Systems Analysis – ITEC 3155
Feasibility Analysis
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What is Feasibility Analysis?
 Feasibility

A measure of how beneficial or practical the development of
an information systems will be to an organization.
 Feasibility Analysis

The process by which feasibility is measured.

The goal of feasibility analysis:

To enable the organization to determine whether or no to
proceed with a project

To identify any important risks associated with the project
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Confirming Project Feasibility
 Risk
management
 Economic
feasibility

Cost/benefit analysis

Sources of funds (cash flow, long-term capital)
 Organizational
 Technological
and cultural feasibility
feasibility
 Schedule
feasibility
 Resource
feasibility
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Risk Management
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Economic Feasibility
 An
economic feasibility analysis (or cost-benefit
analysis) should be performed to identify the
financial risk associated with the project

Estimate project development costs

Estimate operational costs after project

Estimate financial benefits based on annual
savings and increased revenues

Calculate using table of costs and benefits
 Uses
net present value (NPV), payback period,
return on investment (ROI) techniques
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Supporting Detail for Salaries
and Wages for RMO (Figure 3-16)
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Summary of Development Costs for RMO
(Figure 3-17)
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Summary of Annual Operating Costs
for RMO (Figure 3-18)
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Sample Benefits for RMO (Figure 3-19)
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RMO Cost Benefit Analysis (Figure 3-20)
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Intangibles in Economic Feasibility
 Intangible
benefits cannot be measured in dollars

Increased levels of service

Customer satisfaction

Survival

Need to develop in-house expertise
 Intangible
costs cannot be measured in dollars

Reduced employee morale

Lost productivity

Lost customers or sales
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Organizational and Cultural Feasibility
 Each

company has own culture
New system must fit into culture
 Evaluate
related issues for potential risks

Low level of computer competency

Computer phobia

Perceived loss of control

Shift in power

Fear of job change or employment loss

Reversal of established work procedures
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Technological Feasibility

The goal

to assess the extent to which the system can be
successfully designed, developed and installed

Does system stretch state-of-the-art technology?

Does in-house expertise presently exist for development?

Does an outside vendor need to be involved?

Solutions include

Training or hiring more experienced employees

Hiring consultants

Changing scope and project approach
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Schedule Feasibility
 Estimates
needed without complete information
 Management
 Project
deadlines may not be realistic
managers

Drive realistic assumptions and estimates

Recommend completion date flexibility

Assign interim milestones to periodically reassess
completion dates

Involve experienced personnel

Manage proper allocation of resources
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Resource Feasibility
 Team
member availability
 Team
skill levels
 Computers,
equipment, and supplies
 Support
staff time and availability
 Physical
facilities
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Summary
 Feasibility

aims to determine whether an organization should
proceed with a project; identify important risks.
 Feasibility

analysis
has many facets
technical, economic, organizational/cultural,
schedule, resource.
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