CT026-3-1

SYSTEMS ANALYSIS AND DESIGN

Week 8: Feasibility Study

Tutorial – Work in pairs

Oakwood Community College needs a new Student Registration System to replace the
current manual way of handling the tasks. During the early stage, your team leader
suggested that a feasibility study needs to be conducted.

1. Explain FOUR (4) types of feasibility study that can be conducted by your team
members before proceed to the development stage. (8 Marks)
Technical Feasibility - Process of determining whether the organization has
the technology resources to develop or purchase, install, and operate the
system.

Operational Feasibility -  This measure how well your company will be able
to solve problems and take advantage of opportunities that are presented
during the course of the project.

Schedule Feasibility - Does the company currently have the time resources to
undertake the project? Can the project be completed in the available time?

Economic Feasibility - Given the financial resources of the company, is the

project something that can be completed? The economic feasibility study is
more commonly called the cost/benefit analysis.

2. In the operational feasibility, your team members suggested to use PIECES

framework. Discuss the PIECES framework. (12 Marks)
Performance – Does the current mode of operation provide adequate
throughput and response time?

Information – Does the current mode provide end users and managers with
timely, pertinent, accurate and usefully formatted information?

Economy – Does the current mode of operation provide cost-effective

information services to the business? Could there be a reduction in costs and /
or an increase in benefits?
 Control – Does current mode of operation offer effective controls to protect
against fraud and to guarantee accuracy and security of data and information?

Efficiency – Does the current mode of operation make maximum use of

available resources, including people, time, flow of forms?

Services – Does the current mode of operation provide reliable service? Is it

flexible and expandable?

3. One of the team members did not agree with the suggestion to conduct feasibility
study. Discuss the importance of feasibility study to this project. (3 Marks)

Feasibility study is important for us because feasibility study can improve

project teams’ team focus, identifies new opportunities, provides valuable
information for a “go/non-go” decision, identifies a valid reason to undertake the
project and Enhances the success rate by evaluating multiple parameters.

4. It is important to estimate all costs and benefits before starting to develop the new
Student Registration System. Explain when would the team members be able to
perform cost-benefits analysis? (2 Marks)

Before building a new plan or taking on a new project, team member can
conduct a cost-benefit analysis to evaluate all the potential costs and revenues that
a company might generate from the project. The outcome of the analysis will
determine whether the project is financially feasible or if the company should
pursue another project. A cost-benefit analysis (CBA) should begin with
compiling a comprehensive list of all the costs and benefits associated with the
project or decision.

5. The team leader has asked you to provide detail of the cost classifications which
need to be considered for this project. Explain and list ONE (1) example for each
cost classifications that are related to the project: (10 Marks)

i) Development Cost and Operational Cost.

Development Cost: Costs that are incurred only once at the time the
system is developed or acquired.
Example: Purchase of necessary hardware or furniture

Operational Cost: Costs that are incurred after the system is implemented
and continue while system is in use.
Example: System maintenance

ii) Tangible Cost and Intangible Cost.

 Tangible Cost: Costs for which you can assign a specific dollar value.
Example: Employee salaries

Intangible Cost: Costs whose dollar value cannot be calculated easily.

Example: Customer dissatisfaction

iii) Direct Cost and Indirect Cost.

Direct Cost: Costs that can be associated with the development of a

specific system.
Example: Purchase of hardware

Indirect Cost: Overhead expenses / costs that cannot be attributed to the

development of a specific system
Example: Copy machine rentals

iv) Fixed Cost and Variable Cost.

Fixed Cost: Costs that are relatively constant and do not depend on a level
of activity or effort.
Example: Hardware rentals

Variable Cost: Costs that vary depending on the level of activity.

Example: Printer paper

6. Your team member was a bit confused with positive benefits and cost-avoidance
benefits. Explain the difference between positive benefits and cost-avoidance
benefits. (5 Marks)
Positive benefits that are a direct result of the new information system for
example increased revenues, improved services, higher morale, and better
management. Cost-avoidance benefits that are expenses that would be necessary
if the new system is not installed. For example: Handling work with current staff
instead of hiring and not having to replace hardware and software.