Evaluation of in-house versus time-shared computer services utilizing the systems engineering process

Abstract

Maintaining a proactive role in evaluating a company's core business functions for areas of possible cost reductions is pertinent in the current business environment. Within Virginia Power's Nuclear Engineering Services division, time-shared computer services were identified as a potential area for cost savings. These services are provided by a vendor and are primarily used for engineering analysis. It was hypothesized that cost savings could be experienced through the replication of these services with an in-house computer system. The contracted services were used as a baseline for the design of an in-house computer system.

The systems engineering process was used to design and develop an in-house system and to formulate a comprehensive economic and functional evaluation of each alternative. The economic evaluation consisted of a life-cycle cost analysis using a top-down approach to determine the economic feasibility of an in-house system. Consequently, a sensitivity analysis was done to identify any influential variables that could have skewed the outcome of the evaluation. The methods of quality functional deployment were employed to perform the functional evaluation. This functional evaluation formulated the practicality of each alternative for comparative purposes. Overall, it was desired to determine if it would be economically and functionally feasible to obtain in-house computer services within a set of constraints prescribed by management. A set of recommendations was prepared for management's use.