Chapter 2

Phase Description Systems planning is the first of five phases in the systems development life cycle (SDLC) In this phase, you will learn how IT projects get started and how a systems analyst evaluates a proposed project and determines its feasibility

Chapter Objectives Explain the concept of a business case and how a business case affects an IT project Describe the strategic planning process and why it is important to the IT team Explain the purpose of a mission statement 3

Chapter Objectives Describe the SDLC, and explain how it serves as a framework for systems development and business modeling Describe risks and risk management features List the reasons for information systems projects and the factors that affect such projects 3

Chapter Objectives Explain the initial review of systems requests and the role of the systems review committee Define operational feasibility, technical feasibility, economic feasibility, and schedule feasibility Describe the steps in a preliminary investigation and the end product of an investigation

Introduction The term business case refers to the reasons, or justification, for a proposal Systems development typically starts with a systems request, followed by a preliminary investigation, which includes a feasibility study 4

Introduction During the systems planning phase of the SDLC: Project requests are reviewed and approved Project requests are prioritized Resources, such as money, people, and equipment, are allocated Project development teams are formed

Strategic Planning – A Framework for IT Systems Development Strategic planning is the process of identifying long-term organizational goals, strategies, and resources Strategic Planning Overview SWOT analysis 4

Strategic planning overview The system analyst need to know about strategic planning. And consider these planning as they carry out their day to day responsibilities. During strategic planning top managers ask a series of questions that is called a SWOT analysis, because it examines a company’s strengths (s), weakness (W), opportunities (O), and threats (T). Each questions may lead to an IT related issues which in turn requires more review, analysis, and planning.

A company develops a mission statement based on the firm’s purpose, vision, and values. The mission statement is the foundation for the company’s major goal, shorter term objectives, and day to day.

The mission statement describes a company for it’s stockholders and briefly states the company's overall purpose, products, services and values. Stockholders include any one affected by the company’s operation, such as customers, employees, suppliers, stockholders, and members of the community.

Strategic Planning – A Framework for IT Systems Development From Strategic Plans to Business Results Mission statement Stakeholders Goals Objectives

The mission stamens is the starting point The mission stamens is the starting point. Next the company identifies a set of goals that will accomplish the mission. Example, the company might establish one year, three year, and five year goals for expanding market share. To achieve those goals, the company develops a list of shorter term objects. If the goal is to increase web based order by 30 percent next year, a company set quarterly objectives with monthly millstones.

Strategic Planning – A Framework for IT Systems Development In a Business study you need to consider Critical success factors Factors must be archived for enterprise to fulfill it’s mission. Critical business issues Issues that are the key problems, opportunities, and constrains that affect and shape the firms decisions. Case for action A summary of the project request and a specific recommendation.

Strategic Planning – A Framework for IT Systems Development The Role of the IT Department in Project Evaluation Management leadership and information technology are linked closely, and remarkable changes have occurred in both areas Today, systems development is much more team oriented new approach like JAD and RAD that is involve groups of users, managers and IT staff working together. Although team-oriented development is the norm, some companies see the role of the IT department as a gatekeeper

Strategic Planning – A Framework for IT Systems Development The Future If you could look into the future, here is what you might see: New industries, products, and services emerging from amazing advances in information technology, customers who expect world-class IT support, a surge in Internet-based commerce, and a global business environment that is dynamic and incredibly challenging. The company should see the opportunities and create a strategic plan.

What Is a Business Case? Should be comprehensive, yet easy to understand Should describe the project clearly, provide the justification to proceed, and estimate the project’s financial impact

A business case should answer questions such as: Why are we doing this project? What is the project about? How does this solution address key business issues? How much will it cost and how long will it take? What is the return on investment? What risks are the risk of doing and not doing the project? How will we measure success? What alternatives do we have?

Information Systems Projects The star point of most projects is system request, which is a formal way of asking for asking for IT support. Main Reasons for Systems Projects are: Systems request Improved service Support for new products and services Better performance More information Like a system that predict market trend Stronger controls of security and data Encryption and biometric devices Reduced cost

Information Systems Projects Factors that Affect Systems Projects Internal and external factors affect every business decision that a company makes, and IT systems projects are no exception

Information Systems Projects Internal Factors Strategic plan. It sets the overall direction of company Top managers. It is the prim source of large scale system project User requests. Sales rep might request changes to companies website Information technology department. like purposing new data or reporting collection system Existing systems and data. Errors or problem in existing system

Information Systems Projects External Factors Changing Technology Barcode replaced by Electronic product code (EPC) Suppliers Suppliers With the growth of electronic data interchange, the companies data should be compatible with supplier data it also enable Just-in-time (JIT) inventory system which is computer to computer data exchange

Information Systems Projects External Factors Customers Companies implement Customer Relationship Management (CRM) Customer may need Electronic proof of delivery (EPOD) Competitors The economy Government example is income tax reporting requirements must be designed with payroll package.

Information Systems Projects Project Management Tools All IT projects, large and small, must be managed and controlled Project management begins with a systems request, and continues until the project is completed or terminated Risk Management Every IT project involves risks that system analysts and IT project managers must address Risk management

Evaluation of Systems Requests Systems review committee Computer resources committee Systems Requests Forms

Evaluation of Systems Requests Systems Review Committees Most large companies use a systems review committee to evaluate systems requests Many smaller companies rely on one person to evaluate system requests instead of a committee The goal is to evaluate the requests and set priorities Disadvantage: action on request should wait until the committee meets.

Overview of Feasibility A systems request must pass several tests, called a feasibility study, to see whether it is worthwhile to proceed further

Overview of Feasibility Operational feasibility If the purposed system will be used effectively after it had been developed Technical Feasibility Technical feasibility refers to technical resources needed to develop, purchase, install, or operate the system Economic Feasibility Total cost of ownership (TCO) Tangible benefits that can be measured by company like reducing overtime Intangible benefits that are difficult to measure in dollar like sale tracing system Schedule Feasibility

Evaluating Feasibility The first step in evaluating feasibility is to identify and weed out systems requests that are not feasible Even if the request is feasible, it might not be necessary Feasibility analysis is an ongoing task that must be performed throughout the systems development process

Setting Priorities The highest priority goes to the project that provide the greatest benefit, at the lowest cost, in the shortest period of time

Factors that Affect Priority Will the proposed system reduce costs? Where? When? How? How much? Will the system increase revenue for the company? Where? When? How? How much? Will the systems project result in more information or produce better results? How? Are the results measurable? Will the system serve customers better? Will the system serve the organization better?

Factors that Affect Priority Can the project be implemented in a reasonable time period? How long will the results last? Are the necessary financial, human, and technical resources available? Whenever possible, the analyst should evaluate a proposed project based on tangible costs and benefits that represent actual (or approximate) dollar values

Setting Priorities Discretionary and Nondiscretionary Projects Projects where management has a choice in implementing them are called discretionary projects Projects where no choice exists are called nondiscretionary projects Some people believe that the committee does not be involve with Nondiscretionary project , others believe that the committee should know about the nondiscretionary project to make reasonable plan for other project

Preliminary Investigation Overview Preliminary investigation to study the system request and recommend specific action. The end product is a report to manager Interaction with Managers and Users

Planning the Preliminary Investigation During a preliminary investigation, a systems analyst typically follows a series of steps The exact procedure depends on the nature of the request, the size of the project, and the degree of urgency

Step 1: Understand the Problem or Opportunity A popular technique for investigating causes and effects is called a fishbone diagram, or Ishikawa diagram Pareto chart tool for Visualizing and Prioritizing issues that Need attention

Step 2: Define the Project Scope and Constraints Project scope , defining the boundaries of project Project without specification can get expanded without any control, in a process called project creep Constraint is a requirement or condition that system must satisfy. Present versus future. Is the constraint must meet as soon as the is developed or can be done if future

Internal versus external is the constraint due to requirement within the origination or is it from external force like government regulation Mandatory versus desirable is the constraint mandatory or desired. Regardless of the type, all constraints should be identified as early as possible to avoid future problems and surprises

Preliminary Investigation Overview Step 3: Perform Fact-Finding Fact-finding involves various techniques Fact-finding might consume several hours, days, or weeks Analyze Organization Charts

Step 3: Perform Fact-Finding Conduct interviews Determine the people to interview Establish objectives for the interview Develop interview questions Prepare for the interview Conduct the interview Document the interview Evaluate the interview

Step 3: Perform Fact-Finding Review documentation Observe operations Conduct a user survey Step 4: Evaluate Feasibility Evaluate the project’s operational, technical, economic, and schedule feasibility

Step 5: Estimate Project Development Time and Cost What information must you obtain, and how will you gather and analyze the information? What sources of information will you use, and what difficulties will you encounter in obtaining information? Will you conduct interviews? How many people will you interview, and how much time will you need to meet with the people and summarize their responses? Will you conduct a survey? Who will be involved? How much time will it take people to complete it? How much time will it take to prepare it and tabulate the results?

Step 5: Estimate Project Development Time and Cost How much will it cost to analyze the information gathered and to prepare a report with findings and recommendations? You should provide an estimate for the overall project, so managers can understand the full cost impact and timetable

Step 6: Present Results and Recommendations to Management The final task in the preliminary investigation is to prepare a report to management The format of the preliminary investigation report varies from one company to another

Atypical report might consist of the following sections: Introduction Systems request summary Findings Recommendations Project Roles - who will participate in the project Time & cost estimates Expected benefits- tangible and intangible benefits Appendix- reports and supporting information

Chapter Summary Systems planning is the first phase of the systems development life cycle Effective information systems help an organization support its business process, carry out its mission, and serve its stakeholders 49

Chapter Summary Strategic planning allows a company to examine its purpose, vision, and values and develops a mission statement, which leads to goals, objectives, day-to-day operations, and business results that affect company stakeholders Systems projects are initiated to improve performance, provide more information, reduce costs, strengthen controls, or provide better service 49

Chapter Summary Various internal and external factors affect systems projects During the preliminary investigation, the analyst evaluates the systems request and determines whether the project is from an operation, technical, economic, and schedule standpoint 49

Chapter Summary Analysts evaluate systems requests on the basis of their expected costs and benefits, both tangible and intangible The steps in the preliminary investigation are to understand the problem or opportunity; define the project scope and constraints; perform fact-finding; estimate the project’s benefits; estimate project development time and cost; and present results and recommendations to management 49

Chapter Summary The report must include an estimate of time, staffing requirements, costs, benefits, and expected results for the next phase of the SDLC Chapter 2 complete 49