Making business case for IS Asper School of Business University of Manitoba Systems Analysis & Design Instructor: Bob Travica Updated: September 2014

3510 Systems Analysis & Design * Bob Travica2 Outline Business and systems planning Business Case Feasibility kinds Risk management

3510 Systems Analysis & Design * Bob Travica3 Business and systems planning Business comes first, then systems Business strategy determines systems strategy Case: Rocky Mountain Outfitters (RMO) in the book

3510 Systems Analysis & Design * Bob Travica4 RMO Case Business: Manufacture and distribute sports clothing. Strategic goal: Support growth through business-to-consumer e-commerce. Systems strategy: Develop new customer support system (CSS) that fits business goals. In 2010s, social media are part of the e-commerce context.

3510 Systems Analysis & Design * Bob Travica5 RMO Case (cont.) What should system analyst’s do first: Understand customer-related tasks (e.g., product search, ordering) Investigate current IS Define objectives of new CSS Create planning documentation As any system, CSS is developed via a system development project project organization & team work matter

3510 Systems Analysis & Design * Bob Travica6 Business case (See pp ) Business Case = Assessment of a system’s feasibility and risks. Feasibility: 1. Economic (benefits vs. costs of IS? Next slides …) 2. Technological (expertise to develop & use IS? IT maturity?*) 3. IS Development Project aspects (size, complexity?) 4. Organizational factors (IS culture & politics?)** 5. Scheduling (development timing vs. a company’s time constraints?) 6. Resource (sufficient staff available?)

3510 Systems Analysis & Design * Bob Travica7 Economic feasibility: System benefits Reduced execution time Online store example Common Productivity Challenging Quality eliminates re-working

3510 Systems Analysis & Design * Bob Travica8 System costs One-time tangible costsRecurring tangible costs Online store example Online store example

Matching costs with benefits Use some financial model (NPV, Break-Even analysis, Return on Investment…)NPV Intangible costs & benefits – can be part of feasibility case common way: listing & trying to project conversion of intangible benefits into tangibles better way: formal methods like Balanced Scorecard 3510 Systems Analysis & Design * Bob Travica9

10 Risk management Risk = undesirable events affecting feasibility aspects during IS development project in production stage of an IS can be calculated (later slide)

3510 Systems Analysis & Design * Bob Travica11 Risk analysis Technological Factors: - Developers - Users Organizational factors Project factors

3510 Systems Analysis & Design * Bob Travica12 Risk analysis (cont.) Risk level= Risk Factor Weight (Impact)*Occurrence Likelihood (p) Example*; scales of Risk and Risk Factor: 0 (low)-10 (high), probability scale: 0-1: Key developer unavailability: weight=7, p=0.6; Risk=7*0.6=0.42 Legal problems, weight=7, p=0.3; Risk=7*0.3=0.21 Key developer unavailability risk > Legal risk To run the formula on risk frameworks, some re-wording may be needed (check table on slide 11) See Note bellow