types of computerization for the solutionsÄ Advantages and disadvantages of the alternativesÜ Things to conclude:Ä Feasibility of the projectÄ The preferred alternative.University of TorontoDepartment of Computer Science© Easterbrook 20044Exploring FeasibilityÜ The “PIECES” frameworkÄ Useful for identifying operational problems to be solved, and their urgencyÄ PerformanceØ Is current throughput and response time adequate?Ä InformationØ Do end users and managers get timely, pertinent, accurate and usefully formatted information?Ä EconomyØ Are services provided by the current system cost-effective?Ø Could there be a reduction in costs and/or an increase in benefits?Ä ControlØ Are there effective controls to protect against fraud and to guarantee information accuracy and security?Ä EfficiencyØ Does current system make good use of resources: people, time, flow of forms,…?Ä ServicesØ Are current services reliable? Are they flexible and expandable?See the course website for a more specific list of PIECES questions2University of TorontoDepartment of Computer Science© Easterbrook 20045Four Types of feasibilityÜ Technical feasibilityÄ Is the project possible with current technology?Ø How much technical risk is there?Ä Does the technology exist at all?Ø Is it available locally?Ø Can it be obtained?Ø Will it be compatible with other systems?Ü Economic feasibility Ä Is the project possible, given resource constraints?Ä What benefits will result from the system?Ø Both tangible and intangible benefitsØ Quantify them! Ä What are the development and operational costs?Ä Are the benefits worth the costs? Ü Schedule feasibilityÄ Is it possible to build a solution in time to be useful:Ø Any constraints on the schedule?Ø Can these constraints be met?Ü Operational feasibilityÄ Urgency of the problem and the acceptability of any solution:Ø If the system is developed, will it be used?Ä Human and social issues…Ä internal issues:Ø Available of human resources?Ø Potential labour objections?Ø Manager resistance?Ø Organizational conflicts and policies?Ä external issues:Ø Social acceptability?Ø legal aspects and government regulations?University of TorontoDepartment of Computer Science© Easterbrook 20046Technical FeasibilityÜ Is the proposed technology or solution practical?Ä Do we currently possess the necessary technology?Ä Do we possess the necessary technical expertise, and is the schedule reasonable?Ä Is relevant technology mature enough to be easily applied to our problem? Ü What kinds of technology will we need?Ä Some organizations like to use state-of-the-art technologyØ …but most prefer to use mature and proven technology. Ä A mature technology has a larger customer base for obtaining advice concerning problems and improvements.Ü Is the required technology available “in house”?Ä If the technology is available:Ø …does it have the capacity to handle the solution?Ä If the technology is not available:Ø …can it be acquired?University of TorontoDepartment of Computer Science© Easterbrook 20047Economic FeasibilityÜ Can the bottom line be quantified yet? Ä Very early in the project…Ø a judgement of whether solving the problem is worthwhile. Ä Once specific requirements and solutions have been identified…Ø …the costs and benefits of each alternative can be calculatedÜ Cost-benefit analysisÄ Purpose - answer questions such as: Ø Is the project justified (I.e. will benefits outweigh costs)? Ø Can the project be done, within given cost constraints? Ø What is the minimal cost to attain a certain system?Ø Which alternative offers the best return on investment?Ä Examples of things to consider:Ø Hardware/software selectionØ How to convince management to develop the new systemØ Selection among alternative financing arrangements (rent/lease/purchase)Ä DifficultiesØ benefits and costs can both be intangible, hidden and/or hard to estimateØ ranking multi-criteria alternativesUniversity of TorontoDepartment of Computer Science© Easterbrook 20048Benefits and CostsÜ Tangible BenefitsÄReadily quantified as $ valuesÄExamples:Ø increased salesØ cost/error reductionsØ increased throughput/efficiencyØ increased margin on salesØ more effective use of staff timeÜ Intangible benefitsÄDifficult to quantifyØ But maybe more important!Ø business analysts help estimate $ values ÄExamples:Ø increased flexibility of operationØ higher quality products/servicesØ better customer relationsØ improved staff moraleÜ How will the benefits accrue?ÄWhen - over what
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