Project risks and feasibility assessment

Project Risks and Feasibility Assessment

Advanced Systems Analysis and Design


Project Risk Factors


Project Risk Classification


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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.
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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
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Why feasibility assessment?
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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

2

Survey

Study

3
Definition

End-users
4
Configuration

9

5

6

Support

Design

Procurement

8

7

Delivery

Construction

Vendors


Feasibility Analysis
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Feasibility Checkpoints During Analysis
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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
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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


Constructive Cost Model (COCOMO)

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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)
CoCoMo Basic Equations
Mode

Description

Effort

Schedule

Organic

Small-Medium Size,
In-house Dev.

WM=
2.4(KDSI)1.05

TDEV=
2.5(MM)0.38

Semidetached

Intermediate-Large Size,
Partial In-house &
contracted

WM=
3.0(KDSI)1.12

TDEV=
2.5(MM)0.35

Embedded

Very Large Size,
Contractor developed

WM=
3.6(KDSI)1.20

TDEV=
2.5(MM)0.32

WM = Work-Months; TDEV = Time of Development
KDSI = Thousands of delivered source instruction


Cost Drivers in COCOMO
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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
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Application type
Language level
Requirements volatility

Personnel continuity
Management quality
Customer interface quality

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Amount of documentation
Hardware configuration
Security and privacy
restrictions


Function Point Analysis
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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

Basic Equation: FP = FC (PCA)
PCA = 0.65 + (0.01) Σci
PCA – Processing Complexity Adjustment; C – Complexity Factors
Simple

Average

Complex

Input

3

4

6

Output (eg, reports,
screens)
Inquires

4

5

7

7

10

15

Files

5

7

10

Applications Interfaces

3

4

6

FC =
Count *
Weight


Feasibility Analysis of Candidate Systems
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Candidate Systems Matrix
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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
Portion of System Computerized
Brief description of that portion of the
system that would be computerized in
this candidate.
Benefits

Brief description of the business benefits
that would be realized for this
candidate.
Servers and Workstations
A description of the servers and
workstations needed to support this
candidate.
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.
Application Software
A description of the software to be
purchased, built, accessed, or some
combination of these techniques.
Method of Data Processing
Generally some combination of: on-line,
batch, deferred batch, remote batch, and
real-time.
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).

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).
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.

Candidate 1
COTS package Platinum
Plus from Entertainment
Software Solutions would be
purchased and customized to
satisfy Member Services
required functionality.
This solution can be
implemented quickly
because its a purchased
solution.

Candidate 2
Member Services and
warehouse operations in

relation to order fulfillment.

Candidate 3
Same as candidate 2.

Fully supports user required
business processes for
Soundstage Inc. Plus more
efficient interaction with
member accounts.
Same as candidate 1.

Same as candidate 2.

MS Visual Basic 5.0
System Architect 3.1
Internet Explorer

MS Visual Basic 5.0
System Architect 3.1
Internet Explorer

Package Solution

Custom Solution

Same as candidate 2.

Client/Server

Same as candidate 1.

Same as candidate 1.

(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)

Same as candidate 2.

Technically architecture
dictates Pentium pro, MS
Windows NT class servers
and Pentium, MS Windows
NT 4.0 workstations
(clients).
MS Visual C++ and MS
ACCESS for customization
of package to provide report
writing and integration.

Keyboard & mouse

MS SQL Server DBMS with
100GB arrayed capability.

Web pages must be designed
to VGA resolution. All
internal screens will be
designed for SVGA
resolution.
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 1.

Same as candidate 1.

Same as candidate 2.

Same as candidate 1.

Candidate ...


Feasibility Analysis of Candidate Systems
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Feasibility Analysis Matrix
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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
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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.
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Candidate 1 Name Candidate 2 Name Candidate 3 Name

Description
Operational
Feasibility
Technical
Feasibility
Schedule
Feasibility
Economic
Feasibility
Ranking


Feasibility Criteria
Operational Feasibility

Wt.
30%

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.
Technical Feasibility

30%

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.

Candidate 1
Only supports Member
Services requirements and
current business processes
would have to be modified to
take advantage of software
functionality

Candidate 2
Fully supports user required
functionality.

Candidate 3
Same as candidate 2.

Score: 60
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.

Score: 100
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.

Score: 100
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.

Required to hire or train C++
expertise to perform
modifications for integration
requirements.

MS Visual Basic 5.0 is a
mature technology based on
version number.
Score: 50
Economic Feasibility

Score: 95

Score: 60

30%

Cost to develop:

Approximately $350,000.

Approximately $418,040.

Approximately $400,000.

Payback period (discounted):

Approximately 4.5 years.

Approximately 3.5 years.

Approximately 3.3 years.

Net present value:

Approximately $210,000.

Approximately $306,748.

Approximately $325,500.

Detailed calculations:

See Attachment A.

See Attachment A.

See Attachment A.

10%

Score: 60
Less than 3 months.

Score: 85
9-12 months

9 months

100%

Score: 95
60.5

Score: 80
92

Schedule Feasibility

Score: 90

An assessment of how long the solution
will take to design and implement.
Ranking

Score: 85
83.5

Candidate ..