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SYSTEM ANALYSIS AND DESIGN

BBAN 602
UNIT 1
SYSTEM

A system is a set of interacting elements responding to inputs to produce output
according to plan to achieve a specific objective.

Characteristics

1. Specific purpose: every system has a purpose or objective.

2. Components: every system is a collection of subsystems or components and
each component which collectively functions to achieve the objective of the
system.
3. Organization: each subsystem in a system is defined in a specific order or
in an organized manner.
4. Interdependence: it means that component or subsystem depend on one
another. They are coordinated and linked together according to the plan.
5. Integration: it is concerned with how a system is tied together. Successful
integration will produce a better result as a whole rather than if each
component works separately.

Types of system

1. Abstract and physical systems An abstract or conceptual system is an
orderly arrangement of interdependent ideas or constructs, which may or
may not have any counterpart in the real world.

On the other hand, physical systems are generally concrete operational
systems made up of people, materials, machines, energy and other physical
things; Physical systems are more than conceptual constructs.

2. Deterministic and Probabilistic Systems

A deterministic system is one in which the occurrence of all events is known
with certainty. A probabilistic system is one in which the occurrence of
events cannot be perfectly predicted. Though the behavior of such a system
can be described in terms of probability, a certain degree of error is always
attached to the prediction of the behavior of the system.

3. Open and Closed Systems

An open system is one that interacts with its environment and thus exchanges
information, material, or energy with the environment, including random and
undefined inputs. Open systems are adaptive in nature, as they tend to react with
the environment in such a way, so as to favor their continued existence. Such
systems are ‘self organizing’, in the sense that they change their organization in
response to changing conditions.

A closed system is one, which does not interact with its environment. Such systems
in business world are rare, but relatively closed systems are common. Thus, the
systems that are relatively isolated from the environment but not completely closed
are termed closed system.

SYSTEM DEVELOPMENT LIFE CYCLE

The system-development life cycle enables users to transform a newly-developed
project into an operational one.

The System Development Life Cycle, "SDLC" for short, is a multistep, iterative
process, structured in a methodical way. This process is used to model or provide a
framework for technical and non-technical activities to deliver a quality system
which meets or exceeds a business’s expectations or manage decision-making
progression.

Traditionally, the systems-development life cycle consisted of five stages. That has
now increased to seven phases. Increasing the number of steps helped systems
analysts to define clearer actions to achieve specific goals.

Similar to a project life cycle (PLC), the SDLC uses a systems approach to
describe a process. It is often used and followed when there is an IT or IS project
under development.

The SDLC highlights different stages (phrases or steps) of the development
process. The life cycle approach is used so users can see and understand what
activities are involved within a given step. It is also used to let them know that at
any time, steps can be repeated or a previous step can be reworked when needing
to modify or improve the system.

Following are the seven phases of the SDLC:

1. Planning

2. , Systems Analysis

3. Systems Design

4. Development

5. Testing

6. Implementation

7. Maintenance

1. Planning

This is the first phase in the systems development process. It identifies whether or
not there is the need for a new system to achieve a business’s strategic objectives.
This is a preliminary plan (or a feasibility study) for a company’s business
initiative to acquire the resources to build on an infrastructure to modify or
improve a service. The company might be trying to meet or exceed expectations
for their employees, customers and stakeholders too. The purpose of this step is to
find out the scope of the problem and determine solutions. Resources, costs, time,
benefits and other items should be considered at this stage.

2. Systems Analysis and Requirements

network engineer and/or database developer are brought on to do the major work on the project. possible solutions are submitted and analyzed to identify the best fit for the ultimate goal(s) of the project. processing and procedures for the system to accomplish its objectives. the necessary specifications. who will be responsible for individual pieces of the project. In the event of a problem. in detail. There are several tools businesses can use that are specific to the second phase. They include:  CASE (Computer Aided Systems/Software Engineering)  Requirements gathering  Structured analysis 3. Systems Design The third phase describes. This is where teams consider the functional requirements of the project or solution. Systems analysis is vital in determining what a business"s needs are. This work includes using a flow chart to ensure that the process of the system is properly organized.The second phase is where businesses will work on the source of their problem or the need for a change. Development The fourth phase is when the real work begins—in particular. Additionally. It is also where system analysis takes place—or analyzing the needs of the end users to ensure the new system can meet their expectations. It"s during this phase that they will consider the essential components (hardware and/or software) structure (networking capabilities). 4. features and operations that will satisfy the functional requirements of the proposed system which will be in place. and what sort of timeline should be expected. when a programmer. The development phase marks the end of the initial section of the process. this phase signifies the start of . This is the step for end users to discuss and determine their specific business information needs for the proposed system. as well as how they can be met.

. the company might have to proceed through all the above life cycle phases again. none are to be overlooked. the cutover typically happens during off-peak hours. Importance of the SDLC If a business determines a change is needed during any phase of the SDLC. add new capabilities or meet additional user requirements. The development stage is also characterized by instillation and change.production. Focusing on training can be a huge benefit during this phase. This step is when end users can fine-tune the system. An oversight could prevent the entire system from functioning as planned. Testing may be repeated. The life cycle approach of any project is a time-consuming process. Integration and Testing The fifth phase involves systems integration and system testing (of programs and procedures)—normally carried out by a Quality Assurance (QA) professional—to determine if the proposed design meets the initial set of business goals. Even though some steps are more difficult than others. both of which will help ensure the program"s successful completion. 7. Another part of this phase is verification and validation. to boost performance. if they wish. this phase involves the actual installation of the newly-developed system. 5. Operations and Maintenance The seventh and final phase involves maintenance and regular required updates. Additionally. 6. thus minimizing the risk. Both system analysts and end-users should now see the realization of the project that has implemented changes. specifically to check for errors. Implementation The sixth phase is when the majority of the code for the program is written. This step puts the project into production by moving the data and components from the old system and placing them in the new system via a direct cutover. bugs and interoperability. While this can be a risky (and complicated) move. This testing will be performed until the end user finds it acceptable.

and ensure that new technical requirements are properly integrated with existing processes and skill sets. A systems analyst is a person who uses analysis and design techniques to solve business problems using information technology. design considerations. possibly. to some degree. Some dedicated professionals possess practical knowledge in both areas (business and systems analysis) and manage to successfully combine both of these occupations. software vendors and programmers in order to achieve these outcomes. These roles. design a solution without diving too deep into its technical components. Systems analysts may serve as change agents who identify the organizational improvements needed. operating systems. and train and motivate others to use the systems. are not the same. and computer hardware platforms. effectively blending the line between business analyst and systems analyst. They may be responsible for developing cost analysis. A business analyst will evaluate the business need and identify the appropriate solution and. even modify such to some extent. A systems analyst may:  Identify. review scripting and. although having some overlap. relying instead on a systems analyst to do so. and implementation timelines. A systems analyst will often evaluate code. A systems analyst is typically confined to an assigned or given system and will often work in conjunction with a business analyst. Systems analysts assess the suitability of information systems in terms of their intended outcomes and liaise with end users. designing and implementing information systems. design systems to implement those changes.ROLE OF SYSTEM ANALYST A systems analyst is an information technology (IT) professional who specializes in analyzing. they do not normally involve themselves in the actual hardware or software development. staff impact amelioration. Although they may be familiar with a variety of programming languages. . understand and plan for organizational and human impacts of planned systems.

e. personality and common sense. 2. a structured framework and a disciplined approach to solving problems are a part of the analysis.g. UML and BPMN diagrams.  Help programmers during system development. Therefore the analyst requires a combination of skills. flowcharts. experience.  Plan a system flow from the ground up. The different interpersonal skills that a system analyst should have are as follows – 1. show . The fact that a system is designed for a specific user also means that the analyst must have interpersonal skills. provide use cases. Communication Skills – System analyst should have the ability to articulate and speak and knack of working with all levels of managerial positions of the organization.  Interact with internal users and customers to learn and document requirements that are then used to produce business requirements documents.  Whenever a development process is conducted.  Write technical requirements from a critical phase.  Interact with software architect to understand software limitations. Understanding – System analyst should have the ability to identify problems and assess their solution. grasping of company goals and objectives. the system analyst is responsible for designing components and providing that information to the developer.  Document requirements or contribute to user manuals. QUALITIES OF SYSTEM ANALYST The system analyst is a person with unique skills – common sense.

Teaching & selling ideas – System analyst should have the skill to educate other people in the use of computer systems and selling ideas and promoting innovations in problem solving using computers. developing alternative solutions. 4. scheduling. Problem Solving & project management – System analyst should have the skill of problem solving. He should also have a questioning attitude and inquiring mind. coordinating team efforts and managing costs and accounts. overcome constraints. 3. A graph showing the involvement of interpersonal and technical skills during the system development phase for a good system analyst is shown below – .sensitivity to the impact of the system on people at work and understanding their problems. The various TECHNICAL SKILLS that a system analyst should have are as follows – 1. Thorough knowledge of computers – System analyst should have the knowledge of basics of computers and business functions. Dynamic interface – System analyst should be a perfect blend of both technical and non-technical skills in functional specifications and general design. 2. Creativity – The analyst should be creative to help the users to model ideas into real plans and developing candidate systems to match user requirements. 3.

Design tools. development and maintenance of software projects with help of various automated software tools. Database Management tools.Now. Project management tools. Use of CASE tools accelerates the development of project to produce desired result and helps to uncover flaws before moving ahead with next stage in software development. CASE TOOLS FOR SYSTEM ANALYST CASE stands for Computer Aided Software Engineering. Documentation tools are to name a few. which are used to automate SDLC activities. Components of CASE Tools . There are number of CASE tools available to simplify various stages of Software Development Life Cycle such as Analysis tools. It means. CASE tools are set of software application programs. the system analyst should have proper academic qualifications in system analysis and design or other computer oriented similar degrees. analysts and engineers to develop software system. in addition to these personal qualifications. CASE tools are used by software project managers.

 Upper Case Tools .Lower CASE tools are used in implementation. integrated and consistent information. related reports and diagrams. which can serve as a source of common.  Integrated Case Tools .Upper CASE tools are used in planning. analysis and design stages of SDLC.  Lower Case Tools . . CASE tools can be grouped together if they have similar functionality. from Requirement gathering to Testing and documentation. Central repository is a central place of storage where product specifications.CASE tools can be broadly divided into the following parts based on their use at a particular SDLC stage: Central Repository . other useful information regarding management is stored. requirement documents. Central repository also serves as data dictionary. testing and maintenance. process activities and capability of getting integrated with other tools.Integrated CASE tools are helpful in all the stages of SDLC.CASE tools require a central repository. Scope of Case Tools The scope of CASE tools goes throughout the SDLC.

Diagram tools These tools are used to represent system components. Flow Chart Maker tool for creating state-of-the-art flowcharts. For example. For example.Case Tools Types Now we briefly go through various CASE tools 1. which is used to develop the software. 2. For example. data and control flow among various software components and system structure in a graphical form. Project management tools help in storing and sharing project information in real-time throughout the organization. Process Modeling Tools Process modeling is method to create software process model. Basecamp. cost and effort estimation. Trac Project. goes throughout all phases of SDLC and after the completion of the project. project scheduling and resource planning. Documentation tools generate documents for technical users and end users. Process modeling tools help the managers to choose a process model or modify it as per the requirement of software product. Managers have to strictly comply project execution with every mentioned step in software project management. Documentation Tools Documentation in a software project starts prior to the software process. Project Management Tools These tools are used for project planning. Creative Pro Office. EPF Composer 3. 4. Technical users are mostly in-house professionals of the development team who .

5. 6. CaseComplete for requirement analysis. For example. Change Control Tools . which may further be broken down in smaller modules using refinement techniques. Animated Software Design 7. Doxygen. Configuration Management tools deal with –  Version and revision management  Baseline configuration management  Change control management CASE tools help in this by automatic tracking. Git. Visible Analyst for total analysis. automatically check for any inconsistency.refer to system manual. Analysis Tools These tools help to gather requirements. version management and release management. The end user documents describe the functioning and how-to of the system such as user manual. Adobe RoboHelp for documentation. Accept 360. training manual. 8. For example. Accompa. installation manuals etc. inaccuracy in the diagrams. DrExplain. Design Tools These tools help software designers to design the block structure of the software. Fossil. These tools provides detailing of each module and interconnections among modules. Accu REV. For example. For example. reference manual. data redundancies or erroneous omissions. Configuration Management Tools An instance of software is released under one version.

It also helps in enforcing change policy of the organization. Prototype provides initial look and feel of the product and simulates few aspect of actual product. 9. Fontello. Foundation 3. script. These tools provide comprehensive aid in building software product and include features for simulation and testing. These tools help us to build rapid prototypes based on existing information.Web Development Tools These tools assist in designing web pages with all allied elements like forms. For example. CASE tools automate change tracking. Programming Tools These tools consist of programming environments like IDE (Integrated Development Environment). Prototyping CASE tools essentially come with graphical libraries. Cscope to search code in C. graphic and so on. For example. In addition. They deal with changes made to the software after its baseline is fixed or when the software is first released. They can create hardware independent user interfaces and design. Mockup Builder. Eclipse. text. Web tools also provide live preview of what is being developed and how will it look after completion.These tools are considered as a part of configuration management tools. Adobe Edge Inspect. For example. code management and more. Brackets. they provide simulation of software prototype.Quality Assurance Tools Quality assurance in a software organization is monitoring the engineering process and methods adopted to develop the software product in order to ensure conformance of quality as per organization standards. Serena prototype composer.Prototyping Tools Software prototype is simulated version of the intended software product. in-built modules library and simulation tools. file management. 10. QA tools consist of . 12. 11.

a throwaway prototype is built to understand the requirements. The goal is to provide a system with overall functionality. Prototyping is an attractive idea for complicated and large systems for which there is no manual process or existing system to help determining the requirements.configuration and change control tools and software testing tools. Prototype model is a software development model. For example. HP Quality Center. PROTOTYPE MODEL IN SYSTEM ANALYSIS AND DESIGN The basic idea in Prototype model is that instead of freezing the requirements before a design or coding can proceed. This prototype is developed based on the currently known requirements.Maintenance Tools Software maintenance includes modifications in the software product after it is delivered. JMeter. 13. which help software organization in maintenance phase of SDLC. Automatic logging and error reporting techniques. SoapTest. The prototype are usually not complete systems and many of the details are not built in the prototype. Bugzilla for defect tracking. the client can get an “actual feel” of the system. AppsWatch. By using this prototype. since the interactions with prototype can enable the client to better understand the requirements of the desired system. . automatic error ticket generation and root cause Analysis are few CASE tools. For example.

this methodology may increase the complexity of the system as scope of the system may expand beyond original plans. application. incomplete.  Errors can be detected much earlier.  Missing functionality can be identified easily  Confusing or difficult functions can be identified  Requirements validation. but functional.  Quicker user feedback is available leading to better solutions.Diagram of Prototype model: Advantages of Prototype model:  Users are actively involved in the development  Since in this methodology a working model of the system is provided. . the users get a better understanding of the system being developed. Quick implementation of.  Practically. Disadvantages of Prototype model:  Leads to implementing and then repairing way of building systems.

keeping in mind the goals and requirements of the organization.  Incomplete application may cause application not to be used as the full system was designed  Incomplete or inadequate problem analysis.  Typically. online systems.  Prototyping ensures that the end users constantly work with the system and provide a feedback which is incorporated in the prototype to result in a useable system. It might take a while for a system to be built that allows ease of use and needs minimal training for the end user. This is what will ultimately define the way the project is to be carried out. there are numerous factors that need to be considered before an organization decides to take it up. How is it then that you decide whether a project is viable? How do you decide if the project at hand is worth approving? This is where project selection methods come in use. web interfaces have a very high amount of interaction with end users. When to use Prototype model:  Prototype model should be used when the desired system needs to have a lot of interaction with the end users. The most viable option needs to be chosen. are best suited for Prototype model. Choosing a project using the right method is therefore of utmost importance. Once a proposal has been received. PROJECT SELECTION One of the biggest decisions that any organization would have to make is related to the projects they would undertake. They are excellent for designing good human computer interface systems. .

But the question then arises as to how you would go about finding the right methodology for your particular organization. the organization as well. each selection method is best for different organizations. usually the underlying concepts and principles are the same. as a small mistake could be detrimental to your project as a whole. This could include various techniques. These methods have different features and characteristics. At this instance. Therefore. and in the long run. you could use the benefit measurement methods. you would need careful guidance in the project selection criteria. Although there are many differences between these project selection methods. of which the following are the most common: . Selection Methods There are various project selection methods practiced by the modern business organizations. Following is an illustration of two of such methods (Benefit Measurement and Constrained Optimization methods): Project Selection Methods As the value of one project would need to be compared against the other projects.

. Based on the results you receive for different projects. the better it would be for your organization.You and your team could come up with certain criteria that you want your ideal project objectives to meet. The mathematical approach is commonly used for larger projects. you could also consider choosing based on opportunity cost . you need to be looking for a high rate of return from the project. The higher the present value of the project. These benefits and costs need to be carefully considered and quantified in order to arrive at a proper conclusion. Going by this method.When choosing any project. you would need to keep in mind the profits that you would make if you decide to go ahead with the project. The constrained optimization methods require several calculations in order to decide on whether or not a project should be rejected. Questions that you may want to consider asking in the selection process are:  Would this decision help me to increase organizational value in the long run?  How long will the equipment last for?  Would I be able to cut down on costs as I go along? In addition to these methods. When it comes to the Discounted Cash flow method. The rate of return received from the money is what is known as the IRR. you would have to consider all the positive aspects of the project which are the benefits and then deduct the negative aspects (or the costs) from the benefits. You could then give each project scores based on how they rate in each of these criteria and then choose the project with the highest score. Cost-benefit analysis is used by several organizations to assist them to make their selections. Here again. you could choose which option would be the most viable and financially rewarding. the future value of a project is ascertained by considering the present value and the interest earned on the money.

 Not every project makes effective use of resources of the organisation. Feasibility studies are useful to businesses in many ways.Profit optimization is therefore the ultimate goal. with a list of criteria to be considered and goals to be achieved. The objective of such a study is to ensure a project is legally and technically feasible and economically justifiable. but are absolutely essential for efficient business planning. It is always best to have a good plan from the inception. as in this way you would be able to make the best decision for your organization considering a wide range of factors rather than concentrating on just a few. Careful consideration would therefore need to be given to each project. Some of the reasons organizations conduct feasibility studies are as follows:  Not every project is doable. It tells us whether a project is worth the investment. TESTING PROJECT FEASIBILITY As the name implies. You need to consider the difference between the profits of the project you are primarily interested in and the next best alternative. a feasibility study is used to determine the viability of an idea. Conclusion In conclusion. Implementation of the Chosen Method The methods mentioned above can be carried out in various combinations. . It is best that you try out different methods.  Not every project should be taken up. This will guide you through the entire selection process and will also ensure that you do make the right choice. you would need to remember that these methods are time- consuming. This will engage otherwise useful resources and block their use on other tasks.

this involves undertaking a study to analyze and determine whether your business needs can be fulfilled by using the proposed solution. a feasibility study involves taking a judgment call on whether a project is doable. The two criteria to judge feasibility are cost required and value to be delivered. 3. It helps organizations asess if the technical resources meet capacity and whether the technical team is capable of converting the ideas into working systems. It also measures how well the proposed system solves . Operational Feasibility . accounting statements. Generally. legal requirements and tax obligations. Technical feasibility also involves evaluation of the hardware and the software requirements of the proposed system. Economic Feasibility . and helps quantify them. It helps decision-makers determine the positive economic benefits to the organization that the proposed system will provide. such studies precede technical development and project implementation. This assessment typically involves a cost/ benefits analysis of the project. financial data. as a result. therefore. Five Areas of Project Feasibility: 1. Technical Feasibility . A well-designed study should offer a historical background of the business or project.But what is a Feasibility Study? In simple terms. marketing research and policies.investigates if the proposed system conflicts with legal requirements like data protection acts or social media laws. details of operations and management. 2. perceived objectivity is an important factor in the credibility of the study for potential investors and lending institutions. a description of the product or service. cost. 4. and enhances project credibility. It also serves as an independent project assessment. A feasibility study evaluates the project's potential for success.assessment is centered on the technical resources available to the organization. and benefits associated with projects before financial resources are allocated. Legal Feasibility .helps organizations assess the viability.

Operational feasibility studies also analyze how the project plan satisfies the requirements identified in the requirements analysis phase of system development. supportability. and with our technical skills we need to estimate the period to complete the project using various methods of estimation. Environment. Laws and Regulations.  Internal Corporate Constraints: Financial. Resource. problems and takes advantage of the opportunities identified during scope definition. In scheduling feasibility. Scheduling Feasibility is the most important for project success. etc. These include such design- dependent parameters such as reliability.  External Constraints: Logistics. affordability. some projects also require for other constraints to be analyzed -  Internal Project Constraints: Technical. we estimate how much time the system will take to complete. Form a project team and appoint a project leader . maintainability. usability.  Narrows the business alternatives. 5. Technology. Export. etc. Benefits of Conducting a Feasibility Study Conducting a feasibility study is always beneficial to the project as it gives you and other stakeholders a clear picture of your idea. desired operational outcomes must inform and guide design and development. STEPS IN FEASIBILITY ANALYSIS Feasibility analysis involves eight steps: 1.  Enhances the success rate by evaluating multiple parameters. Below are the key benefits of conducting a feasibility study:  Gives project teams more focus and provides an alternative outline.  Identifies a valid reason to undertake the project. disposability.  Aids decision-making on the project. Apart from the approaches to feasibility study listed above. etc. Marketing. and others. Budget. To ensure success. sustainability. A project will fail if not completed on time.

This step identifies the candidate systems that are capable of producing the outputs included in the generalized flowcharts. The first step involves forming a project team. Evaluation for both design and implementation is . Enumerate potential candidate systems. In this step. lasting as long as the project. Describe and identify characteristics of candidate system. outputs and data flow among key points in the existing system. 3. Here the analyst has to determine and evaluate the performance and cost of the candidate system. Determine and evaluate performance and cost effectiveness of each candidate system. 5. The senior systems analyst is generally appointed as project leader. Prepare system flowcharts The next step in feasibility study is to prepare generalized system flowcharts for the system. A record is kept of the progress made in each meeting. The chart brings up the importance of inputs. 4. Projects are planned to occupy a special time. 2. Information oriented charts and data flow diagrams prepared in the initial investigation are reviewed at this time. This requires a transformation from logical to physical system models. In many cases. Regular meetings take place to keep up the momentum and accomplish the mission – selection of the best candidate system. The appointment is temporary. Another aspect of this step is consideration of the hardware that can handle the total system requirements. the analysis is mainly based on what each candidate system can and cannot do. an outside consultant and an information specialist join the team until the job is completed. technical knowledge and expertise in the hardware/software area are critical. ranging from several weeks to months. For determining this. The team consists of analysts and user staff.

and sufficiently nontechnical to be understandable. 7. 3. it should be brief. This assumes the weighting factors are fair and the rating of each evaluation criterion is accurate. Sum the score column for each candidate system. 4. 6. some weight is given to each alternative of the system. general findings and recommendations to be considered. updating the physical facilities and documenting etc. Assign a quantitative rating to each criterion’s qualitative rating. . Select the best candidate system. FEASIBILITY REPORT The report contains the following sections. 8. Cover letter-It represents the report and briefly indicates to management the nature. Then the candidate system with the highest total score is selected. performed here. Multiply the weight assigned to each category by the relative rating to determine the score. a document called feasibility report is prepared and is directed to the management. It includes user training. Assign a weighting factor to each evaluation criterion based on the criterion’s effect on the success of the system. The system with the highest total score is judged as the best system. The report is a formal document for management use. 2. Weight system performance and cost data According to the performance and cost of the candidate system. The procedure for weighting candidate system is 1. Feasibility report After feasibility study. 1.

This section also provides a description of the objectives and general procedures of the candidate system. 4. Appendixes -document all memos and data compiled during the investigation. 5. Body of presentation  Describe existing system  Describe proposed system  Summarize implementation plan and schedule .details point by point cost comparisons and preliminary cost estimates for the development and operation of the candidate system. They are written only as a recommendation. Table of contents. Recommendations and conclusions.suggest to management the most beneficial and cost effective system. Detailed findings. Following the recommendations. not a command. 2. Economic justification. 3. 2. The following general outline is suggested for oral presentation 1. ORAL PRESENTATION It is the second method for presenting the information for management use. 7. They are placed at the end of the report for reference. the reason for undertaking the feasibility study and the departments involved or affected by the candidate system. any conclusions from the study may be included.Outline the methods used in the present system. 6.specifies the location of the various parts of the reports. Overview. Introduction  Self-introduction by the analyst  A brief introduction of the topic  A brief description of the existing system.is a narrative explanation of the purpose and scope of the project. The System’s effectiveness and efficiency as well as operating costs are emphasized.

g. Cost and Benefit Categories In developing cost estimates for a system. benefits and rules associated with each alternative system. COST BENEFIT ANALYSIS From the analysis. Costs/Benefits analysis gives a picture of various costs. a knowledge of cost and benefit categories and their evaluation methods is important. Cost fall in two categories:  Costs associated with developing the system: Costs which are associated with developing the system. we consider several cost elements such as  Facility Costs: These are expenses incurred in the preparation of the physical site where the application or the computers will be in operation. can be estimated only once specific computer-based solutions have been defined (during the selection phase or later).  Hardware: Costs related to the actual purchase or lease of the computer and peripherals (e. printer. disk drives.  Review human resources requirements to install the system.. Conclusion  Summarize objectives and recommendations  Summarize benefits and savings 4. . system design requirements are identified and alternative systems are evaluated. Discussion period  Question answer session. The analysis of the costs and benefits of each alternative guides the selection process.  Costs associated with operating system: Costs which are associated with operating a system. Therefore. 3. can be estimated from the outset of a project and should be reviewed at the end of each phase of the project. and tape unit).

 Supply Costs: These are variable costs that increase with increased use of paper. a student fee. data entry personnel. Procedure for Cost/Benefit Determination Costs are incurred throughout its Life cycle. vacation time.  Training Costs: If the computer personnel or end-users have to . Benefits The two major benefits are:  Improving performance: The performance category emphasizes improvement in the accuracy of or access to information and easier access to the system by authorized  Minimizing the cost of processing: Minimizing costs through an efficient system-error control or reduction of staff is a benefit that should be measured and included in Cost Benefit Analysis. staff efficiency or revenues.  Personnel Costs: It includes EDP staff salaries and benefits (health insurance. the ‘nature of the applications. or an hourly fee. conversion. word processing. loading new data files etc.be trained. the training courses may be charged out on a flat fee per site. programmers.) as well as pay for those involved in developing the system. improved corporate image. secretaries.  Operating Costs: It includes all costs associated with the day-to-day operation of the system. ribbons. The salaries of systems analysts.  Supply Usage Cost: Computer time will be used for one or more of the following activities: programming. prototyping. and disks. They should be estimated and included in the overall cost of the system. and the like who work on the project make up the personnel costs. testing. etc. The amount depends on the number of shifts. Benefits are realized in the form of reduced operating costs. This includes the equipment costs also. and the caliber of the operating staff. consultants. sick pay. . maintaining a project dictionary. computer operator.

Cost and Benefit Identification Some costs and benefits are easily identified. benefits and rules associated with a system. e. When one course of action is taken. these costs provide a comparable base to evaluate alternatives. For example. As a result. Opportunity costs are hypothetical costs and therefore they do not enter accounting records. Direct benefits often relate one-to-one to direct costs.Cost/Benefit analysis is a procedure that gives a picture of the various costs. direct costs. The determination of costs and benefits entails the following steps:  Identify the costs and benefits overtraining to a given project. suppose the company owns a building which can be used in the business or rented out.  Categorize the various costs and benefits for analysis. savings from reducing costs. price of hard disk.  Take action. They are relevant for decision-making. This cost loses its importance or significance once decisions are mad.g.  Interpret the results of the analysis. It is the benefit foregone by not choosing the next best alternative in a given decision making situation. During decision making process.. To the extent the benefits forgone can be quantified they represent the opportunity costs. e. the rent forgone by not letting it out is the opportunity cost of using the building for business purposes.. i. when choice of one course of action requires that a on alternative choice of action be given up..e.g. . the other possible course is left out. If the company chooses to use the building for business purposes.  Select a method of analysis. the benefits that would accrue are given up. Another category of cost and benefit that is not easily discernable is opportunity cost/benefit. A cost that measures the opportunity which is cost or sacrificed.

direct or indirect. Fixed or Variable Cost/Benefits ... fixed or variable. Direct benefits: The benefits which can be specifically attributable to a given project e. 1. They may be tangible or intangible. e. are called indirect costs.g. Indirect Benefits: The benefits that are realized as a by-product of another activity or system.Classification of Costs/Benefits Next step in Cost/benefit determination is to categorize costs and benefits.. 2. or they may also be called as “Overhead” costs. e. cost of sugarcane in the manufacture of sugar. Direct or Indirect Costs and benefits Direct Costs: Are those which can be directly identified with a product. wages paid to all work force who supervise production of more than one product.g. process or department. Indirect Cost: Those costs which cannot be easily identified with or traced to a product or service. Direct costs are those with which can be directly associated in a project. a new system that can handle 25% more transaction per day is direct benefit. depreciation of machinery.g. They are applied directly to the operation. Cost of Lubricants used for smooth running of machines. All those costs incurred in producing a product or offering a service which can be directly “identified” with or “traced” to that product or service are called of direct costs. salaries of product manager. cost of timber hi manufacture of furniture.

They have to be incurred even if there is no production and therefore are also called shutdown or start by costs. 3. the fixed cost open unit decreases because it gets distributed over a larger number of units. When there is no production.g. carriage. no variable cost is incurred e. .Behavior of cost in relation with the level of activity (usually production activity) forms the basis for the distinction between fixed and variable costs. Variable costs vary in proportion to tile change in the volume of production. wages. With the increase in production level. e. Within the production capacity established the fixed costs remain the same irrespective of the level of activity. packing expenses. Example of fixed costs are— insurance. the fixed cost per unit changes with change in output level.. depreciation. fuel. rent. Fixed Costs: Fixed Costs are those that remain the same within a certain range in the level of activity. while the Cost total fixed costs remain the same. The benefit of personnel savings may recur every month.. etc. power. Therefore. rates etc. Variable Cost: All those costs that vary in direct proportion to the volume of activate are called variable costs.g. Tangible or Intangible Costs/Benefits Tangibility refers to the ease with which costs and benefits can be measured. raw materials. Fixed benefits: These are constant and do not change. This states that per unit cost remains relatively constant but the total cost increases with increase in production and decreases with decrease in production. decrease in number of personnel by 20% resulting from the use of a new computer. Variable benefits: These are realized on a regular basis.

. Select the Evaluation Method When all financial data have been identified and broken down into cost categories. 4. Tangible Benefits: Those which are quantifiable. no loss condition occurs: . 3. Intangible Benefits: Those which are not easily quantified. the analyst must select a method of evaluation. Net benefit Analysis: It involves subtracting total costs from total benefits. e.g. 2. Net Present Value: The net present value is represented as a percentage of investment. Present Value Analysis: It calculates costs/benefits of the system in terms of today’s value of the investment and then comparing across alternatives. It is easy to identify but difficult to measure. They can be identified and measured. lowered company’s image. Evaluation methods are  Net Benefit Analysis  Present Value Analysis  Net Present Value  Payback Analysis  Break-even Analysis  Cash-flow Analysis 1. Payback Analysis: Where there is not profit. Intangible Cost: Costs that are known to exist but whose financial value cannot be accurately measured.Tangible Cost: An outlay of cash for a specific item or activity is called tangible cost.

It has to be alphabetic. . At view level. either animate or inanimate. etc. For example. called attributes. the ER model is considered a good option for designing databases. a student's name cannot be a numeric value. It works around real- world entities and the associations among them. For example.Payback Period = Investment/Cash inflow 5. All attributes have values. All these entities have some attributes or properties that give them their identity. students. Entity An entity can be a real-world object. Attributes Entities are represented by means of their properties. and courses offered can be considered as entities. that can be easily identifiable. E-R MODEL The ER model defines the conceptual view of a database. teachers. For example. classes. a student entity may have name. For example. class. no loss condition occurs. in a school database. A student's age cannot be negative. There exists a domain or range of values that can be assigned to attributes. Cash-flow Analysis: It is total revenue minus the total expenses on a period-by- period basis. An entity set may contain entities with attribute sharing similar values. An entity set is a collection of similar types of entities. Entity sets need not be disjoint. Break-Even Point = Fixed Cost/Sales per Unit — Variable Cost Per unit 6. a Students set may contain all the students of a school. likewise a Teachers set may contain all the teachers of a school from all faculties. Break-Even Analysis: Where there is no profit. and age as attributes.

 Derived attribute − Derived attributes are the attributes that do not exist in the physical database.Types of Attributes  Simple attribute − Simple attributes are atomic values. a person can have more than one phone number. For example. etc. . instead it can be derived. but their values are derived from other attributes present in the database. age can be derived from data_of_birth. For example. which cannot be divided further.  Multi-value attribute − Multi-value attributes may contain more than one values. For another example. email_address. For example − Social_Security_Number.  Single-value attribute − Single-value attributes contain single value. For example. average_salary in a department should not be saved directly in the database.  Composite attribute − Composite attributes are made of more than one simple attribute. a student's complete name may have first_name and last_name. For example. These attribute types can come together in a way like −  simple single-valued attributes  simple multi-valued attributes  composite single-valued attributes  composite multi-valued attributes Entity-Set and Keys Key is an attribute or collection of attributes that uniquely identifies an entity among entity set. a student's phone number is an atomic value of 10 digits.

For example. an employee works_at a department.  Primary Key − A primary key is one of the candidate keys chosen by the database designer to uniquely identify the entity set. These attributes are called descriptive attributes. Binary = degree 2 Ternary = degree 3 n-ary = degree Mapping Cardinalities Cardinality defines the number of entities in one entity set.  Candidate Key − A minimal super key is called a candidate key.For example. Relationship Set A set of relationships of similar type is called a relationship set. Works_at and Enrolls are called relationships. a student enrolls in a course. . the roll_number of a student makes him/her identifiable among students. An entity set may have more than one candidate key. Relationship The association among entities is called a relationship. Like entities. which can be associated with the number of entities of other set via relationship set. Degree of Relationship The number of participating entities in a relationship defines the degree of the relationship. Here. a relationship too can have attributes.  Super Key − A set of attributes (one or more) that collectively identifies an entity in an entity set.

however an entity from entity set B can be associated with more than one entity from entity set A.  One-to-many − One entity from entity set A can be associated with more than one entities of entity set B however an entity from entity set B.  Many-to-one − More than one entities from entity set A can be associated with at most one entity of entity set B. . can be associated with at most one entity. One-to-one − One entity from entity set A can be associated with at most one entity of entity set B and vice versa.

Consider an entity set Payment which has three attributes: payment_number. this entity set does not have a primary key and it is an entity set. STRONG AND WEAK ENTITY TYPES The entity set which does not have sufficient attributes to form a primary key is called as Weak entity set. An entity set that has a primary key is called as Strong entity set. Although each payment entity is distinct but payment for different loans may share the same payment number. A weak entity set does not have a primary key but we need a means of distinguishing among all those entries in the entity set . Thus. payment_date and payment_amount.  Many-to-many − One entity from A can be associated with more than one entity from B and vice versa. Each weak set must be a part of one-to-many relationship set. A member of a strong entity set is called dominant entity and member of weak entity set is called as subordinate entity.

For example. Employee having E# 1. Relation Between strong and weak entity set Let us consider another scenario. payment_number acts as discriminator for payment entity set. . Chahat.and corresponding identifying relation by a doubly outlined diamond as shown in figure. where we want to store the information of employees and their dependents. payment_number} acts as primary key for payment entity set. The every employee may have zero to n number of dependents. The discriminator of a weak entity set is underlined with dashed lines rather than solid line. 2.that depend on one particular strong entity set. The relationship between weak entity and strong entity set is called as Identifying Relationship. loan-payment is the identifying relationship for payment entity. The arrow from loan-payment to loan indicates that each payment is for a single loan. has two dependents as 1. Every dependent has an id number and name. The discriminator of a weak entity set is a set of attributes that allows this distinction be made. It is also called as the Partial key of the entity set. A weak entity set is represented by doubly outlined box . Here double lines indicate total participation of weak entity in strong entity set it means that every payment must be related via loan-payment to some account. In example. The primary key of a weak entity set is formed by the primary key of the strong entity set on which the weak entity set is existence dependent plus the weak entity sets discriminator. In the above example {loan_number. Now let us consider the following data base: There are three employees having E# as 1. and 3 respectively. Rahat and 2.

Dependent is a weak entity set having id as a discriminator. Thus. The other table will be of Dependent having E#. The tabular comparison between Strong Entity Set and Weak Entity Set is as follows: Comparison between Strong and Weak entity . Raju. Employee having E# 3. has no dependents. 2. has three dependents as 1. These are Employee having E# as single column which acts as primary key. Ruhi. There are two tables need to created above e-r diagram. 3 Raja. Now. The E-R diagram for the employee-dependent database is shown. It has a total participation with the relationship "has" because no dependent can exist without the employees (the company is concerned with employees). in case of Dependent entity id cannot act as primary key because it is not unique.Employee having E# 2. id and name columns where primary key is the combination of (E# and id).