Chapter 2 Analyzing The Business Case PDF

Chapter 2 Analyzing the Business Case Learning Objectives (1 of 2) After this chapter, you will be able to: Describe the strategic planning process Conduct a SWOT analysis Explain how tools can support strategic planning Explain the concept of a business case Su...

Chapter 2 Analyzing the Business Case Learning Objectives (1 of 2) After this chapter, you will be able to: Describe the strategic planning process Conduct a SWOT analysis Explain how tools can support strategic planning Explain the concept of a business case Summarize the six main reasons for systems requests Describe the two factors affecting systems projects Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Learning Objectives (2 of 2) Explain how systems requests are processed Explain how systems request feasibility is assessed Explain how systems requests are prioritized Conduct a preliminary investigation Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Strategic Planning (1 of 4) Process of identifying long-term organizational goals, strategies, and resources Starts with a mission statement Reflects the vision, purpose, and values Critical success factor: high-priority objective SWOT analysis Strengths, weaknesses, opportunities, and threats Examines technical, human, and financial resources Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Strategic Planning (2 of 4) FIGURE 2-1 A SWOT analysis might produce results similar to those shown here. Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Strategic Planning (3 of 4) FIGURE 2-2 This SWOT analysis example focuses on a specific asset, such as a company patent. Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Strategic Planning (4 of 4) The role of the IT department Careful project planning Supports overall business strategy and operational needs Scope is well-defined and clearly stated Goals are realistic, and tied to specific statements, assumptions, constraints, factors, and other inputs Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Strategic Planning Tools Approaches vary Microsoft Word and Excel CASE tools Mind maps Balanced scorecards Gap analysis Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Business Case Justification for a proposal Comprehensive and easy to understand Describe the project clearly, provide justification to proceed, and estimate financial impact Many questions answered Why are we doing this project? How much will it cost and how long will it take? Are there any risks involved? How will we measure success? What alternatives exist? Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Systems Requests (1 of 2) Starting point for most information systems projects Formal way of asking for IT support Stronger controls More information Better performance Improved service More support for new products and services Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Systems Requests (2 of 2) FIGURE 2-4 Six main reasons for systems requests. Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Factors Affecting Systems Projects FIGURE 2-6 Internal and external factors that affect IT projects. Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Processing Systems Request (1 of 3) Systems review committee or a computer resources committee Evaluated systems requests Systems request forms Streamline the request process Ensure consistency Easy to understand Include clear instructions Indicate required supporting documents Submitted electronically Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Processing Systems Request (2 of 3) FIGURE 2-10 Example of an online systems request form. Source: Florida Institute of Technology Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Processing Systems Request (3 of 3) Systems request tools Used to help manage workflow Systems review committee Broader viewpoint enables a committee to establish priorities more effectively One person’s bias is less likely to affect decisions Disadvantages Action on requests must wait until committee meets Members might favor projects requested by their own departments Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Assessing Request Feasibility (1 of 7) Feasibility studies can be simple or exhaustive Effort required depends on nature of request Initial fact-finding Studying organizational charts Performing interviews Reviewing current documentation Observing operations Surveying users Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Assessing Request Feasibility (2 of 7) FIGURE 2-11 A feasibility study examines operational, technical, economic, and schedule factors. Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Assessing Request Feasibility (3 of 7) Operational feasibility Proposed system will be used effectively after it has been developed Can be affected by organizational culture Cannot be accurately measured but requires careful study Questions that can help predict feasibility Is the project supported by management and users? Will the new system result in a workforce reduction? Do legal or ethical issues need to be considered? Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Assessing Request Feasibility (4 of 7) Economic feasibility Projected benefits of a proposed system out- weigh total cost of ownership (TCO) Determination of TCO requires cost analysis People, including IT staff and users Hardware and equipment Software Formal and informal training Licenses and fees Consulting expenses and facility costs Estimated cost of not developing or postponing Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Assessing Request Feasibility (5 of 7) Costs and benefits Tangible costs are measured in dollars Intangible costs can significantly affect organizational performance Tangible benefits can result from a decrease in expenses or an increase in revenues Intangible benefits are important to the company despite the inability to measure them in dollars Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Assessing Request Feasibility (6 of 7) Technical feasibility Technical resources required to develop and operate the system Questions analysts should ask Does the company have the necessary hardware, software, and network resources? Does the company have the required technical expertise? Does the proposed platform have sufficient capacity for future needs? Will a prototype be required? Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Assessing Request Feasibility (7 of 7) Schedule feasibility Project implemented in an acceptable time frame Issue: interaction between time and costs Additional schedule feasibility issues Can the company or the IT team control the factors that affect schedule feasibility? Has management established a firm timetable? What conditions must be satisfied? Will an accelerated schedule pose any risks? Will project management techniques be available? Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Setting Priorities (1 of 3) Dynamic priorities Changes can cause request priorities to change Factors that affect priority Will the proposed system reduce costs? Will the system increase revenue? Will the systems project result in more information or produce better results? Will the system serve customers better? Will the system serve the organization better? Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Setting Priorities (2 of 3) Can the project be implemented in a reasonable time period? Are the necessary financial, human, and technical resources available? Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Setting Priorities (3 of 3) Discretionary projects Projects where management has a choice in implementing them Nondiscretionary projects No choice Many are predictable Annual updates to payroll Tax percentages Quarterly changes Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Preliminary Investigation (1 of 9) Planning the preliminary investigation Meet with key managers, users, and IT staff to describe the project, explain responsibilities, answer questions, and invite comments Focus on improvements and enhancements, not problems Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Preliminary Investigation (2 of 9) FIGURE 2-13 Model of a preliminary FIGURE 2-14 Six main steps in a investigation. Notice the importance of fact- typical preliminary investigation. finding in each of the four areas. Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Preliminary Investigation (3 of 9) Planning the preliminary investigation Step 1: understand the problem or opportunity Develop a business profile that describes current business processes and functions Understand how modifications will affect business operations and other information systems Identify the departments, users, and business processes involved Consider using a fishbone diagram Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Preliminary Investigation (4 of 9) Step 2: define the project scope and constraints Define specific boundaries, or extent, of the project Create a list with must do, should do, could do, and won’t do sections Avoid project creep Identify constraints Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Preliminary Investigation (5 of 9) FIGURE 2-16 Examples of various types of constraints. Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Preliminary Investigation (6 of 9) Step 3: perform fact-finding Gather data about project usability, costs, benefits, and schedules Analyze organization charts Conduct interviews Review documentation Observe operations Conduct a user survey Analyze the data Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Preliminary Investigation (7 of 9) Step 4: analyze project usability, cost, benefit, and schedule data What information must be obtained, and how will it be gathered and analyzed? Who will conduct the interviews? How many people will be interviewed? Will a survey be conducted? Who will be involved? How much time will it take to tabulate the results? How much will it cost to analyze the information and prepare a report with findings and recommendations? Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Preliminary Investigation (8 of 9) Step 5: evaluate feasibility Operational feasibility Technical feasibility Economic feasibility Schedule feasibility Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. The Preliminary Investigation (9 of 9) Summarizing the preliminary investigation Format of a report Introduction Systems request summary Findings Recommendations Project roles Time and costs estimates Expected benefits Appendix Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Summary (1 of 3) Systems planning First phase of systems development life cycle A business case is the reason for a proposed system Describes the project clearly Provides justification to proceed Estimates project’s financial impact Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Summary (2 of 3) Systems projects Initiated to improve performance, provide more information, reduce costs, strengthen controls, or provide better service Affected by various internal and external factors Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Summary (3 of 3) Analysts evaluate the systems request Determine whether the project is feasible Steps in the preliminary investigation Understand the problem or opportunity Define the project scope and constraints Perform fact-finding and analyze project usability, cost, benefit, and schedule data Evaluate feasibility Prepare a report to management Systems Analysis Design, 12th Edition. ©2020 Cengage. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.