In-House Systems Development

Organizations usually acquire information systems in two ways:

1. They develop customized systems in-house through formal
systems development activities
2. They purchase commercial systems from software vendors

• Although each approach has advantages and disadvantages,

they are not mutually exclusive options.

• A firm may satisfy some of its information systems needs by p

urchasing commercial software and developing other systems
in-house.
System Development Life Cycle
 Systems Development
• Estimates hold that up to 25% of All Systems Projects
fail, for they are terminated prematurely and never
implemented, or they must be redesigned within
6 months of implementation

Three problems that account for most systems failures are:

1. Poorly specified systems requirements
2. Ineffective development techniques
3. Lack of user involvement in systems development
 Prototyping
• A technique for providing a preliminary working
version of the system

• Built quickly and relatively inexpensively with the

intention it will be modified

• End users work with the prototype and make

suggestions for changes.
Prototyping Techniques
 Computer-Aided Software
Engineering (CASE)
• CASE technology involves the use of computer systems to
build computer systems.
• CASE tools are commercial software products consisting
of highly integrated applications that support a wide range
of SDLC activities.

Uses of CASE Tools

• Define user requirements
• Create physical databases from conceptual user views
• Produce system design specifications
• Automatically generate program code
• Facilitate the maintenance of programs created by both CASE and n
on-CASE techniques
CASE Spectrum of Support Tools for the SDLC
 Project Evaluation and Review
Technique (PERT)
• is a tool for showing the relationship among key
activities that constitute the construct and delivery
process.

The principal features of this diagram are:

1. Activities
2. Events
3. Paths
4. Critical Path
PERT Chart for In-House Development Project

Construct Phase Deliver Phase

B = 4 Weeks E = 5 Weeks I = 3 Weeks

Design Data Model Create Data Structures Convert Data Files
1 3 6 9

4
5
8
 Gantt Chart

• A horizontal bar chart that presents time on a

horizontal plane and activities on a vertical plane.

• A Bar marking its starting and ending dates represents

the time associated with each activity.

• The Gantt chart is popular because it can show the

current status of the project at a glance.
Gantt Chart
 Gantt Chart

• A horizontal bar chart that presents time on a

horizontal plane and activities on a vertical plane.

• A Bar marking its starting and ending dates represents

the time associated with each activity.

• The Gantt chart is popular because it can show the

current status of the project at a glance.
Construct the System
Designing and Building a working software
 Structured Design Approach

• A disciplined way of designing systems from the top

down

• Starts with the “big picture” of the proposed system

and gradually decomposes it into greater detail so that
it may be fully understood

• Utilizes data flow diagrams (DFDs) and structure

diagrams
 Object-Oriented Design Approach

• It builds information systems from reusable standard

components or objects.

• Once created, standard modules can be used in other

systems with similar needs.

• A library of modules can be created for future use.

 Elements of the Object-Oriented Approach

01 Objects: equivalent to nouns

• vendors, customers, inventory, etc.

02 Attributes: equivalent to adjectives

• part number, quantity on hand, etc.

03 Operations: equivalent to verbs

• review quantity on hand, reorder item
Characteristics of an Inventory Object
 Classes and Instances
• An object class is a logical grouping of individual object
s that share the same attributes and operations.
• An object instance is a single occurrence of an object
within a class.
 Inheritance

• Inheritance means that each object instance inherits

the attributes and operations of the class to which it
belongs.

• Object classes may also inherit from other object

classes.
 Data Modeling

• Formalizes the data requirements of the business

process as a conceptual model

• Primary documentation instrument used for data mode

ling is the Entity-relationship diagram (ERD), the
primary tool for data modeling

• Used to depict the entities or data objects in the

system
 Design Output Views

• Output is the information produced by the

system to support user tasks and decisions.
Output attributes:
• relevance • timeliness
• summarization • accuracy
• exception orientation. • completeness
• conciseness
 Output Reporting Techniques
Different Users prefer different:
• Styles of output:
• tables, matrices, charts, and graphs

• Modes of output:
• hard copy vs. display screen.

• Systems designers must identify these styles and

provide output in the desired style.
 Design Input Views

• Input views are used to capture the relevant facts in bu

siness processes and transactions

• Input may be either hard copy input documents or

electronic input.
• Electronic input fall into two basic types: input
from source documents and direct input.
 Design Input Views

• Input views are used to capture the relevant facts in

business processes and transactions

• Input may be either hard copy input documents or

electronic input.
• Electronic input fall into two basic types: input
from source documents and direct input.
Designing Electronic Input
 Data Entry Devices
• Point-of-sale terminals

• Touch screens

• Magnetic ink character recognition devices

• Optical character recognition devices

• Voice and touch-tone recognition devices

 The Modular Approach
• Each module performs a single task.
• Coupling - the degree of interaction between modules
• Interaction - exchange of data between modules

Correctly designed modules possess two attributes:

• loosely coupled
- low amounts of exchange of data between modules
• strongly cohesive
- small number of tasks performed in each module
 Designing System Controls
• The last step in the detailed design phase

• This step in the design phase allows the design team to

review, modify, and evaluate controls with a system-wide
perspective that did not exist when each module was being
designed independently

• Also includes computer processing controls, database

controls, manual controls, as well as controls over
operational environment
 Systems Walkthrough

• Usually performed by the development team, ensuring

that the design is free from conceptual errors that could
become programmed into the final system

• Many firms have formal, structured walk-throughs that a

quality assurance group conducts, who is an independent
group of programmers, analysts, users, and internal auditors
 Program Application Software
• If the organization intends to develop software in-house,
then a programming language must be selected:

Procedural languages:
• COBOL

Event-driven languages
• Visual Basic

Object-oriented languages
• Java
Deliver the System
Roll out of the new system, termination of the old system
 Deliver the System:
Testing
• Programs must be thoroughly tested before being
implemented. All logic procedures should be tested.

• Outputs of the system are reconciled with predetermined re

sults, and the test is documented to provide evidence of the
system's performance

• Test individual modules with test data containing both “good”

and “bad” data.

• After testing individual modules, the entire system should te

sted as a whole.
 Deliver the System:
Documenting
Documentation should be provided for:
• Designers and programmers - comment lines in programs, s
ystem flowcharts, and program flowcharts

• Operator documentation - run manuals

• User documentation - instructions on how to use the s

ystem, tutorials, and help features

• Accountants and auditors - all of the above as well as docu

ment flowcharts
 Deliver the System:
Converting the Databases
The transfer of data from its current form to the format or
medium required by the new system

Control risks with the following procedures:

• Validation – inspect old database before conversion

• Reconciliation – reconcile the new converted database

against the original

• Backup - keep copies of the original files against

discrepancies in the converted data
 Deliver the System:
Converting the Databases
Three data conversion cutover approaches:

• Cold turkey - switch to the new system all at once and

simultaneously terminate the old system.
• The most riskiest approach

• Phased - modules are implemented in a piecemeal fashion.

• Reduces risk of a devastating failure

• Parallel operation - the old system and new system are run s
imultaneously for a while.
• safest, yet costliest, approach
 Deliver the System:
Post-Implementation Review
• Final step in the implementation phase, takes place some
months later in a post-implementation review

• Objective is to measure the success of the system and of the

process after the dust has settled

• The Post-implementation review of newly installed systems

can provide insights into ways to improve the process for
future systems
 Deliver the System:
The Role of Accountants
• Most system failures are due to poor design and improper
implementation.

• Accountants should provide their expertise to help avoid

inadequate systems by:
• providing technical expertise for financial reporting
requirements (GAAP, PAS, IFRS etc.)
• specifying documentation standards for auditing
purposes
• verifying control adequacy in accordance with Statement on
Auditing Standards No.78, requiring accountants involvment at
both the design and implementation phases
Commercial Packages
Purchase of Commercial Software
 The Purchase of Commercial
Systems Packages

Four factors have stimulated the growth of commercial

software:
• relatively low cost
• prevalence of industry-specific vendors
• growing demand by small businesses
• trend toward downsizing and distributed data
processing
 Four Steps in Choosing a
Commercial Package
1. Analyze needs and develop detailed specifications of the
system requirements.

2. Send out the request for proposals to all prospective

vendors to serve as a comparative basis for initial screening

3. Gather the facts about each vendor’s system using

multiple sources and techniques.

4. Analyze the findings and make a final selection.

Maintenance and Support
Implementing latest software and modifying existing systems
 Maintenance and Support
• Maintenance involves both implementing latest software
versions of commercial packages and modifying existing
systems to accommodate dynamic user needs.

• Can be outsourced or done in-house resources

• End user support is a critical aspect of maintenance that can

be facilitated by:
• knowledge management - method for gathering,
organizing, refining, and disseminating user input
• group memory - method for collecting user input for
maintenance and support
That’s all,

THANK
YOU!