FEASIBILITY STUDY

Presented by
Asha Sara Sam & SHILPA ZACHARIAH

S2,mba

CONTENTS
Introduction Feasibility study Objectives Types of feasibility Steps in feasibility study Conclusion

INTRODUCTION
Feasibility study is the second stage in the system development life cycle (SDLC). The major objective of the feasibility study is to find out which is the most optimal solution to the problem, given the objectives of the problem and constraints. Feasibility study has been conducted carefully ,the chances of the system being a failure are very less.

The feasibility study phase is the one which gives answers to the following questions: Is there a new and better way to do the job that will benefit the user? What are the costs and savings of the alternatives? What is recommended?

OBJECTIVES
Presentation of alternative systems (candidate system )
Evaluation of cost and savings for each alternatives

Comparison of various alternatives

Recommendation of the most suitable alternative

TYPES OF FEASIBILITY
Economic feasibility Cost benefit analysis
Technical feasibility Behavioural feasibility

COST /BENEFIT ANALYSIS

Cost /benefit analysis is performed to ascertain whether the costs in the system match with the benefits it will provide

TYPES OF COSTS
Hardware costs Personnel costs Facility costs Operating costs

Supply costs

PROCEDURE OF COST/BENEFIT ANALYSIS

Identify the various costs and benefits pertaining to given project Categorize the various costs and benefits for analysis Select a method for evaluation

Interpret the results of evaluation

Take action

METHODS OF EVALUATION
Net benefit analysis difference between total cost and benefit Present value analysis - calculating cost and benefit of system in terms of today's value. Payback analysis - Time taken for getting back the initial investment Break-even analysis

STEPS IN FEASIBILITY STUDY

1. 2. 3. 4.
5. 6. 7. 8.

Form a project team and appoint a project leader Prepare system flow chart Enumerate potential candidate systems Describe and identify characteristics of candidate systems Determine and evaluate performance and cost effectiveness of each candidate systems Weight system performance and cost data Select the best candidate system Prepare and report final project directive to management

FORM A PROJECT TEAM AND APPOINT A PROJECT LEADER

Future system users should be involved in the design and implementation Complex studies require project team Team consist of an analyst and user staff Projects occupy a specific time period The senior system analyst is appointed as project leader

A record is kept of the progress made

PREPARE SYSTEM FLOWCHARTS

Information oriented charts and data flow diagrams are reviewed Brings up the importance of inputs, outputs and dataflow in the existent system. The flowcharts completed for detailed evaluation are

ENUMERATE POTENTIAL CANDIDATE SYSTEM

Identifies the candidate systems that produces the outputs required A transformation from logical to physical system models Consideration of the hardware that handles the total system requirements

DESCRIBE AND IDENTIFY CHARACTERISTICS OF CANDIDATE SYSTEMS

A preliminary evaluation to reduce the team to a manageable number Technical knowledge and expertise in hardware and software area are required Description the shortlisted candidates is produced Details like memory requirements, source language, price etc are enlisted

For example , suppose systems A,B&C have been shortlisted for a safe deposit application. The description may include:
CHARACTERISTICS A B C

Memory required

120 KB

64KB

64 KB

Source language
Source code available Purchase items Purchase price Number installed till date

Cobol
yes Purchase (licence) Rs 56000 200

C++
no Purchase (licence) Rs 126000 157

Pascal
no Purchase(licence) Rs 23000 31

DETERMINE AND EVALUATE PERFORMANCE AND COST EFFECTIVENESS OF EACH CANDIDATE SYSTEM Cost encompasses designing and installing the system It includes training and updating the physical facilities

System performance criteria is evaluated against the cost of each system Cost is determined when the benefits are tangible

EVALUATE PERFORMANCE AND COST EFFECTIVENESS OF EACH CANDIDATE SYSTEM

CHARACTERISTICS Performance System accuracy 99% 97% 98% A B C

Growth potential
Response time less than 5 seconds User friendly Costs Development Training Operations Payback

To 500KB

To 250KB

To 250KB

Yes Menu driven

Yes Command driven

Yes Menu driven

Rs.25,000-40,000 1-2 days RS 700/days 4 Months

Rs 1,10,500-1,25,000 3-4 days Rs 500/days 3 Months

Rs 65,000-80000 1-2 days Rs 650/days 9 Months

WEIGHT SYSTEM PERFORMANCE AND COST DATA

Assign a weighing factor to each evaluation criteria Assign a quantitative rating to each criterion qualitative rating Multiply the weight assigned to each category Sum the score column for each candidate system

SELECT THE BEST CANDIDATE SYSTEM

The system with the highest total score is the best system
Evaluation criteria
Performance System accuracy Growth potential Response time User friendly Costs Development Training Operations Payback

Weighing factor

A Rating Score Rating

B Score Rating

C Score

3 4 2 2 5 3 2 3

5 4 4 5 3 5 4 4

15 16 8 10 15 15 8 12 99

5 3 4 4 4 3 2 5

15 12 8 8 20 9 4 15 91

5 3 4 4 4 3 4 3

15 12 8 8 20 9 8 9 89

FEASIBILITY REPORT
Cover letter presents the report and indicates the nature, general findings and recommendations Table of contents specifies the location of the various parts of the report Overview of the purpose and scope of the product System effectiveness and efficiency and operating cost are emphasised Cost comparisons and preliminary cost estimates given Suggests the most beneficial and cost effective system Appendices all the memos and data compiled

CONCLUSION
The feasibility study is the second major phase in SDLC. It evaluates all possible solutions and selects the optimum systems. The feasibility study starts with setting up of a team. It enumerates various candidate systems The various characteristics of each system are evaluated and the systems are compared with each other Weightage is given to various selection criteria The optimum system with highest weightage system is selected

Cont
A report on the study with suggestions for selecting a system is prepared Cost/benefit analysis is conducted to determine if cost of a system are higher than its benefits Present value system includes ascertaining the cost and benefits on the same time, i.e. , on present value Payback analysis is done to find out when the project will provide benefits equal to initial investment

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