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Making business case for IS

This document outlines the essential components of creating a business case for Information Systems (IS) within the context of systems analysis and design. It emphasizes the significance of aligning business strategy with systems strategy, using the Rocky Mountain Outfitters (RMO) case study to illustrate the process. Key topics covered include feasibility assessments, risk management, and the development of a new customer support system to meet strategic business goals. This guide serves as a valuable resource for instructors and students in the field of 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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