Information System
Development
Chapter 2: Analyzing The Business
Case
Chapter 2: Analyzing The Business Case 1
Introduction
During the system planning phase, a system analyst
(SA) reviews a proposal to determine if it presents a
strong business case.
Business Case
Refers to the reason, or justification, for a proposal.
To produce business case, SA must consider company’s
overall mission, objectives, and IT needs
System Development start with:
System request
Preliminary investigation
Preliminary report
Chapter 2: Analyzing The Business Case 2
Strategic Planning—A Framework for IT System
Development
Strategic Planning
Is the process of identifying long-term organizational goals,
strategies, and resources
Use SWOT (Strength, Weaknesses, Opportunities, and
Threats) Analysis
Mission Statement
Describes a company for its stakeholders and briefly states the
company overall purpose, products services, and values
Stakeholders include anyone affected by the company
operations, such as customers, employees, suppliers,
stockholders and members of the communities.
Goals – a sets of goals that will accomplish mission
To achieve those goals the company develops a list of
shorter-term objectives.
Chapter 2: Analyzing The Business Case 3
Information System Projects
Reason for System Factors that affects system
projects
Projects
Internal Factors
Improve service Strategic plan
Better performance Top Managers
User Request
More information
IT Department
Stronger controls Existing System
Reduce Cost External Factors
Technology
Suppliers
Customers
Competitors
The economy
government
Chapter 2: Analyzing The Business Case 4
Project Management Tools
All IT projects, large and small, must be managed and
controlled.
A project start with system request and will continue until
completed.
A project is manage by project manager.
Project management tools - Microsoft Project.
Help manage & control project effectively and efficiently.
Project Management Tools contains:
Project schedule
Project task
List of activities & participants
Estimates project milestone dates
Track all cost.
Chapter 2: Analyzing The Business Case 5
Evaluation of System Requests
System request must be evaluated by a group of key
managers and users called system review committee or
computer resources committee.
System Request Forms
Fill the form and send it to system analyst (SA)
SA will do preliminary investigation.
System review committee will make decision for next action.
System Review Committee
Consist of IT directors and managers from other departments.
Some company, system request is evaluated by one person.
To evaluate the system request and set priorities.
Chapter 2: Analyzing The Business Case 6
Overview of Feasibility
Feasibility study is a set of test to see
whether it is worthwhile to proceed further.
Four types of feasibility study to measure a
proposal:
Operational feasibility
Technical feasibility
Economic feasibility
Schedule feasibility
Chapter 2: Analyzing The Business Case 7
Operational Feasibility
Means that a proposed system will be used/operate
effectively after it has been developed.
Key issues
User & management support and will be effectively use by them.
Workforce reduction
Training
User involvement in the system planning
Changes on any operation, information accessibility, and
performance
Effects on customers, either temporary or permanent.
Risk to the company image
Schedule conflict with other activities
Legal and ethical issue
Chapter 2: Analyzing The Business Case 8
Technical Feasibility
Refers to the technical resources needed to
develop, purchase, install, or operate the
system.
Key issues:
Have hardware, software, and network
resources?
Technical expertise
Have sufficient capacity for future needs
Reliability, integration
Performance
Chapter 2: Analyzing The Business Case 9
Economic Feasibility
Means that the projected benefits of the proposed
system outweigh the estimated costs usually
considered the total cost of ownership (TCO)
Include ongoing support, maintenance cost, and
acquisition cost.
Also assess tangible and intangible benefits
Tangible benefits are benefits that can be measured in
dollars.
Result from a decrease and increase in revenues or
expenses.
Intangible benefits are advantages that are difficult to
measure in dollars.
Chapter 2: Analyzing The Business Case 10
Evaluating Feasibility & Setting Priorities
Identify and weed out system request that are not feasible.
Evaluate alternatives solution.
Evaluate against development efforts, cost, and requirement
changes.
Set priorities to all system request.
System request that have highest priority should be
implemented first.
Reduce cost, increase revenue, produce better result, serve
customer better, serve organization better, implemented in
resonable time period, and available resources.
Projects where management has a choice in implementing
them is called discretionary project.
Projects where no choice exists are called non-discretionary
project.
Chapter 2: Analyzing The Business Case 11
Preliminary Investigation
A system analyst conducts a preliminary investigation to study
the system request and recommend specific action.
Before investigation, contact key managers and users to notify
about the investigation and your role.
Project Scope
& Constraint
Problem or Project
Opportunity Fact-Finding Benefits Report to
management
Development
Time and Cost
Chapter 2: Analyzing The Business Case 12
Planning the Preliminary Investigation
Step 1: Understand the problem or opportunity
Step 2: Define the project scope and constraint
Step 3: Perform fact finding
Step 4: Evaluate Feasibility
Step 5: Estimate project development time and
cost
Step 6: Present results and recommendations
to management.
Chapter 2: Analyzing The Business Case 13
Step 1: Understand the problem or opportunity
Understand the business profile that describes
business process and functions.
Identify problem or symptom
Fishbone diagram or Ishikawa diagram is a popular
technique to investigate causes and effects.
environment workers
Too hot training Unhappy
workers
old
management machine
Chapter 2: Analyzing The Business Case 14
Step 2: Define the project scope and constraint
Project scope means to define the boundaries, or extent, of
the project—being as specific as possible.
General statement: Payroll is not being produced accurately
More specific statement: Overtime pay is not calculated
accurately for the production workers on the second shift at the
Yorktown plant.
General scope: to modify the account receivable system.
More specific scope : to allow customers to inquire online
account balances and recent transaction.
A constraint is a requirement or condition that the system
must satisfy or an outcome that the system must achieve. For
example:
System must operate with existing IBM mainframe server.
The order entry must accept input from 15 remote sites.
The new website must operate by March 1, 2004.
Chapter 2: Analyzing The Business Case 15
Step 3: Perform fact finding
Fact-finding involves various techniques,
depending on what information is needed.
1. Analyze organization charts
2. Conduct interviews
3. Review documentation
4. Observe operation
5. Conduct a user survey
Chapter 2: Analyzing The Business Case 16
Step 4: Evaluate Feasibility
Evaluate the project’s operational, technical,
economic, and schedule feasibility.
May use financial analysis tool.
See previous slide (Evaluating Feasibility & Setting
Priorities)
Step 5: Estimate project development time and
cost
To develop specific time and cost estimates for the
next development phase.
Chapter 2: Analyzing The Business Case 17
Step 6: Present results and recommendations to
management.
Prepare report to management which may include
the following section:
1. Introduction
2. System Request
3. Findings
4. Recommendation
5. Time & Cost Estimates
6. Expected Benefits
7. Appendix
Chapter 2: Analyzing The Business Case 18
Review Questions
What is business case?
What is SWOT analysis and why it is important?
What are five common reasons for systems projects?
What are some internal and external factors that affects
system projects?
What is feasibility? List and briefly discuss four feasibility
tests.
How do tangible benefits differ from intangible benefits?
What are the steps in the preliminary investigation?
What is project scope and what is constraint? Give two
examples of each scope and constraint.
Chapter 2: Analyzing The Business Case 19
