MIS 3360 CH 5

Intangible Benefits

-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

Managing Risk

-Change the project plan to avoid risky factors -Assign project team members to carefully manage the risky aspects -Set up monitoring methods to determine whether or not potential risk is, in fact, materializing

Who is responsible for performing the PIP process?

-Experienced systems analyst/team of analysts -Works with proposed customers and technical development staff in preparing final plan -Analysts' experience and customers' understanding of IS needs decrease PIP effort required

Consequences of Not Assessing and Managing Technical Risks

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

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

Why is PIP such a challenging activity?

-Open-ended process:Vague system request -> Tangible product description -Effective communication among analysts, users, and management is crucial -Agreement on project direction is difficult when differing business objectives are involved -Complex organizational settings for projects increase PIP effort required

Factors in 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

Economic Feasibility

-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

Project Initiation Establishes

-Project Initiation Team •Relationship with the Customer • Project Initiation Plan •Management Procedures •Project Management Environment and Project Workbook • Project Charter (see Ch 3)

Rule of thumb

10-20% entire development effort should be expended on project initiation and planning

Legal and contractual feasibility

Assesses potential legal and contractual ramifications due to the construction of a system - Typically a greater consideration if the organization has used an outside organization for specific systems/services that it is now considering handling itself - Common situation: Developing new application system for use on new computers may require new/expanded system software licenses

Political feasibility

Evaluating how key stakeholders within the organization view the proposed system - IS may affect the distribution of information within the organization, and thus the distribution of power - Stakeholders not supporting the project may block, disrupt, or change the intended focus of the project

User group

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

Development group

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

Project structure

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

Management issues

Outlines a number of managerial concerns related to the project.

Feasibility assessment

Outlines issues related to project costs and benefits, technical difficulties, and other such concerns

System description

Outlines possible alternative solutions

Structured Walkthroughs

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

Assessing Technical Feasibility

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

Project size

Team size, organizational departments, project duration, programming effort

Tangible Costs

• Costs associated with an information system that can be measured in dollars and with certainty • IS development tangible costs include: -Hardware costs-Labor costs -Operational costs, including employee training and building renovations

Intangible Costs

• Costs associated with an information system that cannot be easily measured in terms of dollars or with certainty • Intangible costs can include: -Loss of customer goodwill -Employee morale -Operational inefficiency

One-Time Costs

• Costs 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-Data or system conversion

General Rules for Risk Assessments

• Larger projects are riskier than smaller projects. • 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. • The development of a system employing commonly used or standard technology will be less risky than one employing novel or nonstandard technology. • A project is less risky when the user group is familiar with the systems development process and application area than if unfamiliar.

Tangible Benefits

•Items that can be measured in dollars and with certainty • Examples: - Reduced personnel expenses - Lower transaction costs, or - Higher profit margins. • Most will fit within the following categories: - Cost reduction and avoidance - Error reduction - Increased flexibility - Increased speed of activity - Improvement of management planning and control - Opening new markets and increasing sales opportunities

Baseline Project Plan (BPP)

is a document intended primarily to guide the development team • Sections: - Introduction - System description - Feasibility assessment - Management issues

Project scope statement

is part of the BPP introduction • Sections: -Problem statement -Project objectives -Project description -Business benefits -Deliverables -Expected duration

Recurring Costs

Costs 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, and -Supplies and other expenses (i.e., paper, forms, data center personnel)

Operational feasibility

Degree to which a proposed system solves business problems or takes advantage of business opportunities - Justifies the project on the basis of being consistent with or necessary for accomplishing the IS plan - Analysis of how the proposed system will influence organizational structures/procedures

Scheduling feasibility

Degree to which the potential time frame for all major project activities meets organizational deadlines/constraints

Fixed costs

are billed or incurred at a regular interval and usually at a fixed rate. -Example: facility lease payment

Variable costs

are items that vary in relation to usage. -Example: long-distance charges