S556 SYSTEMS ANALYSIS & DESIGN Week 12

Selecting Alternatives SLIS S556 2  Provide clients with some alternatives:  Long-term vs. short-term  Expensive vs. inexpensive

Cost-Benefit Analysis SLIS S556 3  1. Identify the problem clearly  2. Explicitly define the set of objectives to be accomplished  3. Generate alternatives that satisfy the stated objectives  4. Identify clearly the constraints (e.g., technological, political, legal, social, financial

Cost-Benefit Analysis SLIS S556 4  5. Determine and list the benefits and costs associated with each alternative  6. Calculate the benefit/cost ratios and other indicators (e.g., present value, payback period) for each alternatives  7. Prepare the final report, comparing the results

Cost-Benefit Analysis TitleBudget (Million) Domestic BO (M) World BO (M) The Lord of the Rings: The fellowship of the ring $109$313.8$860.7 The Two Towers $94$340.5$920.5 The Return of the king $94$377$ SLIS S

Cost-Benefit Analysis TitleBudget (Million) Domestic BO (M) World BO (M) The Lord of the Rings: The fellowship of the ring $109$313.8$860.7 The Two Towers $94$340.5$920.5 The Return of the king $94$377$ X-Men: First Class $160$146.4$352.6 SLIS S

Shortcomings of the B/C Methodology SLIS S556 7  Doesn’t identify the scale of the projects (ratio only)  Do not assess unquantifiable items in financial terms  Introduce biases in the approaches to a problem

Cost-Effectiveness  Effectiveness:  Value  Worth  Benefit  Utility  Gain  Performance  Establish criteria & use weight (see Shtub, et al., 1994, Figure 3-3) SLIS S556 8

Selecting Alternatives (Satzinger, et al., 2009) SLIS S556 9  Identifying criteria:  General requirements (Fig. 8-7, p. 308)  Functional requirements (Fig. 8-8, p. 309)  Technical requirements (Fig. 8-9, p. 310)

Risk-payoff Analysis (Yen & Davis, 1999)  Area 3: advance immediately  Area 4: do nothing until resources or the expected payoff increases  Area 1: wait until additional analysis reduces the risk  Area 2: stop immediately 10 SLIS S556 payoffs risks Area 1 high payoff high risk Area 3 high payoff low risk Area 2 low payoff high risk Area 4 low payoff low risk

Risk-Benefit Analysis (Shtub, et al., 1994, p. 134) SLIS S  Formulations  Problem (or risk) definition  Value system design  System synthesis  Analysis  Forecast failures  Optimization and refinement of alternatives  Interpretation  Decision making  Planning for action  Implementation

Analyzing Forces SLIS S  Force Field Analysis:  Is a method used to get a whole view of all the forces for or against a plan, so that  Helps decision making which takes into account all interests.  Is a specialized method of weighing pros and cons  Where a plan has been decided on, FFA allows you to look at all the forces for or against the plan. It helps you to plan or reduce the impact of the opposing forces, and strengthen and reinforce the supporting forces.

Analyzing Forces SLIS S  List all forces for change in one column, and all forces against change in another column.  Assign a score to each force, from 1 (weak) to 5 (strong).  Draw a diagram showing the forces for and against, and the size of the forces

Analyzing Forces SLIS S556 14

Adjusting Forces SLIS S  By training staff (increase cost by 1) fear of technology could be eliminated (reduce fear by 2)  It would be useful to show staff that change is necessary for business survival (new force in favor, +2)  Staff could be shown that the new machines will introduce variety and interest to their jobs (new force, +1)  Wages could be raised to reflect new productivity (cost +1, loss of overtime -2)  Slightly different machines with filters to eliminate pollution could be installed (environmental impact -1) These changes swing the balance from 11:10 (against the plan), to 8:13 (in favor of the plan)