System Analysis
Unit 2 Feasibility Studies
• Learning outcomes
• LO2
• LO3
Understand the importance of feasibility studies
Be able to perform a systems investigation
• Assessment criteria
• AC2.1 Discuss the components of a feasibility report
• AC2.2 Assess the effect of different feasibility criteria on a systems
investigation
• AC3.1 Undertake a systems investigation to meet a business need
• AC3.2 Use appropriate systems analysis tools and techniques to perform a
systems investigation AC3.3 Create documentation to support a systems
investigation
• AC3.4 Evaluate how user and systems requirements have been addressed
• Learning objectives
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Understand the importance of feasibility studies
Perform a systems investigation
Discuss the components of a feasibility report
Assess the effect of different feasibility criteria on a systems investigation
Undertake a systems investigation to meet a business need
Feasibility studies
• Before a systems development project can begin, it is essential to determine
whether or not it is feasible.
• A feasibility study is used to conclude if a project can be executed or to
suggest alternative solutions.
• A feasibility study includes research that is conducted to determine whether
or not to go ahead with a project.
• This is based on factors that include the marketplace, competitors, available
technology, manpower and the financial resources of an organisation.
• Feasibility studies need not be complex and can be executed within a day.
• However, if a systems request involves major changes to a system or the
development of a new system, a thorough investigation and extensive factfinding is very important and, thus, might extend the duration of the
process.
• The amount of effort needed to conduct a feasibility study will depend on
the request received.
• If the Finance Department of an organisation wants an existing report
to contain more specific detail, a decision on feasibility will not take
long.
• Conversely, a request from the marketing manager for a new system
that can assist with market research to predict future sales trends will
require considerably more effort.
• Regardless of the case, a systems analyst needs to compile answers
for the following important questions:
• Is the proposal operationally feasible? Is it a practical approach that can
assist with solving the problem at hand?
• Is the proposal technically feasible? Does the organisation have the
necessary technical resources and expertise (people) available to complete
the project?
• Is the proposal economically viable? What are the estimated project costs
and benefits? Will the benefits outweigh the costs? Is the problem worth
solving?
• Is the proposal feasible in terms of schedule? Will the problem be solved
within an acceptable timeframe?
• All of the mentioned questions need to be answered in a positive
manner in order for a project to be regarded as feasible.
SWOT analysis
• Part of a feasibility study should entail performing a SWOT analysis.
• The strengths (S) in this analysis refer to the characteristics of a
business or system that give it an advantage over other industry
competitors; this is known as a ‘competitive advantage’.
• The following are examples of strengths that a system may have:
• Ease of use for end users
• Integration and alignment of business and IT strategies
• Implementation of technologies
• Weaknesses (W) in a SWOT analysis refer to the characteristics that
place a firm at a disadvantage relative to other organisations that
perform the same function.
• The following are examples of weaknesses that a system may have:
• Platform dependence
• Low system security
• A lack of expertise to maintain the system
• Opportunities (O) that are identified refer to the external chances
that exist to assist in making greater sales/profits or to deliver better
customer service.
• Examples of opportunities for a system may include:
• Development of more effective security protocols
• Development of platform independent software
• Availability of new technology
• Lastly, threats (T) refer to external elements in an environment that
could cause trouble for a business or system.
• The following are examples of threats that a system may encounter:
• A competitor introduces a similar, more advanced system during the
development of the system
• Threats to digital security, owing to hacking or corporate espionage
• Changes in technological requirements
• The carelessness of management and employees can often lead to breaches
in information security
• A SWOT analysis matrix can be drawn up to assist in determining the
strengths, weaknesses, opportunities and threats that a system may
have.
Opportunity
Threat
Strength
Weakness
How do I use the strengths to take
advantage of opportunities?
How do I overcome the
weaknesses that prevent me from
taking advantage of opportunities?
How do I use the strengths to
reduce the effect of threats?
How do I address the weaknesses
that will make threats a reality?
Feasibility report layout
• There is no set way that has to be followed with feasibility reports, thus this
section describes a guideline that can be followed.
• However, for module assessment purposes, this guideline should be followed.
• Title
• A title is provided so that a feasibility report can be put together with other documents, such
as business letters or memoranda.
• The title should be descriptive, for example, ‘Feasibility report for the creation of a new
library
system at CTI’.
• Introduction
• The introduction of a feasibility report should list the purpose of the feasibility study in order
to provide recommendations.
• This should be a summary of the contents and is generally quite short in length
(approximately ten lines).
• Background
• This entails a detailed description of the background of the problem, situation or opportunity
that has led to the report being created or the issuing of a request.
• Requirements
• This is where you discuss the requirements related to the recommendations
of the report, i.e. cost, time, technicality, etc.
• Comparisons
• This section compares the different available options and rates them from
best to worst.
• This could include the methodology being employed, such as purchasing
software or developing such.
• Recommendations
• This entails what is recommended as the solution to the problem.
• Several options may be available and they should all be listed.
• Recommendations are a professional opinion as to which option is the best
in terms of the requirements.
• For example, if you ask a person what type of computer they need, the
answer will usually be ‘the best one on the market’.
• True recommendations should consider what is practical and required, not
what is wanted by the individual.
Feasibility types
• There are four basic types of feasibility that need to be measured to
determine the likelihood of a system’s/project’s success, namely:
1. Operational feasibility
2. Technical feasibility
3. Economic feasibility
4. Schedule feasibility
• After the completion of a feasibility study, management will make a
decision as to whether or not to continue with the systems
development project.
Operational feasibility
• Operational feasibility is the process of assessing the degree to which
a proposed system solves a business problem or takes advantage of a
business opportunity.
• The outcome of an operational feasibility study will be to define
the urgency of the problem as well as the acceptability of the
solution (if the system is developed).
• Another operational factor to consider is whether there will be
resistance from users that will affect possible system benefits.
• Answer the following questions:
• Do you have the support of management in developing the system?
• Is the current system not giving the users the required outputs? Will it cut
the time for the user to do their work? If yes, then the user will welcome the
change and the new system.
• Have the users been involved in the planning and development of the
project? Early involvement reduces the probability of resistance towards the
new system.
• Will the proposed system really benefit the organisation?
Technical feasibility
• Technical feasibility is the process of assessing an organisation’s
ability to construct the proposed system.
• The purpose of this assessment is to determine how an organisation
will deliver a product or service.
• In other words, a technical feasibility study is the logistical/tactical
plan of how a business will produce, store, deliver and track its
products or services.
• This might include materials to complete the project, manpower,
transportation, where the business is located and the technology
needed.
• Answer the following questions:
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Is the system possible with the current technology that is in place?
How much technical risk is there?
Does the technology that is required exist and is it available locally?
Will the new technology be compatible with current systems?
• It should be determined whether an organisation has the technical
resources and expertise to complete a systems development project.
• Example:
• If an organisation does not have programmers to develop a system,
outsourcing could be considered.
• If outsourcing is not an option owing to cost, the project might not be
technically feasible.
• Another example could be that the technical tools are not available for a
specific project.
• This might also cause the project to not be technically feasible.
Economic feasibility
• Economic feasibility is the process of identifying the financial benefits
and costs associated with a systems development project.
• In order for a systems request to be regarded as economically
feasible, the expected benefits from such must be greater than the
predicted costs.
• Most organisations use various financial techniques to determine
economic feasibility; a widely used technique is cost-benefit analysis.
Cost-benefit techniques
Net present value (NPV)
NPV uses a discount rate from a company’s cost of
capital to establish the present value of a project
Return on investment (ROI)
ROI is the ratio of the net cash receipts of a project,
divided by the cash outlays of a project
Break-even analysis (BEA)
BEA calculates the amount of time required for the
cumulative cash flow from a project to equal its
initial and ongoing investment
• Answer the following questions:
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Is the project possible, given resource limitations?
What benefits will result from the system? Quantify them!
What are the development and operational costs?
Are the benefits worth the costs?
Schedule feasibility
• Schedule feasibility is the process of determining whether a systems
development project can be completed given the available
timeframe.
• It is a measure of how reasonable a project timetable is.
• The big question to answer during schedule feasibility is: ‘Is it
possible to build a solution in time to be useful?’
Activity
Activity 2
Fact-Finding Tools & Techniques
• Fact-finding plays a vital role in the systems development process.
• If you do not have information about a problem, how can you fix it?
• This is the basis of why one would use different types of fact-finding
technique to obtain more information on a problem at hand.
• Most fact-finding techniques involve getting information from people,
because people, as resources, have extensive knowledge about an
organisation and the information systems used in such.
• Fact-finding is thus the process of collecting relevant information by using
methods that will assist in obtaining an accurate understanding of a
problem.
• The overall success of any project is dependent on the accuracy of data and
the collected requirements.
• There are many different techniques that can be employed; the more tools
used, the more information about a certain subject.
PROBLEM DOMAIN
• Definition:
• Area that one would particularly focus on after looking at all of the topics
that surround that particular problem
• Things to consider
• The need to record the interviewee’s personal details
• Ask them relevant questions that will encourage relevant answers
• Do not ask questions that are too personal, because the interviewee could
get defensive and not tell you other important things
Fact Finding
• Getting the required information
• Put information into a system investigation report
• Tools and techniques
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Interviews
Questionnaires
Investigation and documentation
Observation
 Identify other tools and techniques to gather information
Interviews
• Very effective to gather information
• Can be slow
• Able to ask questions that can arise from conversations
• Unclear answers can be explained
• Ways to perform interviews:
• Face-to-face (one-on-one, group or panel)
• Telephonic
 Identify other ways to perform interviews
Observation
• The process of keeping track of how users behave in their natural
environment
• Effective way to gather information
• Is time consuming and expensive
• The person being observed might feel uncomfortable and might
behave differently
• Results in inaccurate results
• Need to identify:
• Correct information
• Right candidate
• Right place to achieve objective at hand
Questionnaires
• A well-prepared questionnaire has the ability to obtain useful information
from
individuals regarding a certain subject.
• Questionnaires are one of the most time effective methods to gather
information.
• In a questionnaire, the same type of information is gathered from all
individuals.
• It consists of a number of questions that have been structured logically;
there are numerous types of question that should thus be considered when
developing a questionnaire.
• A good questionnaire will contain a mix of the following different types of
question:
• Open-ended questions that have no prescribed answer, for example, ‘What
motivated you to use this particular website?’
• Closed-ended questions provide a range of answers from which an individual
should select the most appropriate answer. For example: ‘Choose the feature that
you have used the most on the website:
• Search the catalogue
• Leave a comment
• Order a product
• Frequently asked questions (FAQs)’
Questionnaires
• Time effective way to gather information
• Informal method making it more acceptable
• Can be completed by any one
• People can lie more easily on paper than in an interview
• Types of questions
• Open ended questions
• Close ended questions
Sample Questionnaire
Activity
• Do this at home and bring your answer to the next lecture!
Investigation of documentation
• Any documentation kept about a system can be a useful tool when
determining requirements for a new system.
• Companies should get into the habit of keeping documentation up to date.
• These documents can provide a systems analyst with information about the
following:
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Problems with existing systems
Opportunities to meet new needs if only information, in part, is required
Organisational direction can influence information systems requirements
Titles and names of key individuals who have an interest in relevant and existing
systems
Organisational or individual values can help determine priorities for different
capabilities, as desired by different users
Special information processing circumstances that occur irregularly that may not
be identified by any other requirements determination technique
Reasons why current systems are designed as they are, which can suggest
features left out of current software that may now be feasible and desirable
Data, rules for processing data and the principles by which an organisation
operates that must be enforced by information systems
Test your knowledge
• Toolbox activities
• Individual exercise 2
• Group exercise 2
• Research task 2
• Textbook activities
• Chapter 4: match the terms and definitions
• Chapter 4: review questions
• Chapter 4: Pine Valley Furniture case study
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Briefly discuss the components of a SWOT analysis.
Differentiate between the four different feasibility types.
List the sections that should be addressed in a feasibility report.
Identify different methods that can be employed to determine
systems requirements.