Systems Analysis and Design

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 Chapter 1 Outline
▪ The systems analyst.
▪ The Systems Development Life Cycle
(SDLC).
▪ Information system project
identification and initiation.
▪ Feasibility analysis.

© Copyright 2011 John Wiley & Sons, Inc. 1-2

 Information System (IS)
▪ IS in organizations capture and manage data to produce useful
information that supports an organization and its employees,
customers, suppliers and partners.
▪ IS can be classified according to the functions they serve.
▪ Transaction Processing Systems (TPSs) process business transactions
such as orders, time cards, payments, and reservations.
▪ Management Information Systems (MISs) use the transaction data
to produce information needed by managers to run the business.
▪ Decision support systems (DSSs) help various decision makers makes
identify and choose between options or decisions.
▪ Executive Information Systems (EISs) are tailored to the unique
information needs of executives who plan for the business and assess
performance against these plans.
▪ Expert Systems capture and reproduce the knowledge of an expert
problem solver or decision maker and then simulate the “thinking’ of
that expert.
▪ Etc.
 INTRODUCTION
▪ The systems development life cycle (SDLC) is
the process of determining how an
information system (IS) can support business
needs, designing the system, building it, and
delivering it to users.
▪ The key person in the SDLC is the systems
analyst, who analyzes the business situation,
identifies the opportunities for improvements,
and designs an IS to implement the
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 THE SYSTEMS ANALYST
▪ The systems analyst plays a key role in IS development
projects.
▪ The systems analyst works closely with all project team
members so that the team develops the right system in
an effective way.
▪ Systems analysts must understand how to apply
technology in order to solve problems.
▪ Systems analysts may serve as change agents who
identify organizational improvement needed, design
systems to implement those changes, and train and
motivate others to use the systems.

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 Systems Analyst Skills
▪ Technical – Must understand the
technical environment, technical
foundation, and technical solution.
▪ Business – Must understand how IT
can be applied to business situations.
▪ Analytical – Must be problem
solvers.
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(cont’d)
▪ Interpersonal – Need to communicate
effectively.
▪ Management – Need to manage people
and to manage pressure and risks.
▪ Ethical - Must deal fairly, honestly, and
ethically with other project members,
managers, and systems users.
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THE SYSTEMS DEVELOPMENT LIFE
CYCLE (SDLC)

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(cont’d)
▪ The SDLC is composed of four fundamental
phases:
• Planning
• Analysis
• Design
• Implementation
▪ Each of the phases is composed of steps, which
rely on techniques that produce deliverables
(specific documents that explain various
elements of the system).
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 Planning
▪ This phase is the fundamental
process of understanding why an
information system should be built,
and determining how the project
team will go about building it.

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The planning phase has two steps:
1. During project initiation, the system’s
business value to the organization is
identified (How will it lower costs or
increase revenues?).
2. During project management, the project
manager creates a work plan, staffs the
project, and puts techniques in place to
help the project team control and direct the
project through the entire SDLC.
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 Analysis
▪ The analysis phase answers the questions
of who will use the system, what the
system will do, and where and when it will
be used.
▪ During this phase the project team
investigates any current system(s),
identifies improvement opportunities, and
develops a concept for the new system.

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 The analysis phase has three steps:
1. Analysis strategy: This is developed to guide the projects
team’s efforts. This includes a study of the current
system and its problems, and envisioning ways to
design a new system.
2. Requirements gathering: The analysis of this information
leads to the development of a concept for a new
system. This concept is used to build a set of analysis
models.
3. System proposal: The proposal is presented to the
project sponsor and other key individuals who decide
whether the project should continue to move forward.
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 Design
▪ The design phase decides how the
system will operate, in terms of the
hardware, software, and network
infrastructure; the user interface,
forms, and reports that will be used;
and the specific programs,
databases, and files that will be
needed.
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 The design phase has four steps:
1. Design Strategy: This clarifies whether the system
will be developed by the company or outside the
company.
2. Architecture Design: This describes the hardware,
software, and network infrastructure that will be
used.
3. Database and File Specifications: These documents
define what and where the data will be stored.
4. Program Design: Defines what programs need to be
written and what they will do.

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 Implementation
▪ During the implementation phase,
the system is either developed or
purchased (in the case of packaged
software) and installed.
▪ This phase is usually the longest and
most expensive part of the process.

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 The implementation phase has three steps:

1. System Construction: The system is

built and tested to make sure it
performs as designed.
2. Installation: The old system is turned
off and the new one is turned on.
3. Support Plan: Includes a post-
implementation review as well as a
systematic way for identifying changes
needed for the system.

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 PROJECT IDENTIFICATION AND
INITIATION
▪ A project is identified when someone in the
organization identifies a business need to build
a system.
▪ A need may surface when an organization
identifies unique and competitive ways of using
IT.
▪ To leverage the capabilities of emerging
technologies such as cloud computing, RFID,
Web 2.0
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 Project sponsor
▪ The project sponsor is a person (or group) who has
an interest in the system’s success
▪ The project sponsor will work throughout the SDLC
to make sure that the project is moving in the right
direction from the perspective of the business.
▪ The project sponsor serves as the primary point of
contact for the project team.
▪ The size or scope of the project determines by the
kind of sponsor that is involved.

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(cont’d)
▪ The project sponsor has the insights needed to
determine the business value that will be
gained from the system.
▪ Tangible value can be quantified and measured
easily (reduction in operating costs).
▪ An intangible value results from an intuitive
belief that the system provides important, but
hard-to-measure benefits to the organization.

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 System Request
▪ The document that describes the
business reasons for building a system
and the value that system is expected
to provide.
▪ The project sponsor usually completes
this form as part of a formal system
selection process within the
organization.
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(cont’d)
▪ The business requirements of the project refer
to the business capabilities that the system
will need to have.
▪ The business value describes the benefits that
the organization should expect from the
system.
▪ Special issues are included on the document
as a catchall category for other information
that should be considered in assessing the
project.
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(cont’d)
▪ The completed system request is submitted
to the approval committee for
consideration.
▪ The committee reviews the system request
and makes an initial determination of
whether to investigate the proposed
project or not.
▪ If so, the next step is to conduct a feasibility
analysis.
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© Copyright 2011 John Wiley & Sons, Inc. 1-24
 FEASIBILITY ANALYSIS
▪ Feasibility analysis guides the
organization in determining whether
to proceed with a project.
▪ Feasibility analysis also identifies the
important risks associated with the
project that must be managed if the
project is approved.
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(cont’d)
▪ As with the system request, each organization has
its own process and format for the feasibility
analysis, but most include techniques to assess
three areas:
– Technical feasibility
– Economic feasibility
– Organizational feasibility
▪ The results of evaluating these three feasibility
factors are combined into a feasibility study
deliverable that is submitted to the approval
committee at the end of project initiation.
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 Technical Feasibility
▪ Technical feasibility is the extent to
which the system can be successfully
designed, developed, and installed
by the IT group.
▪ It is, in essence, a technical risk
analysis that strives to answer the
question: “Can we build it?”
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(cont’d)
▪ Risks can endanger the successful completion
of a project. The following aspects should be
considered:
– Users’ and analysts’ should be familiar with the
application.
– Familiarity with the technology
– Project size
– Compatibility of the new system with the
technology that already exists

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 Economic Feasibility
▪ Economic feasibility analysis is also
called a cost-benefit analysis, that
identifies the costs and benefits
associated with the system.
▪ This attempts to answer the
question: “Should we build the
system?”
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Cash Flow Analysis and Measures
▪ IT projects involve an initial
investment that produces a steam of
benefits over time, along with some
on-going support costs.
▪ Cash flows, both inflows and
outflows, are estimated over some
future period.
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Simple cash flow projection

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 Common methods for evaluating a
project’s worth
▪ Return on Investment (ROI)
ROI=(Total Benefits – Total Costs)/Total Costs
▪ Break-Even Point (BEP)

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 Discounted cash flow technique
▪ Discounted case flows are used to compare
the present value of all cash inflows and
outflows for the project in the today’s
dollar terms.

▪ Net present value (NPV): the difference

between the total PV of the benefits and
the total PV of the costs.
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Discounted cash flow projection

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 Steps to conduct an economic
feasibility analysis
1. Identify Costs and Benefits
2. Assign Values to Costs and Benefits
3. Determine Cash Flow
4. Assess Project’s Economic Value
- ROI
- BEP
- NPV

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 Identify Costs and Benefits
▪ The costs and benefits and be broken down in
to four categories:
– Development costs
– Operational costs
– Tangible benefits
– Intangibles

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 Assign Values to Costs and Benefits
▪ Once the types of costs and benefits have been identified, the
systems analysts needs to assign specific dollar values to them.

© Copyright 2011 John Wiley & Sons, Inc. 1-37

 Determine Cash Flow
▪ A formal cost-benefit analysis usually
contains costs and benefits over a
selected number or years to show
cash flow over time.
- Determine ROI
- Determine BEP
- Determine NPV

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(cont’d)

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 Organizational Feasibility
▪ Organizational feasibility of the system is how well
the system ultimately will be accepted by its users
and incorporated into the ongoing operations of the
organization.
▪ There are many organizational factors that can have
an impact on the project, and seasoned developers
know that organizational feasibility can be the most
difficult feasibility dimension to assess.
▪ In essence, an organizational feasibility analysis is to
answer the question “If we build it, will they come?”

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(cont’d)
▪ One way to assess the organizational feasibility is to
understand how well the goals of the project align
with the business objectives and organizational
strategies.
▪ A second way to assess the organizational feasibility
is to conduct stakeholder analysis.
▪ A stakeholder is a person, group, or organization that
can affect a new system
- Project champion
- System users
- Organizational management
- Other stakeholders
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 SUMMARY
▪ The Systems Analyst is the key person in the development
of information systems.
▪ The Systems Development Lifecycle consists of four
stages: Planning, Analysis, Design, and Implementation.
▪ Project Identification and Initiation recognize a business
need that can be satisfied through the use of information
technology.
▪ System Request describes the business value for an
information system.
▪ A Feasibility Analysis is used to provide more detail about
the risks associated with the proposed system.

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