Cost Benefit Analysis:

A cost-benefit analysis is a process businesses use to analyze decisions.

The business or analyst sums the benefits of a situation or action and
then subtracts the costs associated with taking that action.

A cost benefit analysis is a process by which organizations can analyze

decisions, systems or projects, or determine a value for intangibles.

The Cost-Benefit Analysis Process

A cost-benefit analysis (CBA) should begin with compiling a

comprehensive list of all the costs and benefits associated with the
project or decision.

The costs involved in a CBA might include the following:

Direct costs would be direct labor involved in manufacturing, inventory,

raw materials, manufacturing expenses.

Indirect costs might include electricity, overhead costs from

management, rent, utilities.

Intangible costs such as customer impact of pursuing a new business

strategy, project, or construction of a manufacturing plant, delivery delays
of product, employee impact.

Opportunity costs such as alternative investments, or buying a plant

versus building one.

Cost of potential risks such as regulatory risks, competition, and

environmental impacts.

Cost Benefit Analysis : Quantitative and Qualitative Aspects

Quantitative aspect of Cost Benefit Analysis.

Cost-benefit analysis checks the consequences of your decision

quantitatively like determining the number of customers or price, leading to
the calculation of revenues and costs and the corresponding profitability of
the idea.

For example, the analysis of a decision to construct a facility in a particular

city could include quantitative factors, such as the amount of tax breaks
that can be obtained

Qualitative aspect of Cost Benefit Analysis.

In terms of Qualitative aspect, this might be more important in the final

decision making, E.g., the culture of the firm. Even though it is critical to
 quantify the business idea in terms of profitability, you must ignore the
qualitative aspects, which often give insights about the implementation of
ideas.

For example , the analysis of a decision to construct a facility in a

particular city could include qualitative factors, such as the rating of the
schools in that city to which workers would send their children.

System Analysis & Design

Systems development is systematic process which includes phases
such as planning, analysis, design, deployment, and maintenance.

Systems Analysis

It is a process of collecting and interpreting facts, identifying the

problems, and decomposition of a system into its components.

System analysis is conducted for the purpose of studying a system or

its parts in order to identify its objectives. It is a problem solving
technique that improves the system and ensures that all the
components of the system work efficiently to accomplish their
purpose.

Analysis specifies what the system should do.

Systems Design

It is a process of planning a new business system or replacing an

existing system by defining its components or modules to satisfy the
specific requirements. Before planning, you need to understand the
old system thoroughly and determine how computers can best be
used in order to operate efficiently.

System Design focuses on how to accomplish the objective of the system.

System Analysis and Design (SAD) mainly focuses on −

• Systems
• Processes
• Technology

System Implementation
Implement the design into source code through coding.
 Combine all the modules together into training environment that
detects errors and defects.

A test report which contains errors is prepared through test plan that
includes test related tasks such as test case generation, testing
criteria, and resource allocation for testing.

Integrate the information system into its environment and install the
new system.

System Maintenance/Enhancement
Maintenance means restoring something to its original conditions.
Enhancement means adding, modifying the code to support the changes
in the user specification. System maintenance confirms the system to its
original requirements and enhancement adds to system capability by
incorporating new requirements.

Thus, maintenance changes the existing system, enhancement adds

features to the existing system, and development replaces the existing
system. It is an important part of system development that includes the
activities which corrects errors in system design and implementation,
updates the documents, and tests the data.

Maintenance Types
System maintenance can be classified into three types −

Corrective Maintenance − Enables user to carry out the repairing

and correcting leftover problems.

Adaptive Maintenance − Enables user to replace the functions of the

programs.

Perfective Maintenance − Enables user to modify or enhance the

programs according to the users’ requirements and changing needs.