Zusammenfassung der Ressource
Economic Feasibility
- Assessment factors
- Development Costs
- Operational Costs
- Tangible Benefits
- Annual benefits
- Scalability and upgradability
- Intangible Benefits
- enables organisation to make the go/no-go decision on projects.
- measure of how beneficial or practical an information system will be to an organization.
- Results of a feasibility study serve as an input to the business case
- Steps
- Techniques
- Payback Analysis
- determining if and when an investment will pay for itself
- calculates the period within which the investment will be recovered.
- Payback period
Anmerkungen:
- the period of time that will lapse
before accrued benefits overtake accrued and continuing costs.
- Payback Period = Net Investment / Average Annual Cash Flow
- Ignores inflation and rate of interest
- Return On Investment
- comparing alternative investment opportunities
- Ignores inflation and rate of interest
- Return on Investment (ROI) = Annual Profit / Investment
- Calculates the annual rate of return or profit from the investment
- Discounted Cash Flow Techniques
- Net Present Value
- All future cash flows are adjusted to present value
- Net present value = Original Investment +
Current value of all future cash flows
- NPV < 0 / NPV > 0
Anmerkungen:
- In the case of multiple
investments and returns, the NPV of all
returns should be greater than the NPV of all investments – so
the project is profitable
- Annuity and Net Present Value
- Internal Rate of Return
- Time Value of Money
- Interest
- Paid to compensate for the depreciation in money value
- Simple Interest: Interest is not re-invested
- Interest = Principal x Rate of Interest x Time (PxRxT=I)
- Compound Interest: Interest is added to the
principal and re-invested
- Interest = Principal [(1 + Rate)n – 1]
- Future Value of Money
- The future value of an
investment after periods (n)
of time is:
- Future Value = Principal + Compound Interest
- Future Value = Principal x (1 + Rate)n
- Cost Benefit Analysis (CBA)
Anmerkungen:
- assessing the
appropriateness of an investment, based on the projected flow of costs, and the
benefits expected to result from the investment.
- Appropriateness of investment
Anmerkungen:
- to be assessed based on the above
- projected flow of costs
- outlay of cash required
Anmerkungen:
- Any outlay of cash required for the initial purchase or maintenance of the investment at any point during the investment’s useful life.
- opportunity costs
- Identifying Costs
- Determine monetary value and timing of project costs
Anmerkungen:
- both immediate and on-going
- Consider both direct and indirect project costs.
- Agree with project sponsor on how to deal with indirect or intangible costs.
- Document all assumptions
Anmerkungen:
- to
be clarified, or vague areas identified
- Identify alternatives
- Full Cost of Systems
- Cost of the software, initial purchase and updates
- Cost of any additional hardware requirements
- Cost of ongoing systems
support, internal and external
- Cost of initial training and
any refresher training
- Costs associated with having to
forego other activities
Anmerkungen:
- that
could have either saved money or increased revenues while staff are engaged in
the project
- Area that Costs That Will Arise
- People
- Hardware
- Software
- Data/Processes
- Networking
- Documentation
- Developing the project cash flow schedule
- Determine the evaluation horizon –
usually three to five years
- Determine the time
periods (years or
months) to be used
- Allocate anticipated costs and
benefits across the schedule
- Calculate net cash flow
for each time period
- benefits expected to result from the investment.
- Any returns
Anmerkungen:
- Any returns to the organization resulting from the investment that occur at any
time during the investment’s useful life.
- e.g.
Reductions in current costs Increased capacity to generate
new revenue generating output
- Identifying the Benefits
- Identify the project benefits
- Work with the project sponsor
- project goals and objectives
Anmerkungen:
- Start with expected tangible benefits
- Determine monetary value and timing
- Document all assumptions
- Discuss how intangible benefits are to be presented.
- Transform intangibles to tangibles (sometimes).
- Limitations
- under-estimate actual costs.
- over-estimate cost savings.
- Most estimates of staff
reductions are never realized
- Most cost-benefit analyses
ignore the value of new
opportunities.