Business Case and Feasibility Analysis
In the realm of Certified Information Systems Auditor (CISA) and Information Systems Acquisition, Development, and Implementation, the Business Case and Feasibility Analysis are critical components that guide decision-making and project success. A Business Case serves as a formal document that outlines the justification for initiating a project or task. It presents the rationale, including the benefits, costs, risks, and alignment with organizational goals. The Business Case helps stakeholders understand the value proposition and ensures that the proposed initiative is strategically sound and financially viable. It typically includes an executive summary, problem statement, analysis of alternatives, expected benefits, cost estimates, risk assessment, and implementation strategyFeasibility Analysis, on the other hand, is an evaluative process that assesses the practicality and potential for success of a proposed project. It examines various dimensions such as technical feasibility, operational feasibility, economic feasibility, legal feasibility, and schedule feasibility. Technical feasibility evaluates whether the organization has or can obtain the necessary technology and expertise. Operational feasibility looks at the alignment with existing processes and the capability of staff to support the system. Economic feasibility analyzes the cost-benefit ratio to ensure that the project is financially sensible. Legal feasibility ensures compliance with relevant laws and regulations, while schedule feasibility assesses whether the project can be completed within the desired timeframeTogether, the Business Case and Feasibility Analysis provide a comprehensive foundation for project approval and implementation. They ensure that resources are allocated effectively, risks are managed, and the project aligns with the organization’s strategic objectives. For IS auditors, understanding these concepts is essential for evaluating the integrity and effectiveness of information systems projects, ensuring that they deliver value and operate within defined parameters. Properly conducted, these analyses contribute to informed decision-making, minimize the likelihood of project failure, and support the overall governance and accountability within information systems acquisition and development initiatives.
Business Case and Feasibility Analysis Guide - CISA
Why Business Case and Feasibility Analysis are Important
Business Case and Feasibility Analysis are critical components in IS acquisition and development because they:
• Provide justification for investing resources
• Help organizations avoid costly implementation failures
• Ensure alignment with strategic objectives
• Establish criteria for measuring project success
• Identify potential risks and constraints early
• Support informed decision-making
What is a Business Case?
A Business Case is a formal document that outlines the rationale and justification for initiating a project. It typically includes:
• Problem statement or opportunity identification
• Proposed solution
• Strategic alignment with organizational goals
• Expected benefits (tangible and intangible)
• Cost estimates and resource requirements
• Return on Investment (ROI) calculations
• Risk assessment
• Timeline and implementation approach
• Success metrics and evaluation criteria
What is Feasibility Analysis?
Feasibility Analysis evaluates whether a proposed system or project can be successfully implemented. It examines multiple dimensions:
• Technical Feasibility: Can the organization implement the solution with existing or attainable technology?
• Economic Feasibility: Do the financial benefits outweigh the costs? (Cost-benefit analysis)
• Operational Feasibility: Will the solution work effectively within the organization's operations?
• Schedule Feasibility: Can the project be completed in an acceptable timeframe?
• Legal/Regulatory Feasibility: Does the project comply with laws and regulations?
• Cultural/Political Feasibility: Will stakeholders accept and support the solution?
How Business Case and Feasibility Analysis Work Together
1. Initiation: A business need or opportunity is identified
2. Business Case Development: The case for pursuing the project is documented
3. Feasibility Studies: Multiple dimensions of feasibility are assessed
4. Integration: Feasibility findings enhance and validate the business case
5. Decision Point: Go/No-go decision is made based on combined analysis
6. Baseline Creation: Approved business case becomes the project baseline
7. Ongoing Reference: Used throughout project lifecycle to ensure alignment
Key Components of Cost-Benefit Analysis
• Tangible Benefits: Quantifiable financial gains (cost reduction, revenue increase)
• Intangible Benefits: Non-quantifiable improvements (customer satisfaction, competitive advantage)
• One-time Costs: Initial investment (hardware, software, implementation)
• Recurring Costs: Ongoing expenses (maintenance, support, training)
• Financial Metrics: ROI, NPV (Net Present Value), IRR (Internal Rate of Return), Payback Period
Common Methods for Feasibility Evaluation
• SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)
• Decision matrices and weighted scoring models
• Risk assessment frameworks
• Financial modeling and forecasting
• Prototyping or proof of concept
• Stakeholder analysis and engagement
Exam Tips: Answering Questions on Business Case and Feasibility Analysis
1. Focus on the IS auditor perspective: Remember that CISA questions often focus on evaluating rather than creating these documents
2. Understand evaluation criteria: Know how to assess the adequacy and completeness of business cases and feasibility studies
3. Recognize red flags: Identify insufficient analysis, missing components, or unrealistic assumptions
4. Know the sequence: Business case and feasibility analysis occur early in the project lifecycle, before significant resources are committed
5. Remember the governance angle: These documents support IT governance by ensuring strategic alignment and responsible resource allocation
6. Master financial concepts: Understand ROI, NPV, IRR, payback period, and TCO (Total Cost of Ownership)
7. Consider all feasibility dimensions: Don't focus solely on technical or economic aspects
8. Look for stakeholder involvement: Proper analysis includes input from various organizational perspectives
9. Identify assumptions: Critical assumptions should be documented and validated
10. Connect to risk management: Business case and feasibility studies should identify and address key project risks
When answering exam questions, remember that the most correct answer often reflects a balanced approach that considers business objectives, technical requirements, risk management, and governance principles.
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