Modern Systems Analysis and Design PDF

Modern Systems Analysis and Design Eighth Edition, Global Edition Joseph S. Valacich Joey F. George Initiating and Planning Systems Development Projects Chapter 5 Copyright © 2017 Pearson Education, Ltd....

Modern Systems Analysis and Design Eighth Edition, Global Edition Joseph S. Valacich Joey F. George Initiating and Planning Systems Development Projects Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-1 Learning Objectives ✓ Describe the steps involved in the project initiation and planning process. ✓ List and describe various methods for assessing project feasibility. ✓ Describe the activities needed to build and review the baseline project plan. ✓ Describe the activities and participant roles within a structured walkthrough. Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-2 The Process of Initiating and Planning IS Development Projects FIGURE 5-1 Systems development life cycle with project initiation and planning highlighted ◼ Project initiation focuses on activities designed to assist in organizing a team to conduct project planning. Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-3 Initiating and Planning Systems Development Projects ◼ What must be considered when making the decision on the division between project initiation and planning (PIP) and analysis? ◼ How much effort should be expended on the PIP process? ◼ Who is responsible for performing the PIP process? ◼ Why is PIP such a challenging activity? Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-4 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 Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-5 The Process of Initiating and Planning IS Development Projects (Cont.) ◼ 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). Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-6 The Process of Initiating and Planning IS Development Projects (Cont.) ◼ Business Case  Justificationfor an information system  Presented in terms of the tangible and intangible economic benefits and costs  The technical and organizational feasibility of the proposed system Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-7 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. Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-8 Elements of Project Planning (Cont.) ◼ Determine standards and procedures. ◼ Identify and assess risk. ◼ Create preliminary budget. ◼ Develop a statement of work. ◼ Set baseline project plan. Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-9 Deliverables and Outcomes (Cont.) ◼ Baseline Project Plan (BPP) A major outcome and deliverable from the PIP phase  Contains the best estimate of a project’s scope, benefits, costs, risks, and resource requirements Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-10 Deliverables and Outcomes (Cont.) ◼ Project Scope Statement (PSS) A document prepared for the customer  Describes what the project will deliver  Outlines at a high level all work required to complete the project Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-11 Assessing Project Feasibility ◼ Economic ◼ Technical ◼ Operational ◼ Scheduling ◼ Legal and contractual ◼ Political Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-12 Assessing Project Feasibility (Cont.) FIGURE 5-2 System Service Request for Customer Tracking System (Pine Valley Furniture) Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-13 Assessing Project Feasibility (Cont.) ◼ 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 Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-14 Determining Project Benefits ◼ Tangible benefits refer to items that can be measured in dollars and with certainty. ◼ Examples include:  reduced personnel expenses  lower transaction costs, or  higher profit margins. Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-15 Determining Project Benefits (Cont.) ◼ Most tangible benefits 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 Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-16 Determining Project Benefits (Cont.) Figure 5-3 Tangible benefits for Customer Tracking System (Pine Valley Furniture) Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-17 Determining Project Benefits (Cont.) ◼ 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 Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-18 Determining Project Benefits (Cont.) Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-19 Determining Project Costs ◼ Tangible cost: a cost associated with an information system that can be measured in dollars and with certainty ◼ IS development tangible costs include:  Hardware costs  Labor costs, or  Operational costs, including employee training and building renovations. Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-20 Determining Project Costs (Cont.) ◼ Intangible cost: a cost associated with an information system that cannot be easily measured in terms of dollars or with certainty ◼ Intangible costs can include:  Lossof customer goodwill,  Employee morale, or  Operational inefficiency. Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-21 Determining Project Costs (Cont.) ◼ 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. Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-22 Determining Project Costs (Cont.) ◼ Recurring cost: a cost resulting from the ongoing evolution and use of a system ◼ Examples of these costs include:  Applicationsoftware maintenance  Incremental data storage expenses  Incremental communications  New software and hardware leases, and  Supplies and other expenses (i.e., paper, forms, data center personnel). Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-23 Determining Project Costs (Cont.) Figure 5-4 One-time costs for Customer Tracking System (Pine Valley Furniture) Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-24 Determining Project Costs (Cont.) Figure 5-5 Recurring costs for Customer Tracking System (Pine Valley Furniture) Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-25 Determining Project Costs (Cont.) ◼ 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.  Example: facility lease payment ◼ Variable costs are items that vary in relation to usage.  Example: long-distance charges Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-26 Determining Project Costs (Cont.) Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-27 Determining Project Costs (Cont.) Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-28 The Time Value of Money ◼ Time value of money (TVM): the concept that money available today is worth more than the same amount tomorrow ◼ Discount rate: the rate of return used to compute the present value of future cash flows (the cost of capital) ◼ Present value: the current value of a future cash flow Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-29 The Time Value of Money ◼ Net Present Value (NPV)  Use discount rate to determine present value of cash outlays and receipts ◼ Return on Investment (ROI)  Ratio of cash receipts to cash outlays ◼ Break-Even Analysis (BEA)  Amount of time required for cumulative cash flow to equal initial and ongoing investment Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-30 The Time Value of Money (Cont.) ◼ Net Present Value  PVn = present value of Y dollars n years from now based on a discount rate of i.  NPV = sum of PVs across years.  Calculates time value of money Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-31 The Time Value of Money (Cont.) ◼ Break-even analysis: a type of cost- benefit analysis to identify at what point (if ever) benefits equal costs Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-32  The Time Value of Money (Cont.) Figure 5-6 Summary spreadsheet reflecting the present value calculations of all benefits and costs for the Customer Tracking System (Pine Valley Furniture) (Source: Microsoft Corporation.) Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-33 The Time Value of Money (Cont.) Figure 5-7 Break-even analysis for Customer Tracking System (Pine Valley Furniture) Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-34 Assessing Technical Feasibility ◼ Technical feasibility: a process of assessing the development organization’s ability to construct a proposed system ◼ Assessment of the possible target hardware, software, and operating environments ◼ Consider system size, complexity, and the group’s experience with similar systems Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-35 Assessing Technical Feasibility (Cont.) ◼ The potential consequences of not assessing and managing risks can include:  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. Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-36 Project Risk Factors ◼ Project size  Team size, organizational departments, project duration, programming effort ◼ Project structure  New vs. renovated system, resulting organizational changes, management commitment, user perceptions ◼ Development group  Familiarity with platform, software, development method, application area, development of similar systems ◼ User group  Familiarity with IS development process, application area, use of similar systems Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-37 Assessing Technical Feasibility (Cont.) ◼ Four general rules of risk assessment: 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. Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-38 Assessing Technical Feasibility (Cont.) 3. The development of a system employing 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. Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-39 Assessing Technical Feasibility (Cont.) FIGURE 5-8 Effects of degree of project structure, project size, and familiarity with application area on project implementation risk (Source: Based on 7th Applegate, Austin, and McFarlan. 2007; Tech Republic, 2005.) Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-40 Assessing Other Feasibility Concerns ◼ Operational  Does the proposed system solve problems or take advantage of opportunities? ◼ Scheduling  Can the project time frame and completion dates meet organizational deadlines? ◼ Legal and Contractual  What are the legal and contractual ramifications of the proposed system development project? ◼ Political  How do key stakeholders view the proposed system? Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-41 Building the Baseline Project Plan ◼ A Baseline Project Plan (BPP) is a document intended primarily to guide the development team. ◼ Sections:  Introduction  System description  Feasibility assessment  Management issues Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-42 Building the Baseline Project Plan (Cont.) ◼ Project Scope statement is part of the BPP introduction. ◼ Sections:  Problem statement  Project objectives  Project description  Business benefits  Deliverables  Expected duration Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-43 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 Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-44 Diagram Depiction of Project Scope FIGURE 5-11 Context-level data flow diagram showing project scope for Purchasing Fulfillment System (Pine Valley Furniture) Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-45 Building the Baseline Project Plan (Cont.) ◼ 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. Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-46 Reviewing the Baseline Project Plan ◼ Structured Walkthroughs: a 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 Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-47 Making an Effective Presentation ◼ Presentation planning  Audience, message, presentation environment ◼ Presentation design  Organized, simple, consistent, variety, proof- read, limit bells-and-whistles, appropriate supplemental materials, clear beginning and end Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-48 Making an Effective Presentation ◼ Presentation delivery  Practice, arrive early, use special software keys for shortcuts, have a backup plan, deliver information effectively, good personal appearance Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-49 E-Commerce Initialization and Planning (Pine Valley Furniture) ◼ Web-based system costs:  Platform – web hosting service, web server, server software, plug-ins, firewall, router, internet connection  Content and service – creative design/devt., ongoing design fees, project mgt., site mgt., content staff, graphics staff, support staff, enhancement funds, licensing fees, programming, consulting, research, training, travel  Marketing – direct mail, public relations, print advertising, paid website links, promotions, marketing staff, advertising sales staff Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-50 E-Commerce Initialization and Planning (Pine Valley Furniture) Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-51 E-Commerce Initialization and Planning (Pine Valley Furniture) Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-52 E-Commerce Initialization and Planning (Pine Valley Furniture) Figure 5-16 Schedule for WebStore project at Pine Valley Furniture (Source: Microsoft Corporation.) Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-53 Summary ◼ In this chapter you learned how to: ✓ Describe the steps involved in the project initiation and planning process. ✓ List and describe various methods for assessing project feasibility. ✓ Describe the activities needed to build and review the baseline project plan. ✓ Describe the activities and participant roles within a structured walkthrough. Chapter 5 Copyright © 2017 Pearson Education, Ltd. 5-54