UNIT 2 SYSTEMS PLANNING PDF

UNIT 0 SYSTEMS PLANNING 2 Previous lessons introduced concepts and definitions of Systems Analysis and Design, the different systems development methods...

UNIT 0 SYSTEMS PLANNING 2 Previous lessons introduced concepts and definitions of Systems Analysis and Design, the different systems development methods and techniques, software development strategies and life- cycle models and most importantly the main phases in systems development life cycle. This next unit is specifically crafted to focuses on system planning which is the first phase in the system development life cycle which includes discussion on Project initiation, preliminary investigation, feasibility study, project scheduling and other sub-processes involved in activities of information systems projects. It also discusses the role and capabilities of the managing activities and project team members that plays a vital part in project management fundamentals. As the organization needs to adapt to change, there are lots of phases that are needed to undergo before it can produce a new system that will give system solutions to their problem, and it all started with the system planning phase. This unit deals with the overview of system planning projects which focuses on project initiation (also called project identification) during the system planning phase in the System Development Life Cycle. It also provides several sub- steps of project initiation including system request, reasons and sources of systems projects. IT303: SYSTEMS ANALYSIS AND DESIGN 48  PRETEST WHAT DO YOU ALREADY KNOW? This section contains pretest questionnaires that are essential in assessing a student's understanding of the lesson prior to its discussion. What is their initial knowledge baseline? This pretest covers topics that are not familiar with students to determine the level of the prior knowledge, while a posttest activity for assessing student understanding of the entire lesson proper is suggested in a separate section. This activity consists of 25 items pretest questionnaires using a True or False type of test. You have 40 minutes to answer this pretest activity. Name:_______________________________________________Score:_________ Year & Section:________________________________________Date:_________ TRUE/FALSE. Read each statement below carefully. Write C at the beginning of each sentence if you think a statement is CORRECT otherwise, write W at the beginning of each sentence if you think the statement is WRONG. _____1. Requirements gathering and structuring is the first activity of the project identification and selection phase. _____2. System Service Request is the primary deliverable from the project identification and planning activities. _____3. When identifying and selecting projects, the development group must have a ready-made cost-benefit analysis. _____4. Project planning and initiation concentrate on activities that will help organize a team to conduct project planning. _____5. All facts can only be gathered by the users of the new system. _____6. Planning is the last phase in the system development life cycle. _____7. Predicting the business cycle is not an exact science. _____8. Users change dramatically and have the power to reshape existing business operations. _____9. Fact-finding is the technique of collecting information for a new information system. _____10. System analysts can observe the existing system, document the reviews, and result in their observations. _____11. The analysis phase starts with reviewing the request for system development. _____12. A strategic plan that stresses technology tends to create a favorable climate for Information system projects. _____13. Application software maintenance, incremental data storage expenses, and incremental communications are examples of recurring costs. _____14. Net economic benefit is a list of every project expense and what the benefits will be after successfully executing the project. _____15. Gantt chart is a useful visualization technique for progress tracking and reporting purposes. IT303: SYSTEMS ANALYSIS AND DESIGN 49  PRETEST WHAT DO YOU ALREADY KNOW? …continuation _____16. In every project, a list of tasks is broken down called Work Breakdown Structure. _____17. Recurring cost is defined as a cost resulting from the continued evolution and use of a system. _____18. Schedule Feasibility ensures that the electronic and technical resources and specifications of the existing system are workable. _____19. Develop system flowcharts is one of the steps in the Feasibility Study. _____20. One-time cost is defined as a cost related to project start-up and development or system start-up. _____21. The main objective of a feasibility study is to accumulate problem scope rather than solving the problem. _____22. A schedule should be proportionate with the time set for the project and all its resources. _____23. PERT and GANTT Chart are an example of the Unified Modelling Language Tool. _____24. Money is central to financial analysis but only instrumental within the economic appraisal of projects and policies. _____25. Net present value is the calculation of all benefits and costs in terms of currency value. IT303: SYSTEMS ANALYSIS AND DESIGN 50  LESSON 1: PROJECT FUNDAMENTALS IN SYSTEMS PLANNING OBJECTIVES: At the end of this lesson, students will be able to:  Determine how system planning works and understand its importance in the system development process;  Describe project fundamentals and the activities involved in the early phase of the project development process;  Explain how organizations identify Information system development projects through business case studies;  Understand the value of SWOT analysis in doing system project; and  Identify steps in doing SWOT analysis and determine how to conduct a similar example of it. Duration: 3 Hours IT303: SYSTEMS ANALYSIS AND DESIGN 51  UNIT 2: Systems Planning Thoughts to Ponder “The more time you spend contemplating what you should have done…you lose valuable time planning what you can and will do.” – Lil Wayne Overview of Project Fundamentals Many companies and organizations develop and maintain IT information systems to support their present and future business transactions. Some IT needs are immediate, like fixing a logic problem during a payroll system. Other needs might be on the horizon, such as planning IT support for a new factory, a future merger, or a corporate restructuring. In most companies, the IT team reviews each IT-related proposal, project, and systems request to work out if it presents a strong business case or justification. Most successful IT managers engage in long-range planning while they handle daily maintenance and support. To go through this task effectively, they need to understand and participate in the firm’s strategic planning process. Systems Planning is the initial phase in the System Development Life Cycle. During this phase, the objectives of the project are taken into consideration, and the IT Team or the person in authority reviews a proposal to gauge if it presents a strong business case wherein requirements of the system are identified. This term, business case, as discussed and defined by (Shelly & Rosenblatt, 2012, p.52) refers to the reasons, or justification, for a proposal. A business case can serve as a basis for whether there is a demand for a new system or just an enhancement of the existing system depending on the company’s alternative to pursue it because it is in the company’s best interest to do so. In examining the needs for a specific system proposal, the system analysts who are in-charge in doing it must study the company’s needs, overall mission, goal and objectives. Strategic Planning- A Framework for IT Systems Development Strategic planning is the identification of long term organizational objectives, strategies, and resources. Strategic planning looks beyond daily activities and focuses on a horizon that is ranging from three to five or ten or more years in the future Strategic planning begins with a management evaluation of its practices and processes called a SWOT analysis. The acronym means strengths, weaknesses, opportunities, and threats. A SWOT analysis usually starts with a broad overview. It is used for a clear strategic plan for the company before deciding to start a new strategy, then they need to evaluate how the company is doing and what options do they have for them to conduct SWOT analysis. A SWOT analysis is a solid foundation for the strategic planning process because it examines a firm’s technical, human, and financial resources. (Shelly & Rosenblatt, 2012, p.54). IT303: SYSTEMS ANALYSIS AND DESIGN 52  UNIT 2: Systems Planning This analysis tool will be helpful to find out what turns out well in the company and, what is not good as well. This will help them understand what their company wants to become and how they can achieve it, despite other alternatives or obstacles that might come their way to make it happen. Figure 2.1 shows a template of SWOT analysis of Google. Figure 2.1 SWOT Analysis of Google Source:Swot, Google, Ische. (n.d.) Retrieved from September 02, 2020, from https://www.pinterest.ph/pin/464011567837817325/ Steps To Do A SWOT Analysis Table First, draw up a SWOT Analysis Table. This consists of two (2) rows by two (2) columns table, with one square for each of the four aspects of SWOT. Figure 2.2 below shows what a SWOT Analysis Table should look like. You can use a SWOT Analysis in two ways: to urge people or someone from the organization to "kick-off" strategy formulation informally, or as a more sophisticated and formal tool, and the other one is the use of brainstorming techniques to create an inventory of ideas about where the organization currently stands. IT303: SYSTEMS ANALYSIS AND DESIGN 53  UNIT 2: Systems Planning SWOT ANALYSIS OF Put the name of company or organization here STRENGTHS WEAKNESSES OPPORTUNITIES THREATS Figure 2.2 A SWOT Analysis Table Every time you spot a Strength, Weakness, Opportunity, or Threat, write it down within the relevant part of the grid. To clarify which section it belongs, it is going to be useful to consider Strengths and Weaknesses as internal factors that have something to do with the organization’s assets, procedures, and people. Consider Opportunities and Threats as external factors arising from your market, your competition, and, therefore, the wider economy. You need to check out each area in additional detail and consider what questions you need to ask as a part of your analysis. Here are some of the definitions and guides questions to help you in giving the right perspective for each section:  Strengths. Strengths are things that a corporation does particularly well, or during a way that distinguishes them from their competitors. Believe the benefits of the organization over other organizations. These could be the motivation of staff, access to certain materials, or a robust set of producing processes. Their strengths are an integral part of their organization, so believe what makes them click. It answers the subsequent questions: What do they do better than anyone else? What values drive their business? What unique or lowest-cost resources can they draw upon that others cannot? Identify and analyze the organization's unique selling proposition (USP), and add this to the strengths section. Then turn your perspective around, jot it down and ask yourself. IT303: SYSTEMS ANALYSIS AND DESIGN 54  UNIT 2: Systems Planning  Weaknesses. You need to be truthful in answering this part! So it is best to be realistic and face any unpleasant truths that you simply will determine in a corporation. Weaknesses, like strengths, are inherent features of an organization, so specialize in their people, resources, systems, and procedures. Believe what they might improve, and therefore the kinds of practices they should avoid. Once more, imagine or determine how people in their market see them. Do they notice weaknesses that you simply tend to be blind to? Take time to look at how and why competitors do better than they (can do). What are they lacking? You would like to jot it down within the weaknesses section.  Opportunities. Opportunities are beginning or possibilities for something positive to happen. They typically arise from situations outside the organization and need an eye fixed to what might happen within the future. They could arise as developments within the market they serve, or within the technology they use. Having the ability to identify and exploit opportunities can make an enormous difference to their organization's ability to compete and take the lead within the market. Think about the good opportunities you will spot immediately. These do not have to be game-changers; even small advantages can increase their organization's competitiveness. What interesting market trends are you conscious of, large or small, which could have an impact? You should also be careful about changes in government policy associated with their field. And changes in social patterns, population profiles, and lifestyles can all present interesting opportunities. All of what you will gather jot it down within the opportunities section.  Threat. Threats include anything which negatively affect their business from the surface, like supply chain problems, shifts in market requirements, or a shortage of recruits. It is important to anticipate threats and to require action against them. Believe the obstacles you face in getting your product to plug and selling. You will notice that quality standards or specifications of their products are changing, which they will have to change those products if you remain within the lead. Evolving technology is both an ever-present threat. and an opportunity! Always consider what competitors do, whether or not they will change your organization's emphasis to satisfy the challenge. Make certain to explore whether a corporation is particularly exposed to external challenges. All of what you will gather are going to be considered as threats. (“SWOT Analysis: – How to Develop a Strategy For Success”, n.d.) From Strategic Plans to Business Results A company develops a mission statement supporting the firm’s purpose, vision, and values. The mission statement is the basis of the company’s major goals, short- term objectives, and day-to-day business operations. A mission statement describes a corporation for its stakeholders and briefly states the company’s overall purpose, products, services, and values. Stakeholders include anyone suffering from the company’s operations, like customers, employees, suppliers, stockholders, and members of the community. A mission statement is just the starting point. Next, the corporate identify a group of goals that will accomplish the mission. For example, the corporate might establish one-year, three-year, and five-year goals for expanding market share. To achieve these goals, the company develops a list of short-term IT303: SYSTEMS ANALYSIS AND DESIGN 55  UNIT 2: Systems Planning objectives such that, if a goal is to increase web-based orders by 30% next year, a company might set quarterly objectives with monthly milestones. Objectives also might include tactical plans, like creating a replacement internet site and training a special customer support group to answer email inquiries. Lastly, these objectives translate into daily business processes supported by IT and other corporate assets. The outcome may be a set of business results that affect company stakeholders. Figure 2.3 shows a diagram of the early stages of the strategic planning process. Within the strategic planning process, a company’s purpose, vision, and values shape its mission statement, which successively results in goals, objectives, business operations, and business results that affect company stakeholders. Figure 2.3 Diagram of the Early Stages of the Strategic Planning Process IT303: SYSTEMS ANALYSIS AND DESIGN 56  APPLICATION ACTIVITY FOR LESSON 1 HOW DO YOU APPLY WHAT YOU HAVE LEARNED? APPLICATION ACTIVITY Name:_______________________________________________Score:_________ Year & Section:________________________________________Date:__________ SWOT ANALYSIS 1. Prepare a SWOT Analysis by looking for a local organization or company that can be found in the Philippines. 2. Using Microsoft Word or Google Document, create a SWOT Analysis using the template shown in Figure 2.2 SWOT Analysis Table. 3. Have a deeper understanding of the process of the company or organization. Use the guide questions mentioned in the steps in creating SWOT analysis that will help you in giving the right perspective for each section of the strength, weaknesses, opportunities, and threats. 4. Prepare a one-page management evaluation review with not more than 200 words outlining your analysis if there is really a need for an information system proposal based on the previous lessons learned in lesson 1. What went right and what went wrong in this company or organization. IT303: SYSTEMS ANALYSIS AND DESIGN 57 UNIT 2: Systems Planning GRADING RUBRICS IN APPLICATION ACTIVITY FOR LESSON 1 HOW WELL DID YOU PERFORM? RUBRICS FOR SWOT ANALYSIS 1 3 2 CATEGORY NEEDS POINTS EXCELLENT GOOD IMPROVEMENT Identification of Identified all Identified most Failed to General major issues in but not all of the identify all Issues/Problems the company or major issues of major issues of organization, the company or the company or stakeholders, organization organization and its relation to technology. Identification of Correctly Correctly Correctly Strength identified 5 or identified 3 to 4 identified 1 to 2 more relevant relevant relevant strength of the strength of the strengths of the organization or organization or organization or company and company and company and reasons for its few reasons for incomplete or inclusion are its inclusion are no reason at all provided provided for its inclusion is provided. Identification of Correctly Correctly Correctly Weaknesses identified 5 or identified 3 to 4 identified 1 to 2 more weaknesses of weaknesses of weaknesses of the organization the the organization or company and organization or or company and few reasons for company and reasons for its its inclusion are incomplete or inclusion are provided no reason at all provided for its inclusion is provided. Identification of Correctly Correctly Correctly Opportunities identified 5 or identified 3 to 4 identified 1 to 2 more opportunities opportunities opportunities that may arise that may arise that may arise for organization for organization for organization or company and or company or company and few reasons for and incomplete reasons for its its inclusion are or no reason at inclusion are provided all for its provided IT303: SYSTEMS ANALYSIS AND DESIGN 58 UNIT 2: Systems Planning inclusion is provided. GRADING RUBRICS IN APPLICATION ACTIVITY FOR LESSON 1 (Continuation…) HOW WELL DID YOU PERFORM? 1 3 2 CATEGORY NEEDS POINTS EXCELLENT GOOD IMPROVEMENT Identification of Correctly Correctly Correctly Threats identified 5 or identified 3 to 4 identified 1 to 2 more threats that threats that threats that may may harm the may harm the harm the organization or organization or organization or company and company, and company and reasons for its few reasons for incomplete or inclusion are its inclusion are no reason at all provided provided for its inclusion is provided. Presentation of Clear, concise Clear and Did not explain Evaluation presentation that concise their Review emphasized how presentation; presentation each section of did not well and failed the SWOT Table emphasize how to emphasize affects the each section in how each current business the SWOT section in the processes. Table affects SWOT Table the current Affects current business business processes processes. TOTAL N/18 Remarks:_______________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ _____________________ IT303: SYSTEMS ANALYSIS AND DESIGN 59  UNIT 2: Systems Planning LESSON 2: PROJECT INITIATION AND PRELIMINARY INVESTIGATION OBJECTIVES: At the end of this lesson, students will be able to:  Define project initiation and discuss its significance in system planning phase;  Identify the system development project and create a system request;  Cite and comprehend the reasons for system projects;  Identify the different factors to consider that drives change in the business;  Enumerate the steps in conducting preliminary investigation; and  Comprehend and cite the four key steps in managing projects Duration: 5 Hours IT303: SYSTEMS ANALYSIS AND DESIGN 60  UNIT 2: Systems Planning Thoughts to Ponder “A project without a critical path is like a ship without a rudder.” ~ D. Meyer Overview of Project Initiation Today, the demands for a new or enhancement of the system exceeds the ability and resources of most organizations to conduct system development projects. System planning is the first phase in the system development life cycle. System planning is where an organization’s total information needs are identified, analyzed, prioritized, and arranged. The organization creates and assesses the original goals and expectations of a new system. There are reasons why the organization needs to develop a new or improved system; for example, it is to add value to the organization. In this phase, you will learn how information system projects get started and how the team evaluates a proposed system and determines its feasibility before it will be developed. The planning phase begins by reviewing the request for system development. Figure 2.4 shows two major activities involved in system planning: i. Project Initiation (Project Identification) ii. Preliminary Investigation (Feasibility Study) Figure 2.4 Two Major Activities Involved in System Planning IT303: SYSTEMS ANALYSIS AND DESIGN 61  UNIT 2: Systems Planning Let us define first what is project initiation, according to (Slideshare, 2018), “Project initiation begins when someone in a corporation identifies that there's a requirement to enhance an existing system or a replacement system is required to enhance business operations. Most ideas come from non-IT department like marketing, accounting, and etc., as a sort of system request” Project initiation, also called project identification, is the first activity in a project's life cycle. It is in this stage where the opportunity or goal for the project is identified, and a project needs to be developed to take advantage of that opportunity. It is also during this stage that a project team is assembled to initiate the project, and a business case is designed to define the business perspective of the information system project in detail. Several Sub-Steps of Project Initiation:  Systems Request  Reasons for Systems Projects  Sources of Systems Projects System Request In project initiation, every organization has its own approach of determining what needs to be accomplished or changed in its existing system, and that technique can be done by system request. “The starting point for most projects is called a systems request, which is a formal way of asking for IT support. A systems request might propose enhancements for an existing system, the correction of problems, the replacement of an older system, or the development of an entirely new information system that is needed to support a company’s current and future business needs.” (Shelly & Rosenblatt, 2012, Chapter 2, Page 59) As stated in the definition above, a system service request is considered the starting point of an information system project. It is built when someone in the organization identifies that they need to enhance an existing system through the correction of problems or errors encountered in the current process, or create a new system for a certain need entirely. The system service request is another way of informing the management that users are asking for IT support. System service request form can be requested by the user to the IT department, either manually submitting the system request form or sending it through e-mail or web-based downloadable system request system. IT303: SYSTEMS ANALYSIS AND DESIGN 62  UNIT 2: Systems Planning Figure 2.5 Example of an Online System Request Form Source: Shelly, G. B., & Rosenblatt, H. J. (2012 p. 65). Systems analysis and design (9th ed., Shelly Cashman). Boston: Course Technology Cengage Learning. Figure 2.5. shows an example of an online system request form. Every organization has a different approach to initiating information system projects such as system requests. It is an essential document that includes reasons for enhancing or building a new information system project in an organization. A designated system analyst or a system review committee examines whether it needs the approval to proceed with a preliminary investigation or not depending on its need for immediate response or if the problem involves a mission-critical system, then it needs to be prioritized. The project team then conducts a review and prepares for the next activities in the system planning phase. (Shelly & Rosenblatt, 2012, p.65) Reasons for Systems Requests This section discusses the main reasons for systems projects as listed below: Improved service. Systems requests often aim at improving service to customers, suppliers, or users within the corporate. For instance, a bank or a open-end fund company might want to permit its account holders to see account balances from the corporate websites, or a university might want to make a web registration system. IT303: SYSTEMS ANALYSIS AND DESIGN 63  UNIT 2: Systems Planning Better performance. The present system would not meet performance requirements. For instance, the systems could be old and slow to reply to inquiries, have limited flexibility, or unable to support company growth. More information. Existing system might produce information that's insufficient, incomplete, or unable to supply the company's changing information needs. For instance , a system that tracks customer orders would not be capable of analyzing marketing needs. The business might keep track of some critical information which will not be obtained from the present system. Stronger controls. A system might not have all rules on accurate data entry, resulting in incorrect entry of data and storage, loss of income, and even system failure. For instance, a system might not have all security required by the corporate for various users. Standard user controls include login passwords to programs and databases, various levels of systems access. Reduced cost. The present system might be expensive to work and maintain thanks to technical problems, design weaknesses, or the changing demands of the business. For instance , it will be possible to adapt the system to newer technology or upgrade it. On the opposite hand, the analysis might show that a replacement system would be less expensive and supply better support for long-term objectives. (“Systems Planning – Phase 1 System Planning”, n.d.) Sources of Systems Projects Just like any other organization, there are so many different factors to consider that drives change in the business. Requests of information systems projects may face many factors in various areas, both internal and external, to an organization. Internal Factors The internal factors refer to the strategic plan, top managers, user requests, information technology department, and existing systems and data inside an organization that is generally under the direct control of the company. Strategic Plan. A company’s strategic plan sets the general direction for the firm and has an important impact thereon projects. Company goals and objectives that require IT support will generate system requests and influence IT priorities. A strategic plan that emphasizes technology tends to make a positive climate for IT projects that extends throughout the organization. Top Managers. Directives from top managers are a major source of large-scale system projects. It often results from strategic business decisions that need new IT systems, more information for decision-making, or stronger support for mission-critical systems. User Requests. As users depend more heavily on information systems to perform their jobs, they are likely to request even more IT services and support. Users would not be satisfied with the present system because it's difficult for business requirements that did not exist when the system was developed. Information Technology Department. Most project requests usually come from IT303: SYSTEMS ANALYSIS AND DESIGN 64  UNIT 2: Systems Planning the IT department. IT staff members often make recommendations to support their knowledge of business operations and technology trends. IT proposals could be strictly technical matters, like the replacement of certain network components, or suggestions could be more business- oriented, like proposing a replacement reporting or data collection system. Existing Systems. Errors or problems in existing systems can prompt requests for system projects. It must be corrected, but analysts often spend an excessive amount of time reacting to day-to-day issues without watching the underlying causes. This approach can turn a data system into a patchwork of corrections and changes that cannot support its overall business needs. External Factors The external factors include technology, suppliers, customers, competitors, the economy, and government. These are factors that occur outside the organization but can cause internal impact, and it is beyond the company’s control. Technology. Changing technology is a significant force affecting business and society in general. Technology also dramatically reshapes existing business operations. Most companies have the collaboration of software and hardware that must work together effectively. As technology changes, companies make decisions that prompt system requests. Suppliers. With the expansion of electronic data interchange (EDI), relationships with suppliers are critically important. For instance, an automobile company might require that suppliers code their parts during a specific manner to match the auto company’s internal control system. The aim of this is to supply the proper product within the right place at the proper time. Customers. Customers are extremely vital to any business, and knowledge systems that link with customers usually receive top priority. Most companies implement customer relationship management (CRM) systems that integrate all customer-related events and transactions, including marketing, sales, and customer service activities. CRM components can provide an automatic response to sales inquiries, web-based processing, and online inventory tracking. Competitors. Competition drives many information systems decisions. New marketing research and development, marketing, sales, and repair all require IT support. The Economy. Economic activity features a powerful influence on corporate information management. In periods of economic expansion, firms have to be ready with scalable systems to handle additional volume and growth. Predicting the trade cycle is not a particular science, and careful research and planning are critically important. IT303: SYSTEMS ANALYSIS AND DESIGN 65  UNIT 2: Systems Planning Government. Federal, state, and local government regulations influence the design of corporate information systems. For instance, income tax reporting requirements must be designed into a payroll package.(Shelly & Rosenblatt, 2012, p. 62-64) Preliminary Investigation Preliminary Investigation After initiating a system request in the early stages of the system planning phase, the next activity is to conduct a preliminary investigation. During this phase, the existing system is investigated. The goal of this activity is to administer an initial study and findings of the current system. It includes the following steps: 1. Understand the problem or opportunity a. Analyze the problem statement and understand the existing system that need for a new system or modification of the current system b. Identify the improvements to be done in the current system and if improvements have been made, know how it will impact the new system c. Identify the affected group of people 2. Define the project scope and constraints. Determining the project scope by defining the characteristics of the project and the result of the project. a. The scope statement defines the quality of the end project obtained and produces a clear idea of what the project consists of. b. The scope of the project should be SMART(specific, measurable, attainable, realistic, and time-bounded. c. Constraints define limitations for projects, including time, resources, and performance. It is used to identify what is part of the new system. 3. Perform fact-finding. Fact-finding is the technique of collecting information for a new information system. a. It is useful for the development of new systems. Facts can be collected for users of the new system. b. It is essential to know the function of an organization, its performance,, and how it will use the proposed system. You can do it by conducting interviews, conducting surveys, and collecting facts. System analysts can observe the existing system document the reviews and results of their observations. 4. Analyze project usability, schedule data, cost and benefit. Analyzing the data for finding out estimated cost and time for the development of the project a. The system analyst checks the project usability for the end-users and documents the findings. b. System analysts schedules the gathered data, where the collected data is essential for module development of the project. c. System Analyst uses many techniques to produce a precise estimate. 5. Evaluate feasibility. Determine the viability of an idea, such as ensuring a project is technically feasible and economically justifiable. It tells the system analyst whether a project is worth the investment or it may not be doable because findings show that the proposed system needs a massive amount of resources, that may cost more than an organization would earn back, so why proceed on a project that is not profitable at all. IT303: SYSTEMS ANALYSIS AND DESIGN 66  UNIT 2: Systems Planning (Note: Detailed discussions about feasibility study will be discussed in the next topic for better understanding of the lesson) 6. Present outcome and suggestion to the management. It is a document of the investigation report, which included what system request is present. a. The system analysts recommend the proposed project, estimated time, and the whole cost required in project development. b. Benefits attained by the organization over the cost incurred are presented to management. (“Solved; Describe the Six Steps in a Typical Preliminary Investigation,” n.d.) Managing the Project When managing projects, always bear in mind that you should not put yourself in a rush when you are doing project planning. It would be best if you do it correctly; doing project planning takes time. If you do not, it guarantees that you will encounter problems and people would not understand what they allege to do and why. Excellent preparation sets you up for success. It gives you the reliance on knowing that you have all your processes, tools, and systems in place to deliver the desired result. In managing one's project, the study and style method can become unwieldy, especially when the system to be developed is large to keep the event activities as manageable. We usually employ several project management techniques to assist us in getting organized. One crucial aspect of project management is the way to manage one's schedule to finish the system on time, but it's not the sole thing needed. The project manager is usually the lead analyst. The project manager determines what is needed and how to initiate a project, develop a drag definition; examine the feasibility of completing the systems project; reduce risk; identify and manage activities; and the way to rent, manage and motivate other team members. ("Managing the Project," 2017) Four Key Steps in Managing Projects 1. Identifying project size 2. Creating and managing work plan 3. Staffing the project 4. Defining project activities Identifying Project Size Identifying project size is a defining process coverage. Project size is a determinant factor of the range of the processes involved in the project defined as the level and extent to which project management practices are formally applied. Project sizing is a "must consider factor" for project planning, ensuring that plans and activities are relevant and appropriately used and allocated. It is particularly vital in the multi-project environment, where simultaneous projects must compete for funds and human resources. IT303: SYSTEMS ANALYSIS AND DESIGN 67  UNIT 2: Systems Planning Creating and Managing Work Plan In achieving your goals, you need to plan on how you can hit those goals. A work plan is what you need to create a clear path to achieve those desired results. Along that path is going to be resources, constraints, and other elements that require to be recognized. This work plan should be written and initiated by one person. It is thought of as action for a project that ought to eventually be submitted to board members and stakeholders for approval. Once all is claimed and done, you'll continue building out your work plan's remainder. A work plan could also be a project management plan by another name. When done correctly, your work plan will articulate and describe the steps needed to know a department-level or company-level end goal by baking in milestones, deliverables, resources, budgetary requirements, and a timeline weave it together. (Scavetta, 2020) Steps in Creating a Work Plan Creating a work plan is a process that requires as many established details as possible before presenting to stakeholders. The subsequent is what you get to specialize in creating a project plan:  Identify the Project Name, Purpose, and General Timeline  Put Your Work Plan into Context  Establish Your Goals and Objectives  Define and Coordinate Your Resources  Understand Your Constraints  Discuss Risks and Accountability Staffing the Project Putting together the project team is a vital part of making a project successful. Without the proper people in place, the project would not go very far. You may wish to spend the acceptable amount of some time at the start of the project reviewing the project team to handle it and determining who belongs and who does not—and those are not easy decisions. It helps you to have a solid management plan in place to staff the project correctly. It will not happen overnight—and if you wish to make those tough decisions for the project's benefit, you need to come up with a staffing plan. The staffing plan should relate to how you will allot the resources into the project and manage throughout the entire lifecycle. Within this project management plan, you would wish to detail how people will bring into the project, whether or not they are new hires or contractors, assigned from other areas within the organization, or an area of a matrixed organization. The plan should relate to how the team is mentioned to hurry, how it will place into the project, and how everyone will organize. Everyone should have a transparent understanding of who is making decisions, who can help them run through any issues, and assign the work from a high-level viewpoint. (Darter, 2016) IT303: SYSTEMS ANALYSIS AND DESIGN 68  UNIT 2: Systems Planning Defining Project Activities In Project Management, activities characterize the measure of labor that changes over an idea for appropriate outcomes. Activities during a project cannot identify and document accessible activities to supply the project deliverables. To define activities during a project, you would wish to possess the work package, which is the Work Breakdown Structure (WBS), and thus it drives in due to the first input of the scope baseline. In every project, activities might be estimated, scheduled, monitored, and managed. ("Defining Activities during a Project," n.d.) A project manager should be conversant in two important things:  Scope baseline  Availability of a project team IT303: SYSTEMS ANALYSIS AND DESIGN 69  APPLICATION ACTIVITY FOR LESSON 2 PART 1 HOW DO YOU APPLY WHAT YOU HAVE LEARNED? APPLY YOUR KNOWLEDGE Name:_______________________________________________Score:_________ Year & Section:________________________________________Date:__________ TRUE/FALSE. Read each statement below carefully. Place a T on the line if you think a statement is TRUE. Place an F on the line if you think the statement is FALSE. _____1. System planning is the first phase of the systems development life cycle. _____2. Requirements gathering and structuring is the first activity of the project identification and selection phase. _____3. Project planning and initiation concentrate on activities that help organize a team to conduct project planning. _____4. System Service Request is the primary deliverable from the project identification and planning activities. _____5. When identifying and selecting projects, the development group is not concentrated on cost-benefit analysis. _____6. Competition has no powerful influence on the corporate information system. _____7. System service request forms cannot be requested by the user. _____8. Systems requests are often aimed at improving service to customers, suppliers, or users within the company. _____9. Facts can be collected for users of the new system. _____10. Planning ends with reviewing the request for system development. _____11. Predicting the business cycle is not an exact science. _____12. Technology also dramatically reshapes existing business operations. _____13. The goal of the preliminary investigation is to conduct an initial study and to find the existing system. _____14. Fact-finding is the technique of collecting information for a new information system. _____15. A designated executive review committee examines whether it needs the approval to proceed with the preliminary investigation or not. _____16. As technology changes, companies make decisions that trigger system requests. _____17. System analysts cannot observe the existing system document the reviews and results of their observations. _____18. The planning phase starts with reviewing the request for system development. _____19. A strategic plan that stresses technology tends to create a favorable climate for IT projects. _____20. System Analyst uses many techniques to produce a precise estimate. IT303: SYSTEMS ANALYSIS AND DESIGN 70  UNIT 2: Systems Planning APPLICATION ACTIVITY FOR LESSON 2 PART 2 HOW DO YOU APPLY WHAT YOU HAVE LEARNED? LET’S DO IT ONLINE Name:_______________________________________________Score:_________ Year & Section:________________________________________Date:__________ USER SYSTEM REQUEST FORM In this activity, the students are reminded to prepare the necessary resources that are convenient for them to use. Students are encouraged to have a deeper analysis approach in creating system requests to determine what needs to be accomplished or changed in their existing system in the company. Guidelines for this activity are as follows: 1. The students will use the internet to send a user request to the MIS Department using their email account. For those in the RPL mode of learning, see attached user request template below to be used as your guide in creating your system request document template in MS Word and attached it to your module. In contrast, the SL and AOL mode of learning to complete the Learn It Online activity will be given a web link to access the system request template via a google form, as shown in the sample below. Navigate to the resource link and click the link for the activity you want to complete through the permission of your Instructor. The Instructor will give a request link to access during the period of this activity. IT303: SYSTEMS ANALYSIS AND DESIGN 71 UNIT 2: Systems Planning APPLICATION ACTIVITY FOR LESSON 2 PART 2 (Cont….) HOW DO YOU APPLY WHAT YOU HAVE LEARNED? SAMPLE OF USER SYSTEM REQUEST VIA GOOGLE FORM IT303: SYSTEMS ANALYSIS AND DESIGN 72  UNIT 2: Systems Planning APPLICATION ACTIVITY FOR LESSON 2 PART 2 (Cont…) HOW DO YOU APPLY WHAT YOU HAVE LEARNED? 2. Use the subject: System Request Form For (include the name of the company here). 3. It is a similar scenario in applying proper approaches to creating system requests. Search for appropriate information through background checking in your chosen company for problem identification to develop a good reason for making your system request. Suppose that you are one of the employees involved, and you are one of the end-users affected by the dilemmas always encountered in your existing system in the company. 4. Have a brief and precise description of the system request and attach additional documents if necessary. IT303: SYSTEMS ANALYSIS AND DESIGN 73  UNIT 2: Systems Planning GRADING RUBRICS FOR ACTIVITY IN LESSON 2 PART 2 HOW WELL DID YOU PERFORM? FOR USER SYSTEM REQUEST 5 15 10 CATEGORY NEEDS POINTS EXCELLENT GOOD IMPROVEMENT Identification of Identified the Identified minor Failed to identify Appropriate major technological appropriate issues Organizational technological related issues in of the company or Issues/Problems related issues in the company or organization or the company or organization or stakeholders organization or stakeholders. stakeholders Failed to gather All pertinent Some pertinent pertinent information is information are information from gathered from gathered from reliable sources reliable sources reliable sources and did not follow Gathering of through accurate through accurate precise data Pertinent data gathering data gathering gathering information procedure and procedure and procedure and gathered directly gathered directly gathered indirectly from the end from the end from the end user's point of user's point of user's point of view view view Well organized Well organized, Weakly organized but Summary demonstrates and demonstrates demonstrates Paragraph on logical illogical illogical Request sequencing and sequencing on sequencing on Description sentence sentence sentence structure. structure. structure. TOTAL N/45 Remarks:___________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ IT303: SYSTEMS ANALYSIS AND DESIGN 74  UNIT 2: Systems Planning LESSON 3: PROJECT FEASIBILITY STUDY OBJECTIVES: At the end of this lesson, students will be able to:  Define and understand the importance of feasibility study in information system projects;  Understand and differentiate operational feasibility, technical feasibility, schedule feasibility and economic feasibility;  Identify and apply the steps involved in doing feasibility study;  Describe various scheduling techniques and apply the steps in creating the PERT and GANTT Chart diagram;  Cite some of the most common reasons for performing a cost-benefit analysis; and  Determine how to compute cost and benefit analysis. Duration: 8 Hours IT303: SYSTEMS ANALYSIS AND DESIGN 75  UNIT 2: Systems Planning Thoughts to Ponder "At the beginning of all experimental work stands the choice of the appropriate technique of investigation." -Walter Rudolf Hess Defining Feasibility Study “A feasibility study is an analysis that gathers all the vital factors of a project, including economic, technical, legal, and scheduling considerations —to establish the possibility of successfully completing the project. It has been used by project managers to discern the pros and cons of undertaking a project before they invest tons of your time and money into it”. (Kenton, 2020) Feasibility studies are a tremendous help to the company's management to provide them the necessary information and data enough for them to decide to push through with any project and prevent them from entering blindly to risky projects in the future. It identifies the likelihood of improving an existing system, develops a replacement system, and produces refined estimates for further development of a new system. It is intended to obtain the outline of the necessary documents and choose whether a feasible or appropriate solution exists or not. Its main goal is to accumulate problem scope rather than to solve the problem. The output of a feasibility study may be a formal system proposal act as a decision document that incorporates the fundamental nature and scope of the proposed system. Steps Involved in the Feasibility Study are as follows:  Create a project team that will lead the activity and choose a project leader.  Develop system flowcharts.  Pinpoint the shortfall of the existing system and enumerate the choice solution or potential candidate system to satisfy goals.  Determine the feasibility of every alternative, like technical feasibility, operational feasibility, etc.  Weight the performance and price effectiveness of every candidate system.  Rank the opposite alternatives and choose the simplest candidate system.  Prepare a system proposal of ultimate project directive to management for approval. IT303: SYSTEMS ANALYSIS AND DESIGN 76  UNIT 2: Systems Planning Types of Feasibility Study A feasibility study plays a vital role in the success of one's potential project; therefore, biased judgement is an essential factor in the credibility of the result of the study, especially to the management. There are four types of feasibility studies that are separately discussed and described below. Technical Feasibility. It refers to the exploration to determine whether the solutions are often supported by existing technology or not. The system analyst knows whether existing technical resources need an upgrade or inclusion of new requirements must be requested. Technical feasibility makes sure that the existing system provides proper responses to what extent it can assist in the technological enhancement of the company. Some of the questions to find out whether an information system project is technically feasible are as follows:  Is the project viable within the restrictions of existing technology?  Is it a practical proposition?  Does the technology exist at all?  Is it available within given resource constraints?  Are the existing technological resources enough for the proposed system?  Can it be improved to provide the level of technology required for the proposed system?  Do we have the appropriate technical expertise?  Can technological resources be easily applied to current problems?  Do the proposed technological resources have the capacity to handle the solution?  Do we currently possess the necessary technology? Operational Feasibility. It determines whether the system is functioning effectively once it is developed and implemented. It ensures that the management should support the proposed system and it is working feasible within the present organizational environment. It analyzes whether the users are getting to be affected by whether they accept the modified or new business methods that involve the possible system benefits. It also ensures that the electronic and technical resources and specifications of the existing system are workable. The essential questions that help in testing the operational feasibility of a system include the following:  Does the existing mode of operation offer essential management to protect against fraud and to assure accuracy and security of information?  Does existing operation make use of available resources efficiently, including people, time, and flow of transactions?  Does the current mode of operation provide reliable services?  Are the services flexible and expandable?  If the system is developed, will it be adopted by the user?  Does management support the project?  Are the users satisfied with existing business practices?  Are the existing business practices and procedures enough to support the proposed system? IT303: SYSTEMS ANALYSIS AND DESIGN 77  UNIT 2: Systems Planning  Does management support the project?  Are users having difficulty with existing business practices?  Does management support the project?  Will it reduce the time of operation considerably?  Does the overall response increase when it comes to accessibility of information? Will the system considerably affect the stakeholders? Schedule Feasibility. It determines that the proposed project should be finished within a given period or schedule. It also verifies whether the deadlines of the project are reasonable to finish or not. In this feasibility study, the project managers got to give proper attention to controlling the conduct of its schedule feasibility for them to calculate and continually re-examine whether it's possible to finish all amount and scope of labor lying ahead, utilizing the given amount of resources, within the specified period. Economic Feasibility. It refers to assessing the effectiveness of the proposed system by using a cost/benefit analysis that includes details of the costs and terms of the benefit that the organization will get from it. The main goal of conducting economic feasibility is to have an approximation of the economic requirements of the proposed system before the company's expenditures are committed to the project proposal. Possible questions raised in economic analysis are:  Does the system cost significant?  Do benefits outweigh costs?  The whole cost of doing the system  The cost of business employee time  The estimated cost of hardware  The estimated cost of software packages/ development  Is the project can be finished, given the resource constraints?  Cost of employees' time to do the study  Cost of software packages/ development  Options among alternative financing arrangements (rent/lease/purchase) In doing economic feasibility analysis, a cost-benefit analysis (CBA) is used to appraise whether the project is worth undertaking. It gives the costs and benefits of different scenarios to determine the benefits that offset the costs. (Note: Detailed discussion of the preparation of the cost and benefit analysis will be given in the next lesson.) Project Scheduling Technique We need to use scheduling techniques during a project to align all its aspects with figuring like one another. A schedule should be in proportion with the time set for the project, and every one of its resources should be utilized in the best manner. Given the variable nature of the project and its scope, It is hard to plan it, but we are expected to try to to it because it is we who are going to be held responsible. A schedule should have all the activities included within the implementation and execution of a project within the set time-frame of the project. A project schedule helps prioritize work involved during a project and finish IT303: SYSTEMS ANALYSIS AND DESIGN 78  UNIT 2: Systems Planning it off in an orderly manner. It also helps appoint the proper person for the work and properly allocate the available resources. Time allotment and adjustments with the scope of a project is merely possible if there is an appropriate schedule prepared for the project. Project scheduling includes the following four-step process: 1. Using the list of activities identified in the standard SDLC as a guide, remember all individual tasks. 2. Estimate the size of the task: the number of human resources, the person-days required, the calendar time needed, and any other unique resources that may be required. 3. Determine the sequence for the identified tasks. The team accomplishes this step by determining which tasks are predecessors for a given job. 4. Schedule the tasks themselves, taking into account that resources cannot be double-scheduled. When performing on projects involving valuable resources, every manager worth their salt tries to optimally utilize those resources to the most superficial extent possible, while, at an equivalent time, striving to complete the project on schedule. PERT(Project Evaluation and Review Technique) Chart A PERT Chart may be a visual tool that project management uses to schedule, organize, and coordinate activities of their project. In every project, a list of tasks is broken down called Work Breakdown Structure or (WBS) to complete in a definite sequence, which defines the project. Resources required to finish each task - in terms of cash, material, and manpower - are listed. One simple advantage of making a PERT chart during project planning is the insight it provides on the critical path. In our network diagram below, a critical path is that the longest path is traversed from the starting node to the ending node, in terms of the whole of the calendar time taken to understand each intermediate node. All activities on this critical path must be completed for the project to finish on time. Seen during this light, each activity within the critical path could even be a critical activity, to tend the utmost attention. Resources from tasks that are not critical are often reallocated to assist critical path elements should issues arise, or inevitably unforeseen conditions occur. On the other hand, activity outside the critical path is often delayed without the project getting delayed - for a specific amount of some time. PERT experts call this the Slack Time for that specific activity. PERT allows managers within the planning divisions of organizations to speak and consolidate ideas. They are also effective for evaluating the performance of teams and individual members. These charts are also a superb visual basis for gauging the design and analytical skills of team leaders. PERT analysis also promotes cost-effectiveness and optimal use of manpower because the process determines the time-frame for a project to be also completed because of the risks involved. ("Diagram – PERT”, n.d.) IT303: SYSTEMS ANALYSIS AND DESIGN 79  UNIT 2: Systems Planning Figure 2.6 Example of PERT Chart of Sales Promotion Tracking Figure 2.6 shows places the project milestones or tasks, time to do a task, earliest start date/time (ESD), and the earliest finish date (EFD) inside the tasks box. The horizontal axis shows the time measures in weeks, and the vertical axis shows the sequence of those project milestones or tasks. It also includes a legend that serves as a guide in identifying which among your project milestones or tasks is your critical path. How to Develop a PERT Chart? The Information System Project will benefit from using one of the diagrams in the project scheduling tool. The steps in this process are very alike to identify the critical path of your proposed system, which is extremely helpful since these diagrams are one method for mapping out that path. (Morpus, 2020) Six steps in creating a PERT chart diagram are as follows: 1. List your project milestones and tasks. 2. Identify the sequence of those tasks. 3. Determine the time criteria for your tasks.  Earliest start date/time (ESD/EST): It is the most initial possible time to begin a task in your project. To know the earliest start date or time, you must understand all of your task dependencies inside and out. IT303: SYSTEMS ANALYSIS AND DESIGN 80  UNIT 2: Systems Planning  Earliest finish date/time (EFD/EFT): It is the most initial possible time you hope to finish a particular task. It is determined by adding up all of the previous dependent step times, including the duration of this specific step you are trying to quantify.  Time to complete: This is the duration of time you plan on spending to finish each task. Once you have determined all three of these criteria and listed out the sequence of your tasks, you have ready to create your PERT chart. 4. Draw up your PERT diagram. 5. Draw out your critical path. 6. Update your PERT chart as needed. Gantt Chart The project schedule Gantt chart may be a useful visualization technique for progress tracking and reporting purposes. It is the go-to tool for many project managers once they want to urge a fast estimate of the time it'll fancy completing all the project activities. A project schedule Gantt chart could also be a bar chart that shows series of activities or tasks in sequence on the left (first activity is at the very best left and last activity ends within the bottom right corner) vs. time (on the highest or bottom). Each activity or task is represented by a bar that reflects the start and date of the activity, and thus its timescale. The chart showed all the activities or tasks when they were set to start and to finish, how long each activity will last, where there are overlaps of activities, dependencies between activities, which are connected with arrows and, therefore, the start/end date of the whole project. If the Gantt chart isn't a neighborhood of a project management system, it's very flat and has similar limitations to the task list, like little collaboration, no versioning, or progress tracking. ("Most Common Scheduling Techniques in Project Management," n.d.) Pros: Adaptable to all industries and projects Easy to view progress Ability to set accurate deadlines and define dependencies Easily modified Can be created in Microsoft Excel or in a project management system Ability to assign tasks to resources Cons: If the Gantt chart is not part of a project management system, it is flat No versioning Limited collaboration No progress tracking IT303: SYSTEMS ANALYSIS AND DESIGN 81  UNIT 2: Systems Planning Steps in Creating A Gantt Chart Gantt chart as one of the project scheduling techniques used when you create or manage any kind of system project that has many tasks associated with it. Consider this: If task ID No. 2 cannot begin until task ID No.1 is complete—and task ID No.1 takes at least two weeks to complete—we cannot begin task ID No.2 for two weeks. So it only means that the project will take a minimum of two weeks, plus the length of completion for task ID No.2. It seems simple to understand, but when you have many dependencies, it is a little confusing to plot the tasks and need to allocate your project team's time as effectively as possible. (Foley, 2020) For a better understanding of how the processes all fit together, below are the steps in creating a Gantt Chart: 1. Begin with a project or drive in mind. 2. Assess the present plan for this project in place. 3. Determine which tasks are hooked into each other. 4. Compile the time frames that include all the tasks in your Gantt chart layout. 5. Repeatedly use your Gantt chart as a reference. Figure 2.7 Example of Gantt Chart of Sales Promotion Tracking IT303: SYSTEMS ANALYSIS AND DESIGN 82  UNIT 2: Systems Planning Figure 2.7 represents another way of creating or managing any project milestones with many tasks associated with it. Schedules of tasks are presented in the horizontal axis, including the sequence of tasks, project milestones or tasks, time to do a task which includes starting date and ending date. The duration of project milestones was measured in weeks, and it also provides legend that serves as a guide in identifying which among your project milestones or tasks is your critical path, non- critical path, and in progress. What Is Cost And Benefit Analysis? Cost-Benefit Analysis or CBA is a relatively straightforward tool for deciding whether to pursue a project. In the information system project management, it is one tool that can be used mainly in identifying whether it is economically feasible or not. It is a tool that has been designed to assess the cost versus the benefits in your proposed project proposal. It starts with a list, as so many processes do. It is essential to understand the real goals why we are conducting cost and benefit analysis, as stated by (De Rus, 2020) in his rationale of cost and benefit analysis; he explained that cost-benefit analysis is not only about money. It is neither about inputs or outputs; it is about welfare. The value of this economic tool is to assist within the selection of the best projects and policies for the benefit of society. Money is central to financial analysis but only instrumental within the economic appraisal of projects and policies. Cost and benefit analysis may be a list of each project expense and what the advantages are going to be after successfully executing the project. From that, you will calculate the return on investment (ROI), internal rate of return (IRR), net present value (NPV), and the payback period. The variance between the value and the benefits will allow you to decide whether to pursue a data system project or not. When Do We Perform A Cost And Benefit Analysis? It is a non-comprehensive list of the foremost common reasons for performing an analysis, but if you so desire, you will perform one for almost any decision you create. We do that a day once we prioritize some tasks over others. The five most vital Instances for conducting analysis for your business are as follows: 1. Making a new hire. 2. Kicking off a new project. 3. Adopting a new software tool. 4. Administering a new business practice or process improvement. 5. Making a market pivot. IT303: SYSTEMS ANALYSIS AND DESIGN 83  UNIT 2: Systems Planning How To Conduct A Cost And Benefit Analysis? Conducting a cost-benefit analysis is a straightforward process that you can complete in three steps. 1. List out your costs and benefits. It is the easiest step in the process of performing a cost-benefit analysis. List all of the costs and benefits of engaging in a specific action. If you are looking to hire someone new, for example, these costs and benefits might include: Costs:  Agency finders fee  HR screening time  Jobs boards fees  Background checks  Time spent training and onboarding  Salaries and benefits  Potential misaligned hire Benefits:  Improved efficiency  Lighter workloads across teams  Higher quality work  More experience on the team  New areas of expertise  Decreased risk of team burnouts  Potential networking opportunities Assessing cost and benefit is a process of identifying the financial benefits and costs associated with developing an information system project. The project is assessed in terms of cost and benefit to decide whether to continue, redirect, or stop development. One-Time Cost is defined as a cost related to 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 the system conversion Recurring cost is defined as a cost resulting from the continued 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 IT303: SYSTEMS ANALYSIS AND DESIGN 84  UNIT 2: Systems Planning  Supplies and other expenses (for instance, paper, forms, data center personnel). In determining project cost, you should remember the following:  Procurement which includes the following such as consulting, equipment, site preparation, capital, management time  Start-up which includes operating systems, communications installation, personnel hiring, organizational disruption  Project-related such as application software, software modification, personnel overhead, training, data analysis, documentation  Operating Costs such as system maintenance, rental, asset depreciation, operation, and planning. It is not a problem when your list of costs and benefits might come out uneven with more items than the other. Your analysis is not finished here since you continue to have not assigned any value metrics. Tips in doing your costs and benefits is that before you jump into listing these effects, make certain to utilize of these tips below so you will build the foremost comprehensive lists possible: Be sure your action is obvious. When analyzing the analysis of a proposed action, your goal must be specific and clear. For instance, instead of check out the analysis of adopting a project management software, drill right down to the actual software option you have in mind. This way, you will account for the various variables inherent in making your choice, like price, features, support,etc. Include present also as future costs/benefits. The simplest analysis not only looks at the more immediate effects of a choice but also the potential future outcomes of creating that call, like scope sneak in projects. These costs are crucial afterward when handling future project planning. 2. Establish a worth framework for your costs and benefits. As stated in Step No. 1, having more costs or benefits does not mean anything unless you assign a weighted value to every point. This value framework usually consists of cash , since everything you are doing as a business will either contribute to or deduct from your bottom line. Allocating monetary values to your costs and benefits in some cases could be easy, like determining the salary of a replacement hire or calculating the yearly cost of shopping for a replacement software tool. There are points that are not as upfront and obvious, like the time spent training your employees on the way to use software that might rather be spent working. Producing cost analysis like these would require some math on your part, like deciding the worth created through a particular amount of labor during a certain amount of your time. Tips for establishing a worth framework are as follows: IT303: SYSTEMS ANALYSIS AND DESIGN 85 UNIT 2: Systems Planning Sort your costs by type. There are all kinds of costs involved during this quite analysis; a) Breakdown of One Time Cost Worksheet and Recurring Cost Breakdown of One Time Cost Worksheet included costs such as development costs (developer's honoraria), user training expenses (trainer's honoraria and training kit supplies), additional hardware and software for the proposed system (devices, computer, etc.), and recurring cost(software maintenance, incremental communication, and software license renewal etc.). Recurring cost should also be computed, which is the sum of all recurring expenses, including any costs that the company is regularly incurring. (Note: Figure 2.8 below are a detailed example of the said Breakdown of One Time Cost Worksheet and Recurring Cost) Figure 2.8 Breakdown of One Time Cost Worksheet b) Breakdown of Tangible Benefit Worksheet included costs such as annual supplies cost of all consumed in the proposed system(pen, ballpen, folder, paper, ink, etc.) and labor cost of all involved in the proposed system (employees salary). Sort out your costs by each type for identification purposes. IT303: SYSTEMS ANALYSIS AND DESIGN 86  UNIT 2: Systems Planning Figure 2.9 Breakdown of Tangible Benefit Worksheet Figure 2.9 above shows a detailed example of the Breakdown of Tangible Benefits Worksheet, which includes explicit computation of supplies cost consumed annually, both the existing and proposed system, labor cost for annual employee's salary expenses of both the existing and proposed system. Create best-case vs. worst-case scenarios. Since a number of these costs/benefits are certain, while others are not set in stone (such as rent vs. productivity levels), it is just to run several potential value scenarios with each uncertain factor. Benefits are presumably to be suffering from these scenarios since they were not as easily quantified. It should be incorporated into any contingency plans you will eventually draw up afterward before executing a business decision or project. Benefits can be quantified by getting the Total Cost Reduction, which is the sum of what you save in the salary of the employees and the supplies that you use through the enhancement of the existing system. You can also assume an additional labor cost in the employee's salary through system upgrade. (Note: Figures 2.9 above and Figures 2.10 and 2.11 shown below are examples of that said quantifiable benefits). IT303: SYSTEMS ANALYSIS AND DESIGN 87 UNIT 2: Systems Planning Figure 2.10 Additional Cost Reduction Based on Employees Salary Figure 2.11 Computation of Net Economic Benefit Worksheet IT303: SYSTEMS ANALYSIS AND DESIGN 88  UNIT 2: Systems Planning 3. Perform cost-benefit analysis. There are several reasons for employing an analysis, the obvious one is to work out the anticipated financial returns and profitability of an investment or a project. Afterward, different options are compared with one another supported cost-benefit analysis. It is an idea for decision-making and, therefore, the selection of the choice or choice to choose (source). It is usually included within the project business case and an important step to try before initiating a data system project. The initial analysis results also function as a baseline for the measurement of success in an ongoing project. Thus, they assist project managers, sponsors, and other stakeholders to live, monitor, and manage the worth a project is creating against the first expectation. (Sebastian, 2020) Once you have assigned values to every cost and benefit, it's time to gauge whether your proposed action would offer a positive benefit to your business. In order to conduct this analysis, you need to use the subsequent formulas: Once you have assigned values to each cost and benefit, it is time to assess whether your proposal would provide a positive benefit to your business. In order to conduct this analysis, you will need to use the following formulas:  Net Economic Benefit =Total Cost Reduction+Error Cost Reduction  Discount Rate = [1 ( / (1 + i)^n )  Where:  i = Discount rate (or interest rate)  n = the number of year in the future the cash flow is  PV of Benefits= Net Economic Benefits * Discount Factor  One Time Cost =Total Development Cost + Total User Training + Total Additional Hardware/Software  PV of Recurring Cost= Recurring Cost * Discount Rate  Overall NPV=NPV of All Benefits-NPV of All Costs The results of the Cost-Benefit Analysis can be used to assess and consider certain risks of a project. An example is finding the NPV, ROI and payback period, which are vital to find out in a proposed system project. How NPV, ROI, and Payback Period Works? When deciding to acquire new technology or business asset, companies typically assess if the said investment will have a short return payback using financial metrics like return on investment (ROI), net present value (NPV), and payback period. ROI, NPV, and payback period interest both the customer and seller because they are the inspiration for building a business case for the investment. These 3 metric tools are used for comparison of your investment IT303: SYSTEMS ANALYSIS AND DESIGN 89  UNIT 2: Systems Planning options with other competing business project proposals having an equivalent amount of capital or budget. So, ROI, NPV, and payback period, what exactly are they, and what do they tell us? What is ROI? Return on investment may be a percentage that represents internet value received from an investment over a given period of your time. The ROI Formula: Note: Represented in percentage value (it can be multiplied by 100) and multiplied on a given period of time based on the projection of the project life span. For example, if your company invests PHP500,000 in technology and realizes profits from that investment of PHP800,000, it is as simple as using this formula(PHP800,000 – PHP500,000) / PHP500,000 = 60%. ROI is very simple. It tells how you can gain profit from an investment over a given period of your time. One of the significant drawbacks of ROI is that it does not consider the value of cash, this might be true if the first or second year ROI is positive, but if ROI is not positive until year four or five, then this might not be a wise investment. This is also the reason why the normal time period in Break Even Analysis Table is usually 0 to 5 years approximately, and it is considered the ideal project life span for a good projection of a system project. If your ROI value is positive, then it indicates your action would benefit your business. A negative result would only mean profit loss. Once you have determined this result, then you can make the decision to either pursue or leave the action behind. (Note: Figure 2.12 below is an example of the ROI Computation.) Figure 2.12 Example ROI Computation Taken from Break Even Analysis Table What is NPV? Compared to ROI, NPV may be a bit complicated when it involves Net Present Value (NPV) which is usually employed by technology and business asset investors because it converts the multi-year benefits and costs of investment into today's Peso value (or other currency value). This makes it easier to match investment options. Investors can check out this "normalized" value alongside other factors (like strategic importance and risk) when making decisions. (Kenton, 2020) IT303: SYSTEMS ANALYSIS AND DESIGN 90  UNIT 2: Systems Planning Most companies are continuously making decisions on the way to manage their cash inflows and cash outflows like for instance; they will need to decide between:  Reducing debt, which yields a return supported their interest rate; Investing in their own stock;  Hiring additional employees  Acquiring technology to manage productivity In order to level the playing field regarding riskier options (like acquiring a business or technology), companies establish an expected annual financial return percent (or hurdle rate). Projections for a proposed investment must exceed the hurdle rate to be viable. The NPV formula Net Present Value (NPV) of a series of money flows supported by a specified discount rate. The NPV formulas are useful for financial analysis when determining the worth of an investment NPV for a Series of Money Flows In most cases, a securities analyst must calculate the Net Present Value of a series of money flows, not only one individual income. The formula works within the same way; however, each income has to be discounted individually, then all of them are added together. (Kenton, 2020) NPV Formula Below is the formula for computing the present value of annual cash flow. Where: NPV: Net Present Value F : Future payment (cash flow) i :Discount rate (or interest rate) n :number of periods in the future the cash flow is NPV Formula in Excel Mostly analyst never computes net present value manually, nor with a calculator. Instead, they use MS Excel. =NPV(discount rate, series of money flow) Example of the way to use the NPV function: 1. Set a discount factor rate during a cell. 2. Set up a series of cash flows (must be in consecutive cells). 3. Use this function formula in MS Excel: NPV= NPV( Discount Factor Percentage, Value of Cash Flow Cells from Year 1 to Year 5 not included the Year 0) + the Value of Year 0. IT303: SYSTEMS ANALYSIS AND DESIGN 91  UNIT 2: Systems Planning See Sample computation below: Figure 2.13 Example Calculation of Net Present Value in MS Excel As shown in Figure 2.13 we used 12%, assuming that the placeholder discount rate (hurdle rate) is 12% during that time. Remember that this percentage needs to be updated with the particular discount rate factor or current rate of inflation during the amount where the project is initiated. Using 12%, we will calculate the "discount factor" annually. To do the cash flows discounting, we divide the income every year by its discount factor. All we are doing is discounting the worth every year by 12%. As we enter the longer term, we add another 12% discount annually. (Note: The automatic calculation of that discount factor which will be discussed in the MS Excel Spreadsheet by your Instructor within the discussion of the example given in Figure 2.13 above.) What Is the Payback Period? Payback period (break-even point) – the point in time at which the increased cash flow (benefits) settle the costs of development and operation. Simply put, the payback period is that the length of some time an investment reaches a break-even point. It directly affects the desirability of an investor to proceed with the proposed project. Shorter paybacks mean more attractive investments. The shorter you will get your payback means the higher for you to take a position your money while the longer it can catch on means not so desirable for an investor or sponsor. (Kagan, 2020) IT303: SYSTEMS ANALYSIS AND DESIGN 92  UNIT 2: Systems Planning Figure 2.14 Example Calculation of Payback Period in MS Excel Figure 2.14, which was taken from the Break-Even Analysis Table shown a specific example of how you will get an actual payback or break-even point. This is done by computing your Yearly NPV Income on the lower portion of your Break-Even Analysis Table, followed by Overall NPV CAshflow for you to work out your running balance in your investment. Overall NPV Income turns positive during the period of Year 3. Seek out how the calculation is done in MS Excel, below is the mathematical formula for calculating the payback period. The actual Payback Period or Break-Even Point has often computed counting on when the general NPV reaches its positive value. Once you get the particular number of payback year period then the solution to its reach point is going to be multiplied by twelve (12) because we have twelve (12) months a year to get the exact number of months, the decimal value to the present answer will then be multiplied by 30 which is that the average number of days during a month for you to urge the particular number of days. When you are done, add it with the implementation date of the project to come up with the particular date of the payback period or break-even point. IT303: SYSTEMS ANALYSIS AND DESIGN 93 UNIT 2: Systems Planning Figure 2.15 Example of Break-Even Analysis Table IT303: SYSTEMS ANALYSIS AND DESIGN 94  UNIT 2: Systems Planning Figure 2.16 Example of Payback Period Analysis Table Figure 2.16 in which data was taken from the Break-Even Analysis Table in Figure 2.15 shows a reflection of how actual payback or break-even point through a line graph chart where it shows that the X and Y-Axis meet in almost the middle period of Year 3 and Year 4 which is logically in accordance with our initial estimation of Year 3, 5 months and 16 days. IT303: SYSTEMS ANALYSIS AND DESIGN 95  UNIT 2: Systems Planning APPLICATION ACTIVITY FOR LESSON 3 HOW DO YOU APPLY WHAT YOU HAVE LEARNED? Practice Tasks Name:_______________________________________________Score:_________ Year & Section:________________________________________Date:__________ PROJECT SCHEDULING TASKS This activity can be used to assess the level of understanding of the learners, to proceed with a practical activity after engaging themselves to newly acquired knowledge about principles or theories learned about project scheduling techniques. This approach is a good motivation for learners to apply what they recall or remember in the previous lesson. Ana Santos owns a frozen food company and wants to develop an information system for tracking shipments to warehouses. DESCRIPTION TASK MUST FOLLOW TIME IN (WEEKS) Draw data flow A NONE 5 Draw decision tree B A 4 Revision tree C B 10 Write up project D C 4 Organize data dictionary E A 7 Do output prototype F E 4 Revise output design G F 9 Write use cases H E 10 Design database I A 8 Guidelines for this activity are as follows: PART I. Creating Project Gantt Chart (25 PTS) 1. Assuming that project will start on November 1, 2020. Using the given data from the table above, use the previous template that was given to you in the previous lesson to draw a Gantt chart to help Ana organize her project design. 2. Put the name of the system followed by the name of the owner and date of the start of the project at the top of your Gantt Chart. (5 pts.) 3. Plot the identified tasks that were given in the table for Ana's Project Gantt chart. (10 pts.) 4. Compute for the duration of project development in weeks and put it below your Gantt Chart, including the estimated completion date of the project. (5 pts.) IT303: SYSTEMS ANALYSIS AND DESIGN 96 UNIT 2: Systems Planning APPLICATION ACTIVITY FOR LESSON 3 (Continuation…) HOW DO YOU APPLY WHAT YOU HAVE LEARNED? 5. Identify which among the tasks that Ana needs to accomplish will be chosen as your critical path using your own legend. (5 pts.) 6. For those who are in the RPL mode of learning, GANTT Chart needs to create