System technology and feasibility
The evaluation is based on a design diagram of system requirements in terms of Input, Processes, Output, Fields, Programmes and Procedures. The evaluation can be quantified in terms of volume of information, trends, frequency of update, etc., in order to estimate whether the new system will operate in an adequate manner or not. The technological feasibility study is usually done to determine if the company has the possibility, in terms of software, hardware, personnel and skills, to completely manage the project.
The economic analysis is the main method used to evaluate the effectiveness of the new system. More commonly known as a cost/benefit analysis, the procedure consists of estimating the benefits and savings that can be expected from the new system and compare them to the relative costs. If the benefits effectively outweigh the costs, then it is valid and reasonable to go ahead with the design and system implementation stages. An entrepreneur in fact has always to evaluate the cost/benefit rapport before undertaking an investment action.
Study of the basic costs: it is important to identify the cost and benefit factors, which can be classified as follows:
- Development costs, for the system implemantation
- Operating costs, for the operational management of the system over the time.
The time/benefit ratio: it refers to the verification and/or estimate of the time necessary to obtain a return on investments, the benefits deriving from the system. The future value of a project is also a factor to bear in mind.
This determines if the project system provides for conflicts with the requisite legal considerations, for example: a system of data processing has to be developed according to local Data Protection Acts (DPA).
Operative feasibility verifies, with respect to the system proposed, that the following might be possible:
- the degree of the resolution of the problems
- the degree of satisfaction of the requisites identified in the estimate stage of the analysis stage of the system
- the degree of the possibility to take advantages of opportunities identified during the field of application definition
Feasibility planning means estimating what will be the development period: if it can be brought to term within a determined time frame, considering also the use of several methods as playback period. Feasibility planning is therefore the measure of how reasonable the activity programme is for a new project with respect to the project itself.