Chapter 13

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Building Information Systems

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 Systems Development

Activities that go into producing an information system solution

to an organizational problem or opportunity are called systems
development.

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Example: Manual ticket processing vs Automated ticket
processing
Steps in systems development
 Systems analysis
 Systems design
 Programming
 Testing
 Conversion
 Production and maintenance

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 1. Systems Analysis
• Systems analysis
Analysis of problem to be solved by new system
 Defining the problem and identifying causes

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 Specifying solutions
○ Systems proposal report identifies and examines
alternative solutions (in-house, outsource, out of the box-
e.g. Ticket Tailor, Purplepass Ticketing)
 Identifying information requirements such as passenger name,
one way or round trip, source airport, destination airport, date
etc.

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 1. Systems Analysis
Feasibility study
 Whether the new system is achievable from a financial,
technical, and organization standpoint?
 Financial standpoint: Whether the investment for a new
system is a good investment? Analyze company budget,

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financial statements, and forecast sales
 Technical standpoint: Whether the company have necessary IT
infrastructure?
 Organization standpoint: Whether the workforces are able to
adopt the change? Questionnaire survey can help to answer
the question. Whether the processes have to be re-designed or
not? Demonstration of available systems will help to answer
the question.
Establishing information requirements
 Who needs what information, where, when, and how
 Faulty requirements analysis is leading cause of systems
failure and high systems development cost
Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 2. Systems Design

The design of a system is the overall plan or model for the

system. Like the blueprint of a building or house, it consists of
all the specifications that give the system its form and

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structure.
Role of end users
 User information requirements drive system building
 Users must have sufficient control over design process to
ensure system reflects their business priorities and information
needs
 Insufficient user involvement in design effort is major cause of
system failure

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 Systems Design Specifications
OUTPUT PROCESSING DOCUMENTATION
Medium Computations Operations documentation
Content Program modules Systems documents
Timing Required reports User documentation
Timing of outputs
INPUT CONVERSION

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Origins MANUAL PROCEDURES Transfer files
Flow What activities Initiate new procedures
Data entry Who performs them Select testing method
When Cut over to new system
USER INTERFACE
How
Simplicity TRAINING
Where
Efficiency Select training techniques
Logic CONTROLS Develop training modules
Feedback Input controls (characters, limit, Identify training facilities
Errors reasonableness) ORGANIZATIONAL CHANGES
Processing controls (consistency, record
DATABASE DESIGN Task redesign
Logical data model counts) Job redesign
Volume and speed Output controls (totals, samples of output) Process design
requirements Procedural controls (passwords, special forms) Organization structure design
File organization and SECURITY Reporting relationships
design Access controls
Record specifications Catastrophe plans
Audit trails

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 3. Systems Development
• The steps in the systems development process translate the
solution specifications established during systems analysis and
design into a fully operational systems.
Step 1- Programming:

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System specifications from design stage are translated into
software program code using Java, C++, C# etc.
Step 2- Testing
Ensures system produces right results
Unit testing: Tests each module in system separately
System testing: Test functioning of system as a whole such as
load testing, performance testing in peak hour etc.
Acceptance testing: Makes sure system is ready to be used in
production setting. Systems tests are evaluated by users and
reviewed by management

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 3. Systems Development
Step 3- Conversion
Process of changing from old system to new system
Four main strategies

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 Parallel strategy: old and new systems are run at the same
time. It is the safest conversion strategy because in the event
of error with the new system, the old system can be used as
backup.
 Direct cutover: replaces the old system entirely. It is a risky
strategy.
 Pilot study: new system is introduced at some part of the
organization.
 Phased approach: introduces new systems in stages.
Requires end-user training to use the new system
Finalization of detailed documentation showing how system
works from technical and end-user standpoint
Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 3. Systems Development
Step 4- Production and maintenance
After the new system is installed and conversion is complete,
the system is said to be in production.
In the production stage system is reviewed to determine if

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revisions needed. This may include post-implementation audit
document.
Maintenance
 Changes in hardware, software, documentation, or procedures
to a production system to correct errors, meet new
requirements, or improve processing efficiency
○ 20% of time for debugging, emergency work
○ 20% changes to hardware, software, data, reporting
○ 60% of work: User enhancements, improving
documentation, recoding for greater processing efficiency

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 Systems Building Approaches

Traditional systems life-cycle

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Prototyping
Outsourcing

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 Traditional Systems Lifecycle
• Traditional systems lifecycle:
Oldest method for building information systems
Phased approach divides development into formal stages

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 Follows “waterfall” approach: Tasks in one stage finish before
another stage begins
Used for building large complex systems
Can be costly, time-consuming, and inflexible

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 Prototyping
The process of
developing a prototype
can be broken down
into four steps.
Because a prototype
can be developed

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quickly and
inexpensively, systems
builders can go
through several
iterations, repeating
steps 3 and 4, to
refine and enhance the
prototype before
arriving at the final
operational one.

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon
 Outsourcing

Several types
 Cloud computing and SaaS providers

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○ Subscribing companies use software and computer
hardware provided by vendors
 External vendors
○ Hired to design, create software
○ Domestic outsourcing
» Driven by firms need for additional skills, resources,
assets
○ Offshore outsourcing
» Driven by cost-savings

Management Information Systems: Managing the Digital Firm, 12e Authors: Kenneth C. Laudon and Jane P. Laudon