BCA III - SAD Compiled By: GIRIJA 1

Unit 4. System Analysis [8 Hrs.]

a. System planning and initial investigation
b. Project Scheduling
c. Requirement analysis
d. Types of requirements
e. Requirement gathering methods
f. Feasibility study and its types
g. Steps in feasibility study
h. Cost/Benefit Analysis (Playback method, NPV method)

A. System planning and initial investigation

The primary purpose of systems planning is to identify a problem’s nature and its scope. It also
includes preliminary (or initial) investigation and feasibility study. Initial investigation is used to
understand the problem, define the project scope and constraints, identify the benefits, estimate
the time and costs, and interact with managers and users.

System planning is an organized and integrated management process that focuses on the actions
necessary for the project's practical completion. It avoids problems in the project, such as
changes in the projects or organization's objectives, resource shortages, and so forth. Project
planning also aids in improved resource use, and the most efficient use of a project's allowed
time. The following are the other project planning goals.
 It establishes the project management team's duties and responsibilities.
 It guarantees that the project management team adheres to the company's goals.
 It examines the schedule's viability and the needs of the users.
 It establishes the project's limits.

Effective project planning ensures that the project gets off to a good start with well-defined tasks.
Effective project planning helps keep the project's additional expenses to a minimum when it's
in process. Some guidelines are followed when designing a project. These guidelines are outlined
below.
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 Planning: Before starting a project, it's essential to plan. Objectives and timelines should
be clear and understandable for efficient planning.

 Risk analysis: Before beginning the project, senior management and the team should
think about the potential hazards. Changes in requirements, for example, maybe desired
by the user while the project is in process. In this instance, time and cost estimations
should be made by the requirements (new requirements).

 Monitoring the project's progress: The project plan should be tracked and adjusted as
needed once it is completed.

 Meet quality standards and offer high-quality results: The project plan should outline
the project management team's procedures to assure software quality. The project's
duration and cost are calculated based on the quality assurance approach.

 Flexibility to accommodate changes: The result of project planning is recorded in the

form of a project plan, which should allow for new modifications to be accommodated
as the project progresses.

System Planning Process

The system planning process involves several interconnected actions carried out in a sequential
sequence to implement user requirements in software. It describes a series of project planning
activities and the individual(s) responsible for carrying them out. The project planning process
also includes the following steps.
 The project's objectives and scope
 Techniques for undertaking project planning
 Individuals participating in the project's effort (measured in time)
 Timeline and milestones for the project
 The project will require specific resources.
 The project's potential dangers.

The project planning process consists of numerous tasks required to complete a project
methodically. These activities relate to a set of functions that ended over time to building
software. These actions involve estimating the amount of time, effort, and resources needed,
as well as the project's hazards.
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Project Planning Activities

1. Identification of project requirements: Before beginning a project, it is critical to

determine the project requirements since this aids in the orderly execution of operations.
These specifications include details on the project's scope, the data and functionality that
must be included in the program, and the members of the project management team's
duties.

2. Identification of cost estimates: Along with estimating work and time, it's also essential to
figure out how much a project will cost. The cost estimate covers the cost of hardware,
network connections, and hardware component maintenance. In addition, the cost of the
project's participants is estimated.
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3. Identification of risks: Unexpected events that have a negative impact on the project are
known as risks. A software project entails several hazards (such as technical and business
risks) that might impact the project's timeline and cost. Identifying hazards before the start
of a project aids in determining their likely influence on the project.

4. Identification of critical success factors: Critical success elements are followed to make a
project successful. These are the conditions that increase the likelihood of a project's
success. Support from management, a reasonable budget, an appropriate timetable, and
talented software engineers are all examples of these elements.

5. Preparation of project charter: A project charter summarizes the project's scope, quality,
time, cost, and resource restrictions as specified during the planning stage. It is developed
by management for approval by the project's sponsor.

6. Preparation of project plan: A project plan outlines the resources available for the project,
the people who will be engaged, and the timeline for completion.

7. Commencement of the project: The software project begins once the project planning is
completed and resources are allotted to team members.

Initial Investigation
 The 1st step in SDLC is the identification of a need.
 This is a user's request to change, improve, or enhance an existing system.
 There is likely to be a stream of such requests, standard procedures must be established
to deal with them.
 The Initial investigation is one way of handling this.
 The objective is to determine whether the request is valid and feasible before a
recommendation is reached to do nothing, improve or modify the existing system or build
a new one

The user’s request form specifies the following:

1. User-assigned title of work requested
2. Nature of work requested
3. The date the request was submitted
4. The date the job should be completed
5. Job objectives – purpose of job requested
6. Expected benefits to be derived from proposed change
7. Input/output description – quantity of inputs and outputs of proposed change
8. Requester’s signature, title, department and phone number
9. Signature, title, department and phone number of person approving the request.
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Initial Investigation has following steps:

1) Problem Definition:
Problem definition is the process of identifying the need of the user which led him to request for
the system change.

2) Background Analysis:
Background analysis is the process of getting the basic information about the Customer's
Company or organization i.e. how it really works? What people are involved in it? Etc.
Background analysis helps the system analyst to prepare the organization chart with the list of
people and functions.
3) Fact finding:
After obtaining the background information, analyst start gathering the data like input, output
and cost of the existing system. Information can be gathered by following tools:
a.) Review of written documents.
b.) On-site observations
c.) Interview and questionnaires

4) Fact Analysis:
After the collection of data it must be organized and evaluated so that report can be prepared
for the final approval from the user.

5) Determination of Feasibility:
After organizing data, and fact analysis feasibility is evaluated and determine that any alternative
proposal is possible or not for the customer's Project.

B. Project Scheduling
A project schedule is a technique of communicating and informing people about the activities
that must be completed, the organizational resources that will be assigned to these tasks, and
the amount of time that the work must be completed. Successful project scheduling results in
lower costs, higher client satisfaction, and a successful project. In project management,
scheduling refers to outlining the deliverables, milestones, and tasks that must be completed
within a project. Compared to the notes in your typical weekly planner, it has more notes. The
Gantt chart is the most often used and significant type of project schedule.
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Steps involved:
1. Define the project scope: Clearly outline what the project needs to achieve and what is
not included.
2. Break down the project into tasks: Divide the project into smaller, manageable units of
work.
3. Estimate task durations: Use historical data, expert judgment, or other methods to
estimate how long each task will take.
4. Identify dependencies: Determine which tasks must be completed before others can
start.
5. Sequence the tasks: Arrange the tasks in a logical order that respects dependencies.
6. Allocate resources: Assign the appropriate resources to each task.
7. Create the project schedule: Choose a tool or format to visually represent your schedule,
such as a Gantt chart or network diagram.
8. Monitor and adjust: Regularly review your schedule and make adjustments as needed
due to changes, risks, or issues.

Benefits of effective project scheduling:

 Improved time management: Helps you stay on track and avoid delays.
 Better resource allocation: Ensures the right resources are available for the right tasks at
the right time.
 Enhanced communication: Provides a clear roadmap for everyone involved in the project.
 Reduced risk: Helps identify potential problems early on and take corrective action.
 Increased stakeholder satisfaction: Delivers projects on time and within budget,
exceeding expectations.

Project Scheduling Techniques

There are several project scheduling techniques that can help you break down your project into
small, manageable tasks. Some of these techniques include
 Task lists
 Gantt charts and
 Calendars
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1. Task lists
This is the simplest scheduling technique and works for small projects without a lot of
interdependencies. However, for larger projects, it may not be the right choice as tracking the
progress can become a major challenge.

The task list contains the list of tasks and subtasks along with the team members assigned to do
them.

2. Calendar
The calendar can be used to depict the project timelines of all the tasks throughout the course of
the project. It’s a decent approach to view overlaps between activities. But, this approach suffers
from an inability to assign tasks and view dependencies.

3. Gantt Chart
Gantt chart is a type of a bar chart that is used for illustrating project schedules. Gantt charts can
be used in any projects that involve effort, resources, milestones and deliveries.
 A Gantt chart is a visualization that helps in scheduling, managing, and monitoring specific
tasks and resources in a project.
 It consists of a list of tasks and bars depicting each task's progress.
 The horizontal bars of different lengths represent the project timeline, which can include
task sequences, duration, and the start and end dates for each task
 It's the most widely used chart in project management.
 Gantt charts are used in heavy industries for projects like building dams, bridges, and
highways, as well as software development and building out of other goods and services.

Benefits of Gantt chart:

 Clear visualization: Simplifies complex project schedules into an easily digestible format,
improving communication and understanding.
 Schedule planning: Helps allocate resources, estimate timelines, and identify potential
bottlenecks or conflicts.
 Progress tracking: Monitors task completion and overall project progress, allowing for
proactive adjustments if needed.
 Team collaboration: Provides a shared visual reference for team members, promoting
transparency and accountability.
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Example:

C. Requirement Analysis
Requirements analysis (requirements engineering) is the process of determining user
expectations for a new or modified product. It is usually a team effort and demands a variety of
human soft skills, such as critical thinking, communication and judgment.
Requirements analysis is a common and essential concept in software development and software
project management. At the start of every software project, the project team must understand,
finalize and document the features and functionalities required of the end product. These
required features and functionalities are often called functional specifications, and the process
of determining and understanding them is called requirements gathering and analysis.

Requirements Analysis in System Analysis and Design does the following:

Why requirement analysis is essential in software development?
 Clarifies the required features and overall vision of a new product.
 Clarifies stakeholder expectations for that product.
 Prevents conflict and communication gaps during development and testing.
 Ensures that the final product conforms to requirements, i.e., prevents scope creep.
 Clearly define the project scope, specifying inclusions and exclusions.
 Provide a foundation for project planning, including estimates for time, budget, and
resources.
 Identify potential risks early, enabling proactive risk management.
 Facilitate communication and collaboration among team members and stakeholders.
 Serve as input for designing system architecture, databases, and user interfaces.
 Form the basis for creating test cases and conducting quality assurance activities.
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Software Requirement Analysis Process

Based on the software project's nature, software analysis is done by an independent analysis or
a team of analysis to know about the present requirements of the users. Requirements include
functional and non-functional requirements and require both business and technical experts.

The steps for effective capturing on present requirements of users are:

 Requirement Knowledge:
It is very necessary to know about the requirements of the users before starting any
project. Working on the present requirements of the users will be helpful in gaining
popularity of your project.

 Identification of Stakeholders:
Stakeholders includes customers, end-users, system administrators etc. identifying the
correct stakeholder is second step and is one of the most important step in all. Identifying
the correct stakeholders help to properly analyze and create a road map for gathering
requirements.

 Collection of Requirements:
After identifying stakeholders one has to collect requirements for them. Based on the
nature and aim of the project there can be many kinds of stakeholders. Interacting with
stakeholder groups can be in person interviews, focus groups, market study, surveys and
secondary research.
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 Analysis of Collected Requirements:

Once the data is gathered structured analysis must be done of the data to make models.
Data are analyzed on the basis of various parameters depending on the goals of the
software. These include animation, automated reasoning, knowledge based critiquing,
consistency checking, analogical and case based reasoning.

 System requirement Specification (SYRS):

Once the data is analyzed they are put together in the form of system requirement
specification document (SYRS) or system requirement specification (SRS). It acts as a
blueprint for the designing team to make the project. It serves as a technical collection of
all the requirements of stake holders which includes user requirements, system
requirements, user interface and operational requirements.

 Management Of Software Requirements:

The last step of this analysis process is correcting and validating all elements of
requirement specifications document. Errors can be corrected at this stage. Minor
changes can also be done according to the requirement of the software user.

D. Types of requirements
Introduction

 Requirements are descriptions outlining the services a software system must deliver and
the constraints it must adhere to.
 They encompass a spectrum, spanning from high-level abstract statements of services to
detailed mathematical functional specifications.
 These requirements provide a comprehensive understanding of what the software system
is expected to achieve and the limitations it must observe.
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Types of Requirements

Business Requirements:
These represent the high-level goals and objectives the business wants to achieve through the
software. They focus on the strategic value the software brings to the organization, like:
 Increased revenue or market share
 Improved efficiency or cost reduction
 Enhanced customer satisfaction or loyalty
 Compliance with regulations or industry standards
Business requirements are typically broader and less technical than user requirements. They
often involve financial considerations, marketing strategies, and competitive analysis.

User Requirements
 User requirements articulate the desires and expectations of the end-user regarding the
software system.
 Typically expressed in natural language, these requirements are often gathered through
methods such as interviews, surveys, or user feedback.
 User requirements provide insights into the functionalities and features that the end-
users find essential or desirable in the software system.
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Functional Requirements
Functional requirements define what the software system should do. These requirements
describe the behavior of the system and specify what the user can do with it. Examples of
functional requirements include:
 User interface requirements: These requirements describe how the user interacts with
the system, including what data is input, how the system responds, and what information
is displayed.
 Data management requirements: These requirements define how the system will store,
retrieve, and manage data.
 Business rules requirements: These requirements define the rules that the system must
follow, such as how to calculate taxes or how to process orders.
 Reporting requirements: These requirements specify the types of reports that the system
should generate, including the format and content.
 Security requirements: These requirements specify how the system should protect
sensitive data and prevent unauthorized access.
Example:
 What are the features that we need to design for this system?
 What are the edge cases we need to consider, if any, in our design?

Non-Functional Requirements
Non-functional requirements specify how the system should perform. These requirements
describe the qualities of the system, such as reliability, usability, and performance. Examples of
non-functional requirements include:

 Performance requirements: These requirements specify how quickly the system should
respond to user input, how much data it can handle, and how many users it can support
simultaneously.
 Usability requirements: These requirements define how easy the system is to use,
including its interface design, user documentation, and error handling.
 Reliability requirements: These requirements specify how reliable the system should be,
including its ability to recover from failures, maintain data integrity, and avoid data loss.
 Availability requirements: These requirements define how often the system should be
available for use, including maintenance windows and downtime.
 Scalability requirements: These requirements specify how the system should scale as
demand increases, including its ability to handle more users and data.
Example:
 Should each request be processed with minimum latency?
 System should be highly valuable.
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Domain Requirements
 Domain requirements are specific to a particular category or domain of projects.
 They can be either functional or nonfunctional in nature.
 Domain requirements engineering is an ongoing process aimed at proactively defining
requirements for all foreseeable applications within a software product line.
 Examples of domain requirements include functionalities essential to a particular
domain, such as accessing the list of faculty and students in an academic software for a
school or college.
 These requirements are derived from the domain model and are not user-specific.

Difference between Functional Requirements and Non-Functional Requirements:

Functional Requirements Non Functional Requirements

A functional requirement defines a system A non-functional requirement defines the

or its component. quality attribute of a software system.

It places constraints on “How should the

It specifies “What should the software
software system fulfill the functional
system do?”
requirements?”

Non-functional requirement is specified by

Functional requirement is specified by User. technical peoples e.g. Architect, Technical
leaders and software developers.

It is mandatory. It is not mandatory.

It is captured in use case. It is captured as a quality attribute.

Defined at a component level. Applied to a system as a whole.

Helps you verify the functionality of the Helps you to verify the performance of the
software. software.
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Non-Functional Testing like Performance,

Functional Testing like System, Integration,
Stress, Usability, Security testing, etc are
End to End, API testing, etc are done.
done.

Usually easy to define. Usually more difficult to define.

Example Example
1) Authentication of user whenever he/she 1) Emails should be sent with a latency of no
logs into the system. greater than 12 hours from such an activity.
2) System shutdown in case of a cyber 2) The processing of each request should be
attack. done within 10 seconds
3) A Verification email is sent to user 3) The site should load in 3 seconds when
whenever he/she registers for the first time the number of simultaneous users are >
on some software system. 10000

E. Requirement gathering methods

Requirement gathering, also known as requirement elicitation or requirement discovery for a
software system. The goal of requirements elicitation is to ensure that the software development
process is based on a clear and comprehensive understanding of the customer’s needs and
requirements.

One-to-One Interviews/Meetings:
One-to-one interviews or meetings involve direct, individualized interactions between an
interviewer and a participant, commonly employed for requirements gathering. These sessions
utilize various questioning techniques, such as open-ended, follow-on, or probing questions, to
delve into user or stakeholder perspectives and system requirements.

Advantages:

 In-depth insights
 Open communication
 Personalized interaction
 Privacy for sensitive information
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Disadvantages:
 Time-consuming
 Limited perspective
 Resource-intensive
 Potential for bias

Group Interviews
When there are many users or stakeholders, group interviews can be efficient, especially if
participants are at a similar level or from the same section within a department.
Advantages:
 Faster gathering of information and requirements compared to one-to-one interviews.
Disadvantages:
 Requires more preparation before the interview.
 More challenging to keep the meeting focused.

Workshops
Involving 6-10 or more users/stakeholders working together to identify requirements, workshops
are time-limited and may need repetition for clarification or more details.
Advantages:
 Faster than group interviews, especially for common or system-wide requirements.
Disadvantages:
 Requires more preparation.
 Facilitating workshops demands additional skills, possibly needing an extra IT person to
record details/requirements.
 Initiating conversation/requirements can be challenging, especially at the beginning.

Brainstorming
Brainstorming can be done either individually or in groups. The ideas collected can then be
reviewed / analyzed and where relevant included within the system requirements. Ideas can
come from what users / stakeholders have seen (e.g. at software exhibitions), or experienced
elsewhere (e.g. before they joined the present organization).
Advantages:

 Innovative Ideas: Enables the generation of highly innovative ideas and requirements by
encouraging creative thinking.
 Efficient Requirement Definition: Provides an efficient way for users/stakeholders to
articulate and define their requirements collectively.
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Disadvantages:
 On-Demand Challenge: Some individuals may find it difficult to brainstorm ideas when
required.
 Individual Variances: Effectiveness varies among people, with some finding
brainstorming more challenging than others.

Feasibility Study
A feasibility study is an evaluation to determine the practicality of a proposed project or the
replacement of existing systems, considering various factors such as technical, economic, legal,
operational, and scheduling aspects.
Advantages:

 Recent and documented findings.

 Facilitates easy transfer of identified needs to requirements specification.
Disadvantages:

 Lack of detailed information.

 Potential insufficiency for capturing "detailed" user requirements.

Current System Documentation

Current system documentation refers to information about the existing system, including
interface details, user manuals, and software vendor manuals, which can be utilized as input for
defining requirements for a new system.
Advantages:
 Abundance of information available.
 Easy transfer of information to a new system requirements document.
Disadvantages:

 Documentation may be outdated.

 Changes in systems, interfaces, processes, and reports may not be accurately reflected.
 Care needed to ensure it aligns with the actual needs of the new system.

Questionnaire

Questionnaires are a data collection method used to gather limited system requirements from
users or stakeholders, especially those with minor involvement or located remotely. The
questionnaire design and question types play a crucial role, influencing the quality of responses.
There are two types of questionnaires −
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 Open-ended Questionnaires − It consists of questions that can be easily and correctly

interpreted. They can explore a problem and lead to a specific direction of answer.
 Closed-ended Questionnaires − It consists of questions that are used when the systems
analyst effectively lists all possible responses, which are mutually exclusive.
Advantages:

 Cost-effective method for reaching a large number of users.

 Suitable for obtaining input from geographically distant users.
 Written replies are easy to analyze and save time in documentation.
Disadvantages:

 Time-consuming to create.
 Low response rates, as filling out questionnaires may be a low priority for many.
 Potential for recipients to feel excluded if they desired more direct input.

Use Cases:
Use cases are comprehensive narratives that intricately describe the unfolding of system
processes, actions, and roles, providing a holistic and user-centric perspective on how the system
operates.
Advantages:
 Users find it accessible to describe processes.
 System requirements are effectively derived through systematic use case analysis.
Disadvantages:
 Requires additional analysis to convert processes into explicit requirements.
 Focus on existing processes may lead to less relevant information due to system changes.

Observation:
Observation involves actively immersing oneself in existing processes by shadowing users or
participating in their tasks, offering valuable insights for optimizing these processes within the
context of the new system.
Advantages:
 Valuable when users struggle to articulate needs.
 Offers insights into optimizing processes in the new system.
Disadvantages:
 Relatively slow, focusing primarily on understanding and documenting existing processes.

Prototyping:
Prototyping is a dynamic process where an initial version of the system is constructed based on
collected requirements. This iterative approach allows users to visualize, refine, and enhance
their needs, particularly useful for exploring software function requirements or bespoke software
development.
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Advantages:
 Effective for exploring software function requirements or bespoke software.
 Enhances requirement quality and aids in software selection.
Disadvantages:
 Less practical for the initial identification of requirements with numerous potential
software systems.
 Not suitable for large applications; cost may be limiting.

Steps Of Requirements Elicitation:

1. Identify all the stakeholders, e.g., Users, developers, customers etc.
2. List out all requirements from customers.
3. A value indicating degree of importance is assigned to each requirement.
4. In the end the final list of requirements is categorized as:
 It is possible to achieve.
 It should be deferred and the reason for it.
 It is impossible to achieve and should be dropped off.

Some Advantages of Requirements Elicitation:

 Clear requirements: Clarifies and refines customer requirements.

 Improved communication: Enhances communication and collaboration among
stakeholders.
 Quality software: Increases the likelihood of developing software meeting customer
needs.
 Avoids misunderstandings: Helps in avoiding misunderstandings and managing
expectations.
 Risk identification: Supports early identification of potential risks in the development
cycle.
 Accurate project plan: Facilitates the development of a comprehensive and accurate
project plan.
 User confidence: Boosts user and stakeholder confidence in the development process.

F. Feasibility study and its types

 A feasibility study is a systematic analysis and evaluation of the potential of a proposed
project or business venture.
 Its primary purpose is to determine whether the project is viable, practical, and
economically sustainable before committing resources and efforts to its implementation.
 The goal is to determine if the software product is suitable for development and beneficial
for the organization.
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Objectives of Feasibility Study

 Risk Assessment: Identifies potential risks and challenges in the project.
 Resource Evaluation: Helps in assessing the required resources for the project.
 Cost Analysis: Determines the financial feasibility of the project.
 Decision Making: Provides information to make informed decisions about project
viability.
 Time Management: Assesses the time required for project completion.
 Alternatives Exploration: Explores and evaluates alternative solutions or approaches.
 ROI Prediction: Predicts the return on investment for the organization.
 Scope Clarification: Defines the scope and objectives of the proposed project.
 Stakeholder Alignment: Ensures alignment with the expectations and goals of
stakeholders.
 Project Success Indicator: Serves as a critical factor in predicting the project's overall
success.

Types of Feasibility Study

1. Technical Feasibility
This assessment focuses on the technical resources available to the organization. It helps
organizations determine whether the technical resources meet capacity and whether the
technical team is capable of converting the ideas into working systems. Technical feasibility also
involves the evaluation of the hardware, software, and other technical requirements of the
proposed system. As an exaggerated example, an organization wouldn’t want to try to put Star
Trek’s transporters in their building—currently, this project is not technically feasible.

2. Economic Feasibility
This assessment typically involves a cost/ benefits analysis of the project, helping organizations
determine the viability, cost, and benefits associated with a project before financial resources
are allocated. It also serves as an independent project assessment and enhances project
credibility—helping decision-makers determine the positive economic benefits to the
organization that the proposed project will provide.

3. Legal Feasibility
This assessment investigates whether any aspect of the proposed project conflicts with legal
requirements like zoning laws, data protection acts or social media laws. Let’s say an
organization wants to construct a new office building in a specific location. A feasibility study
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might reveal the organization’s ideal location isn’t zoned for that type of business. That
organization has just saved considerable time and effort by learning that their project was not
feasible right from the beginning.

4. Operational Feasibility
This assessment involves undertaking a study to analyze and determine whether—and how
well—the organization’s needs can be met by completing the project. Operational feasibility
studies also examine how a project plan satisfies the requirements identified in the
requirements analysis phase of system development.

5. Scheduling Feasibility
This assessment is the most important for project success; after all, a project will fail if not
completed on time. In scheduling feasibility, an organization estimates how much time the
project will take to complete.
When these areas have all been examined, the feasibility analysis helps identify any constraints
the proposed project may face, including:
 Internal Project Constraints: Technical, Technology, Budget, Resource, etc.
 Internal Corporate Constraints: Financial, Marketing, Export, etc.
 External Constraints: Logistics, Environment, Laws, and Regulations, etc.

Key benefits of conducting a feasibility study:

 Improves project teams’ focus
 Identifies new opportunities
 Provides valuable information for a “go/no-go” decision
 Narrows the business alternatives
 Identifies a valid reason to undertake the project
 Enhances the success rate by evaluating multiple parameters
 Aids decision-making on the project
 Identifies reasons not to proceed
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G. Steps in Feasibility Study

A feasibility study acts as a crucial roadmap for determining whether a proposed system is
practical and worthwhile.

1. Define the Problem and Objectives:

 Clearly define the existing system's challenges or the need for a new system.
 Establish clear objectives for the proposed system, aligned with business goals.

2. Collect Data and Information:

 Conduct interviews with stakeholders (users, management, IT) to understand needs and
expectations.
 Gather existing documentation, system reports, and data relevant to the proposed
system.
 Analyze current processes and workflows to identify areas for improvement.

3. Conduct Feasibility Analysis:

 Technical Feasibility: Evaluate the technical resources, infrastructure, and expertise
needed to develop and implement the system. Assess if existing technology can support
the required features.
 Economic Feasibility: Estimate the costs associated with development, implementation,
maintenance, and training. Analyze potential return on investment (ROI) and cost-benefit
analysis.
 Operational Feasibility: Assess if the proposed system aligns with organizational
structure, workflow, and user acceptance. Evaluate the impact on existing operations and
potential resistance to change.
 Legal and Regulatory Feasibility: Identify any legal or regulatory compliance
requirements that the system must adhere to. Assess potential risks and mitigation
strategies.

4. Evaluate Alternatives:
 Explore different options for achieving the identified objectives, including modifying
existing systems, developing a new system in-house, or outsourcing development.
 Compare each alternative based on feasibility criteria and select the most viable option.

5. Document and Present Findings:

 Prepare a comprehensive feasibility report outlining the problem, objectives, data
analysis, feasibility evaluation, alternative options, and recommendations.
 Present the findings to stakeholders and decision-makers, addressing concerns and
clarifying doubts.
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6. Decisions and Next Steps:

 Based on the feasibility study, decision-makers choose whether to proceed with the
project, modify the proposal, or abandon it.
 If proceeding, the next steps could involve detailed system design, resource allocation,
and project planning.

G. Cost/Benefit Analysis (Playback method, NPV method)

A cost-benefit analysis is a process used by firms to project the potential net rewards of
undertaking a project. It involves the estimation of the benefits of an investment that have been
reduced for its associated costs after accounting for the time value of money.
The determination of costs and benefit entails following steps:
1. Identify the costs and benefits pertaining to given project.
2. Categorize the various costs and benefits for analysis.
3. Select a method of evaluation.
4. Interpret the results of the analysis.
5. Take action.

Classifications of costs and benefits.

1. Tangible or intangible costs and benefits
2. Direct or indirect costs and benefits
3. Fixed and variable costs and benefits.

1. Tangible or intangible:
Tangible costs and benefits are those that can be easily identified and measured. Ex for
tangible costs are Purchase of hardware and software, personnel training, employee salaries.
Ex for tangible benefits are completing jobs in fewer hours, producing report with no errors.

Intangible costs and benefits are those that cannot be easily identifiable and measured
accurately.
Ex for tangible costs are employee morale problem caused by new system, lowered company
image. Ex for intangible benefits are more satisfied customers.

2. Direct or indirect
Direct costs and benefits are those functions that are directly applied to the operation ex for
direct costs is purchase of a box of diskettes. A new system that can handle 25 percent more
transactions per day is a direct benefit.
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Indirect costs and benefits are those whose results of the operations that are not directly
associated with given system or activity. Indirect costs are referred to as overhead. Ex-indirect
costs are insurance, maintenance, and protection of computer center, air conditioning. Indirect
benefits are defined as a by-product of another activity or system.

3. Fixed or variable
fixed costs and benefits are constant, they do not change. Fixed costs are insurance. ex for fixed
benefits is decrease in a number of personnel by 20 percent resulting from the use of a new
computer. Variable costs and benefits are changeable. They are not constant

Cost-benefit analysis Methods

Payback Method
Payback analysis is a mathematical method finance professionals and investors can use to
determine how long it may take to start, complete and pay for a capital project. This method
can provide organizations with the payback period and the value of a project.
Payback Period:
This metric calculates how long it takes for the benefits of a software project to equal the initial
costs. It essentially measures the speed of recouping the investment. This timeframe is crucial
for understanding the project's financial viability and potential return on investment (ROI).
Calculation:
Payback Period = Total Initial Cost / Annual Net Benefits
Example:
A software project costs $100,000 upfront and is expected to generate annual benefits of
$20,000. The payback period would be:
Payback Period = $100,000 / $20,000 = 5 years
why the playback method is used for cost-benefit analysis in software engineering:
1. Visualization of Progress:
 Playback allows stakeholders to see a tangible representation of the software's
progress at different stages.
 It provides a visual demonstration of features and functionalities, making it
easier to assess the project's advancement.

2. User Feedback:
 Early playback enables users and stakeholders to provide feedback on the
software's functionality and design.
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 User input during the development process helps in identifying and addressing
issues before the final product is delivered.

3. Risk Identification:
 Playback helps in identifying potential risks and challenges early in the
development life cycle.
 Stakeholders can assess the software's feasibility, making it possible to adjust
the project plan or requirements as needed.

4. Alignment with Requirements:

 Playback ensures that the developed software aligns with the specified
requirements.
 It allows stakeholders to validate that the delivered features meet their
expectations and business needs.

5. Cost-Efficiency:
 Early detection of issues through playback minimizes the cost of fixing defects
later in the development process.
 Iterative playback also facilitates incremental development, making it easier to
manage costs and resources.

6. Adaptability to Changes:
 Playback supports an iterative and adaptive development approach.
 It allows for adjustments and changes based on feedback, ensuring that the
software meets evolving business requirements.

Net Present Value method (NPV)

 Net present value (NPV) is used to calculate the current value of a future stream of
payments from a company, project, or investment.
 To calculate NPV, you need to estimate the timing and amount of future cash flows and
pick a discount rate equal to the minimum acceptable rate of return.
 The discount rate may reflect your cost of capital or the returns available on alternative
investments of comparable risk.
 If the NPV of a project or investment is positive, it means its rate of return will be above
the discount rate.
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Net Present Value Formula

The net present value formula finds application in estimating which projects are likely to
generate great profits. Thus the formula can be expressed as:

OR

NPV can also be calculated by finding the difference between the Present Value (PV) after the
competition of time duration of investment and the initial amount invested where the Present
Value "PV" after time "t" for a rate of return "r" can be calculated as:

Net Present Value Formula Rules

There are certain signs that are used in the net present value formula that determine whether
the investment is good or bad. They are as follows:
 NPV > 0 = the present value of money coming in is more than the money going out. The
investment is good since the money earned from the investment is more than the
money invested.
 NPV = 0 = When the money earned from the investment is equal to the money invested
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 NPV < 0 = The money earned from the investment is less than the money invested

Example 1: An investor made an investment of $500 in property and gets back $570 the next
year. If the rate of return is 10%. Calculate the net present value.

Solution:

 Given:
 Amount invested = $500
 Money received after a year = $570
 Rate of return = 10% = 0.1
 Using net present value formula,


 PV = $570/1.1
 PV = $518.18
 Net Present Value = $518.18 − $500.00 = $18.18
 Therefore, for 10% rate of return, investment has NPV = $18.18.

Interpretation:
A positive NPV indicates that the investment is expected to generate a return greater than the
discount rate, suggesting potential profitability.
A negative NPV implies the investment is likely to lose money, as the present value of its future
cash flows is less than the initial investment.
A zero NPV suggests the investment will exactly break even, generating a return equal to the
discount rate.
Benefits of using NPV:
 Considers time value of money: Provides a more accurate picture of an investment's
profitability compared to simply looking at future cash flows.
 Compares different investments: Allows for standardized evaluation of various
investment options with different cash flow patterns.
 Supports decision-making: Helps investors choose projects with the potential for the
highest return on investment.
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Limitations of NPV:
 Relies on accurate estimates: Requires precise forecasting of future cash flows and
selecting an appropriate discount rate, which can be challenging.
 Ignores other factors: Doesn't consider qualitative aspects like market risk, strategic
value, or environmental impact.
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Assignments:
1. Explain the key aspects involved in system planning and initial investigation for a new
project. What are the main objectives of this phase?
2. Describe the different investigation techniques used in the initial stages of a project,
and provide examples.
3. Define project scheduling and explain its importance in system development. What
are the key factors considered while creating a project schedule?
4. What is requirement analysis? Explain the different phases involved in this process.
5. Describe the different types of requirements.
6. Difference between functional and non-functional requirements.
7. List and explain various techniques used to gather requirements from stakeholders.
What are the advantages and disadvantages of each method?
8. In a specific scenario (e.g., developing a new student information system), suggest
suitable requirement gathering methods and provide justifications for your choices.
9. Define a feasibility study and explain its significance in system development. What are
the major areas of investigation in a feasibility study?
10. Differentiate between the different types of feasibility studies and provide examples
of how each one is assessed.
11. Outline the key steps involved in conducting a comprehensive feasibility study for a
proposed information system.
12. Explain the importance of conducting a cost-benefit analysis in a feasibility study.
What are the key factors considered in this analysis?
13. Compare and contrast two common cost-benefit analysis methods: the payback
method and the net present value (NPV) method. Discuss the strengths and
weaknesses of each method and when it might be appropriate to use one over the
other.

Additional Question:
 Consider a real-world scenario (e.g., developing a mobile app for a local business) and
apply your understanding of system planning, requirement analysis, feasibility study, and
cost-benefit analysis to develop a comprehensive plan for launching the project.