What system costs are estimated during the feasibility study for various alternate solutions?

A Management Information System ICT Revision Questions and Answers

Answer
Costs are classified as follows:
1. Development Cost:
 Salaries of system development staff.
 Cost of conversion of data files.
 Cost of testing the system.
 Cost of new or expanded computer facilities.

2. Operating Cost:
 Hardware/Software rent or depreciation.
 Salaries of computer staff.
 Cost of input data preparation & control.
 Cost of data processing supplier.
 Maintenance costs.
 Other overheads.

3. Intangible Cost:
These can not be easily measured is terms of money, e.g. : loss in employees productivity due to loss of morale, loss of goodwill due to initial system errors.



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