Chapter 17

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					      Chapter 17

Introduction to Systems
   Development and
   Systems Analysis

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                 Shoppers Mart

   Ann Christy was promoted to controller of Shoppers
    Mart (SM).
   She determined the following:
   Store managers cannot obtain information other than
    what is contained on SM’s periodic, preformatted
   The sales and purchasing department cannot get
    timely information about what products are or are not
    selling well.

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             Shoppers Mart

 Ann is convinced that Shoppers Mart needs
  a new information system.
 She has the following questions:
 What process must the company go through
  to obtain and implement a new system?
 What types of planning are necessary to
  ensure the system’s success?

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             Shoppers Mart

 How will employees react to a new system?
 What problems might this changeover cause,
  and how can they be minimized?
 How should the new system be justified and
  sold to top management?
 How can expected costs and benefits be
  quantified to determine whether the new
  system will indeed be cost-effective?

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      Systems Development and
 This chapter discusses five major topics.
 The first topic is the system development
  life cycle (Objective 1).
 The second topic is the planning activities
  that are necessary during the development
  of the life cycle (Objectives 2 and 3).
 The third topic is the process of demonstrating
  the feasibility of a new AIS (Objective 4).

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      Systems Development and
 The fourth topic is the behavioral aspects
  of change that companies must deal with
  to successfully implement a new system
  (Objective 5).
 The last topic is a discussion of systems
  analysis, the first step in the development
  cycle (Objective 6).

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       The Systems Development
              Life Cycle
   What are the five steps in the systems
    development life cycle (SDLC)?
1   Systems analysis
2   Conceptual design
3   Physical design
4   Implementation and conversion
5   Operations and maintenance

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   The Systems Development
          Life Cycle

      Systems Analysis
   Do initial investigation    Feasibility
                               analysis and
     Do system survey          decision points
     Do feasibility study
Determine information needs
  and system requirements
Deliver systems requirements

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    The Systems Development
           Life Cycle

    Conceptual Design
   Identify and evaluate        Feasibility
                                analysis and
     design alternatives        decision points
Develop design specifications
 Deliver conceptual design

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  The Systems Development
         Life Cycle

    Physical Design
     Design output         Feasibility
                           analysis and
    Design data base       decision points
      Design input
   Develop programs
  Develop procedures
     Design controls
Deliver developed system

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     The Systems Development
            Life Cycle

Implementation and Conversion
          Develop plan             Feasibility
                                   analysis and
 Install hardware and software     decision points
Train personnel, test the system
   Complete documentation
Convert from old to new system
     Fine-tune and review
  Deliver operational system

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  The Systems Development
         Life Cycle

Operation and Maintenance   Systems
     Operate system         Analysis
      Modify system
 Do ongoing maintenance
 Deliver improved system

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                   The Players

   Who are the people involved in developing and
    implementing AIS?
–   management
–   accountants
–   information systems steering committee
–   project development team
–   systems analysts and programmers
–   external players

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                  The Players

   What are top management’s roles?
–   providing support and encouragement
–   establishing system goals and objectives
–   determine information requirements

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                 The Players

   What are accountants’ roles?
–   determine their information needs
–   may be members of the project development
–   play an active role in designing system

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                  The Players

   What are the steering committee’s roles?
–   set policies that govern the AIS
–   ensures top-management participation
–   guidance and control
–   facilitates coordination and integration of
    IS activities

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                 The Players

   What are the project development team’s roles?
–   plan each project
–   monitor project
–   make sure proper consideration is given
    to the human element

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                 The Players

   What are the system analyst’s and
    programmer’s roles?
–   study existing systems
–   design new systems prepare specifications
–   write computer programs

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    Planning Systems Development

   Why is planning an important step in
    systems development?
–   consistency
–   efficiency
–   cutting edge
–   lower costs
–   adaptability

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    Planning Systems Development

   What types of systems development plans
    are needed?
–   project development plans
–   master plan

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          Planning Techniques

 Two techniques for scheduling and monitoring
  systems development activities are:
2 Gantt chart
 PERT (program evaluation and review
  technique) requires that all activities and the
  precedent and subsequent relationships among
  them be identified.

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         Planning Techniques

 What is the critical path?
 The path requiring the greatest amount of time.
 The total time of the project can be reduced
  by shortening the critical path.
 If any activity on the path takes longer than
  anticipated, a delay occurs.

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           Planning Techniques

                                G           6
                    C               F
          A                 D
    1           2               5
Critical path                   3
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          Planning Techniques

 A Gantt chart is a bar chart with project
  activities listed on the left-hand side and units
  of time (days or weeks) across the top.
 For each activity, a bar is drawn from the
  scheduled starting date to the ending date.
 As activities are completed, the bar is filled in.

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      Planning Techniques
          Project Planning Chart
           (Sample Gantt Chart)
   Activity            Week Starting
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              Feasibility Analysis

   Systems analysis is the first step in the systems
    development life cycle (SDLC).
   A feasibility study (also called a business case) is
    prepared during systems analysis and updated as
    necessary during the remaining steps in the SDLC.
   The steering committee uses the study to decide
    whether to terminate a project, proceed
    unconditionally, or proceed conditionally.

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            Feasibility Analysis

   What five important aspects need to be
    considered during a feasibility study?
1   Technical feasibility
2   Operational feasibility
3   Legal feasibility
4   Scheduling feasibility
5   Economic feasibility

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          Feasibility Analysis

 Economic feasibility is the most frequently
  analyzed of the five aspects.
 What is the basic framework for feasibility
– capital budgeting model

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            Feasibility Analysis

   What are some capital budgeting techniques?
–   Payback period – ignores time value of money
–   Net present value (NPV)
–   Internal rate of return (IRR)
–   Positive NPV indicates that true return is
    above the discount rate
–   Requires forecast of future cash flows

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    Behavioral Aspects of Change

 Individuals involved in systems development
  are agents of change who are continually
  confronted by people’s reaction and resistance
  to change.
 The best system will fail without the support
  of the people it serves.
 Why do behavioral problems occur?

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     Behavioral Aspects of Change

–   personal characteristics and background
–   manner in which change is introduced
–   experience with prior changes
–   communication
–   disruptive nature of the change process
–   Fear-Uncertainty-Doubt

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     Behavioral Aspects of Change

   How do people resist AIS changes?
–   aggression
–   projection
–   Avoidance

      “I could take change better if things
    weren’t so different afterward.”

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     Behavioral Aspects of Change

   How can behavioral problems be improved?
–   meet needs of the users
–   keep communication lines open
–   maintain a safe and open atmosphere
–   obtain management support
–   allay fears
–   solicit user participation
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     Behavioral Aspects of Change

–   provide honest feedback
–   make sure users understand the system
–   describe new challenges and opportunities
–   reexamine performance evaluation
–   avoid emotionalism
–   present the system in the proper context
–   control the users’ expectations
–   keep the system simple

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            Systems Analysis

 When a new or improved system is needed,
  a written request for systems development
  is prepared.
 The request describes the current system’s
  problems, why the change is needed, and the
  proposed system’s goals and objectives.
 It also describes the anticipated benefits and

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             Systems Analysis

   There are five steps in the analysis phase:
1   Initial investigation
2   Systems survey
3   Feasibility study
4   Information needs and systems requirements
5   Systems analysis report

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          Shoppers Mart Case

 What did Ann Christy decide?
– that the corporate office would gather
  daily sales data from each store
 What was the estimated initial cost of the
  system? the net present value of the
– initial cost — $5 million
– NPV — more than $3 million

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