project risks and feasibility assessment - aoi
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Project Risks and Feasibility Assessment
Advanced Systems Analysis and Design
Project Risk Factors
Project Risk Classification
• 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.
• Feasibility should be measured throughout the life cycle.
• The scope and complexity of an apparently feasible project can change after the initial problems and opportunities are fully analyzed or after the system has been designed.
• Thus, a project that is feasible at one point in time may become infeasible at a later point in time.
Feasibility Assessment
• Why feasibility assessment?
• Information systems are major investments
• IS projects are subject to the same cost justifications as any other capital investments
• Business value paradox
• Avoid "black hole" projects
1
Survey
2
Study
3
Definition
4
Configuration
5
Design
6
Procurement
7
Construction
8
Delivery
9
Support
End-users
Vendors
Feasibility Analysis
• Feasibility Checkpoints During Analysis • Systems Analysis -Survey Phase
• ``Do the problems (or opportunities) warrant the cost of a detailed study of the current system?''
• Systems Analysis - Study/Definition Phase
• Better estimates of development costs and the benefits to be obtained from a new system.
• Requirements often prove to be more extensive that originally stated.
• If feasibility is in question, scope, schedule, and costs must be rejustified.
• Systems Analysis - Selection Phase
• A major feasibility analysis evaluating options for the target systems design.
• Typical options that are evaluated include
• Do nothing! Leave the current system alone.
• Reengineer the (manual) business processes, not the computer-based processes.
• Enhance existing computer processes.
• Purchase a packaged application.
Four Tests for Feasibility
• Operational feasibility is a measure of how well a specific solution will work in the organization. It is also a measure of how people feel about the system/project.
• Does management support the system?
• How do the end-users feel about their role in the new system?
• What end-users or managers may resist or not use the system? Can this problem be overcome? If so, how?
• Usability analysis
• Ease of use, Ease of learning, User satisfaction
• Technical feasibility is a measure of the practicality of a specific technical solution and the availability of technical resources and expertise.
• Is the proposed technology or solution practical? Is the technology mature?
• Do we currently possess the necessary technology?
• Do we possess the necessary technical expertise, and is the schedule reasonable?
• Schedule feasibility is a measure of how reasonable the project timetable is.
• Economic feasibility is a measure of the cost-effectiveness of a project or solution. This is often called a cost-benefit analysis.
System Costs
Costs
Development cost
Consulting fees
Hardware/ software
Conversion/ installation
Training/ Documentation
Operation/ Production costs
Personnel costs
System usage/ maintenance cost
System upgrades
Supplies
System Benefits
Benefits
Tangible benefits
Reduced processing errors
Increased throughput
Decreased response time
Manpower reduction
Cost elimination
Increased sales
Reduced credit losses
Intangible benefits
Improved customer satisfaction
Improved employee morale
Better decision making
Cost Benefit Analysis
Payback analysis
Return on investment
Net present value
PV = 1(1+i)̂n
Developed by Barry Boehm (1981)
Predicts the effort & duration of a project
Based on size of the system & a number of “cost drivers,”
Constructive Cost Model (COCOMO)
Constructive Cost Model (COCOMO)
WM = Work-Months; TDEV = Time of Development
KDSI = Thousands of delivered source instruction
TDEV=
2.5(MM)0.32
WM=
3.6(KDSI)1.20
Very Large Size,
Contractor developed
Embedded
TDEV=
2.5(MM)0.35
WM=
3.0(KDSI)1.12
Intermediate-Large Size,
Partial In-house &
contracted
Semidetached
TDEV=
2.5(MM)0.38
WM=
2.4(KDSI)1.05
Small-Medium Size,
In-house Dev.
Organic
Schedule Effort Description Mode
CoCoMo Basic Equations
Cost Drivers in COCOMO
Product attributes
software reliability, database size, software complexity
Hardware/platform attributes
execution time constraints, main storage constraints, virtual
machine volatility, turnaround time
Personnel attributes
Analyst capability, applications experience, programmer capability,
virtual machine experience, language experience
Project attributes
use of modern programming practices, use of software tools,
development schedule constriants
Factors not Included in COCOMO
Application type
Language level
Requirements volatility
Personnel continuity
Management quality
Customer interface quality
Amount of documentation
Hardware configuration
Security and privacy
restrictions
Function Point Analysis
Developed by Allan Albrecht at IBM (1979)
Based on estimation of inputs, outputs, queries, interfaces,
and files
Main advantages
Possible to estimate function points early in the
development life cycle
Can be estimated by non-technical personnel
Function Point Analysis
FC =
Count *
Weight
6 4 3 Applications Interfaces
10 7 5 Files
15 10 7 Inquires
7 5 4 Output (eg, reports,
screens)
6 4 3 Input
Complex Average Simple
Basic Equation: FP = FC (PCA)
PCA = 0.65 + (0.01) Σci
PCA – Processing Complexity Adjustment; C – Complexity Factors
Feasibility Analysis of Candidate Systems
• Candidate Systems Matrix
• The candidate systems matrix documents similarities and differences between candidate systems; however, it offers no analysis.
• The columns of the matrix represent candidate solutions.
• The rows of the matrix represent characteristics that serve to differentiate the candidates. The breakdown is as follows:
• TECHNOLOGY
• INTERFACES
• DATA
• PROCESSES
• GEOGRAPHY
Candidate 1 Name Candidate 2 Name Candidate 3 Name
Technology
Interfaces
Data
Processes
Geography
Characteristics Candidate 1 Candidate 2 Candidate 3 Candidate ...
Portion of System Computerized
Brief description of that portion of the
system that would be computerized in
this candidate.
COTS package Platinum
Plus from Entertainment
Software Solutions would be
purchased and customized to
satisfy Member Services
required functionality.
Member Services and
warehouse operations in
relation to order fulfillment.
Same as candidate 2.
Benefits
Brief description of the business benefits
that would be realized for this
candidate.
This solution can be
implemented quickly
because its a purchased
solution.
Fully supports user required
business processes for
Soundstage Inc. Plus more
efficient interaction with
member accounts.
Same as candidate 2.
Servers and Workstations
A description of the servers and
workstations needed to support this
candidate.
Technically architecture
dictates Pentium pro, MS
Windows NT class servers
and Pentium, MS Windows
NT 4.0 workstations
(clients).
Same as candidate 1. Same as candidate 1.
Software Tools Needed
Software tools needed to design and
build the candidate (e. g., database
management system, emulators,
operating systems, languages, etc.). Not
generally applicable if applications
software packages are to be purchased.
MS Visual C++ and MS
ACCESS for customization
of package to provide report
writing and integration.
MS Visual Basic 5.0
System Architect 3.1
Internet Explorer
MS Visual Basic 5.0
System Architect 3.1
Internet Explorer
Application Software
A description of the software to be
purchased, built, accessed, or some
combination of these techniques.
Package Solution Custom Solution Same as candidate 2.
Method of Data Processing
Generally some combination of: on-line,
batch, deferred batch, remote batch, and
real-time.
Client/Server Same as candidate 1. Same as candidate 1.
Output Devices and Implications
A description of output devices that
would be used, special output
requirements, (e.g. network, preprinted
forms, etc.), and output considerations
(e.g., timing constraints).
(2) HP4MV department
Laser printers
(2) HP5SI LAN laser
printers
(2) HP4MV department
Laser printers
(2) HP5SI LAN laser
printers
(1) PRINTRONIX bar-code
printer (includes software &
drivers)
Web pages must be designed
to VGA resolution. All
internal screens will be
designed for SVGA
resolution.
Same as candidate 2.
Input Devices and Implications
A description of Input methods to be
used, input devices (e.g., keyboard,
mouse, etc.), special input requirements,
(e.g. new or revised forms from which
data would be input), and input
considerations (e.g., timing of actual
inputs).
Keyboard & mouse Apple “Quick Take” digital
camera and software
(15) PSC Quickscan laser
bar-code scanners
(1) - HP Scanjet 4C Flatbed
Scanner
Keyboard & mouse
Same as candidate 2.
Storage Devices and Implications
Brief description of what data would be
stored, what data would be accessed
from existing stores, what storage media
would be used, how much storage
capacity would be needed, and how
data would be organized.
MS SQL Server DBMS with
100GB arrayed capability.
Same as candidate 1. Same as candidate 1.
Feasibility Analysis of Candidate Systems
• Feasibility Analysis Matrix
• This matrix complements the candidate systems matrix with an analysis and ranking of the candidate systems. It is called a feasibility analysis matrix.
• The columns of the matrix correspond to the same candidate solutions as shown in the candidate systems matrix.
• Some rows correspond to the feasibility criteria presented in this chapter.
• Rows are added to describe the general solution and a ranking of the candidates.
• The cells contain the feasibility assessment notes for each candidate.
Feasibility Analysis of Candidate Systems
• Feasibility Analysis Matrix • Each row can be assigned a rank or score for each criteria (e.g., for
operational feasibility, candidates can be ranked 1, 2, 3, etc.).
• After ranking or scoring all candidates on each criteria, a final ranking or score is recorded in the last row.
Candidate 1 Name Candidate 2 Name Candidate 3 Name
Description
Operational
Feasibility
Technical
Feasibility
Schedule
Feasibility
Economic
Feasibility
Ranking
Feasibility Criteria Wt. Candidate 1 Candidate 2 Candidate 3 Candidate ..
Operational Feasibility
Functionality. A description of to what
degree the candidate would benefit the
organization and how well the system
would work.
Political. A description of how well
received this solution would be from
both user management, user, and
organization perspective.
30% Only supports Member
Services requirements and
current business processes
would have to be modified to
take advantage of software
functionality
Score: 60
Fully supports user required
functionality.
Score: 100
Same as candidate 2.
Score: 100
Technical Feasibility
Technology. An assessment of the
maturity, availability (or ability to
acquire), and desirability of the
computer technology needed to support
this candidate.
Expertise. An assessment to the
technical expertise needed to develop,
operate, and maintain the candidate
system.
30% Current production release of
Platinum Plus package is
version 1.0 and has only been
on the market for 6 weeks.
Maturity of product is a risk
and company charges an
additional monthly fee for
technical support.
Required to hire or train C++
expertise to perform
modifications for integration
requirements.
Score: 50
Although current technical
staff has only Powerbuilder
experience, the senior
analysts who saw the MS
Visual Basic demonstration
and presentation, has agreed
the transition will be simple
and finding experienced VB
programmers will be easier
than finding Powerbuilder
programmers and at a much
cheaper cost.
MS Visual Basic 5.0 is a
mature technology based on
version number.
Score: 95
Although current technical
staff is comfortable with
Powerbuilder, management is
concerned with recent
acquisition of Powerbuilder
by Sybase Inc.
MS SQL Server is a current
company standard and
competes with SYBASE in
the Client/Server DBMS
market. Because of this we
have no guarantee future
versions of Powerbuilder
will “play well” with our
current version SQL Server.
Score: 60
Economic Feasibility
Cost to develop:
Payback period (discounted):
Net present value:
Detailed calculations:
30%
Approximately $350,000.
Approximately 4.5 years.
Approximately $210,000.
See Attachment A.
Score: 60
Approximately $418,040.
Approximately 3.5 years.
Approximately $306,748.
See Attachment A.
Score: 85
Approximately $400,000.
Approximately 3.3 years.
Approximately $325,500.
See Attachment A.
Score: 90
Schedule Feasibility
An assessment of how long the solution
will take to design and implement.
10% Less than 3 months.
Score: 95
9-12 months
Score: 80
9 months
Score: 85
Ranking 100% 60.5 92 83.5