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![2003 2004 2005 Total
Increased sales from new customers 0 750,000 772,500
Increased sales from existing customers 0 1,875,000 1,931,250
Reduction in customer complaint calls 0 50,000 50,000
Total Benefits: 0 2,675,000 2,753,750
PV of Benefits: 0 2,521,444 2,520,071 5,041,515
PV of All Benefits: 0 2,521,444 5,041,515
Labor: Analysis, Design and Implementation 162,000 0 0
Consultant Fees 50,000 0 0
Office Space and Equipment 7,000 0 0
Software and Hardware 35,000 0 0
Total Development Costs: 254,000 0 0
Labor: Webmaster 85,000 87,550 90,177
Labor: Network Technician 60,000 61,800 63,654
Labor: Computer Operations 50,000 51,500 53,045
Labor: Business Manager 60,000 61,800 63,654
Labor: Assistant Manager 45,000 46,350 47,741
Labor: 3 Staff 90,000 92,700 95,481
Software upgrades and licenses 4,000 1,000 1,000
Hardware upgrades 5,000 3,000 3,000
User training 2,000 1,000 1,000
Communications charges 20,000 20,000 20,000
Marketing expenses 25,000 25,000 25,000
Total Operational Costs: 446,000 452,700 464,751
Total Costs: 700,000 452,700 464,751
PV of Costs: 679,612 426,713 425,313 1,531,638
PV of all Costs: 679,612 1,106,325 1,531,638
Total Project Costs Less Benefits: (700,000) 2,222,300 2,288,999
Yearly NPV: (679,612) 2,094,731 2,094,758 3,509,878
Cumulative NPV: (679,612) 1,415,119 3,509,878
Return on Investment (ROI): 229.16% (3,509,878/1,531,638)
Break-even Point (BEP): 1.32 years (BEP in Year 2 = [2,094,731 – 1,415,119] / 2,094,731 = 0.32)23](https://image.slidesharecdn.com/2-feasibility-study-181002084146/75/2-feasibility-study-23-2048.jpg)
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2 feasibility-study
The document provides an overview of conducting a feasibility analysis for a proposed project. It discusses the three main components of a feasibility analysis: technical feasibility, economic feasibility, and organizational feasibility. Technical feasibility examines the risks associated with familiarity with the application and technology, project size, and compatibility with existing systems. Economic feasibility assesses return on investment, break-even point, and costs/benefits. Organizational feasibility considers strategic alignment, project champions, management support, and user adoption. The document provides templates and examples for evaluating each of these factors to determine if a proposed project is feasible.
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2 feasibility-study
- 1.
- 2. Feasibility Analysis 1. Technicalfeasibility: Can we build it? 2. Economic feasibility: Should we build it? 3. Organizational feasibility: If we build it, will they come? 2
- 3. Feasibility Analysis 1 Technical Feasibility •Familiarity with application: Less familiarity generates more risk • Familiarity with technology: Less familiarity generates more risk • Project size: Large projects have more risk • Compatibility: The harder it is to integrate the system with the company’s existing technology, the higher the risk will be 2 Economic Feasibility • Return on Investment (ROI) • Break Even Point (BEP) • Intangible Benefit 3 Organizational Feasibility • Is the software project strategically aligned with the business? 3
- 4. Technical Feasibility Familiarity with application •Knowledge of business domain • Need to understand improvements • Need to recognize pitfalls and bad ideas Familiarity with technology • Is technology new to this organization? • Is this a brand new technology? • Extension of existing firm technologies Project size • Number of people, time, and features Compatibility • Systems are not built in a vacuum • Needs to integrate with current systems and data 4
- 5. Economic Feasibility: ShouldWe Build It? 5
- 6. Cost-Benefit Analysis -Cash Flow • Project costs and benefits over several years (3–5) • Use normal growth rates for sales etc. • Total added to determine • Overall Benefits = Total Benefits – Total Costs • Higher number is better 6
- 7. Cost-Benefit Analysis -Cash Flow 7
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- 9. Present Value (PV) •The amount of an investment today compared to the same amount n years in the future • Taking into account inflation and time PV = Amount (1 + Interest Rate)n 9
- 10. Net Present Value 395,463 03.01 201,537 5 10
- 11. Net Present Value(NPV) The present value of benefit less the present value of cost NPV = PV Benefits – PV Costs 11
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- 13. Return on Investment(ROI) The Amount of revenue or cost savings results from a given investment ROI = Total Benefits – Total Costs Total Costs 13
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- 15. Break Even Point(BEP) The point in time when the costs of the project equal the value it has delivered BEP = * Use the yearly NPV amount from the first year in which project has positive cash flow Yearly NPV* – Cumulative NPV Yearly* NPV 15
- 16. Break Even Point(BEP) 16
- 17. Organizational Feasibility • StrategicAlignment • How well does the project match up with the business strategy? • Stakeholder analysis considers • Project champion (Product Owner) • Organizational management • System users • Anybody affected by the change 17
- 18. Stakeholder Analysis Considers •Project champion(s) • High-level non-IS executive • Shepherds project to completion • It's good to have more than one • Organizational management • Need this support to sell system to organization • System users • In the loop so end system meets needs 18
- 19.
- 20. Feasibility Analysis Template TechnicalFeasibility: Can We Build It? 1. Familiarity with Application: Less familiarity generates more risk 2. Familiarity with Technology: Less familiarity generates more risk 3. Project Size: Large projects have more risk 4. Compatibility: The harder it is to integrate the system with the company’s existing technology, the higher the risk Economic Feasibility: Should We Build It? 1. Return on Investment (ROI) over 3 years 2. Break-even Point (BEP) 3. Total benefit after 3 years Organizational Feasibility: If We Build It, Will They Come? 1. Project champion(s) 2. Senior management 3. Users 4. Other stakeholders 5. Is the project strategically aligned with the business? 20
- 21. CD Selection InternetOrder Feasibility Analysis Executive Summary Margaret Mooney and Alec Adams created the following feasibility analysis for the CD Selections Internet Order System Project. The System Proposal is attached, along with the detailed feasibility study Technical Feasibility The Internet Order System is feasible technically, although there is some risk. CD Selections’ risk regarding familiarity with the application is high • The Marketing Department has little experience with Internet-based marketing and sales • The IT Department has strong knowledge of the company’s existing order systems; however, it has not worked with Web-enabled order systems CD Selections’ risk regarding familiarity with the technology is medium • The IT Department has relied on external consultants and an Information Service Provider to develop its existing Web environment • The IT Department has learned about Web technology by maintaining the corporate site • Development tools and products for commercial Web application development are available in the marketplace, although the IT department has little experience with them The project size is considered medium risk • The project team likely will include less than ten people • Business user involvement will be required • The project timeframe cannot exceed a year because of the Christmas holiday season implementation deadline, and it should be much shorter The compatibility with CD Selections’ existing technical infrastructure should be good • The current Order System is a client-server system built using open standards. An interface with the Web should be possible • Retail stores already place and maintain orders electronically • An Internet infrastructure already is in place at retail stores and at the corporate headquarters21
- 22. Economic Feasibility A cost–benefitanalysis was performed; see attached spreadsheet for details. A conservative approach shows that the Internet Order System has a good chance of adding to the bottom line of the company significantly. • Return on Investment (ROI) over 3 years: 229 percent • Break-even point (BEP): after 1.7 years • Total benefit after three years: $3.5 million (adjusted for present value) Intangible Costs and Benefits • Improved customer satisfaction • Greater brand recognition Organizational Feasibility • From an organizational perspective, this project has low risk. The objective of the system, which is to increase sales, is aligned well with the senior management’s goal of increasing sales for the company. The move to the Internet also aligns with Marketing’s goal to become more savvy in Internet marketing and sales. • The project has a project champion, Margaret Mooney, Vice President of Marketing. Margaret is well positioned to sponsor this project and to educate the rest of the senior management team when necessary. To date, much of senior management is aware of and supports the initiative. • The users of the system, Internet consumers, are expected to appreciate the benefits of CD Selections’ Web presence. And, management in the retail stores should be willing to accept the system, given the possibility of increased sales at the store level.22
- 23. 2003 2004 2005Total Increased sales from new customers 0 750,000 772,500 Increased sales from existing customers 0 1,875,000 1,931,250 Reduction in customer complaint calls 0 50,000 50,000 Total Benefits: 0 2,675,000 2,753,750 PV of Benefits: 0 2,521,444 2,520,071 5,041,515 PV of All Benefits: 0 2,521,444 5,041,515 Labor: Analysis, Design and Implementation 162,000 0 0 Consultant Fees 50,000 0 0 Office Space and Equipment 7,000 0 0 Software and Hardware 35,000 0 0 Total Development Costs: 254,000 0 0 Labor: Webmaster 85,000 87,550 90,177 Labor: Network Technician 60,000 61,800 63,654 Labor: Computer Operations 50,000 51,500 53,045 Labor: Business Manager 60,000 61,800 63,654 Labor: Assistant Manager 45,000 46,350 47,741 Labor: 3 Staff 90,000 92,700 95,481 Software upgrades and licenses 4,000 1,000 1,000 Hardware upgrades 5,000 3,000 3,000 User training 2,000 1,000 1,000 Communications charges 20,000 20,000 20,000 Marketing expenses 25,000 25,000 25,000 Total Operational Costs: 446,000 452,700 464,751 Total Costs: 700,000 452,700 464,751 PV of Costs: 679,612 426,713 425,313 1,531,638 PV of all Costs: 679,612 1,106,325 1,531,638 Total Project Costs Less Benefits: (700,000) 2,222,300 2,288,999 Yearly NPV: (679,612) 2,094,731 2,094,758 3,509,878 Cumulative NPV: (679,612) 1,415,119 3,509,878 Return on Investment (ROI): 229.16% (3,509,878/1,531,638) Break-even Point (BEP): 1.32 years (BEP in Year 2 = [2,094,731 – 1,415,119] / 2,094,731 = 0.32)23
- 24. Exercise: Membuat FeasibilityAnalysis 1. Lihat contoh Feasibility Analysis untuk Internet Order Project 2. Perhatikan kembali System Request yang sebelumnya sudah kita buat 3. Buat Feasibility Analysis dari system yang akan kita buat tersebut 24
- 25. Referensi 1. Alan Denniset al, Systems Analysis and Design with UML 4th Edition, John Wiley and Sons, 2013 2. Kenneth E. Kendall and Julie E Kendall, Systems Analysis and Design 8th Edition, Prentice Hall, 2010 3. Hassan Gomaa, Software Modeling and Design: UML, Use Cases, Patterns, and Software Architectures, Cambridge University Press, 2011 4. Gary B. Shelly and Harry J. Rosenblatt, Systems Analysis and Design 9th Edition, Course Technology, 2011 5. Howard Podeswa, UML for the IT Business Analyst 2nd Edition, Course Technology, 2009 6. Jeffrey A. Hoffer et al, Modern Systems Analysis and Design 6th Edition, Prentice Hall, 2012 25