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10 Developing Business/IT Solutions

Foundation Concepts: Developing Business/IT Solutions, introduces the traditional, prototyping, and end user
approaches to the development of information systems, and discusses the processes and managerial issues in the
implementation of new e-business applications.

The Systems Development Cycle – Business end users and IS specialists may use a systems approach to help
them develop information system solutions to meet e-business opportunities. This frequently involves a systems
development cycle where IS specialists and end users conceive, design, and implements e-business systems. The
stages, activities, and products of the information systems development cycle are summarized in Figure 10.3.

Prototyping – Prototyping is a major alternative methodology to the traditional information system development
cycle. It includes the use of prototyping tools and methodologies, which promote an iterative, interactive process
that develops prototypes of user interfaces and other information system components. See Figure 10.4.

End User Development – The application development capabilities built into many end user software packages
have made it easier for end users to develop their own e-business applications. End users should focus their
development efforts on the system components of business processes that can benefit from the user of information
technology, as summarized in Figure 10.15.

Implementing IS – The implementation process for information system projects is summarized in Figure 10.19.
Implementation involves acquisition, testing, documentation, training, installation, and conversion activities that
transform a newly designed e-business system into an operational system for end users.

Evaluating Hardware, Software, and Services – Business professionals should know how to evaluate the
acquisition of information system resources. IT vendors’ proposals should be based on specifications developed
during the design stage of systems development. A formal evaluation process reduces the possibility of incorrect or
unnecessary purchases of hardware or software. Several major evaluation factors, summarized in Figures 10.22,
10.23, and 10.24, can be used to evaluate hardware, software, and IS services.


Learning Objective
• Use the systems development process outlined in this chapter, and the model of IS components from Chapter 1
as problem-solving frameworks to help you propose information systems solutions to simple business
• Describe and give examples to illustrate how you might use each of the steps of the information systems
development cycle to develop and implement an e-business system.
• Explain how prototyping improves the process of systems development for end users and IS specialists.
• Identify the activities involved in the implementation of new information systems.
• Describe several evaluation factors that should be considered in evaluating the acquisition of hardware,
software, and IS services.


Section I: Developing e-Business System

This chapter presents a generic systems approach to problem solving. It deals with how organizations can develop
systematic ways to problem solving. This process is known as the systems approach. When the systems approach
to problem solving is applied to the development of information system solutions to business problems, it is called
information systems development or application development. The systems approach can be used to develop e-
business systems and applications that meet the business needs of a company and its employees and stakeholders.

Analyzing Fidelity Investments and Others

We can learn a lot about the challenges of good Web systems design for B2B e-commerce. Take a few minutes to
read it, and we will discuss it (Fidelity Investments and Others in Section IX).


The systems approach to problem solving uses a systems orientation to define problems and opportunities and
develop solutions. Studying a problem and formulating a solution involves the following interrelated activities:
• Recognize and define a problem or opportunity using systems thinking.
• Develop and evaluate alternative system solutions.
• Select the system solution that best meets your requirements.
• Design the selected system solution.
• Implement and evaluate the success of the designed system.
Emphasize to the students that when using the systems approach:
• Steps can overlap each other.
• Activities required for problem solving can be used in more than one step of the process.
• The completion of activities in one step may extend into the performance of another.
• Sometimes you may have to cycle back to a previously completed step.

Systems Thinking:
Using systems thinking to understand a problem or opportunity is one of the most important aspects of the systems
approach. The essence of the discipline of systems thinking is “seeing the forest and the trees” in any situation by:
• Seeing interrelationships among systems rather than linear cause-and-effect chains whenever events occur.
• Seeing processes of change among systems rather than discrete “snapshots” of change, whenever changes

One way of practising systems thinking is to try to find systems, subsystems, and components of systems in any
situation you are studying. This viewpoint ensures that important factors and their interrelationships are
considered. This is also known as using a systems context, or having a systematic view of a situation. For
example, the business organization or business process in which a problem or opportunity arises could be viewed as
a system of:
• Input
• Processing
• Output
• Feedback
• Control


Using the systems approach to develop information systems solutions can be viewed as a multistep processed called
the information systems development cycle, also known as the systems development life cycle (SDLC). The
SDLC is composed of five steps, which include:
• Systems investigation Product: Feasibility Study
• Systems analysis Product: Functional Requirements
• Systems design Product: Systems Specifications
• Systems implementation Product: Operational System
• Systems maintenance Product: Improved System

STRESS to students that:

• All the activities involved are highly related and interdependent.
• Several developmental activities can occur at the same time.
• Different parts of a development project can be at different stages of the development cycle.
• May recycle back at any time to repeat previous activities in order to modify and improve a system being

PROTOTYPING: [Figure 10.4]

Prototyping is the rapid development and testing of working models, or prototypes, of new applications in an
interactive, iterative process involving both IS specialists and business professionals.
• Prototyping makes the development process faster and easier for IS specialists and business professionals.
• Prototyping makes the development process faster and easier, especially for projects where end user
requirements are hard to define. Thus, prototyping is sometimes called
rapid application design (RAD).
• Prototyping has also opened up the application development process to end-users because it simplifies and
accelerates systems design. These developments are changing the roles of end users and information
systems specialists in systems development.

The Prototyping Process

Prototyping can be used for both large and small applications.
• Typically, large e-business systems still require using the traditional systems development approach, but parts
of such systems can frequently be prototyped.
• A prototype of a business application needed by an end user is developed quickly using a variety of application
development software tools. The prototype system is then repeatedly refined until it is acceptable.
• Prototyping is an iterative, interactive process that combines steps of the traditional systems development
cycle, and allows the rapid development and testing of a working model.


The first step in the systems development process is the systems investigation stage. This step may involve
consideration of proposals generated by an e-business planning process. The investigation stage also includes the
preliminary study of proposed information system solutions to meet a company’s e-business priorities and

The three steps of the systems investigation stage involve:

• Determining how to address e-business opportunities and priorities.
• Conducting a feasibility study to determine whether a new or improved e-business system is a feasible solution.
• Developing a project management plan and obtaining management approval.
Feasibility Studies: [Figure 10.6 & Figure 10.7]

Because the process of developing can be costly, the systems investigation stage frequently requires a preliminary
study called a feasibility study. A feasibility study is a preliminary study, where the information needs of
prospective users and the resource requirements, costs, benefits, and feasibility of a proposed project are

Steps of a feasibility study:

• Gather information/data for a feasibility study.
• Formalize a written report including the preliminary specifications and a developmental plan for the proposed
system e-business application.
• Submit the report to management for approval.
• Begin system analysis (if management approves the recommendations of the feasibility study).

The goal of feasibility studies is to:

• Evaluate alternative e-business systems solutions.
• Propose the most feasible and desirable e-business application for development.

The feasibility of a system can be evaluated in terms of four major categories

• Organizational Feasibility:
- Focuses on how well a proposed system supports the e-business priorities of the organization.

• Economic Feasibility:
- Focuses on whether expected cost savings, increased revenue, increased profits, and reductions in required
investment, and other types of benefits will exceed the costs of developing and operating a proposed system.
• Technical Feasibility:
- Focuses on the reliabilities/capabilities of the hardware and software to meet the needs of the proposed
system, and whether they can be acquired or developed in the required time.

• Operational Feasibility:
- Focuses on the willingness and ability of the management, employees, customers, suppliers, and others to
operate, use, and support the proposed system.

Cost/Benefit Analysis

Every legitimate solution will have some advantages or benefits, and some disadvantages or costs. These
advantages and disadvantages are identified when each alternative solution is evaluated. This process is typically
called cost/benefit analysis.

• Tangible Costs: Tangible costs are costs and benefits that can be quantified (e.g., cost of hardware and
software, employee salaries, and other quantifiable costs needed to develop and implement a solution).

• Intangible Costs: Intangible costs are costs and benefits that cannot be quantified (e.g., loss of customer
goodwill or employee morale caused by errors and disruptions arising from the installation of a new system).

• Tangible Benefits: Tangible benefits are favorable results (e.g., decrease in payroll costs caused by a reduction
in personnel or a decrease in inventory carrying costs caused by a reduction in inventory)

• Intangible Benefits: Intangible benefits are hard to estimate (e.g., better customer service or faster and more
accurate information for management).


Systems analysis is an in-depth study of end user information needs, which produces functional requirements that
are used as the basis for the design of a new information system. Systems analysis traditionally involves a detailed
study of:
• The information needs of the company and the end users.
• The activities, resources, and products of any present information systems being used.
• The information systems capabilities required to meet the information needs of end users, and those of other e-
business stakeholders that may use the system.

Organisational Analysis
Organisational analysis involves evaluating the organizational and environmental systems and subsystems
involved in any situation. Systems analysis traditionally involves a detailed study of the organizations:
• Environment
• Management structure
• People
• Business activities
• Environmental systems it deals with
• Current information systems

Analysis of the Present System

Before designing a new system, a detailed analysis of the current system (manual or automated) must be
completed. An analysis of the present system involves analyzing activities, resources, and the products. You must
analyze how the present system uses:
• Hardware, software, people resources to convert data resources into information products, such as reports and
• Document how the information activities of input, processing, output, storage, and control are being
Functional Requirements Analysis
This step of systems analysis is one of the most difficult. Steps involve:
• Working as a team with IS analysts and end users to determine specific business information needs.
• Determining the information processing capabilities required for each system activity (input,
processing, output, storage, and control) to meet the information needs. Goal is to identify WHAT should be
done NOT how to do it.
• Develop functional requirements (information requirements that are not tied to the hardware, software,
network, data, and people resources that end users presently use or might use in the new system).

SYSTEMS DESIGN - [Figure 10.11]

• Systems analysis describes what a system should do to meet the information needs of users.
• System design specifies how the system will accomplish this objective.

Systems design consists of design activities, which produce systems specifications satisfying the functional
requirements developed in the systems analysis stage. These specifications are used as the basis for:
• Software development
• Hardware acquisition
• System testing
• Other activities of the implementation stage
• Systems design can be viewed as the design of three major products, or deliverables that should result from the
design stage. These activities include:
• User interface design
• Data design
• Process design

User Interface Design

User interface design focuses on supporting the interactions between end users and their computer-based
applications. Designer’s concentrate on:
• The design of attractive and efficient forms of user input and output, such as easy-to-use Internet or intranet
web pages.
• Design is frequently a prototyping process, where working models or prototypes of user interface methods are
designed and modified several times with feedback from end users.
• Design process produces detailed design specifications for information products such as display screens,
interactive user/computer dialogues, audio responses, forms, documents, and reports.

Design tips to keep in mind:

• Keep it simple
• Keep it clean
• Organize logically

System Specifications
System specifications formalize the design of an application’s user interface methods and products, database
structures, and processing and control procedures. Therefore, systems designers will frequently develop hardware,
software, network, data, and personnel specifications for a proposed system. Systems analysts work with you so
they can use your knowledge of your own work activities and their knowledge of computer-based systems to specify
the design of a new or improved information system.

The final systems design typically specifies:

• Hardware resources (machines and media)
• Software resources (programs and procedures)
• Network resources (communications media and networks)
• People resources (end users and information systems staff).
• How resources will be used to convert data resources (stored in files and databases they design) into
information products (displays, responses, reports, and documents).


In end user development, IS professionals play a consulting role while you do your own application development.
Sometimes a staff of user consultants may be available to help you and other end users with your application
development efforts. This may include:
• Training in the use of application packages
• Selection of hardware and software
• Assistance in gaining access to organization databases
• Assistance in analysis, design, and implementation

Focus on IS Activities: [Figure 10.15]

End user development should focus on the fundamental activities of an information system:
• Input
• Processing
• Output
• Storage
• Control

In analyzing a potential application, you should focus on:

• Output
- What information is needed and in what form should it be presented?
• Input
- What data are available, from what sources? And in what form?

• Processing
- What operations or transformation processes will be required to convert the available inputs into the desired
- What software can best perform the operations required?

• Storage
- Does the application use previously stored data?
- Does it create data that must be stored for future use by this or other applications?

• Control
- What controls are needed to protect against accidental loss or damage?
- Is there a need to control access to data used by the application?

Doing End User Development:

In end user development, you and other business professionals can develop new or improved ways to perform your
jobs without the direct involvement of IS specialists. The application development capabilities built into a variety
of end user software packages have made it easier for many users to develop their own computer-based solutions.

Section II: Implementing e-Business Systems


The implementation process is the next major stage that follows the investigation, analysis, and design stages of
the systems development process. Therefore, implementation is an important activity planned by an organization
and its end users.

Analyzing PacifiCorp, Reynolds, and Zurich NA

We can learn a lot from this case about the challenges of implementing customer-centric e-business systems. (See
Select PacifiCorp, Reynolds, and Zurich NA in Section IX)


The implementation process for newly designed information systems involves a variety of acquisition, testing,
documentation, installation, and conversion activities. It also involves the training of end users in the operation
and use of the new information system. Thus, implementation is a vital step in ensuring the success of new
systems. Implementation involves a variety of activities, which include:
• Acquisition of hardware, software and services.
• Software development or modification.
• Testing of programs, procedures, and hardware.
• System documentation.
• Conversion (parallel, pilot, phased, plunge).
• End User training.


To evaluate and select hardware and software, computer-using organizations typically:

• Require suppliers to present bids and proposals based on system specifications developed during the design
stage of systems development.
• Establish minimum acceptable physical and performance characteristics for all hardware and software
• Government agencies and most large businesses use a document called an RFP (request for proposal) or RFQ
(request for quotation), which lists all the required specifications.
• When several competing proposals for hardware or software acquisition need to be evaluated, a scoring system
may be used, giving a numerical score for each of several evaluation factors. Each competing proposal is
assigned points for each factor, depending on how well it meets the specifications of the computer user.
• Hardware and software should be demonstrated and evaluated.
• Using special benchmark test programs and test data to evaluate proposed hardware and software. Special
software simulators may also be available that simulate the processing of typical jobs on several computers and
evaluate their performances.
• Other users are frequently the best source of information needed to evaluate the claims of manufacturers and
suppliers. Good example: Internet newsgroups.

Hardware Evaluation Factors: [Figure 10.22]

When evaluating computer hardware, you should investigate specific physical and performance characteristics for
each hardware component to be acquired. This is true whether you are evaluating mainframes, microcomputers, or
peripheral devices. Hardware evaluation factors include:
• Performance
• Cost
• Reliability
• Compatibility
• Technology
• Ergonomics
• Connectivity
• Scalability
• Software
• Support

Software Evaluation Factors: [Figure 10.23]

You should evaluate software according to many factors that are similar to those used for hardware evaluation.
Thus, the factors of performance, cost, reliability, availability, compatibility, modularity, technology, ergonomics,
and support should be used to evaluate proposed software acquisition. In addition, however, software evaluation
factors should also include evaluating:
• Quality
• Efficiency
• Flexibility
• Security
• Connectivity
• Language
• Documentation
• Hardware
• Other factors (performance, cost, reliability etc.)

Evaluating IS Services: [Figure 10.24]

Suppliers of hardware and software products and many other firms offer a variety of IS services to end users and
organizations. Some IS services which are provided free or for a change include:
• e-commerce website development
• Installation or conversion of new hardware and software
• Employee training
• Hardware maintenance.

IS services can be outsourced to an outside company for a negotiated price. For example:
• Systems integrators take over complete responsibility for an organization’s computer facilities when an
organization outsources its computer operations.
• Systems integrators may assume responsibility for developing and implementing large systems development
projects that involve many vendors and subcontractors.
• Value-added resellers (VARs) specialize in providing industry-specific hardware, software, and services from
selected manufacturers.
• Other services include systems design, contract programming, and consulting services.

Evaluating IS services includes factors such as:

• Performance
• Systems development
• Maintenance
• Conversion
• Training
• Backup
• Accessibility
• Business position
• Hardware
• Software


Testing, documentation, and training are keys to successful implementation of a new e-business system.

System testing may involve:
• Testing website performance
• Testing and debugging software
• Testing new hardware
• Review of prototypes of displays, reports, and other output
• Testing at every stage of the systems development process

Developing good user documentation is an important part of the implementation process.
• Documentation serves as a method of communicating among the people responsible for developing,
implementing, and maintaining a computer-based system.
• Documentation is extremely important in diagnosing errors and making changes.
• Documentation involves developing:
1. Manuals for operating procedures 3. Sample forms
2. Sample data entry display screens 4. Sample reports

Training is a vital implementation activity. IS personnel must be sure that end users are trained to operate a new
e-business system or its implementation will fail. Training may include:
• Activities such as data entry
• All aspects of the proper use of a new system
• Managers and end users must be educated in how the new technology impacts the company’s business
operations and management.
• Training programs for specific hardware devices, software packages, and their use for specific work activities.

Conversion Methods: [Figure 10.26]

The initial operation of a new e-business system can be a difficult task. Such an operation is usually a conversion
process in which the personnel, procedures, equipment, input/output media, and databases of an old information
system must be converted to the requirements of a new system. Four major forms of system conversion include:
• Parallel Conversion: - Both the old and the new system are operated until the project development team and
end user management agrees to switch completely over to the new system. It is during this time that the
operations and results of both systems are compared and evaluated. Errors can be identified and corrected,
and the operating problems can be solved before the old system is abandoned.

• Phased Conversion: - Only parts of a new application or only a few departments, branch offices, or plant
locations at a time are converted. A phased conversion allows a gradual implementation process to take place
within an organization.

• Pilot Conversion: - Where one department or other work site serves as a test site. A new system can be tried
out at this site until developers feel it can be implemented throughout the organization.

• Plunge/Direct Cutover: - Use the system immediately and totally abandons the old system.

IS Maintenance:
Once a system is fully implemented and is being used in business operations, the maintenance function begins.
System maintenance is the monitoring, evaluating, and modifying of operational e-business systems to make
desirable or necessary improvements. The maintenance function includes:
• A postimplementation review process to ensure that newly implemented systems meet the e-business
objectives established for them.
• Correcting errors in the development or use of the system. This includes a periodic review or audit of a system
to ensure that it is operating properly and meeting its objectives.
• Making modifications to an e-business system due to changes in the business organization or the business


Conversion Methods:
The process in which the hardware, software, people, and data resources of an old information system must be
converted to the requirements of a new information system. This usually involves a (1) parallel, (2) phased, (3)
pilot, or (4) plunge conversion process from the old to the new system.

Cost/benefit Analysis:
Identifying the advantages or benefits and the disadvantages or costs of a proposed solution.

A collection of documents or information that describes a computer program, information system, or required data
processing operations.

Economic Feasibility:
Whether expected cost savings, increased revenue, increased profits and reductions in required investment exceed
the costs of developing and operating a proposed system.

End User Development:

Managers and business specialists can develop their own computer-based business applications.

Evaluation Factors - Hardware:

Criteria used to evaluate hardware services (Figure 10.22)

Evaluation Factors - IS Services:

Criteria used to evaluate IS services (Figure 10.24)

Evaluation Factors - Software:

Criteria used to evaluate software services (Figure 10.23)

Feasibility Study:
A preliminary study that investigates the information needs of end users and the objectives, constraints, basic
resource requirements, cost/benefits, and feasibility of proposed projects.

Functional Requirements:
A detailed description of user information needs and the input, processing, output, storage, and control capabilities
required to meet those needs.

Implementation Process:
Includes acquisition, testing, training, and conversion to a new system.

Intangible Benefits:
The non-quantifiable benefits of a proposed solution.

Intangible Costs:
The non-quantifiable costs of a proposed solution.

Operational Feasibility:
The willingness and ability of management, employees, customers, and suppliers to operate, use, and support a
proposed system.

Organizational Analysis:
Evaluating the organizational and environmental systems and subsystems involved in any situation.

Organizational Feasibility:
How well a proposed information system supports the objectives of an organization’s strategic plan for information

Postimplementation Review:
Monitoring and evaluating the results of an implemented solution or system.

A working model. In particular, a working model of an information system, which includes tentative versions of
user, input and output, databases and files, control methods, and processing routines.

The rapid development and testing of working models, or prototypes, of new information system applications in an
interactive, iterative process involving both systems analysts and end users.

Systems Analysis:
(1) Analyzing in detail the components and requirements of a system, (2) Analyzing in detail the information
needs of an organization, the characteristics and components of presently utilized information systems, and the
functional requirements of proposed information systems.

Systems Approach:
A systematic process of problem solving based on the scientific method, which defines problems and opportunities
in a systems context. Data is gathered describing the problem or opportunity, and alternative solutions are
identified and evaluated. Then the best solution is selected and implemented, and its success evaluated.

Systems Design:
Deciding how a proposed information system will meet the information needs of end users. Includes logical and
physical design activities, and user interface, data and process design activities, which produce system
specifications that satisfy the system requirements developed in the systems analysis stage.

Systems Development Life Cycle:

(1) Conceiving, designing, and implementing a system, (2) Developing information systems by a process of
investigation, analysis, design, implementation, and maintenance. Also called information systems development,
or application development.

Systems Implementation:
The stage of systems development in which hardware and software are acquired, developed, and installed, the
system is tested and documented, people are trained to operate and use the system, and an organization converts to
the use of a newly developed system.
Systems Investigation:
The screening, selection, and preliminary study of a proposed information system solution to a business problem.

Systems Maintenance:
The monitoring, evaluating, and modifying of a system to make desirable or necessary improvements.

System Specifications:
The product of the systems design stage. It consists of specifications for the hardware, software, facilities,
personnel, databases, and the user interface of a proposed information system.

System Testing:
Checking whether hardware and software work properly.

Systems Thinking:
Trying to recognize systems and the new interrelationships and components of systems in any situation.

Tangible Benefits:
The quantifiable benefits of a proposed solution or system.

Tangible Costs:
The quantifiable costs of a proposed solution or system.

Technical Feasibility:
Whether reliable hardware and software capable of meeting the needs of a proposed system can be acquired or
developed by an organization in the required time.

User Interface, Data, and Process Design:

The three major activities or products of systems design.

 Why has prototyping become a popular way to develop e-business applications. What are
prototyping’s advantages and disadvantages?
 What are the three most important factors you would use in evaluating computer
hardware? Computer software?
 Assume that in your first week on a new job you are asked to use a type of business
software that you have never used before. What kind of user training should your
company provide to you before you start?
 What is the difference between the parallel, plunge, phased, and pilot forms of IS
conversion? Which strategy is best?
 What are several key factors in designing a successful e-commerce or internet website?