Solution Manual for Systems Analysis and Design,

12th Edition, Scott Tilley

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Solution Manual for Systems Analysis and Design, 12th Edition, Scott Tilley

Systems Analysis and Design Instructor’s Manual Page 1 of 12

Systems Analysis and Design

Twelfth Edition
Chapter Seven: Development Strategies
A Guide to the Instructor’s Manual:
We designed the Instructor’s Manual to supplement and enhance your teaching experience with classroom
activities and a cohesive chapter summary.

This document is organized chronologically, using the same main heading in red that you see in the textbook.
Under each heading you will find (in order): Lecture Notes that summarize the section, Figures and Boxes
found in the section, if any, Teaching Tips, and Classroom Activities. Pay special attention to teaching tips and
activities geared toward quizzing your students and enhancing their critical thinking skills.

In addition to the Instructor’s Manual, the Instructor Companion Site also contains PowerPoint Presentations,
Solutions to Exercises, Figures, Test Banks, and other materials to aid you as an instructor.

Table of Contents
Learning Objectives
7.1: Traditional Versus Web-Based Systems Development
7.2: Evolving Trends
7.3: In-House Software Development Options
7.4: Outsourcing
7.5: Offshoring
7.6: Software as a Service
7.7: Selecting a Development Strategy
7.8: The Software Acquisition Process
7.9: Completion of Systems Analysis Tasks
7.10: Summary
Key Terms
End of Chapter Material

Learning Objectives
Students will have mastered the material in Chapter Seven when they can:
• Explain the differences between traditional • Explain outsourcing
and web-based systems development • Explain the main advantages and the
• Explain how Web 2.0, cloud computing, unique concerns of offshoring
and mobile devices may affect systems • Describe the concept of Software as a
development Service
• Explain how to select one of the four in- • Explain how a systems analyst helps in
house software development options selecting a development strategy

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Systems Analysis and Design Instructor’s Manual Page 2

• Execute the five steps in the software • Summarize the tasks involved in
acquisition process completing the systems analysis phase of
• Describe a request for proposal (RFP) and a the SDLC
request for quotation (RFQ)

7.1: Traditional Versus Web-Based Systems Development

LECTURE NOTES
• Discuss the changes the Internet has brought in software acquisition
• Describe the traditional model of software acquisition
• Discuss the role of the web in an Internet-based system
• Discuss the reasons for reliance on traditional systems
• List the characteristics of traditional software systems development
• List the characteristics of web-based software systems development
• Discuss the concept of middleware

CLASSROOM ACTIVITIES
1. Quick Quiz: Assign Question 1 on page 226.
2. Critical Thinking: What characteristics of traditional development can be considered as advantages?
Why? What characteristics might be considered as disadvantages? Why?
3. Critical Thinking: What characteristics of web-based development can be considered as advantages?
Why? What characteristics might be considered as disadvantages? Why?

7.2: Evolving Trends

LECTURE NOTES
• Describe Web 2.0 and cloud computing
• Discuss the commonness of mobile devices

FIGURE: 7-1

CLASSROOM ACTIVITIES
1. Quick Quiz: Assign Question 2 on page 226.
2. Class Discussion: Assign Discussion Topic 1 on page 226.

7.3: In-House Software Development Options

LECTURE NOTES
• Use Figure 7-2 to explain that instead of outsourcing, a company can choose to develop a system in-
house or purchase and possibly customize a commercial package
• Point out that the most important consideration in making a decision is total cost of ownership
(TCO)
• Describe the make or buy (or build or buy) decision
• Differentiate between in-house software and a software package
• Define software vendors and a value-added reseller (VAR)
• Compare a horizontal application with a vertical application
• Using Figure 7-4, discuss the reasons for developing software in-house and the reasons for
purchasing a software package
Systems Analysis and Design Instructor’s Manual Page 3 of 12

• Justify the reason for a company to develop a software in-house to satisfy its unique business
requirements
• Explain the reason why companies choose to develop their own software if available packages
require changes in current business operations
• Justify the reason for developing a software in-house to meet the constraints of existing systems and
existing technology
• Discuss the benefits of designing a system in-house with respect to a company’s internal IT
resources and capabilities
• List the advantages of purchasing a software package
• Discuss the ways to customize a software package
• Define a user application
• Describe a user interface
• Discuss the role of empowerment in making IT department more productive and reducing costs

FIGURES: 7-2, 7-3, 7-4

TEACHING TIPS
Inform the students that because horizontal applications are used by a large number of companies, they
are usually more widely available and less expensive than vertical applications. Some vendors offer
hybrid application software, which combines a vertical application tailored to a specific industry with a
horizontal application, such as a spreadsheet package.

Inform the students that according to industry experts, one guideline for evaluating an organization’s
need for custom versus commercial software is to look for a commercial application package that has an
80 percent or better fit with requirements, as illustrated in the accompanying figure.

If the fit is less than 80 percent, an organization should consider in-house development, outsourcing, or
reevaluating its requirements.

Risks associated with purchasing a software package include the following:

1) Loose fit between needs and features — Because purchased software is developed for multiple users,
its features are likely to be good for the needs of many, but great for only a few.
2) Variable longevity of vendors — If the vendor goes out of business, a purchaser may be left without
support, maintenance services, or the ability to obtain upgrades.
Systems Analysis and Design Instructor’s Manual Page 4 of 12

3) High personnel turnover — Because turnover is high among information technology professionals,
the staff that developed an application may no longer be available when support or upgrades are
needed.

The emergence of application generators, such as screen generators and report generators, easy-to-use
fourth generation programming languages, and tools such as prototyping have made user development
of simple, limited applications a viable alternative.

CASE IN POINT 7.1: Doug’s Sporting Goods

Doug’s Sporting Goods sells hiking and camping supplies. The company has grown considerably in the
past two years. They want to develop a customer order entry system and hired your IT consulting firm
to advise them about development strategies. They are leaning toward in-house development because
they do not want to depend on outside vendors and suppliers for technical support and upgrades. They
also say they are not interested in selling on the Web, but that could change in the future. They want to
meet with you tomorrow to make a decision. What will you say to them at the meeting?

CLASSROOM ACTIVITIES
1. Projects to Assign: Assign Project 2 on page 226.
2. Quick Quiz: Assign Question 3 on page 226.

7.4: Outsourcing
LECTURE NOTES
• Define outsourcing
• Describe business process outsourcing (BPO)
• Explain the reason for companies outsourcing IT tasks
• Define a service provider
• Discuss the different types of service providers
• Mention the two popular outsourcing options
• Define an application service provider (ASP)
• Using Figure 7-5, describe Internet business services (IBS) or managed hosting
• Discuss the fee structures used by firms that offer software as a service
• Distinguish between a fixed fee model, a subscription model, and a usage model or a transaction
model
• Discuss the circumstances during which mission-critical IT systems should be outsourced
• Discuss the ways in which the quality of an outsourcing firm, the economy, and mergers and
acquisitions can affect outsourcing clients
• Indicate the type of companies that would find outsourcing attractive
• Point out the major disadvantages of outsourcing

FIGURE: 7-5

TEACHING TIPS
Outsourced information systems services include the following:
1) Application development and software maintenance
2) Hardware purchasing and maintenance
3) Telecommunications installation and maintenance
Systems Analysis and Design Instructor’s Manual Page 5 of 12

4) Help desk services

5) Website design and maintenance
6) Staff training
A company can outsource some, or all, of its information technology needs.

When information systems executives were asked why they outsourced their IT needs, the reasons they
gave were as follows:
1) To acquire technology skills (49 percent)
2) To gain industry expertise (48 percent)
3) To increase application expertise (38 percent)
4) To add flexibility/reliability (25 percent)
5) To improve IT performance (25 percent)
6) To improve competitive position (22 percent)
7) To link IT and business strategy (12 percent)
8) To share risk (10 percent)
9) To reduce costs (10 percent)

Inform the students that the largest part of ASP expenditures (more than 40 percent) is on customer
service, sales, and training; other ASP expenses include implementation and configuration of hardware
and software, equipment, operations software, telecommunications, staff, and software licensing.

Mention to the students that ASPs eliminate the need to allocate hardware for installation, maintain an
application, and hire experts for installation and maintenance. They also provide timely availability.

Before choosing/using an ASP, organizations should ensure the following:

1) Check the ASP’s history.
2) Investigate the ASP’s financial strength.
3) Understand the price scheme.
4) Obtain a list of the ASP’s infrastructure.
5) Carefully craft service contracts.

In general, advantages of outsourcing include the following:

1) Exact knowledge of IT costs
2) Reduced license and maintenance fees
3) Ability to concentrate on core business activities
4) Shorter implementation cycles
5) Reduced personnel and related costs
6) Increased access to qualified expertise
7) Availability of ongoing consulting
8) Increased security

Potential risks of outsourcing include the following:

1) Loss of experienced employees
2) Loss of control over IT operations
3) Potential disclosure of trade secrets
4) High price
Systems Analysis and Design Instructor’s Manual Page 6 of 12

Remind the students that the overall risks of outsourcing IT are higher at higher levels of management
and lower at lower levels of management.

CLASSROOM ACTIVITIES
1. Class Discussion: Assign Discussion Topic 2 on page 226.
2. Quick Quiz: Assign Question 4 on page 226.

7.5: Offshoring
• Define offshore outsourcing or global outsourcing
• Discuss the reasons for offshore outsourcing along with its unique risks and concerns

CASE IN POINT 7.2: Turnkey Services

Turnkey Services is an ASP that offers payroll and tax preparation services for hundreds of businesses in
the Midwest. The firm is considering a major expansion into accounting and financial services and is
looking into the possibility of supporting this move by hiring IT subcontractors in several foreign
countries. Turnkey’s president has asked you to help him reach a decision. Specifically, he wants you to
cite the pros and cons of offshoring. He wants you to present your views at a meeting of Turnkey
managers next week. How will you proceed?

CLASSROOM ACTIVITIES
1. Quick Quiz: Assign Question 5 on page 226.
2. Projects to Assign: Popular ASP companies include OSi, TriZetto Group, Oracle, SAP, IBM, and
SureBridge. Have the students use the web and/or trade publications to learn more about one of these,
or other, ASPs.
3. Projects to Assign: Assign Project 4 on page 226.

7.6: Software as a Service

LECTURE NOTES
• Review the traditional model of application development
• Describe software as a Service (SaaS)
• Point out that SaaS provides the functionality the customer needs, but without the associated
development, infrastructure, and maintenance costs

FIGURE: 7-6

CLASSROOM ACTIVITIES
1. Quick Quiz: Assign Question 6 on page 226.
2. Class Discussion: Assign Discussion Topic 3 on page 226.

7.7: Selecting a Development Strategy

LECTURE NOTES
• Review the possible software acquisition solutions from which a company must choose
• Discuss the changing roles of a systems analyst depending on the chosen solution
• Discuss the objective of the evaluation and selection process
• Explain how costs and benefits are analyzed
Systems Analysis and Design Instructor’s Manual Page 7 of 12

• Describe an evaluation and selection team

• Review the cost-benefit analysis checklist

FIGURE: 7-7

TEACHING TIPS
Remind the students that the decision of selecting the favorable software acquisition solution depends
on the company’s current and anticipated future needs.

TEACHING TIPS
Inform the students that ROI sometimes is considered the most accurate method of economic analysis.
The greater the ROI, the more economically feasible, or cost-justifiable, the system. Yet, because some
benefits are hard to quantify, calculating ROI can be difficult. Some experts suggest that an even more
important question than “What is the return on investment of the proposed system?” is “Can we be
competitive without the proposed system?”

Assessing economic feasibility requires thorough cost-benefit analysis. Costs can be short-term, such as
the price of acquiring a system and training users, or long-term, such as the expense of maintaining and
supporting the system. Benefits can be tangible, such as savings from staff reduction and greater
efficiency, or intangible, such as improved customer satisfaction and a more enjoyable workplace. Cost-
benefit analysis consists of three steps:
1) Estimating anticipated development and operational costs
2) Estimating anticipated benefits
3) Comparing the anticipated costs with the anticipated benefits

Inform the students that the most frequent error made during cost-benefit analysis is to perform the
calculations before clearly defining costs and benefits. By using the three financial analysis tools to
evaluate development strategies, this error can be avoided.

CASE IN POINT 7.3: Sterling Associates

Sterling Associates specializes in advising clients on IT projects and information systems development.
Marketing is creating a brochure for prospective new clients, and they want you to develop a section
that describes payback analysis, ROI, and NPV in simple terms and mentions the pros and cons of each
financial analysis tool. How do you proceed?

CLASSROOM ACTIVITIES
1. Quick Quiz: Assign Question 7 on page 226.
2. Class Discussion: Ask the students if it is a good idea to include users as a member of the evaluation
and selection team. Ask them to justify their answer.
3. Projects to Assign: Assign Project 3 on page 226.
Systems Analysis and Design Instructor’s Manual Page 8 of 12

7.8: The Software Acquisition Process

LECTURE NOTES
• Point out that although situations vary, this chapter presents a typical example of the issues and
tasks involved in software acquisition
• Point out that a detailed list of key features of a system must be identified using information
gathered during fact-finding; this information becomes part of the system requirement document
• Talk over the need to consider network and web-related issues
• Using Figure 7-8, discuss the importance of estimating volume of transactions and forecasting future
growth
• Discuss the influence of existing hardware, software, and personnel constraints on an acquisition
decision
• Discuss the two documents used to obtain the information needed to make an acquisition decision
• Define a request for proposal (RFP) document
• Define evaluation model and use Figure 7-9 to illustrate two evaluation models for a network
project
• Describe a request for quotation (RFQ) document
• Discuss the various ways to identify potential vendors or outsourcing options
• Point out the advantage of using a consultant to identify potential vendors or outsourcing providers
• Explain the concept of forums and newsgroups
• List the information sources to consider when evaluating alternatives
• Explain the process of testing for horizontal and vertical applications
• Discuss the concept of benchmarking
• Describe a software license
• Point out the restrictions associated with software licensing
• Describe a maintenance agreement
• Point out the need to prepare a recommendation to evaluate alternatives

FIGURES: 7-8, 7-9, 7-10, 7-11

TEACHING TIPS
It is important that students recognize how RFPs and RFQs are different. In short, an RFP states a
buyer’s requirements and requests that the vendor propose products that meet those requirements,
along with prices. An RFQ, on the other hand, identifies the products a customer wants and requests
that the vendor quote prices for those products. A less formal way to obtain information is a request for
information (RFI), which is a standard form sent to a vendor to request information about a product or
service. Inform the students that some vendors provide convenient RFP or RFQ forms on their
websites. Benchmarking compares the performance of system alternatives against the same,
predetermined standard. Inform the students that because benchmark tests are conducted in a
controlled environment, they cannot be used to forecast specific results in the workplace, but they can
be used to compare the performance of competing products. Benchmarking can be provided by some
independent firms. Inform the students that for desktop applications software license terms and
conditions usually cannot be modified, whereas for large-scale systems, license agreement terms often
can be negotiated. Remind the students that implementation tasks must be completed before new
software becomes operational.
Systems Analysis and Design Instructor’s Manual Page 9 of 12

CLASSROOM ACTIVITIES
1. Projects to Assign: Assign Projects 1 and 5 on page 226.
2. Quick Quiz: Assign Questions 8 and 9 on page 226.
3. Critical Thinking: After acquiring and successfully implementing a system for a large company, one
evaluation team leader said that next time he would make the following changes:
1) Have vendors give detailed information about products, training, and consulting services
2) Hold all vendor demonstrations on the same day, at specific sites, for better comparison
3) Insist demonstrations use scenarios and data supplied by the customer, not the vendors
4) Inform vendors that their representatives will meet with real end users
5) Double the number of users on the evaluation team
6) Use more multiple choice questions in user surveys to make ascertaining results easier
7) Use consultants to help narrow the list of finalist vendors in less time
Ask students how each of these suggestions could improve the evaluation process. What other
suggestions could improve evaluations?

7.9: Completion of Systems Analysis Tasks

LECTURE NOTES
• Point out that a system requirements document and a presentation to management are prepared to
complete the systems analysis phase
• Describe the system requirements document or software requirements specification
• Discuss the characteristics of an ideal system requirements document
• Explain the importance of giving a presentation to management at the end of the analysis phase
• Discuss the other presentations that may be given
• Discuss the suggestions listed for preparing a presentation
• Point out the objective of management presentation
• List the five alternatives from which a management probably will choose the suitable development
process
• List the probabilistic task of a systems analyst once the management selects its option for the
development process
• Compare the traditional SDLC environment with the modern approach for systems design
• Discuss the importance of a system requirements document when preparing for systems design tasks
• Describe a logical design
• Describe a physical design
• Discuss the importance of accurate systems analysis

TEACHING TIPS
Before giving any presentation, it is important to know the following:
1) The objective of the presentation
2) The background, expectations, and knowledge that attendees will bring to the presentation
3) The time scheduled for the presentation
4) The location in which the presentation will be given (and what facilities will be available)
5) Any related issues that might affect the delivery and the outcome of the presentation

Encourage students to review the suggestions in Part 1 of the Systems Analyst’s Toolkit to design and
deliver a presentation. List suggestions to keep in mind when delivering a presentation. When giving a
presentation, experts caution that presenters should do the following:
Systems Analysis and Design Instructor’s Manual Page 10 of 12

1) They should stay within the allotted time.

2) They should make sure the room is arranged so that everyone can participate.
3) They should have all necessary facilities and equipment available and functional.
4) They should dress appropriately for the audience — at least as well as the highest ranking attendee.
5) They should use appropriate voice and body language to build rapport with the audience.

A QUESTION OF ETHICS
A junior analyst at a medium-sized IT consulting firm has been asked by her manager to draft a
response to an RFP from a large company that is seeking IT consulting services in connection with a
new accounting system. As the analyst worked on the RFP, she noticed a specific question about her
firm’s recent experience on this type of system. To the best of her knowledge, the firm has only worked
on one other accounting project in the past three years. When the manager saw the analyst’s draft
response, he was upset about the way she answered the question. “You don’t have to be quite that
candid,” he said. “Even though we only had one formal project, we do have several people who worked
on accounting systems before they came here.” “Yes,” the analyst replied, “But that isn’t what the
question is asking.” As he left her office, the manager’s final comment was, “If we want that job, we’ll
have to come up with a better answer.” Thinking about it, the analyst isn’t comfortable with anything
but a straight answer. Is this an ethical question? What are her options?

CLASSROOM ACTIVITIES
1. Quick Quiz: Assign Question 10 on page 226.
2. Projects to Assign: Assign Project 3 on page 226.

7.10: Summary
• Point out that this chapter described system development strategies and the preparation and
presentation of the system requirements document
• Describe the traditional systems
• Explain that systems analysts must consider web-based development environments such as .NET,
MERN, and various outsourcing options, including ASPs and IBSs. ASPs charge subscription fees for
providing application software packages
• Point out that the web generation called Web 2.0 is fueling the expansion of information sharing,
user collaboration, and social networking applications
• Mention that if a company chooses to handle its own software development needs, it can create in-
house systems or purchase (and possibly customize) commercially available software packages from
a software vendor or VAR
• Point out that compared with developing an in-house system, an existing commercial software
package can be an attractive alternative
• Describe the SaaS model
• Discuss the practice of offshoring
• Explain the systems analyst’s role in the software development process
• Point out that the most important factor in choosing a development strategy is TCO
• List the steps in the process of acquiring software
• Mention that the system requirements document is the deliverable, or end product, of the systems
analysis phase
Systems Analysis and Design Instructor’s Manual Page 11 of 12

Key Terms
• application service provider (ASP) • payback analysis
• benchmark • physical design
• build or buy • request for proposal (RFP)
• business process outsourcing (BPO) • request for quotation (RFQ)
• cloud computing • return on investment (ROI)
• evaluation and selection team • service desk
• evaluation model • service provider
• fixed fee model • Software as a Service (SaaS)
• forum • software license
• global outsourcing • software package
• horizontal application • system requirements document
• in-house software • software vendor
• Internet business services (IBSs) • subscription model
• logical design • transaction model
• maintenance agreement • usage model
• make or buy • user application
• managed hosting • user interface
• middleware • value-added reseller (VAR)
• mobile device • vertical application
• net present value (NPV) • Web 2.0
• offshoring
• outsourcing
Solution Manual for Systems Analysis and Design, 12th Edition, Scott Tilley

Systems Analysis and Design Instructor’s Manual Page 12 of 12

End of Chapter Material

▪ Chapter Exercises: The Chapter Exercises include short exercises and review questions that
reinforce concepts and provide opportunities to practice skills.

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