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Preliminary Analysis - Case study: Library Management System

Again referring back to our "Library management system" discussed in earlier chapters, we now apply to it the concepts that we have studied in this chapter.

Preliminary Analysis:

Request Clarification.

First the management of the library approached this ABC Software Ltd. for their request for the new automated system. What they stated in their request was that they needed a system for their library that could automate its various functions. And provide faster response.

From this request statement, it is very difficult for the analyst to know what exactly the customer wants. So in order to get information about the system, the analyst visits the library site and meets the staff of the library. Library staff is going to be the end user of the system. Analyst asks various questions from the staff so that the exact requirements for the system become clear. From this activity, the analyst is able to identify the following requirements for the new system:

  • Function for issue of books
  • Function for return of books that can also calculate the fine if the book is returned after the due date
  • Function for performing different queries
  • Report generation functions
  • Function for maintaining account s
  • Maintaining the details for members, books, and suppliers in some structured way.

Now that the requirements are known, the analyst proposes solution system.

Solution: The desired system can be implemented with Oracle RDBMS in the back end with Visual Basic as the front end. It will have modules for handling issue and return functions, generating reports, performing checks, and maintaining accounts. It will also store the data relating to books, members, and suppliers in a structures way. In our case, the data will be maintained in a relational way.

Feasibility Study

Now the next stage in preliminary analysis is to determine whether the proposed solution is practical enough to be implemented. For this feasibility study is done.

First technical feasibility is done.

Major issues in technical feasibility are to see if the required resources- trained manpower, software and hardware are available or not.

ABC Software Ltd. is big IT Company. It has developed similar projects using Oracle and VB. It has a special team that is formed to work in this combination of projects, that is, Oracle and Visual Basic. So manpower is readily available. The software is available with the company since it has already worked with the same software earlier also. So our solution is technically feasible.

Technical feasibility doesn't guarantee if the system will be beneficial to the system if developed. For this economic feasibility is done.

First task that is done in economic analysis is to identify the cost and benefit factors in the system proposed. In our case, the analyst has identified the following costs and benefits.

First task that is done in economic analysis is to identify the cost and benefit factors in the system proposed. In our case, the analyst has identified the following costs and benefits.

Costs

Cost
Cost per unit
Quantity
Total Cost

Software

Oracle
50,000
1
50,000
Visual Basic
30,000
1
30,000
Windows Server 2003
15,000
1
15,000
Windows XP professional
5,000
4
5,000
Hardware
Central Computer
100,000
1
100,000

Client Machine

50,000
4
50,000
Development
50,000
1
50,000
Analyst
50,000
1
50,000
Developer
20,000
2
40,000
Training
20,000
1
20,000
Data Entry
5,000
1
5,000
Warranty ( 1 month)
Professional
20,000
1
20,000
Total Cost
5,55,000

Benefits

According to new policy: A member is required to pay Rs 500 for a half yearly membership and Rs 1000 for a year membership.

Expected increase in number of members : 75 per month
40 new members for 1 year and 35 new members for half year

Free collected from new members in one year = 12 (40 * 1000 + 35 * 500)
  = Rs 6,90,000
   
For four years = 4 * 6,90,000
  = 27,60,000
   
Now using Net present value method for cost benefit analysis we have,
   
Net present value( or gain ) = Benefits - Costs
  = 27,60,000 - 5,55,000
  = 22,10,000
   
Gain % = Net present value / investment
  = 22,10,000 / 5,55,000
  = 4.018
   
Overall Gain = 401.8 % in four year
   
For each year  
   
First year  
   
Investment = 5,50,000
Benefit = 6,90,000
   
Net present value for first year = 6,90,000 - 5,50,000
  = 1,40,000
Gain %
= 1,40,000 / 5,50,000
  = .254
  = 25.4 % in first year
   
Second Year  
   
Investment = 5,50,000
Benefit = 13,80,000
   
Net present value for second year = 13,80,000 - 5,50,000
  = 8,30,000
   
Gain % = 830000/550000
  = 1.50
   
  = 150 % at the end of second year
   
Third Year  
   
Investment = 5,50,000
Benefit = 20,70,000
   
Net present value for third year = 20,70,000 - 5,50,000
  = 15,20,000
   
Gain % = 1520000/550000
  = 2.76
   
  = 276 % at the end of third year
   
Fourth Year  
   
Invetment = 550,000
Benefit = 2760000
   
Net Present Value for fourth year = 2760000 - 550000
  = 2210000
   
Gain % = 2210000 / 550000
  = 4.018
   
  = 401.8 % at end of fourth year
   

From CBA we have found that it is economically feasible since it is showing great gains(about 400%).

After economic feasibility, operational feasibility is done. In this, major issue is to see if the system is developed what is the likelihood that it'll be implemented and put to operation? Will there be any resistance from its user?

It is very clear that the new automated system will work more efficiently and faster. So the users will certainly accept it. Also they are being actively involved in the development of the new system. Due to this fact they will know the system well and will be happy to use a new improved system. So our system is operationally feasible. After the feasibility study has been done and it is found to be feasible, the management has approved this project. So further work can de done that is the design of system that will be discussed in the later chapters.


  

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