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The Feasibility Study in Information Systems: an Analysis of Criteria and Contents
By: Prashant Palvia and Shaiiendra Palvia
Palvia, P. and Palvia, S. "The Feasibility Study in Information Systems: An Analysis of Criteria and Contents," Information & Management, Vol. 14 (1988), pp. 211-224.
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Abstract: The feasibility study has been prescribed and described as an important step in information system development. Yet there has been little research on issues pertaining to its con-tents and criteria. This paper addresses these issues and reports research from a quasi-experimental investigation using actual system development projects. The empirical results show that the two most important factors in a feasibility study are: convincing the users that the system they get will actually meet their functional requirements, and also that the system will work effectively within the organizational environment. A surprising result was the low importance attached by respondents to meeting the needs of the clerical personnel providing inputs to and handling the outputs from the system. Also. economic factors, which have been the focus of attention for many researchers. were ranked in the middle of all factors considered. Keywords: Feasibility studies, Cost/benefit analysis, User involvement. Quasi-experimental design. Life cycle methodologies, Transactional systems, Management information systems, Systems analysis and design, System evaluation.
Article:
1. Introduction The importance of the feasibility study has been stressed almost unanimously by most researchers and authors in the information systems field. For example, most text-book authors, researchers, and practitioner methodologies in the area of systems analysis and design identify the feasibility study as one of the important phases of the system development life cycle [10,13-17,23, 33,40,47,49]. In fact, in most organizations, it is common to include a feasibility study as part of any major system development, effort. In spite of this agreement, the research literature does not report much about feasibility studies. For example, Ives and Olson [24], while reviewing the " user involvement" literature, did not cite a single paper directly related to feasibility studies.
In this paper, we address the central question: what should be the contents of a feasibility study? Prior research related to feasibility studies is either indirect or addresses only certain specific issues. The importance of the feasibility study is generally established in the context of the system development methodology [9,38,43] and the context of user/management involvement [11]. An aspect of feasibility studies which has received considerable attention is the cost/benefit analysis [19,26,32,42, 48]. However, in these studies, other factors related to the feasibility study have been either sidestepped or lumped as intangibles. Many textbooks and research articles [e.g. 2, 22, 29] have advocated the consideration of other factors besides costs and benefits. Figure 1 1 is a summary of the factors and criteria listed in recent systems texts. The inclusion of factors in these works is based largely on common sense and intuition, and further there is no prioritization of the factors. One article [3] develops and evaluates several factors; however these factors relate specifically to user satisfaction with computer services. Another article [34] evaluates the relative importance of several factors; but the evaluation is for the decision support system project approval process. There is also a body of literature on information systems evaluation [1,6,20,28,44] but this research focuses on information systems already in place.
2. Study Goals In order to identify the issues related to the feasibility study, we first examine the definition of a feasibility study. A commonly accepted definition of a feasibility study/analysis is:
A feasibility study/analysis aids in evaluating the suitability of a single or multiple proposed system solution(s) to an identified business problem according to a set of criteria.
The set of criteria may be explicitly or implicitly applied in the evaluation of the system proposals. It is worth noting that the feasibility study itself is generally prepared by the system analysts/ technical staff with possible assistance from the user group. The actual evaluation is made by the user management and/or top management, with assistance from systems analysts/technical staff. Thus the feasibility study (including its preparation and evaluation) offers an excellent vehicle for achieving user involvement and commitment, as has been strongly recommended for successful system development [e.g. 11. 24].
into teams of three to five students. Each team worked on developing (i.e. defining, designing, and implementing) a real business system for industry or academia (as opposed to working, on case studies). Some examples of the business systems developed by the teams are listed in Exhibit 1.
A system development life cycle (SDLC) model was followed in building the system. The analysis and design part included the following phases/ documents:
A. Investigating Proposal/Problem Statement
B. Requirements Study
C. Alternative System Proposals
D. Feasibility Analysis/Study
E. Detailed System Design
F. Draft User Manual.
Similar life cycle methodologies are presented in many references [e.g. 8, 18, 30, 31, 45, 49]. However, the timing of the feasibility study is not very well defined in the above literature. We chose to perform this study after the proposals reached a reasonably concrete form. Our reasons for doing so are best expressed in the following [12]
"Management would like to see the cost-benefit study completed during the survey phase. ... But the sober fact is that you cannot analyze the trade-offs until you have something to analyze. The idea of performing an early cost-benefit is largely a fiction."
The use of student analysts Mowed control (generally a requirement for a scientific study) on the system development process. There may be differences between student and practitioner analysts, but we believe that our results have field relevance for the following reasons: the student analysts were mostly seniors and MIS majors, had several data processing and MIS courses prior to taking this course, were preparing for a career ; systems analysis and design, and the applications developed by them were real business applications.
Part of the experimental control was exercised in the preparation of the feasibility studies. The criteria factors, as specified by different authors^3 in Figure 1, are similar to those presented in many books [e.g. 35]. Each analyst team was instructed on the definition and purpose of each factor, and was required to prepare the feasibility study in accordance with the criteria factors. They were asked to address each factor in the context of their own project. Thus we had some control over the process, as each study was prepared according to the criteria guidelines, which were fully explained to the analysts.
There were nine major criteria factors used for evaluation of feasibility studies. While most factor.; are self- explanatory; two need explanation. "Ability to meet system --requirements" refers to how well and how completely a proposed system alternative meets the functional requirements. "Operational factors" refer to the ability of the proposed system to work successfully in the operating environment of the organization. Some criteria factors were split into sub-categories (as shown by the indentation in Figure 1). For example, people factors were split into primary and secondary users, DP operations, and DP systems. The primary users are those for which the system is designed, while the secondary users are personnel in the user department doing clerical processing of the input to and output from the system [5]. Data was collected directly on the major factors as well as subfactors; subsequent analysis will report data on all nineteen factors.
Once the feasibility study had been completed, it was submitted to the user management for review. After this, a formal presentation was made by the analysts to the users, at which point clarifications/explanations about the criteria factors were presented. After the alternative system proposals were evaluated and an alternative was selected for implementation, a survey instrument was administered, both to the analysts and users. The questionnaire^4 included questions on the relative importance of the criteria factors of the feasibility study. The importance of each factor was evaluated on the following 5-point Liken scale: Important very
Not important At all In a similar manner, .the adequacy of each factor addressed in the feasibility study was evaluated as follows:
In addition, questions about the profile of the respondent were included. The questionnaire also contained questions on other issues related to feasibility studies. Some were included for the sake of testing the consistency of the responses.
4. Results There were sixty-eight responses to the questionnaires. The profile of the respondents and the systems is reported in Figure 2. Respondents were either clients (users) or analysts. Their orientation to business/data processing was measured and accordingly the respondents are grouped as having more business orientation, more DP orientation or an even balance. The systems being developed had features of "automation of manual operations (i.e., transaction processing)" and "information providing (i.e., MIS)". The systems were grouped as transactional, MIS, or both.
The importance ratings of the criteria factors were analyzed first on an overall basis. Next differences in the importance ratings for particular subgroups were considered. Finally, the adequacy of presentation ratings of the factors, overall, by the clients, and by the analysts, were compared.
Each factor and subfactor was ranked on its importance in feasibility assessment. A higher rating indicated greater importance. The average rating for each factor was computed. Based on the average ratings, the major factors and subfactors are prioritized as shown in Figure 3. Figure 4 lists the percentage of respondents that consider a factor to be important (those giving it a rank of 3 or 4).
Filially, there were several differences identified when the data was classified by the type of system. The differences are that organizational impact, operational costs. and security concerns were rated higher for transactional systems, while people factors and software were rated higher for MIS systems. The marginally significant differences are: for transactional systems, the respondents rated the effect on DP operations higher, while for the MIS systems, the respondents rated the effect on secondary users higher.
The ratings for adequacy of presentation are shown in Figure 8. These generally indicate that the feasibility study adequately addresses the criteria factors. Average scores below 3.00 on a 4-point scale may be some cause for concern. With this cutoff, the technical factors and the people factors (including secondary users, DP operations, and DP systems, but excluding primary users) are only moderately adequately addressed. Legal and security concerns are moderately addressed. Critics may suspect this data, as many of the responses are from the analysts who are evaluating their own adequacy of presentation. 'Therefore, we classified the adequacy ratings by clients and by analysts, as shown in Figure 9. The results are reassuring, as for almost all factors, the clients rated the adequacy higher than the analysts. Thus, analysts were more critical of their own work than their clients. Some client adequacy ratings were significantly higher than those of the analysts, e.g., software, legal and security concerns.
5. Discussion and Utility of the Results The two most important factors are operational ones and the system's ability to meet the functional requirements. It is vitally important for the users to be convinced that the delivered system will actually meet their requirements. Also they have to be quite sure that the system will actually work within the environment and constraints; i.e., the system should work effectively and meet the requirements. The next important factor is the overall impact of the proposed system on the organization as a whole: a new system should have a positive impact on the organization. Next, operational (ongoing) costs are rated only slightly lower than tangible benefits; however intangible and development costs are rated much lower.
There is an important lesson here: systems cannot be sold on their intangible potential or how economically they can be developed, but on their real costs (i.e., operational costs) and benefits. The economic factors are not rated highest as has been suggested in some other studies [22,29,34], but are rated generally in the middle. 'The effect on the primary users (those for whom the system is being developed) is rated next to tangible benefits. The effect on data personnel, i.e. DP operations and DP Systems is not considered very important. The low rating of the impact on secondary users is also surprising. It probably reflects the insensitivity of the stakeholders (analysts and user management) towards the clerical personnel in user departments. Lower in importance are technical factors and management support; software being more important than hardware Legal and security concerns are rated the lowest; it is perhaps understood that adequate legal and security requirements will be met by any proposed system and do not require probing for evaluation.
We reiterate that while some individual differences exist by classification subgroups, the overall ratings are still largely valid. In preparing the feasibility study, one should address the factors as suggested by the composite ratings and then fine tune the study considering the specific characteristics the organization/people mad the type of system. In particular, careful attention may be given to the type of system being developed and the attributes of the target audience.
These results also have special relevance when evaluating the different system proposals contained in lie feasibility study. In evaluating proposals, our results suggest normative guidelines for the relative importance of the factors. These rating may be converted into relative weights and perhaps modified to suit the environment. The actual assessment of the proposals and selection of the best proposal may be based on a simple factor-by- factor comparison, or a weighted score, or a more sophisticated mathematical technique.
It is encouraging to note that once the analysts were given the list of factors to address in the feasibility study, they adequately addressed all of the factors in the actual study. As was stated earlier, the clients generally felt more s strongly that the factors were adequately addressed than did the analysts. In particular, the clients gave much higher adequacy ratings than the analysts for the three factors: software, legal, and security concerns. A possible interpretation of this result is that these factors are overly represented in the study and should be downplayed. A recommended mechanism to ensure that all factors are adequately addressed in the feasibility study is to include the list of factors as a checklist in the system development methodology.
6. Summary and Conclusions This article has addressed the important topic of feasibility studies in the development of business information systems. Specifically, the criteria/contents to be included in a feasibility study were examined. Some important criteria factors to he included are: operational factors, the system's ability to meet the functional requirements, the overall impact on the organization, the tangible benefits, the effect on primary users and the technical factors (it that order). The least important ones are legal and security concerns and the effect on clerical and data processing personnel. It must be emphasized that this prioritization is for evaluating the feasibility of the system proposals; each factor still has to be appropriately addressed during the development life cycle.
More studies should be made to corroborate and expand on the knowledge about feasibility studies. Empirical data may be collected and experiments conducted in field settings to obtain in-depth information about the criteria and contents of the feasibility study. Other issues include non-criteria related contents of the feasibility study and the proper time to perform the feasibility study and present it to management. It would be worthwhile to examine the contents of the feasibility study when it is conducted at different milestone points or when multiple feasibility studies are conducted. It will also be valuable to establish the role of the feasibility study in the context of relatively newer and emerging system development methodologies, e.g., prototyping and iterative methodologies.
Notes: 1 In figure 1, the textbooks' authors' names and year of publication arc abbreviated; also text Dick85 lists several methodologies, two of them: PRIDE and CARA, include feasibility studies. 2 1. Temple University, Philadelphia, Pennsylvania. 2. Kent State University, Kent, Ohio. 3 The determination, whether a factor was included by an author or not, was sometimes subjective. 4 The questionnaire was finalized after several iterations and pilot testing with similar subjects.
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