Economic Feasibility-Economic feasibility is the most
important study that determines the cost and benefits of the proposed system and compares with the budget. The cost of the project should not outweigh the budget. Technical Feasibility-During this study, the analyst identifies the existing computer systems(hardware and software) of the concerned department and determines whether these technical resources are sufficient for the proposed system or not. Behavioral Feasibility-When it is found that the project is both economically and technically feasible, the next step is to determine, whether it is operationally feasible or not. During operational feasibility study, it is determined, whether the system will operate in the way that the user wants. Assessing Project Feasibility Six Categories Economic Operational Technical Schedule Legal and contractual Political Assessing Economic Feasibility Cost Benefit Analysis Determine Benefits Tangible Benefits Can be measured easily Examples Cost reduction and avoidance Error reduction Increased flexibility Increased speed of activity Increased management planning and control Assessing Economic Feasibility Intangible Benefits Cannot be measured easily Examples Increased employee morale Competitive necessity More timely information Promotion of organizational learning and understanding Determine Costs (user end) Tangible Costs Can easily be measured in rupees Example: Hardware
Dept. of Computer Applications
GJIMT, Mohali. Assessing Economic Feasibility Determine Costs Intangible Costs Cannot be easily measured in rupees Examples: Loss of customer goodwill Loss of employee morale
Dept. of Computer Applications
GJIMT, Mohali. One-Time Costs (user end) Associated with project startup, initiation and development Includes System Development New hardware and software purchases User training Site preparation Data or system conversion Assessing Economic Feasibility Recurring Costs (user end) Is an outflow of money to another person or group to pay for an item or service Includes: Application software maintenance Incremental data storage expense New software and hardware releases Consumable supplies Time value of money (TVM) The process of comparing present cash outlays to future expected returns Assessing Other Project Feasibility Concerns Operational Feasibility Assessment of how a proposed system solves business problems or takes advantage of opportunities Technical Feasibility Assessment of the development organizations ability to construct a proposed system Assessing Other Project Feasibility Concerns Schedule Feasibility Assessment of timeframe and project completion dates with respect to organization constraints for affecting change Legal and Contractual Feasibility Assessment of legal and contractual protocols of new system Assessing Other Project Feasibility Concerns Political Feasibility Assessment of view of key stakeholders in organization toward proposed system. In it creation of self made original system is considered so as to avoid future problems. Steps in Feasibility Study Form a Project Team & Appoint a Project Leader Prepare System Flowcharts Enumerate Potential Candidate system Describe & Identify Characteristics of Candidate System Evaluate performance & Cost Effectiveness of CS Weight System Performance & Cost Data Select the Best CS Prepare & Report final Project Feasibility Report Cover letter(A cover letter or covering letter is a letter of introduction attached to, or accompanying another document ) Table of Contents Overview Detailed Findings Economic Justification Recommendations & Conclusions Appendixes(reference section)