It is one thing to define the problem with an existing system. The next question is what are the alternatives - what are the broad avenues that may be taken?  It is very rare that any company will have just one possible solution open to them.

This is the 'Feasibility Study Phase' of the Systems Life Cycle model.

In this phase, alternative solutions are examined.  The costs Vs the benefits are compared in order to see which would best suit the company taking into consideration their requirements and the funds available.  In order to arrive at a final decision, sometimes a trade-off has to be accepted e.g. less functionality for less cash.

Consider three imaginary (very brief!) alternatives that a company could choose from:

a) Company does not change anything

Benefit:: No disruption to the business. Least cost.

Performance: No change, system remains outdated.  Process becomes increasingly less efficient.

b) Company makes alterations to half the system

Benefit: Best parts of the system are retained, whilst the least efficient aspects are redesigned to enhance performance.

Cost: Moderate, training moderate.

Performance improvement: 30%

c) Complete overhaul

Benefit: Reduces company cost base (more profitable).

Cost: High, given that new equipment / software will be required.  Training for staff needed.

Performance: 70% improvement over the old system.

As you can see, deciding on the best alternative is often not simple - management have to take many factors into account. There are often complicated relationships between cost, performance and benefit.

So at this point of the system life cycle, you know what the problem is and you are considering options.

The various options are usually presented to management at this stage and it is up to them to make a decision as to how much cash they want to inject into the project.

Once a decision has been made, the next phase is to analyse that option in greater detail.