the Preparing Systems Proposal CIS458
Last Class
Project outline
Documents and reports
Database Application Lifecycle
Database planning, system definition, requirements collection and analysis, database design, application design, implementation, data conversion and loading, testing, and operational maintenance.
Database planning
Mission statement, mission objectives
Database Design
Conceptual level design, logical database design, and physical database design.
Today
Identifying and Forecasting Costs and Benefits Analysis
Feasibility analysis How to prepare the charts (break even, payback)
Tips for the report #1.
Recommendation
Database Application Lifecycle
Database planning System definition Requirements collection and analysis Database design (conceptual, logical and physical) DBMS selection (optional)
Database Application Lifecycle
Application design Prototyping (optional) Implementation Data conversion and loading Testing Operational maintenance.
Customer Fact Finding Design
Database System
Implementation
DB Developer
Fact Finding
Interview
Interview structure
Questionnaire Observation Research Data format, procedures, etc.
Feasibility Analysis
Technical feasibility.
Do we have adequate technology for the project? DBMS, SDLC, and problem difficulty level
Operational feasibility
Will users accept the new system? How difficult to learn the new system?
Economic feasibility
Is the new project cost effective? Can the user afford it?
Business forecast Estimation of costs and benefits
Identifying and Forecasting Costs and Benefits
Costs and benefits
Interrelated and interdependent
Forecasting costs and benefits
Predict certain key variables
What-if analysis (credible, meaningful, valuable)
Forecasting models: require historic data
Estimates from the sales force Surveys to estimate customer demand Scenarios or historical analogies
Forecasting with Historical Data
Conditional forecast
There is an association between variables
Correlation, Regression, Leading indicators Econometrics, Input output models
Unconditional forecast
There is no need to identify any causal relationship
Graphical judgment, moving averages, time series
Estimation of Trends
Graphical judgment
Simple Depend on individual judgment
The method of least squares The moving average method
Graphical Judgment
The Method of Least Square
Find the best fitting trend line
Minimizing the sum of the deviations from a line
Data points
(X1, Y1), (X2, Y2), ... (Xn, Yn)
Line
Y=m*X+b (Y Y') = (((X X')(Y Y'))/((X X')2) *(X X')
Moving Averages
Seasonal, cyclical, or random patterns may be smoothed, leaving the trend patterns. The data at the very beginning and end are lost. Affected by extreme values
Identifying Benefits and Costs
Tangible Benefits
Advantages measurable in dollars, resources, time saved. Increase in the speed processing of Access to otherwise inaccessible information Access to information on a more timely basis Computing power
Identifying Benefits and Costs
Intangible Benefits
Difficult to measure but are important nonetheless. Improve decision making process Enhance accuracy Become more comparative in the market Customer service Good business image
Identifying Benefits and Costs
Tangible Costs
Cost of equipment Cost of resources The cost of systems analyst's time (other employee's time and salary)
Intangible costs
Losing a competitive edge Losing the reputation for being first Ineffective decision making
Comparing Costs and Benefits
Break-Even Analysis (required)
The total costs of the current system and of the proposed system
Operational cost + Development cost
Benefits are assumed to remain the same (Disadvantage) Comparison of old systems cost vs. new system's cost
Payback-Time Analysis (Required)
A simple way to assess whether a business should invest in a proposed information system. The number of years of operation that the information system needs to pay back the cost of investing in it. Method: increasing revenues or increasing savings Short-term approach It does not consider the importance of how repayments are timed Total return
Return on Investment (ROI)
% rate that measure profitability by comparing net benefits (the return) received from a project to the total costs (the investment) of the project.
RROI = (total benefits total costs)/ total costs
Present Value Analysis
Consideration of Time value of money Interest rate vs. discount rate
Cash-flow Analysis
This analysis examines the direction, size and pattern of cash flow.
Present Value
Guidelines for Analysis
Use break-ev...