Economic Feasibility

Economic analysis is the most frequently used method for evaluating the effectiveness of a candidate system. More commonly known as cost/benefit analysis, the procedure is to determine the benefits and savings that are expected from a candidate system and compare them with costs. If benefits outweigh costs, then the decision is made to design and implement the system. Otherwise, further justification or alterations in the proposed system will have to be made if it is to have a chance of being approved. This is an ongoing effort that improves in accuracy at each phase of the system life cycle. More on cost/benefit analysis is covered in Chapter.