Chapter 13 - Preparing the Systems Proposal

1. Methods Available
2. Ascertaining Information Systems (hardware, software, data, people, procedures) Needs
   • Inventorying Computer Hardware (Fig. 13.2)
   • Estimating Workloads (Fig. 13.3)
   • Evaluating Computer Hardware
   • Acquisition of Computer Equipment (buying, leasing, renting) (Fig. 13.4)
   • Software Evaluation (Fig. 13.8)
   • Data Needs Evaluation
   • Evaluating Personnel Needs
   • Evaluating Procedures Needs
3. Identifying and Forecasting Costs and Benefits
   • Forcasting Costs and Benefits
     • graphical judgement
     • method of least squares
     • moving averages
   • Identifying Benefits and Costs
     • Tangible Benefits
     • Intangible Benefits
     • Tangible Costs
     • Intangible Costs
4. Comparing Costs and Benefits
   • Break-Even Analysis
   • Payback
   • Cash-flow Analysis
   • Present Value (assess all the economic outlays and revenues of the IS over its economic life comparing costs and benfits today with future costs and benefits)
   • Guidelines for Analysis
     1. Use break-even analysis if the project needs to be justified in terms of cost, not benefits, or if benefits do not substatially improve with the proposed system.
     2. Use payback when the improved tangible benefits form a convincing argument for the proposed system.
     3. Use cash-flow analysis when the project is expensive relative to the size of the company, or when the business would be significantly affected by a large drain on funds.
     4. Use present value when the payback period is long or when the cost of borrowing money is high.
   • Examining Alternative Systems

Exercises: Problems #1, 12(due - noon Nov. 5, 1998)
e-mail to summers_wayne@ColumbusState.edu your answers to the following problems:

turn in on Oct. 27th a solution to Group Project # (this may be completed in a small group of 3 to 4 students)
Explore the MRE HyperCase company and e-mail the answers to the questions #1,2,3 on page 443. [This can be done in a group of 2-3]