Project Identification and Business Process Management

Project Identification and Initiation

• A project starts with identifying a business need within an organization to build a system.
• A new customer type or poor customer service can be examples of such needs.
• Needs can also arise when an organization sees unique and competitive IT applications.
• Emerging technologies like cloud computing, RFID, and Web 2.0 may be leveraged.

Business Process Management (BPM)

• Many new Information Systems projects now stem from BPM.
• BPM methodology is used by organizations to improve processes continuously.
• It emphasizes customer view consideration.
• The BPM life-cycle contains design, modeling, execution, monitoring and optimizing.

Business Process Types

• Business process automation (BPA) uses technology to complement or replace manual processes.
• Business process improvement (BPI) creates redesigned processes to improve workflows, which may involve new technologies.
• Business process reengineering (BPR) fundamentally changes existing processes.

Role of a Business Analyst in BPM

• Defines and maps steps in a business process
• Creates ways to improve process steps that add value
• Eliminates or consolidates steps that lack value
• Creates or adjusts electronic workflows to match improved process maps

Project Sponsor

• The project sponsor is a person or group interested in the system's success.
• Project sponsors work throughout the SDLC to ensure the project is moving in the right business direction
• They act as the primary point of contact for the project team.
• The size and scope of the project dictate the type of sponsor involved.

Business Value Types

• The project sponsor helps define the business value gained from the system.
• Tangible value is easily quantified and measured, such as reduction in operating costs.
• Intangible value is based on the intuitive benefits, which are harder to measure, the system offers to the organization.

System Request

• A system request, as a document, outlines the business reasons and the expected value or benefits of building a system.
• The project sponsor completes this form as part of a formal system selection process.
• The system request contains the project sponsor, the business need, the business requirements, the business value, and special issues.

System Request Elements and Examples:

• Project Sponsor: The person initiating the project; finance department members or a VP.
• Business Need: The business-related reason; increasing sales or improving customer service.
• Business Requirements: capabilities the system provides; online access to info or customer demographics.
• Business Value: The benefits created; a % increase in sales or cost savings.
• Special Issues or Constraints: Relevant issues; such as a government deadline or top-level security needed.

Deeper Dive into System Request

• Business requirements refer to the necessary business capabilities.
• Business value describes the expected benefits to the organization.
• Special issues is a catch-all category for other project considerations.
• Completed system requests are submitted to an approval committee.
• The committee reviews the system request for an investigation into the proposed project.
• If approved, the next step is to conduct a feasibility analysis.

Feasibility Analysis

• A feasibility analysis determines whether the organization should proceed with a project.
• A feasibility analysis highlights the project risks that management must do if approved.
• Most organizations have their own process or format for the feasibility analysis.
• A feasibility analysis includes techniques to assess technical, economic, and organizational areas.
• The results of these assessments are compiled into a feasibility study deliverable.
• The deliverable is submitted to the approval committee at project initiation.

Technical Feasibility

• Technical feasibility measures the extent to which the IT group can successfully design, develop, and install the system.
• It is essentially a technical risk analysis.
• It answers the question "Can we build it?".

Risks to Project Completion

• Endanger the completion of a project
• It is important to consider users' and analysts' familiarity with the application i.e. meaning of application
• To consider familiarity with both the technology i.e. problems and delay to learn and the project size i.e. complicated to manage
• To ensure compatibility of the new system with existing technologies during completion.

Economic Feasibility

• Economic feasibility is a cost-benefit analysis that identifies the costs and benefits.
• Economic feasibility answers the question: "Should we build the system?".

Cash Flow Analysis and Measures

• IT projects involve an initial investment that yields benefits over time, along with support costs.
• Cash flows, both inflows and outflows, are estimated over some future period

ROI (Return on Investment)

Break-even Point (BEP)

Discounted Cash Flow Technique

• Used to compare the present value of all cash inflows and outflows for the project in today’s dollar terms

Net Present Value (NPV)

• Is the difference between the total PV of the benefits and the total PV of the costs

Steps to Conduct Economic Feasibility Analysis

• Identify costs and benefits
• Assign values to costs and benefits
• Determine cash flow
• Assess project's economic value, ie. determine ROI, BEP and NPV

Categories to Break Costs and Benefits Into

• Development costs: development team salaries.
• Operational costs: software upgrades.
• Tangible benefits: reductions in staff or IT costs.
• Intangibles: increased market share or brand recognition.

How to Assign Types of Costs and Benefits

• Analysts need to assign specific dollar values to:
• Relying on people who understand them, such as consultants
• Consider past projects
• For difficult predicting, estimate a range of values and assign a pribability value to each cost & benefits value
• Quantify intangible costs & benefits

Determine Cash Flow

• A formal cost-benefit analysis usually contains costs and benefits over a selected number of years to show cash flow over time (three to five years).
• Determine ROI
• Determine BEP
• Determine NPV

Organizational Feasibility

• Organizational feasibility means how well the system will be accepted by its users and incorporated into the organization.
• Many organizational factors can affect the project, and organizational feasibility can be the most difficult to assess.
• Organizational feasibility must be assessed in essence

Assessing Organizational Feasibility

• Assess project goals alignment with business objectives and organizational strategies.
• Conduct a stakeholder analysis
• A stakeholder is someone who can affect a new system
• Project champions or sponsors help provide time, resources, and communicate the system's importance.
• System users are met but there is no further communication
• Organizational management need to make others belief that new system make valuable contribution