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Systems Analysis and Design 11th Edition

Chapter 2

Analyzing the Business Case

Explain the concept of a business case and how a business case affects an IT project

Describe the strategic planning process and why it is important to the IT team

Explain the purpose of a mission statement

Conduct a SWOT analysis and describe the four factors involved

Explain how the SDLC serves as a framework for systems development

Chapter Objectives

List reasons for systems projects and factors that affect such projects

Describe systems requests and the role of the systems review committee

Define operational, technical, economic, and schedule feasibility

Explain the factors that affect project priorities

Describe the steps and the end product of a preliminary investigation

Chapter Objectives (Cont.)

Business case: Justification for a proposal

Requires consideration of the organization’s:

Overall mission

Objectives

IT needs

Systems development process

Systems request

Preliminary investigation

Findings are submitted to management

Introduction

A Framework for IT Systems Development

Strategic Planning Overview

Strategic planning: Process of identifying long-term organizational goals, strategies, and resources

Starts with a mission statement

Must reflect the firm’s vision, purpose, and values

Critical success factor: High-priority objective

What Is SWOT Analysis?

Strengths, weaknesses, opportunities, and threats

Examines a firm’s technical, human, and financial resources

A Framework for IT Systems Development (Cont. 1)

FIGURE 2-1 A SWOT analysis might produce results similar to those

shown here.

A Framework for IT Systems Development (Cont. 2)

FIGURE 2-2 This SWOT analysis example focuses on a specific asset, such as a company patent.

A Framework for IT Systems Development (Cont. 3)

Strategic Planning for IT Projects

Careful planning can help assure that:

The project supports overall business strategy and operational needs

The project scope is well-defined and clearly stated

The project goals are realistic, and tied to specific statements, assumptions, constraints, factors, and other inputs

Planning tools

Microsoft Word and Excel

CASE tools

Visible Analyst

A Framework for IT Systems Development (Cont. 4)

FIGURE 2-3 The Visible Analyst CASE tool supports strategic planning and allows a user to enter many kinds of planning statements. Notice the four SWOT categories highlighted in the list.

Screenshots used with permission from Visible Systems Corporation.

A Framework for IT Systems Development (Cont. 5)

The Changing Role of the IT Department

Management and IT are linked closely

Remarkable changes have occurred in both areas

Today, systems development is much more team- oriented

The IT department is responsible for screening and evaluating systems requests

Larger firms may use an evaluation team or systems review committee

What Is a Business Case?

A business case should:

Be comprehensive and easy to understand

Describe the project clearly, provide the justification to proceed, and estimate the project’s financial impact

Questions answered by a business case

Why are we doing this project?

How much will it cost and how long will it take?

Are there any risks involved?

How will we measure success?

What alternatives exist?

Information Systems Projects

FIGURE 2-4 Six main reasons for systems requests.

Information Systems Projects(Cont.)

FIGURE 2-6 Internal and external factors that affect IT projects.

Evaluation of Systems Requirements

Systems requests are evaluated by a systems review committee or a computer resources committee

Systems Request Forms

Streamline the request process

Ensure consistency

Easy to understand

Include clear instructions

Indicate the required supporting documents

Submitted electronically

Evaluation of Systems Requirements (Cont. 1)

FIGURE 2-10 Example of an online systems request form.

Source: Florida Institute of Technology

Systems Review Committee

A broader viewpoint enables a committee to establish priorities more effectively than an individual

One person’s bias is less likely to affect decisions

Disadvantages

Action on requests must wait until the committee meets

Members might favor projects requested by their own departments

Internal political differences could delay important decisions

Evaluation of Systems Requirements (Cont. 2)

Feasibility studies can be simple or exhaustive

Effort required depends on the nature of the request

Initial fact-finding involves:

Studying organizational charts

Performing interviews

Reviewing current documentation

Observing operations

Surveying users

Overview of Feasibility

Overview of Feasibility (Cont. 1)

FIGURE 2-11 A feasibility study examines operational, technical, economic, and schedule factors.

Operational Feasibility

A proposed system will be used effectively after it has been developed

Can be affected by organizational culture

Cannot be accurately measured but requires careful study

Questions that can help predict a system’s operational feasibility

Is the project supported by management and users?

Will the new system result in a workforce reduction?

Do legal or ethical issues need to be considered?

Overview of Feasibility (Cont. 2)

Economic Feasibility

Projected benefits of a proposed system out-weigh total cost of ownership (TCO)

Determination of TCO requires cost analysis of:

People, including IT staff and users

Hardware and equipment

Software

Formal and informal training

Licenses and fees

Consulting expenses

Facility costs

Overview of Feasibility (Cont. 3)

Tangible costs are measured in dollars

Intangible costs can significantly affect organizational performance

Tangible benefits can result from a decrease in expenses or an increase in revenues

Intangible benefits are important to the company despite the inability to measure them in dollars

Overview of Feasibility (Cont. 4)

Technical Feasibility

Technical resources required to acquire and use the system

Questions analysts should ask

Does the company have the necessary hardware, software, and network resources?

Does the company have the required technical expertise?

Does the proposed platform have sufficient capacity for future needs?

Will a prototype be required?

Overview of Feasibility (Cont. 5)

Schedule Feasibility

A project can be implemented in an acceptable time frame

Issues that can affect schedule feasibility

Interaction between time and costs

Can the company or the IT team control the factors that affect schedule feasibility?

Has management established a firm timetable for the project?

What conditions must be satisfied during the development of the system?

Will an accelerated schedule pose any risks?

Overview of Feasibility (Cont. 6)

Identify and weed out systems requests that are not feasible

Some feasible requests may not be necessary

Requests that are not currently feasible can be resubmitted as new hardware, software, or expertise becomes available

Evaluating Feasibility

Factors that Affect Priority

Will the proposed system reduce costs?

Will the system increase revenue for the company?

Will the systems project result in more information or produce better results?

Will the system serve customers better?

Will the system serve the organization better?

Can the project be implemented in a reasonable time period?

Are the necessary financial, human, and technical resources available?

Setting Priorities

Discretionary and Nondiscretionary Projects

Discretionary projects: Projects where management has a choice in implementing them

Nondiscretionary projects: Management has no choice in implementing a project

Most of these projects are predictable

Annual updates to payroll

Tax percentages

Quarterly changes

Setting Priorities (Cont.)

Interaction with Managers and Users

Meet with key managers, users, and IT staff to describe the project, explain responsibilities, answer questions, and invite comments

Focus on improvements and enhancements, not problems

Preliminary Investigation Overview

Preliminary Investigation Overview (Cont. 1)

FIGURE 2-13 Six main steps in a typical preliminary investigation.

FIGURE 2-12 Model of a preliminary investigation. Notice the importance of fact-finding in each of the four areas.

Planning the Preliminary Investigation

Step 1- Understand the problem or opportunity

Develop a business profile that describes current business processes and functions

Understand how modifications will affect business operations and other information systems

Identify the departments, users, and business processes involved

Consider using a fishbone diagram

Preliminary Investigation Overview (Cont. 2)

Preliminary Investigation Overview (Cont. 3)

FIGURE 2-14 A fishbone diagram displays the causes of a problem. Typically, you must dig deeper to identify actual causes rather than just symptoms.

Planning the Preliminary Investigation (Cont.)

Step 2 - Define the project scope and constraints

Define the specific boundaries, or extent, of the project

Define project scope by creating a list with sections called must do, should do, could do, and won’t do

Avoid project creep

Project creep: Process by which projects with very general scope definitions expand gradually, without specific authorization

Identify constraints

Constraint: A requirement or condition that the system must satisfy or an outcome that the system must achieve

Preliminary Investigation Overview (Cont. 4)

Preliminary Investigation Overview (Cont. 5)

FIGURE 2-15 Examples of various types of constraints.

Planning the Preliminary Investigation (Cont.)

Step 3 - Perform fact-finding

Gather data about project usability, costs, benefits, and schedules

Analyze organization charts, conduct interviews, review documentation, observe operations, and conduct a user survey

Analyze the data

Pareto chart

XY chart (scatter diagram)

Preliminary Investigation Overview (Cont. 6)

Preliminary Investigation Overview (Cont. 7)

FIGURE 2-17 A Pareto chart displays the causes of a problem, in priority order, so an analyst can tackle the most important causes first. In this example, the part number issue would be the obvious starting point.

FIGURE 2-18 An XY chart shows correlation between variables, which is very important in problem solving. Conversely, a lack of correlation suggests that the variables are independent, and that you should look elsewhere for the cause.

Planning the Preliminary Investigation (Cont.)

Step 4 - Analyze project usability, cost, benefit, and schedule data

Factors to consider

What information must be obtained, and how will it be gathered and analyzed?

Who will conduct the interviews? How many people will be interviewed?

Will a survey be conducted? Who will be involved? How much time will it take to tabulate the results?

How much will it cost to analyze the information and prepare a report with findings and recommendations?

Preliminary Investigation Overview (Cont. 8)

Planning the Preliminary Investigation (Cont.)

Step 5 - Evaluate feasibility

Operational feasibility

Technical feasibility

Economic feasibility

Schedule feasibility

Step 6 - Present results and recommendations to management

Prepare a report that includes:

An evaluation of the systems request

An estimate of costs and benefits

A case for action

Preliminary Investigation Overview (Cont. 9)

Planning the Preliminary Investigation (Cont.)

Format of a report

Introduction

Systems request summary

Findings

Recommendations

Project roles

Time and costs estimates

Expected benefits

Appendix

Preliminary Investigation Overview (Cont. 10)

Chapter Summary

Systems planning is the first phase of the systems development life cycle

A business case should:

Describe the project clearly

Provide the justification to proceed

Estimate the project’s financial impact

Factors that affect systems projects

User requests, top management directives, existing systems, the IT department, software and hardware vendors, technology, customers, competitors, the economy, and government

Analysts evaluate the systems request and determine whether the project is feasible from an operational, technical, economic, and schedule standpoint

Steps in the preliminary investigation

Understand the problem or opportunity

Define the project scope and constraints

Perform fact-finding and analyze project usability, cost, benefit, and schedule data

Evaluate feasibility and present results and recommendations to management

Chapter Summary (Cont.)