02 - SAD281 Day 1 -Planning Phase

SAD281 The Planning Phase

Outcomes

  • Upon successful completion of this module, students should understand the following outcomes:

    • Project Identification during Planning

    • System Request Document

    • Feasibility Analysis:

      • Technical

      • Economical

      • Organizational

    • Assign Values to Costs and Benefits

    • Determine Cash Flow

    • Organizational Feasibility

Planning Phase Overview

  • The planning phase is essential to:

    • Understand why a system should be built.

    • Determine project goals.

    • Establish a high-level plan for the project.

  • Primary activities in the planning phase:

    • Identification of the system for development

    • Project initiation

    • Feasibility assessment

Project Identification and Initiation

  • Project Initiation is the process where an organization defines and evaluates the initial goals for a system.

  • The first step is identifying a project that adds value.

  • A project arises when there is a perceived business need.

  • Sources of project ideas:

    • Supporting new marketing campaigns

    • Reaching out to different customer demographics

    • Improving supplier interactions

    • Addressing internal pain points, such as:

      • Decreased market share

      • Poor customer service levels

      • High defect rates

      • Increased competition

    • New business strategies requiring supporting systems

    • Mergers requiring system integration

    • Unique uses of emerging technologies

Example of System Request

  • Background:

    • John, Megan, and Phil are concerned about music piracy through sites like Napster.

    • They aim to create partnerships for a legitimate digital music download platform post-Napster.

    • Carly Edwards, a marketing team member, leads the project.

    • Existing infrastructure:

      • A website for CDs, maintained by a local ISP, provides a foundation to build upon.

System Request Documentation

  • A System Request outlines the business reasons and expected value of the system.

  • Completed by the Project Sponsor who serves as the primary contact.

  • Key elements of the system request:

    • Project Sponsor

    • Business Need

    • Business Requirements

    • Business Value

    • Special Issues

Feasibility Analysis

  • Initiated after defining the system's need and requirements, creating a detailed business case.

  • Techniques generally used include:

    • Technical feasibility

    • Economic feasibility

    • Organizational feasibility

Technical Feasibility

  • Evaluates if the system can be designed, developed, and installed successfully.

  • Aims to answer: "Can we build it?"

  • Risks involved:

    1. Users and analysts' familiarity with the application.

    2. Users' understanding of the new technology.

    3. Project size increases complicate management.

    4. Compatibility with existing systems is crucial.

Handling Technical Feasibility Risk

  • Compare with prior projects undertaken by the organization.

  • Consult experienced IT professionals for feasibility insights.

Economic Feasibility

  • Conducts a cost–benefit analysis.

  • Aims to answer: "Should we build this system?"

  • Key steps:

    1. Identify costs and benefits.

    2. Assign values to costs and benefits.

    3. Determine cash flow over time (3-5 years).

    4. Calculate net present value (NPV).

    5. Determine return on investment (ROI).

    6. Calculate break-even point.

    7. Graph the break-even point over time.

Identifying Costs and Benefits

  • Costs and benefits are categorized:

    1. Development costs

    2. Operational costs

    3. Tangible benefits

    4. Intangible benefits

  • Development Costs:

    • Salaries, software upgrades, training fees, licensing.

  • Operational Costs:

    • Salaries, office space, equipment, utility charges.

  • Tangible Benefits:

    • Increased sales, reduced inventory costs, improved customer service.

  • Intangible Benefits:

    • Enhanced brand recognition, better supplier relations.

Organizational Feasibility

  • Assesses the acceptance of the system by users and its alignment with ongoing operations.

  • Questions include: "If we build it, will it align with organizational goals?"

  • Strategies for assessment:

    • Conduct a stakeholder analysis.

    • Ensure strategic alignment between project and business strategy.

Summary of Feasibility Analysis Techniques

  1. Technical Feasibility:

    • Users' and analysts' familiarity with application and technology.

    • Project size and compatibility with existing systems.

  2. Economic Feasibility:

    • Assess development and operational costs vs. annual benefits.

  3. Organizational Feasibility:

    • Evaluate alignment with business strategy and stakeholder engagement.

Review Questions

  1. Give three examples of business needs for a system.

  2. Describe the roles of the project sponsor and the approval committee.

  3. Explain why the system request should be created by a businessperson rather than an IS professional.

  4. Differentiate between intangible and tangible value with examples.

  5. Highlight the purposes of the system request and feasibility analysis in project selection.

Contact Information

  • Thank you for your attention!

  • For inquiries, contact:

    • Belgium Campus iTversity

    • Email: info@belgiumcampus.ac.za

    • Phone: +27 10 593 53 68

    • Website: www.belgiumcampus.ac.za