1. Chapter 2
Analyzing the Business Case

2. Phase Description
Systems planning is the 1 of 5 phases in the systems development life cycle (SDLC)
Systems planning is where IT projects get started and how a systems analyst evaluates a proposed project and determines its feasibility

3. 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
Describe the SDLC, and explain how it serves as a framework for systems development and business modeling 3

4. Chapter Objectives
List the reasons for information systems projects and the factors that affect such projects
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 3

5. Chapter Objectives
Describe the steps in a preliminary investigation and the end product of an investigation

6. Introduction
The term business case refers to the reasons, or justification, for a proposal
A strong business case suggests that the company should pursue the alternative, above other options, because it would be in the firm’s best interest to do so 4

7. Information Systems Projects
Project Management Tools
All IT projects must be managed and controlled
Begins with a systems request, and continues until the project is completed or terminated
Figure 2-11

8. Reasons for Systems Projects
Other reasons: Government / customer compliance…

9. Drivers for Systems Projects
User requests
Management directive
Legacy system - no longer supported
IT department – stay up-to-date
Economic demands
Competition
Customer Demand
Suppliers

10. Evaluation of Systems Requests
Systems Requests Forms
Use a special form for systems requests
A properly designed form streamlines the request process and ensures consistency
Must be easy to understand and include clear instructions
Should include enough space for all required information and should indicate what supporting documents are needed

11. 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

12. To do or not to do a project.
1st – project to decide whether or not to pursue a project
Decide if to do – ROI/feasibility
Decide what to do
Decide when to do
Decide the approach
Build in-house
Buy turn-key
Out-source to a contractor

13. Strategic Planning – if to do
From Strategic Plans to Business Results
A company develops a mission statement based on the firm’s purpose, vision, and values
Figure 2-3

14. Overview of Feasibility – if to do
Figure 2-13

15. Overview of Feasibility – if to do
A systems request must pass several tests, called a feasibility study, to see whether it is worthwhile to proceed further
Operational Feasibility
A proposed system will be used effectively after it has been developed

16. Overview of Feasibility- if to do
Technical Feasibility
Refers to the technical resources needed
Economic Feasibility
Total cost of ownership (TCO)
Tangible benefits
Intangible benefits
Schedule Feasibility
Means that a project can be implemented in an acceptable time frame

17. Evaluating Feasibility – if to do
The first step 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

18. Strategic Planning – what to do
Strategic Planning Overview
SWOT
Examines a companies
strengths,
weaknesses,
opportunities, and
threats
Figure 2-2 4

19. Setting Priorities – when to do
Factors that Affect Priority
Will the systems project result in more information or produce better results? How? Are the results measurable?
Will the proposed system reduce costs? Where? When? How? How much?
Will the system increase revenue for the company? Where? When? How? How much?

20. Setting Priorities – when to do
Factors that Affect Priority
Will the system serve customers better?
Will the system serve the organization better?
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?

21. Setting Priorities – when to do
Factors that Affect Priority
Whenever possible, the analyst should evaluate a proposed project based on tangible costs and benefits that represent actual (or approximate) dollar values

22. Project Charter
Decision is made to proceed with a project, the project charter confirms and defines that decision.
Set limits or scope
Defines authority
Set time limit
Protects project manager by confirming CEO buy-in

23. Charter or contract Goal – objectives are steps for attaining the goal
Recommended course of action – define what
Scope – boundaries and configuration management
Plan of Action and Milestones
Roles and Responsibilities
Success criteria
Signatures

24. Preliminary Investigation Overview
Interaction with Managers and Users
Fact-Finding
Figure 2-14

25. Preliminary Investigation Overview
Planning the 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

26. Preliminary Investigation Overview
Step 1: Understand the Problem or Opportunity
Determine which departments, users, and business processes are involved
Understand how the project supports the mission statement

27. Preliminary Investigation Overview
Step 2: Define the Project Scope and Constraints
Project scope
Project creep
Constraint

28. Preliminary Investigation Overview
Step 2: Define the Project Scope and Constraints
Means to define the boundaries, or extent, of the project
Being as specific as possible

29. Preliminary Investigation Overview
Figure 2-18

30. Preliminary Investigation Overview
Step 3: Perform Fact-Finding
Fact-finding involves various techniques
Depending on what information is needed to investigate the systems request, fact-finding might consume several hours, days, or weeks

31. Analyze Organization Charts

32. Preliminary Investigation Overview
Step 3: Perform Fact-Finding
Conduct interviews
Figure 2-20

33. Preliminary Investigation Overview
Step 3: Perform Fact-Finding
Review documentation
Observe operations
Conduct a user survey

34. Preliminary Investigation Overview
Step 4: Evaluate Feasibility
Evaluate the project’s operational, technical, economic, and schedule feasibility

35. Preliminary Investigation Overview
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?

36. Preliminary Investigation Overview
Step 5: Estimate Project Development Time and Cost
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?

37. Preliminary Investigation Overview
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

38. Preliminary Investigation Overview
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

39. Preliminary Investigation Overview
Figure 2-21

40. Preliminary Investigation Overview
Step 6: Present Results and Recommendations to Management
Introduction
Systems request summary
Findings
Recommendations
Time & cost estimates
Expected benefits
Appendix

41. Chapter Summary
Strategic planning allows a company to examine its purpose, vision, and values and develops a mission statement
Systems projects are initiated to improve performance, provide more information, reduce costs, strengthen controls, or provide better service
Various internal and external factors affect systems 49

42. Chapter Summary
Analysts evaluate systems requests on the basis of their expected costs and benefits
The steps in the preliminary investigation are to understand the problem or opportunity
Report results and recommendations to management
Chapter 2 Complete 49