Oromia State University
Collage of Science and Technology
Department of Information Technology
Course Title: System Analysis and
Design
Unit Two: SYSTEMS PROJECT PLANNING AND FEASIBILITY STUDY
Compiled by: Abdisa D.
Outline
• Introduction
• Project Selection and Justification
• Project Initiators
• Handling and Managing Systems
Projects
• Project Phases
• Costs of the Proposed System
• The Causes of Project Failure
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Introduction
• Project is defined as a temporary
sequence of unique, complex, and
connected activities having one goal or
purpose and that must be completed by a
specific time, within budget, and
according to specification.
• Before the actual project process is
undertaken:
• The need for such project must be
identified:
• The project must be defined as a
solution to the current information3
PROJECT SELECTION AND JUSTIFICATION
The basic question pertaining to project
selection is “where do system projects
originate?” Projects originate or initiated by a
large group of stakeholders to the firm.
Some these are:
End Users: End users initiate most information
system projects.
Analysts: system analysts propose most system
development projects.
Many projects are identified by intensive
information systems planning activities called
Information Resource Management (IRM).
4
Cont’d
• However, the impetus for most projects is
some combination of problems, opportunities,
and directives.
– Problems: problems are undesirable situations
that prevent the organization from fully achieving
its purpose, goals, and/or objectives. Problems
might be real, suspected or anticipated.
– Opportunity: An opportunity is a chance to
improve the organization even in the absence of
specific problems.
– Directive: A directive is a new requirement that is
imposed by management, government agency, may
mandate that a new set of reports be produced
each quarter.
5
Con’d
• Projects are initiated in order to solve problems, exploiting
opportunities, and fulfilling directives.
• There are far too many potential problems to list them here.
However, there is a useful framework for classifying problems.
It is called PIECES because the letters of each of the
categories of problems spell the word pieces. The categories
are:
– The need to improve performance (P)
– The need to improve information (I)
– The need to improve economics, control casts, or increase profits (E)
– The need to control or security (C)
– The need to improve efficiency of people and processes.
– The need to improve service to customers, suppliers, parents,
employees, etc (S)
• Projects can be either planned or unplanned. A planned
project is the result of one of the following.
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PROJECT INITIATORS
A. End Users: End users communicate the need for systems
project for top managers for implementation. The proposal
should include the following:
Background
Symptoms
Objectives of the Project
Benefits and Beneficiaries
C. Systems Project Originate
B. Systems Department/Systems Analyst: from the has the necessary
Strategic
knowledge and skills to under take the study.
Information Resource
Background management (IRM) plan.
Symptoms In addition to the users and
Objectives of the Project knowledge workers, projects
Scope and limitation of the project can also originate from formal
Methodology organizational plan. This
Benefits and Beneficiaries requires intensive information
The study team
and the involvement of the top
managers.
The project schedule 7
HANDLING AND MANAGING SYSTEMS PROJECTS
• An organization should adapt the following
procedures in proceeding the proposed system
project.
• This procedure should normally covers the initial
system projects management phases, i.e., until the
feasibility report. This is because the continuation of
the project is dependent of the feasibility study result.
– Formulation of the steering committee
– Setting the terms of reference
– Formation of the conditions and terms of payment
(formation of the study group).
– Planning the Study
– Monitoring the Project based on plan
– Evaluating the preliminary
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Project Phases
• Phases of Project planning
– Phase l: Preliminary Investigation Phase
– Phase 2: Feasibility Study
– Phase 3: System Analysis
– Phase 4: System Design
– Phase 5: System Development
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Phase1. Preliminary Investigation
Phase
• The purpose of the initial (preliminary) investigation or
survey phase in two fold.
– First, it answers the question, “Is this project worth looking at?”
To answer this question, managers must define the perceived
problems, opportunities, and directives that triggered the
project and assess the risk of pursuing the systems project.
– Second, the preliminary investigation phase must also establish
the project charter that establishes scope, preliminary
requirements and constraints, project participants, budget and
schedule.
• The major activities of analysts in the preliminary
investigation phase are:
– Reviewing the current system
– Conducting interviews with different personnel
– Reviewing documents
– Making observations
– Preparing a preliminary report 10
Con’d
• The preliminary report may include:
– Terms of reference
– Existing system problem summary
– Results of preliminary investigation
– The advantage and deficiencies of the
existing system
– Recommendations
– Required project cost and schedule.
11
Con’d
Assessing feasibility means answering questions
relating to the
utility and viability of the system that is going to
be developed.
This means answering the following questions:
Is it really cost-beneficial to develop the
proposed system?
Is it possible to develop the proposed system?
Is it ……
The purpose of feasibility studies is to evaluate
systems and to propose the most feasible and
desirable systems for development.
It provides the steering committee with
information with which to make decision on either
developing the system or back logging it for later
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dates.
Feasibility Study
Technical Feasibility
• Assessing technical feasibility means
checking weather the
organization has got the technical capability to
develop the
proposed IS.
• We can assess the technical feasibility of IS
development projects based on the following
factors:
• The size of the project
• The extent of structure the problems
to be solved using the
• IS have:
• The familiarity of the IS development
team with the 13
Feasibility Study
Operational feasibility
• Refers to weather the proposed system can be
implemented and operated with the staff the
organization have and meet its intended purpose.
• Thus operational feasibility requires checking weather
the IS will be operational or not.
• The difference between technical and operational
feasibility is that while technical feasibility is
technology oriented, operational feasibility is people
oriented.
• Operational feasibility also checks how well the
proposed system will solve the organization’s problems
when put in operation.
• Technical feasibility answers:
• Can we build the proposed system with the
proposed technology? (That is, is the technology
practical? Do we have access and expertise to that
technology?) 14
Feasibility Study
Schedule feasibility
• Involves checking if the project team can build
the proposed system with in the time allotted.
Legal feasibility
• Concerns if the IS development project would
have
any legal implications for the organization due to
government regulation or software license
agreements
Political feasibility
• Requires identifying the people that are going to
be
affected by the information system to be
developed
and any power shifts it may bring within the
organization.
• Finding out what people affected by the IS think 15
Feasibility Study
Economic Feasibility
The general term for economic feasibility
is cost-benefit analysis.
It is a bottom line is many project.
During the early phases of the project,
economic feasibility analysis amounts to
little more than judging whether the
possible benefits of solving the problem
are worthwhile.
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COSTS OF THE PROPOSED SYSTEM
• Costs of the proposed system
A. Cost can be broken down into three basic
categories:
• Once-off cost:- This includes outlay on hardware,
software, initial stock of consumable commodities,
consultancy fees, file conversion and staff training costs.
• Ongoing running cost. This includes operating staff
salaries and overheads, stationary and other initial
items, depreciation of purchased capital items,
maintenance of hardware, software and other
equipments.
• Intangible Costs. Intangible costs are one that cannot
be measured directly in a financial terms. Such as staff
dissatisfaction, learning curve, opportunity costs and
incompatibility with the existing system.
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Con’d
• Benefits:-
– Each system is unique in the benefits it
offers to the users, which may fall under
two categories, i.e., direct or indirect.
– The direct benefits of systems project
include savings resulting from the old
system no longer used in terms of staff
salary, and consumable materials.
– It also increases capacity and better
management of capital by reducing
stock level and collection of debts.
18
Con’d
• Projects have also an indirect or
intangible benefits that includes:
– Better and more informed decision-
making.
– Improved customer service, resulting in
an increase in customer satisfaction.
– Freedom from routine decisions
– Safeguarding the customers
– Getting computing advantages over
competitors.
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The feasibility study report
• After all the necessary analysis and study, the analyst or
knowledge worker should produce a document, which
serves as a reference point for further analysis and
evaluation of the system proposed.
• This document in known as the feasibility study report.
This report may include the following components:
1. Introduction
2. Terms of reference
3. Outline of existing system.
4. Outline of the proposed system
5. Likely benefits from the new system
6. Suggested hardware and software and vendors 7. Cost of the
proposed system.
7. Staff and training requirements
8. Suggested implementation time table
9. Information about other organizations who might be using the new
proposed system.
10.Ongoing costs. 20
PROJECT PHASES
Planning for the IS Development Project
Planning requires definition of the scope and
identification of
tasks, their sequence and duration.
After doing this it is just using a tool to represent it
in a form of
schedule.
Defining Scope of the IS Development Project
Scope defines the boundaries of a project-What
part of the business is to be studied, analyzed,
designed, implemented and improved?
It should answer the following basic questions
• Problem statement- what problem are you trying to
solve?
• Project objectives-what product would solve the
problem,
• Project description- what activities will the project
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THE CAUSES OF PROJECT FAILURE
• What causes a systems project to succeed or fail?
• In unit one basic principles of systems
development that are critical success factors for
all projects are discussed.
• From a project management perspective, a
system is considered a success if:
– The resulting information system is acceptable
to the customer (users)
– The system was delivered “on time”.
– The system was delivered “within budget.”
– The system development process had a
minimal impact on ongoing business
operations.
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Con’d
• But not all projects are successful. Failures and limited
successes far out number successful information system.
• The basic reasons are:
– Failure to establish top management commitment to the
project.
– Lack of organization’s commitment to the systems
development methodology
– Taking shortcuts through or around the system development
methodology
– Poor expectations of managers and users.
– Premature commitment to a fixed budget and schedule.
– Poor estimating techniques.
– Inadequate people management skills.
– Failure to adapt to business change.
– Inefficient resources.
– Failure to “manage to the plan”.
– Resistance to change
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Questions?
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