C HAPTER 6

AIS System Development

Process
Introduction to Systems Development and Analysis
AIS Development Strategies,
System Design, Implementation, Operation and Maintenance

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 CIntroduction to Systems
Development and Systems
Analysis

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 INTRODUCTION

• As the environment, technology, and

competition change, an information
system must continually undergo changes
• These changes range from minor
adjustments to major overhauls.
• Occasionally the old system is scrapped
and replaced.

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 INTRODUCTION
• Companies change their systems for a variety of
reasons:
– To take advantage of or respond to technology changes
– To accommodate improvements in their business
process
– To gain a competitive advantage and/or lower costs
– To increase productivity
– To accommodate growth
– To replace a system that is aged and unstable

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 INTRODUCTION
• Developing quality, error-free software is difficult,
expensive, and time-consuming.
• Projects tend to deliver less than expected and consume
more time and money.
• Omitting basic systems development steps becomes
business problem.

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 SYSTEMS DEVELOPMENT LIFE
CYCLE(SDLC)

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 SYSTEMS DEVELOPMENT LIFE CYCLE

• Whether systems changes are major or

minor, most companies go through a
systems development life cycle.
• In this section, we discuss the steps in the
Systems Development Cycle and the
people involved.

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 SYSTEMS DEVELOPMENT LIFE CYCLE

• The five stages in the systems development life cycle

are:
– 1. Systems analysis
– 2.Conceptual Design(How to meet user needs)
– 3. Physical Design
• translated into detailed specifications that can be used by programmers to code the
programs.
• Tasks include:
– Design outputs, database, and inputs
– Develop programs
– Develop procedures
– Design controls
– Deliver developed system

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 SYSTEMS DEVELOPMENT LIFE CYCLE

– 4. Implementation and Conversion

• Tasks include:
– Develop an implementation and conversion plan
– Install any new hardware and software
– Train personnel
• New employees may need to be hired and trained or existing employees relocated.
– Test the system and make any needed modifications.
– Complete the documentation.
– Convert from the old to the new system.
– Deliver operational system.
• Send the final report to the IS steering committee.
– 5. Operation and Maintenance
• Tasks include:
– Fine-tune and do post-implementation review.
– Operate the system.
– Periodically review and modify the system.
– Do ongoing maintenance.
– Deliver improved system.

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 THE PLAYERS

 Many people are involved in developing and

successfully implementing an AIS, including:
 Top management
 Accountants
 The information systems steering committee
 The project development team
 Systems analysts
 Computer programmers
 External players

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 SYSTEMS ANALYSIS

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 SYSTEMS ANALYSIS

• When a new or improved system is

needed, a written request for systems
development is prepared. That request
describes:
– The current system’s problems
– The reasons for the proposed changes
– The goals and objectives of a proposed
system
– The anticipated benefits and costs

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 SYSTEMS ANALYSIS

• The project development team will conduct

the systems analysis in five steps:
– Initial investigation
– Systems survey
– Feasibility study
– Information needs and systems requirements
– Systems analysis report

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 SYSTEMS ANALYSIS

• The project development team will conduct

the systems analysis in five steps
– Initial investigation
– Systems survey
– Feasibility study
– Information needs and systems requirements
– Systems analysis report

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 SYSTEMS ANALYSIS

• Systems objectives must be identified, so

analysts and users can focus on those elements
most vital to success of the AIS. These may
include:
- Usefulness - Capacity
- Economy - Ease of use
- Reliability - Flexibility
- Availability - Auditability
- Timeliness - Security
- Customer service

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 C
AIS Development Strategies

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 INTRODUCTION

• Companies can experience a number of

difficulties in developing an AIS, including:
– The newly designed system doesn’t meet user needs.
– The process takes so long that by the time it’s
complete, it’s outdated.
– Users can’t adequately specify their needs.
– Changes to the AIS are often difficult with
specifications.

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 INTRODUCTION

• AIS Development Strategies

• How to obtain a new information system
– 1.Purchasing prewritten software;
– 2. Developing software in-house; or
– 3.Outsourcing.

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 PURCHASING PREWRITTEN SOFTWARE

1.PURCHASING PREWRITTEN SOFTWARE

• In the early days of computers, companies were rarely
able to buy software to meet their needs.
• But commercially available packages are now outpacing
custom-developed software as old systems are
replaced.

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 PURCHASING PREWRITTEN SOFTWARE

• Canned software is sold on the open

market to a broad range of users with
similar requirements.
– Some companies sell hardware and software
together as a package.
• These systems are called turnkey systems.
• Many are written by vendors who specialize in a
particular industry.

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 PURCHASING PREWRITTEN SOFTWARE

– A major problem with canned software:

• It often does not meet all of a company’s
information needs.
• canned software may:
– Usually best done by the vendor.
– Unauthorized modifications may render the
program unreliable and unstable.

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 PURCHASING PREWRITTEN SOFTWARE

• Companies can also acquire software through

application service providers (ASPs).
– ASPs host web-based software and deliver it to
clients over the Internet.
– Companies don’t have to buy, install, or maintain
canned software; they simply “rent” it.

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 PURCHASING PREWRITTEN SOFTWARE

– Advantages of ASPs:
• Reduction of software costs and administrative
overhead.
• Automated software upgrades.
• Global access to information.
• Access to skilled IT personnel.
• Ability to focus on core financial competencies
rather than IT.

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 DEVELOPING SOFTWARE IN-HOUSE

• 2.DEVELOPING SOFTWARE IN-HOUSE

• Despite the availability of good canned software,
many organizations develop their own because:
– Their requirements are unique; or
– Their size and complexity necessitates a custom
package.

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 DEVELOPING SOFTWARE IN-HOUSE

• Developing custom software is difficult and error prone and

consumes much time and resources.
• The most difficult hurdles, in House software is
– Lack of time.
– Poor requirements and systems planning.
– Inadequate communication and cooperation between
departments and users.
– Lack of qualified staff.
– Poor senior executive support.

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 DEVELOPING SOFTWARE IN-HOUSE

• The process requires much discipline and

management supervision.
• Accountants may help as project
supervisors, users, or development team
members.

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 OUTSOURCE THE SYSTEM

• 3. Outsourcing is hiring an outside

company to handle all or part of an
organization’s data processing activities.
– In a mainframe outsourcing agreement:
• The outsourcers buy the client’s computers and
hire all or most of the client’s employees.
• Then operate and manage the entire system on
the client’s site or migrate it to the outsourcer’s
computers.
• Many of these contracts have terms of 10 or more
years and cost from hundreds of thousands to
millions of dollars a year.
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 OUTSOURCE THE SYSTEM

– In a client/server or a PC outsourcing
agreement the organization outsources:
• A particular service (e.g., help desk services);
• A segment of its business
• A particular function; or
• PC support.

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 OUTSOURCE THE SYSTEM

• Examples of outsourced activities:

– Installation
– Training
– Maintenance
– Help desk
– Technical support

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 OUTSOURCE THE SYSTEM

• The Growth in Outsourcing

Applications
– Outsourcing was initially used for
standardized applications such as payroll,
accounting, and purchasing.
– Also used by companies that were struggling
to survive.

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 OUTSOURCE THE SYSTEM

• Kodak and Xerox were very successful at

cutting capital expenditures and other
costs, which motivated others to outsource
their systems.
• Now many Fortune 500 companies
outsource some or all of there IS.

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 OUTSOURCE THE SYSTEM

• Benefits of outsourcing:
– Provides a business solution
– Asset utilization
– Access to greater experience and more
advanced technology
– Lower costs
– Improved development time
– Facilitation of downsizing

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 OUTSOURCE THE SYSTEM

• Risks of outsourcing:
– Inflexibility
– Loss of control
– Reduced competitive advantage
– Unfulfilled goals
– Poor service

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 Thank you

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