Feasibility Analysis

Project Management :

Page 5-6: SDLCPage 35-38: Corporate Strategic Plan, RMOChapter 9

Chapter 9

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Checking!

Where do you see yourself in 5 years? Interview question nr 1:

Tell us about MIS. What is it?

How do you solve a problem?

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Back ground: SDLC Initial development of a system is done as a

project Activities: id, planned, organized, monitored Project: planned undertaking that has a

beginning and end and produces some definite result

To manage a project with analysis, design, dev activities you need a FRAMEWORK.

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SDLC:

You need a project management framework to guide and co-ordinate the work of the project team

SDLC: id all the activities required to build, launch, and maintain an IS: System analysis System design Programming and testing Deployment and Maintenance

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Core set of processes:

Identify the problem or need and obtain approval to proceed (Ch 9)

Plan and monitor the project: what, how, who (Ch 9) Discover and understand the details of the problem or

need (Ch 2-5) Design the system components that solve the problem or

satisfy the need (Ch 6- 11) Build, test, and integrate system components (CS) Complete system tests and deploy the solution (CS) NOTE: we focus on Ch 6-11

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RMO: case study

Currently: SCM: client server appl, Java and Oracle Phone/Mail Order system: Visual Studio, SQL

server to handle customers demands CSS: Web based technology, internet storefront

Challenges: disparate systems, technologies are mixed and some are outdated. Customers want to interact with mobiles and social nw. HW: read page 37-38

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Outcomes:

You must be able to use Excel to calculate: DCF to determine NET PV, using IRR NPV: determining the RR Payback Analysis:

Graphical Interpolation and determining IOR

Putting ALL of the above on ONE sheet!

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Introduction:

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Heading For:

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DCF:

To find the rate of interest when equating the PV of negative and positive cash flows: Negative when incurring COST and Positive when BENEFITS are anticipated

This interest rate is called the IRR Or indicated as r

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Example:

Initial Capital Cost = R 1000 End of year cash flows:

Year 1: R 500 Year 2: R 600 Year 3: R 400

To express as a FORMULA, see next slide:

COSTS PV or BENEFITS

NET PV = PV - COSTS

DISCOUNT FACTORS

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NPV:

We assume a rate of return, usually a rate what a company decides on

You first calculate the PV of the future benefits or costs, using this interest rate

Then you equate it with the initial cost The result is the NPV

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Payback Analysis:

How long will it take for a project to pay for itself: This time is the ‘payback period’ The break-even point Determine the ROI

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Traditional reg to Web based:

You receive the following detail for a new project: Initial development costs is R 1336000 Benefits, costs and discount factors:

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Linear Interpolation

NPV Sheet

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Formula in terms of x?

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Solving for x: