Feasibility Analysis Consulting

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.

The Feasibility analysis in a project that is feasible at one point in time may become infeasible at a later point in time. Therefore, the Systems Development Life Cycle (SDLC) has to use various go/no-go checkpoints or management reviews. Red diamonds represents the checkpoints. The diamonds identify specific times during the life cycle when feasibility is reevaluated and management review should be conducted at the end of the prior phase. A project can cancel or revised in scope, schedule, or budget at any of these checkpoints. In the textbook, there is a Feasibility Checkpoints in the Systems Development Life Cycle.

The advance of Checkpoints conducted in the SDLC:

• At the early stage of the project, it can measure of the urgency of the problem and the first-cut estimate of development costs.
• Get experience by each of the problem from the checkpoints.
• After each of the Checkpoint, it can occur more detailed study of the current system.
• The analyst can frequently prove more extensive than originally stated. Than, the system will be able to do better than before.
• Considered the solutions before the hardware and software selection impact.
• Once the final checkpoint is completed, all the complexity of the solution should be apparent.

Four Tests For Feasibility

Operational feasibility

Measure the urgency of the problem or the acceptability of a solution.

Aspects of operational feasibility

1. Is the problem worth solving
2. Will the solution to has problem work
3. Political acceptability

Technical feasibility

• can only be evaluated after the technical issues are resolved issues
• IS the prepared technology practical?
• Do we currently process the necessary technology and time?

Schedule feasibility

-To measures the reasonable project timetable.

Issues

• Are the deadlines mandatory or desirable?
• Scope can change if time (Longer)
• Careful if mandatory (Scope no change)
• Missed Schedules are bad, inadequate systems are worse!
• Are the project deadlines reasonable?

Economic feasibility

• To measure the cost-effectiveness of a project or solution. Which is often called cost-benefit analysis.
• Costs are impossible to estimate before requirements and  technical solutions have been identified.
• Benefits are easier to determine at an early stage.
• The alternative solution can be evaluated according to four criteria: operational, technical, schedule, and economic feasibility.

Cost-Benefit Analysis Techniques

One-time costs
-Capital. Example: New Computer hardware, software and office equipment’s ,Training of the personnel.
-Development costs. Example: Personnel, Training,  computer charges, consulting…etc.

Annual operating costs
-Fixed costs. Example: Leasing, licensing, salaries of permanent employees.
-Variable costs. Example: Costs of Computer usage and supplies.

• What benefits will the system provide?
• Benefits normally increase profits or decrease costs or both
• Do not confuses benefits with features
• Classified as tangible or intangible

Tangible benefits

-Usually measured in term’s savings (month annual)or of profit to the firm.

Intangible Benefits

-Benefits believed to be difficult or impossible to quantify

-Example: Improved employee morals, better service to community And decision making.

Is the prepared system cost-effective?

• All costs and benefits do not occur instantaneously.
• In reality, costs and benefits are distributed overtime.
• Head to take into account time value of money.
• Three commonly used technique
  1. Payback analysis.
  2. Return on investment.
  3. Net present value.

Time value of money

• A dollar today is worth more than a dollar one year from now.
• Future monetary value can be discounted backwards to obtain its discounted present value.
• Based on the prevailing interest rate.
• Enable compositions of money values at different periods of time.

Payback Analysis

• Development costs are incurred long before benefits begin to occur.
• Period of time called payback period.
• Present value of a dollar in year n depends on the discount rate.

Return on investment analysis

• Compare lifetime profitability of alternate solutions.
• Measure relationship between the amount invested and the return.
• The ROI for a potential solution or project is calculated as follows:
• ROI is equal Estimated lifetime benefits subtract Estimated
• Lifetime costs and divide Estimated lifetime costs.

Not Present Value (NPV)

• Compute Discount Present Value (DPV) for future costs to benefits
• NPV = (Sum of DPV for yearly benefits) – Initial outlay.
• Initial Outlay is equal the amount required for the implementation of the system prior to its operation.
• Feasibility Analysis of Candidate Systems

Candidate System matrix

• Document similarities and difference between systems.
• Performs no analysis.
• Columns represent candidate solutions
• Rows represent characteristics.(Technology, People, Data, Processes, Networks)

Feasibility Comparison Matrix

• Ranking matrix.
• Columns – candidate systems.
• Rows – feasibility criteria.
• Cells represent ranking.

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