Systems Analysis

Fundamentals
 Project Initiation
 Project Feasibility
 Areas of Feasibility
 Feasibility Analysis
 Work Breakdown Structure
 PERT/CPM Diagram
 Gantt Charts

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Project Initiation

Three general driving forces:

• To respond to an opportunity

• To resolve a problem

• To conform to a directive

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Project Feasibility

 During project feasibility, the project manager

answers questions such as,
• “Are the expected benefits reasonable?”
• “Are the assumed costs realistic?”
 The objective of project feasibility is to determine
whether a development project has a reasonable
chance of success.
 Feasibility analysis basically identifies all the risks
of failure.

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Areas of Feasibility

Economic Feasibility

 Process of identifying the financial benefits and costs

associated with a development project

 Consists of two tests:

• Is the anticipated value of the benefits greater than projected

costs of development?

• Does the organization have adequate cash flow to fund the project
during the development period?

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Areas of Feasibility

 Cost-benefit analysis is the analysis to compare

costs and benefits to see whether investing in
the development of a new system will be
beneficial.

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Areas of Feasibility

 Three-step process:
• Estimate the anticipated development and
operational costs
• Estimate the anticipated financial benefits
• Cost-benefit analysis is calculated based on the
detailed estimates of costs and benefits
 Costs and benefits can be viewed as:
• Tangible
• Intangible

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Areas of Feasibility

 Three techniques to assess economic

feasibility:

• Net Present Value (NPV)

• Payback Period
• Return Of Investment (ROI)

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Areas of Feasibility

The Time Value of Money (TVM) is the concept

applied to each technique, which refers to the
concept of comparing present cash outlays to
future expected returns.

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Areas of Feasibility

Technical Feasibility

 To gain understanding of the organization’s ability to

construct the proposed system

 Should include an assessment of the development

group’s understanding of the possible target hardware,
software, and operating environments to be used as well
as system size, complexity, and the group’s experience
with similar systems

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Areas of Feasibility

Operational Feasibility

 Process of assessing the degree to which a proposed

system solves business problems or takes advantage of
business opportunities

 Measure of how well the solution will work in the

organization

 Measure of how people feel about the system/project

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Areas of Feasibility

Schedule Feasibility
 Gain understanding of the likelihood that all potential
time frames and completion date schedules can be met
and that meeting these dates will be sufficient for
dealing with the needs of the organization

 Measure of how reasonable the project timetable is

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Areas of Feasibility

Resource Feasibility
 Requires the involvement of systems analysts, system
technicians, and users

 Risk to consider here is that the people who are assigned

may not have the essential skills for the project

 Other resources needed for a project to be successful

include adequate computer resources, physical facilities,
and support staff

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Feasibility Analysis

 Process by which feasibility is measured

 Designed to determine whether or not a project

will be successful

 Conducted for a project with an emphasis on

financial feasibility, environmental integrity,
cultural acceptability, or political viability

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Feasibility Analysis

Elements of feasibility analysis for a project should

cover:
• Need analysis
• Process work
• Engineering and design
• Cost estimate
• Financial analysis
• Project impacts
• Conclusions and recommendations

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Work Breakdown Structure

 Hierarchy of phases, activities, and individual tasks

that are required to complete the project

 The foundation for developing the project schedule,

for identifying milestones in the schedule, and for
managing cost

 Developed before dependencies are identified and

activity durations are estimated

 Can be used to identify the tasks in PERT diagram

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Work Breakdown Structure
 Block diagram

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Work Breakdown Structure
 Outline form

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PERT/CPM Diagram

 PERT is an acronym for Program Evaluation and

Review Technique and CPM stands for Critical
Path Method

 Diagram of all the tasks identified in the WBS,

illustrating the sequence of dependencies of the
tasks

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PERT/CPM Diagram

 The critical path is the longest path through the

PERT/CPM diagram and contains all the tasks that
must be done in the defined sequential order.

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PERT/CPM Diagram

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PERT/CPM Diagram

 Rules in PERT/CPM diagram

• Each activity must be represented by its own branch on
the chart.
• Direction of time flows is indicated by arrows. An activity
line meeting an event node indicates activity completion.
The length of an activity branch is not representative of
the time the activity will take.
• Relationships between activities are determined by the
sequence of the branches.

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PERT/CPM Diagram

 One of the advantage of the PERT/CPM technique

is that it produces a diagram that makes it easy to
see dependencies and the critical path.

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PERT/CPM Diagram
Disadvantages:

 There can be potentially hundreds or thousands of

activities and individual dependency relationships.
 The lack of a timeframe on most PERT/CPM charts makes
it harder to show status although colors can help (e.g.,
specific color for completed nodes).
 When the PERT/CPM charts become unwieldy, they are
no longer used to manage the project.

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Gantt Charts

 Developed in 1917 by Henry Gantt

 Bar chart that represents the tasks and activities

of the project schedule

 Good for monitoring the progress of the project

as it moves along

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Gantt Charts

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Gantt Charts

Advantages:
 Simplicity
 The bars representing activities or tasks are drawn to
scale

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