IT Management Reference Guide

This article describes how to conduct an IT feasibility analysis using the guidelines of the IT Infrastructure Library (ITIL). One of the first activities a project manager performs in preparing a proposal for a new IT service is a feasibility analysis. The intent of such an analysis is to provide to executive sponsors answers to basic questions about the project such as:

• What problem will it solve?
• What other benefits will it provide?
• What is the total cost of doing it?
• What is the impact of not doing it?
• Can it be done in a reasonable time-frame?
• How much will it cost to maintain?

There are dozens of other issues associated with a feasibility analysis, including IT architectures, impact to IT infrastructures, testing, training and documentation. Various institutes and organizations offer guidelines as to how a feasibility analysis should be performed and formatted, including the Project Management Institute (PMI).

But there has been little written on the ITIL prescription for such an analysis. This is partly due to the fact that feasibility is not covered in the initial ITIL Fundamentals or Practitioner courses, but is dealt with in some detail in the Service Manager courses leading to the Master's certification.

This article will cover the 12 steps that the ITIL framework specifically prescribes for a feasibility analysis. More and more IT professionals are becoming certified as ITIL Service Managers, and part of this certification requires a full understanding and strict adherence to the ITIL prescription for a feasibility analysis. Figure 1 below lists these 12 steps. Each is described in the following section.

Description of the 12 Steps of an ITIL Feasibility Analysis

1. Introduction – This brief step describes the contents and intent of the overall feasibility analysis, including how the report is organized, its purpose and its intended audience.
2. Management Summary – This step summarizes in very simple terms and in a very succinct manner what the other steps of the analysis will describe in more detail. The intent of this step is to provide a quick overview of pertinent information about the proposal and the feasibility of the service becoming a reality.

   1. Introduction 2. Management Summary 3. Background to the Project 4. Objectives 5. Situation 6. Benefits 7. Problems and Risks 8. Technical Requirements 9. Options 10. Cost/Benefit Analysis 11. Financial/Budget Implications 12. Recommendations

   Figure 1 ITIL Feasibility Study Steps

3. Background to the Project – Usually there are factors leading up to the idea of proposing this new service. This step describes those factors such as new customer needs, government regulations or corporate acquisitions or mergers.
4. Objectives – The objectives describe the high level business purposes of the service. These should be expressed in a manner that supports long-range management goals. For example, if such a goal is to become a leader in automated underwriting, and this new service will directly support that goal then describe the service in those terms.
5. Situation – This step describes the present condition as it currently exists without the service in place. The intent here is to highlight the need for the proposed service, and what the impact will be of not approving the service.
6. Benefits – The benefits step is interesting in the ITIL framework in that it differs from the objective step, and also from the cost/benefit step. Where the objective step focused on support of long-range management goals, this step focuses on the more immediate benefits of the new service, including quick wins, improved customer satisfaction and increased productivity. This step differs from the cost benefit step in that less emphasis is placed here on financial benefits than on business benefits.
7. Problems and Risks – The development, design and deployment of any new IT service will have potential problems and risks associated with it. These may range from new technologies, to complex integrations, to lack of user support, or a shortage of resources. This step identifies and assesses the likelihoods and impacts of these issues, as well as proposing mitigation strategies for them.
8. Technical Requirements – These requirements include selecting the proper platform, operating system, database architecture, network structures and the tools necessary to operate and optimize the proposed service.
9. Options – One of the universal laws of business leaders is that managers love options. The ITIL framework recommends that a feasibility analysis include several alternatives to the specific service being proposed. Advantages and disadvantages of each option, including costs, should be part of this step.
10. Cost/Benefit Analysis – This step identifies the total costs of developing, designing, deploying and maintaining the new service. Costs include hardware, software, facilities and labor. These costs are then compared to the financial benefits the new service will provide. This step should also include the eventual return on investment (ROI) and the break-even point at which time the financial savings of the new service exceeds the total cost of development and deployment.
11. Financial/Budget Implications – Once the overall costs of the new service is agreed upon, the budgeting for it needs to be arranged. This may result in adding more dollars to the budget, or re-arranging priorities and reducing budget in other areas to accommodate these costs.
12. Recommendations – This final step is to present detailed recommendations as to how the project may be budgeted and scheduled, and whether or not it will be deployed in phases or all at once.

Summary

In this article I presented and discussed the 12 steps that the IT Infrastructure Library (ITIL) prescribes for conducting a feasibility analysis. Such an analysis is one of the first activities a project manager will perform in preparing a proposal for a new IT service. A thorough understanding of the intent and sequence of each of these steps is a requirement for becoming certified as an ITIL Service Manager. But beyond that, it is helpful for project managers to be familiar with different approaches to feasibility analysis to enable them to select the specific structure and format that works best in their particular situations.