11 CPIT 456 by Dr. M. Rizwan Jameel Qureshi Chapter 2

2 What is Technical Feasibility?

3 TECHNICAL FEASIBILITY Technical feasibility is composed of estimating: Hardware cost (HW); SW cost. SW cost includes the purchasing of SW required to develop the project, such as OS, server, front end and back end. HW cost includes the purchasing of HW required to develop the project, such as number of system units, monitors, keyboards, mousses and printers.

4 What is Operational Feasibility?

5 Operational Feasibility The operational cost includes all cost that is required to run the SW system operationally at all sites of the organization. It includes the computer terminals needed at each office, the cabling to establish network, salary required hiring computer operators and backup cost.

6 What is Schedule Feasibility?

7 Schedule Feasibility Schedule feasibility is used to display total scheduled time vs. the activities performed needed to complete the project. There are two main types of charts are drawn to represent schedule feasibility. – Gantt chart – PERT chart Gantt chart displays the activities against the time as a horizontal bar only whereas PERT chart also displays the interaction among the activities. PERT chart abbreviation is Program Evaluation and Review Technique. Time overlapping activities can be seen using the Gantt chart where as which activities can be done in parallel

8 Management Issues Who is going to finance the project? Who is/are suspected customer/s? Who is the champion of the project in the top management? How to manage risks regarding the project?

9 What is Costs-Benefits Analysis Sheet? Project manager prepares costs-benefits analysis sheet at the end of proposal document showing the tangible benefits of the SW system against the cost. The overall objective of costs-benefits analysis sheet is to show to the stakeholders that benefits would recover the investment cost.

10 The Main Criteria To Approve The Proposal Or PSD Or Baseline Plan How much the new system will save costs? When and where cost will be saved? How much new system will improve the organizational processes and information processing? How much better services are provided to customers? Will the system implement within affordable time? Is the organization having required resources? The benefits are long term or short term. Long-term benefits are covering the development cost or not.

11 Main benefits of the Baseline Plan To uncover main functional requirements. Track the project in the correct direction. To remove all misunderstandings and uncertainties regarding the project. Users can makeup their mind before a detailed analysis is made. To maintain a feedback loop among the customer, analyst and the developer. It is easy for an analyst to trace and manage the effects on the base line plan whenever a change is made in the project scope or goals

12 Make-Buy Decisions Make-buy decisions method is a graphical representation of alternative solutions using a decision tree. The alternative solutions could be: – Purchased off-the-shelf components; – Reuse full experienced or partially experienced components and then integrate to meet the specific needs; – Customized internal SW development; – Contract the SW house. The project director calculates the expected cost of each path and evaluates the least cost path.

13 Make-Buy Decisions The formula to calculate the expected cost cost = ∑ (path probability) * estimated cost Project manager used the make-buy decisions based on the following conditions

14 Problem 1

15 Problem # 1 The decision tree for a SW-based system ‘X’: – Internal SW development from scratch; – Reuse existing partial experienced components; – Customized off-the-shelf SW; – Contract to the SW house. – Calculates the least cost by using the decision tree.

16 Solution Expected cost (build) = 0.3 *($ 380 K) + 0.7* ($450K) = $ 429 K

17 Solution Expected cost (reuse) = 0.4 *($ 275 K) * [0.2*($310K) *(490K)] = $ 382 K Expected cost (buy) = 0.7 * ($ 210 K) + 0.3*($400K) = $ 267 K Expected cost (contract to SW house) = 0.6* ($ 350 K) *($500K) = $ 410 K It is clear that expected cost of buying the off-the- shelf SW is the least among all paths.