ISYS6300 - Business Process

Fundamental

Week 10 – Systems Development

 Learning Outcomes
• LO5: Elaborate the integration of functional
IT applications in an enterprise.
 Sub Topics
1. SDLC
2. System Analysis
3. System Design
4. System Implementation
5. System Operation and Maintenance
 10.1 SDLC
• System Development Life Cycle
1. System Analysis
2. Conceptual Design
3. Physical Design
4. Implementation and Conversion
5. Operation and Maintenance
 Reason of Change
• Changes in user or business needs.
• Technological changes.
• Improved business processes.
• Competitive advantage.
• Productivity gains.
• Systems integration.
• Systems age and need to be replaced.
 The Players
• Management
• Users
• IS Steering Committee
• Project Development Team
• System Analyst and Programmers
• External Players
 System Development
Planning
• Planning has distinct advantages.
o It enables the system’s goals and objectives to correspond to the
organization’s overall strategic plan.
o Systems are more efficient, subsystems are coordinated, and there is
a sound basis for selecting new applications for development.
o The company remains abreast of the ever-present changes in
information technology (IT).
o Duplication, wasted effort, and cost and time overruns are avoided.
o The system is less costly and easier to maintain.
o Finally, management is prepared for resource needs, and employees
are prepared for the changes that will occur.
 System Development
Planning
• When development is poorly planned, a company must
often return to a prior phase and correct errors and design
flaws. This is costly and results in delays, frustration, and low
morale.
 The Plan
1. Project development plan. A project
development plan, prepared by the project team,
contains a cost–benefit analysis, developmental
and operational requirements (people, hardware,
software, and financial), and a schedule of the
activities required to develop and operate the new
application.
 The Plan
2. Master plan. A long-range master plan, prepared
by the information systems steering committee,
specifies what the system will consist of, how it
will be developed, who will develop it, how
needed resources will be acquired, and where the
AIS is headed.
Reasons of Setback
 Feasibility Study
• Feasibility study - An investigation to
determine whether it is practical to develop
a new application or system.
o Economic
o Technical
o Legal
o Time
o Operational
 Capital Budgeting
Techniques
• 1. Payback period. The payback period is the number of years required
for the net savings to equal the initial cost of the investment. The
project with the shortest payback period is usually selected.
• 2. Net present value (NPV). All estimated future cash flows are
discounted back to the present, using a discount rate that reflects the
time value of money. The initial outlay costs are deducted from the
discounted cash flows to obtain the net present value (NPV). A positive
NPV indicates the alternative is economically feasible. The highest
positive NPV is usually selected.
• 3. Internal rate of return (IRR). The internal rate of return (IRR) is the
effective interest rate that results in an NPV of zero. A project’s IRR is
compared with a minimum acceptable rate to determine acceptance or
rejection. The proposal with the highest IRR is usually selected.
 Behavioral Problem of
Change
• Fear.
• Top-management support.
• Experience with prior changes
• Communication.
• Disruptive nature of change.
• Manner in which change is introduced.
• Biases and emotions.
• Personal characteristics and background.
 How People Resist
Change
• Aggression
• Projection
• Avoidance
 Prevention of Behavior
Problems
• Obtain management support.
• Meet user needs.
• Involve users.
• Allay fears, and stress new opportunities.
• Avoid emotionalism.
• Provide training.
• Reexamine performance evaluation.
• Keep communication lines open.
• Test the system.
• Keep the system simple, and humanize it.
• Control users’ expectations.
10.2 System Analysis
 In House - Advantage
• User creation, control, and implementation.
• Systems that meet user needs.
• Timeliness.
• Freeing up of systems resources.
• Versatility and ease of use.
 In House - Disadvantage
• Logic and development errors.
• Inadequately tested applications.
• Inefficient systems.
• Poorly controlled and documented systems.
• System incompatibilities.
• Duplication of systems and data; wasted resources.
• Increased costs.
 Outsource - Advantage
• A business solution.
• Asset utilization.
• Access to greater expertise and better
technology. Lower costs.
• Less development time.
• Elimination of peaks-and-valleys usage.
• Facilitation of downsizing.
 Outsource - Disadvantage
• Inflexibility.
• Loss of control.
• Reduced competitive advantage.
• Locked-in system.
• Unfulfilled goals.
• Poor service.
• Increased risk.
10.3 Conceptual System
Design
10.3 Physical System
Design
 10.4 System
Implementation
 Cutoff/Implementation
Strategy
• Phased
• Parallel
• Pilot
• Direct / Big Bang
Phased
Parallel
Pilot
Direct/Big Bang
 10.5 Maintenance &
Services
• After the system runs and is operated by staff in the
production environment, it is used for daily business
activities, the next stage is the operational and maintenance
activities of the system. Usually software developer vendors
will offer maintenance & services contracts that are
separate from the project contract. It can be a package
(bundling) of maintenance services for a certain period, for
example five (5) years at a time, or it can also be in units of
one (1) year but can be extended every time the contract
period ends.
• At this stage also the system performance is monitored and
evaluated, not infrequently also improved. After
implementation for a certain period of time, for example six
(6) months, monitoring and review of system performance
is carried out. This activity is called post implementation
review (PIR). This activity produces a post-implementation
review report (PIR report). The purpose of the PIR is to
ensure that the new system meets planned targets,
identifies the adequacy of system standards, and reviews
system controls.
 References
• Romney, Marshal B., Steinbart, Paul John. (2018). Accounting
Information System (Global Edition). 14. Pearson Education Limited.
Essex. ISBN: 1292220082. Chapter 20, 21, 22.
•  Considine, Brett at all. (2012). Accounting Information Systems –
Understanding business processes. 04. Wiley. New York. ISBN: 978-0-
7303-0247-6. Chapter 14, pages 629-659.
Thank You