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Making business case for IS

Asper School of Business University of Manitoba. Systems Analysis & Design. Instructor: Bob Travica. Making business case for IS. Updated: September 2013. Outline. Business and systems planning Business Case Feasibility kinds Risk management. Business and systems planning.

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Making business case for IS

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  1. Asper School of Business University of Manitoba Systems Analysis & Design Instructor: Bob Travica Making business case for IS Updated: September 2013

  2. Outline • Business and systems planning • Business Case • Feasibility kinds • Risk management 3510 Systems Analysis & Design * Bob Travica

  3. Business and systems planning • Business comes first, then systems • Business strategy determines systems strategy • Case: Rocky Mountain Outfitters (RMO) in the book 3510 Systems Analysis & Design * Bob Travica

  4. RMO Case • Business: Manufacture and distribute sports clothing. • Strategic goal: Support growth through business-to-consumer e-commerce. • Systems strategy: Develop new customer support system (CSS) that fits business goals. • In 2010s, social media are part of the e-commerce context. 3510 Systems Analysis & Design * Bob Travica

  5. RMO Case (cont.) • What should system analyst’s do first: • Understand customer-related tasks (e.g., product search, ordering) • Investigate current IS • Define objectives of new CSS • Create planning documentation • As any system, CSS is developed via a system development project • project organization & team work matter 3510 Systems Analysis & Design * Bob Travica

  6. Business case (See pp. 107-113) • Business Case = Assessment of a system’s feasibility and risks. • Feasibility: • Economic (benefits vs. costs of IS? Next slides…) • Technological (expertise to develop & use IS? IT maturity?*) • IS Development Project aspects (size, complexity?) • Organizational factors (IS culture & politics?)** • Scheduling (development timing vs. a company’s time constraints?) • Resource (sufficient staff available?) 3510 Systems Analysis & Design * Bob Travica

  7. Economic feasibility:System benefits Online store example Common Quality eliminates re-working Productivity Reduced execution time Challenging 3510 Systems Analysis & Design * Bob Travica

  8. System costs One-time tangible costs Recurring tangible costs Online store example Online store example 3510 Systems Analysis & Design * Bob Travica

  9. Matching costs with benefits • Use some financial model (NPV, Break-Even analysis, Return on Investment…) • Intangible costs & benefits – • can be part of feasibility case • common way: listing & trying to project conversion of intangible benefits into tangibles • better way: formal methods like Balanced Scorecard 3510 Systems Analysis & Design * Bob Travica

  10. Risk management • Risk = undesirable events affecting feasibility aspects • during IS development project • in production stage of an IS • can be calculated (later slide) 3510 Systems Analysis & Design * Bob Travica

  11. Project factors Organizational factors Technological Factors: • Developers • Users Risk analysis 3510 Systems Analysis & Design * Bob Travica

  12. Risk analysis (cont.) • Risk level=Risk Factor Weight (Impact)*Occurrence Likelihood (p) • Example*; scales of Risk and Risk Factor: 0 (low)-10 (high), probability scale: 0-1: • Key developer unavailability: weight=7, p=0.6; Risk=7*0.6=0.42 • Legal problems, weight=7, p=0.3; Risk=7*0.3=0.21 • Key developer unavailability risk > Legal risk • To run the formula on risk frameworks, some re-wording may be needed (check table on slide 11) • See Note bellow 3510 Systems Analysis & Design * Bob Travica

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