Economic analysis of redesign alternatives for the RESFMS information system.
Loading...
Authors
Richardson, Ron M.
Subjects
Advisors
Haga, William J.
Boger, Dan C.
Date of Issue
1992-03
Date
Publisher
Monterey, California. Naval Postgraduate School
Language
en_US
Abstract
This study is a practical example of economic analysis of information systems and
of the software cost estimation problem as applied to software development in the
Department of Defense. Economic analysis methods and the difficulty of software cost
estimation are demonstrated using the proposed redesign of the Reserve Financial
Management System (RESFMSj. an information system operated by the U.S. Naval
Resene. The mandate for economic analysis in the Department of Defense and
procedures applicable to information systems are discussed. Two alternatives are
analyzed: the status quo and a redesign proposed by Commander Naval Reserve Force
(COMNAVRESFOR). Costs to be considered for each alternative are described. Since
the major cost of the redesign will be software development, the problem of software development cost estimation is discussed. An estimate of software development cost is
produced. This estimate and other identified costs are used to calculate present value of
savings, savings investment ratio, and discounted payback period for the redesign
alternative as compared to the status quo. Risk analysis, using a monte carlo simulation,
is then performed to determine the range of possible outcome values and probabilities for
each. The result of the economic analysis is a recommendation that RESFMS be
redesigned as proposed by COMNAVRESFOR.
Type
Thesis
Description
Series/Report No
Department
Information Systems
Organization
Naval Postgraduate School
Identifiers
NPS Report Number
Sponsors
Funder
Format
250 p.;28 cm.
Citation
Distribution Statement
Approved for public release; distribution is unlimited.