Assessment

Assessment

It is mainly of 2 types: Strategic and Technical 

 

STRATEGIC ASSESSMENT

Strategic planning is defined as an organization’s process of defining its strategy , or direction and making decisions on allocating its resources to pursue this strategy, including its capital and people it deals with: 

• What do we do? 
• For whom do we do it?
• How do we excel? 

STRATEGIC ASSESSMENT is the first criteria for project evaluation.For evaluating and managing the projects, the individual projects should be seen as components of a programme. Hence need to do programme management. 

Programme management:A programme as a group of projects that are managed in a coordinated way to gain benefits that would not be possible were the projects to be managed independently. A programme in this context is a collection of projects that all contribute to the same overall organization goals'.

Effective programme management requires that there is a well defined programme goal and that all the organization’s projects are selected and turned to contribute to this goal.

Technical Assessment:

It is the second criteria for evaluating the project.

Technical assessment of a proposed system evaluates functionality against available: 

• Hardware 
• Software 

Limitations

• Nature of solutions produced by strategic information systems plans.
• Cost of solution. Hence undergoes cost-benefit analysis.

Economic Assessment:

COST BENEFIT ANALYSIS 

• It is one of the important and common way of carrying “economic assessment” of a proposed information system.This is done by comparing the expected costs of development and operation of the system with its benefits.So it takes an account:
  • Expected cost of development of system
  • Expected cost of operation of system
  • Benefits obtained
• Assessment is based on:
  • Whether the estimated costs are executed by the estimated income. 
  • And by other benefits.
• For achieving benefits where there are scarce resources, projects will be prioritized and resources are allocated effectively.
• The standard way of evaluating economic benefits of any project is done by “cost benefit analysis
• Techniques commonly used are:
  • Net Profit = Total Costs - Total Incomes
  • Payback Period (Time taken to recover the initial investment)
  • Return on Investment(Provides a way of comparing the net profitability to the investment required.)
  • Net Present Value(Discounted Cash flow events in a cash flow stream are added together,the result is NPV)
  • Internal Rate of Return(Internal rate of return is the interest rate (or discount rate) at which the net present value for the project is zero. In other words, the rate at which cash inflows equal cash outflows is considered as the internal rate of return.)

Idea Behind Economic Assessment

• Check whether the project is the best among other options  
• Prioritise the projects so that the resources can be allocated effectively if several projects are underway
• How?  
  • Cost-benefit analysis 
  • Cash flow forecasting  
  • Various cost-benefit evaluation techniques  
    • NPV
    • IRR