Info Sys Analysis & Design Chapter 5

Examples of tangible costs

- Cost reduction (hardware, software, operations, etc.) - Error reduction - Increased flexibility - Increased speed of activity - Improvement of management planning and control - Opening new markets and increasing sales opportunities - Higher profit margins.

Examples of Intangible costs:

- Loss of customer goodwill, - Employee morale, or - Operational inefficiency

User group

Familiarity with IS development process, application area, use of similar systems

Project structure

New vs. renovated system, resulting organizational changes, management commitment, user perceptions

The scope statement details the project deliverables and describes the major objectives.

The objectives should include measurable success criteria for the project.

One time cost

a cost associated with project start-up and development or system start-up. These costs encompass activities such as: - Systems development - New hardware and software purchases - User training, Site preparation, and - Data or system conversion.

Recurring cost

a cost resulting from the ongoing evolution and use of a system. Examples of these costs include: - Application software maintenance - Incremental data storage expenses - Incremental communications - New software and hardware leases, - Supplies and other expenses (i.e. paper, forms, data center personnel).

Structured walkthroughs

a peer-group review of any product created during the system development process

Economic feasibility

a process of identifying the financial benefits and costs associated with a development project. - Often referred to as a cost-benefit analysis - Project is reviewed after each SDLC phase in order to decide whether to continue, redirect, or kill a project - Also known as Go/No Go Decision

Intangible benefits

are benefits derived from the creation of an information system that cannot be easily measured in dollars or with certainty. - May have direct organizational benefits, such as the improvement of employee morale. - May have broader societal implications, such as the reduction of waste creation or resource consumption.

Roles

coordinator, presenter, user, secretary, standard-bearer, maintenance oracle • Can be applied to BPP, system specifications, logical and physical designs, program code, test procedures, manuals and documentation

The key activity of project planning is the process of

defining clear, discrete activities and the work needed to complete each activity within a single project.

The objective of the project planning process is the

development of a Baseline Project Plan (BPP) and the Project Scope Statement (PSS).

Scope statements

may take many forms depending on the type of project being implemented and the nature of the organization.

Project Scope Statement (PSS)

o A document prepared for the customer o Describes what the project will deliver o Outlines at a high level all work required to complete the project o Sections: § Problem statement § Project objectives § Project description § Business benefits § Deliverables § Expected duration

Tangible benefits

refer to items that can be measured in dollars and with certainty.

The key activity of project initiation is the development of the project charter

• A document that is prepared for both internal and external stakeholders • Provides a high-level overview of the project • Useful communication tool that helps to assure that the organizations and other stakeholders understand the initiation of a project

Break even analysis (BEA)

• Amount of time required for cumulative cash flow to equal initial and ongoing investment

Project related

• Application software, software modification, personnel overhead, training, data analysis, documentation

Determining project costs

• Both one-time and recurring costs can consist of items that are fixed or variable in nature. • Fixed costs are billed or incurred at a regular interval and usually at a fixed rate. • Variable costs are items that vary in relation to usage.

Risk can be managed on a project by:

• Changing the project plan to avoid risky factors. • Assigning project team members to carefully manage the risky aspects. • Setting up monitoring methods to determine whether or not potential risk is, in fact, materializing.

Procurement

• Consulting, equipment, site preparation, capital, management time

Elements of project planning

• Describe project scope, alternatives, feasibility. • Divide project into tasks. • Estimate resource requirements and create resource plan. • Develop preliminary schedule. • Develop communication plan. • Determine standards and procedures. • Identify and assess risk. • Create preliminary budget. • Develop a statement of work. • Set baseline project plan.

The Process of Initiating and Planning IS Development Projects (Cont.):

• Establishing the Project Initiation Team. • Establishing a Relationship with the Customer. • Establishing the Project Initiation Plan. • Establishing Management Procedures. • Establishing the Project Management Environment and Project Workbook. • Developing the Project Charter.

The potential consequences of not assessing and managing risks can include the following:

• Failure to attain expected benefits from the project, • Inaccurate project cost estimates & project duration estimates, • Failure to achieve adequate system performance levels • Failure to adequately integrate the new system with existing hardware, software, or organizational procedures.

Development group

• Familiarity with platform, software, development method, application area, development of similar systems

Baseline Project Plan (BPP)

• Guide for the project team • A major outcome and deliverable from the PIP phase • Contains the best estimate of a project's scope, benefits, costs, risks, and resource requirements • Example Sections: • Introduction • System description • Feasibility assessment • Management issues

Business case

• Justification for an information system • Presented in terms of the tangible and intangible economic benefits and costs • The technical and organizational feasibility of the proposed system

Start up

• Operating systems, communications installation, personnel hiring, organizational disruption

Assessing Other Feasibility Concerns

• Operational o Does the proposed system solve problems or take advantage of opportunities? • Scheduling o Can the project time frame and completion dates meet organizational deadlines? • Legal and Contractual o What are legal and contractual ramifications of the proposed system development project? • Political o How do key stakeholders view the proposed system?

Factors determining scope

• Organizational units affected by new system • Current systems that will interact with or change because of new system • People who are affected by new system • Range of potential system capabilities

• The four primary factors associated with the amount of technical risk on a given project are:

• Project size, • Project structure, • The development group's experience with the application and technology area • The user group's experience with systems development projects and the application area.

A project charter typically contains:

• Project title and date of authorization • Project manager name and contact information • Customer name and contact information • Projected start and completion dates • Key stakeholders, project role, and responsibilities • Project objectives and description • Key assumptions or approach • Signature section for key stakeholders

Return on Investment (ROI)

• Ratio of cash receipts to cash outlays

Building the Baseline Project Plan:

• System description section outlines possible alternative solutions. • Feasibility assessment section outlines issues related to project costs and benefits, technical difficulties, and other such concerns. • Management issues section outlines a number of managerial concerns related to the project.

Operating

• System maintenance, rental, asset depreciation, operation and planning

Project size

• Team size, organizational departments, project duration, programming effort

Net Present Value

• Use discount rate to determine present value of cash outlays and receipts

Technical feasibility

• a process of assessing the development organization's ability to construct a proposed system

Four general rules emerged as technical risk assessments:

1. Larger projects are riskier than smaller projects. 2. A system in which the requirements are easily obtained and highly structured will be less risky than one in which requirements are messy, ill structured, ill defined, or subject to the judgment of an individual. 3. The development of a system using commonly-used or standard technology will be less risky than one employing novel or nonstandard technology. 4. A project is less risky when the user group is familiar with the systems development process and application area than if unfamiliar.