Systems Analysis and Design

Chapter 1

The Systems Analyst and

Information Systems Development
 Chapter 1 Outline
The systems analyst.
The Systems Development Life Cycle
(SDLC).
Information system project
identification and initiation.
Feasibility analysis.
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 System Development Life Cycle
(SDLC)
SDLC is the process of
Determining how an IS can support business needs
Designing the system
Building it
Delivering it to users
Key person in SDLC is systems analyst who
Analyzes the business situation
Identifies opportunities for improvements
Designs an IS to implement improvements

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 The Systems Analyst
Systems analyst plays a key role in IS
development projects
Systems analyst works closely with all
project team members so that the team
develops the right system in an effective
way
Objective:
NOT to create a wonderful/neat system
But to create value for the organization (lower costs;
increase revenues)
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Systems analysts must understand
how to apply technology in order to
solve problems
Systems analysts may also serve as
change agents who
identify the organization improvements needed,
design systems to implement those changes,
train/motivate others to use the systems

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 Systems Analyst Skills
Introduces change to the organization
and people
Leads a successful organization change
effort
Understanding what to change,
knowing how to change it, convincing
others of the need for change require
six categories of skills
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 Technical: Must understand the technical environment,
technical foundation, and technical solution
Business: Must understand how IT can be applied to
business situations
Analytical: Must solve problems
Interpersonal: Communicate effectively and give
presentations
Management: Manage people and situations; manage
pressure and risks
Ethical: Must be able to deal fairly, honestly, and
ethically with other project members, managers, and
systems users

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 Project Team Specialization
Systems analyst
Business analyst
Requirements analyst
Infrastructure analyst
Software architect
Change management analyst
Project manager
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 Systems Analyst
Focuses on the IS issues surrounding the
system
Have significant training and experience in analysis and
design and in programming
Develops ideas and suggestions for ways
IT can improve business process
Helps design new business processes
Designs the new information system
Ensures that all IS standards are
maintained
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 Business Analyst
Focuses on the business issues
surrounding the system
Have business training and experience, plus knowledge of
analysis and design
Identifies the business value that the
system will create
Develops ideas for improving the business
processes
Helps design new business processes and
policies
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 Requirements Analyst
Focuses on eliciting requirements from
stakeholders associated with new IS

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 Infrastructure Analyst
Focuses on technical issues surrounding the ways
the system will interact with the organizations
technical infrastructure
Have training and experience in networking, database admin,
various HW/SW products
Ensures that the new information system
conforms to organization standards
Identifies infrastructure changes
Over time, an experienced infrastructure analyst
may become software architect, who takes a
holistic view of the organizations entire IT
environment and guides application design
decisions within that context 1 - 12
 Change Management Analyst
Focuses on the people and management
issues surrounding the system installation
Have training and experience in organizational behavior
and expertise in change management
Ensures that adequate documentation and
support are available to users
Provides user training
Develops strategies to overcome
resistance to change
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 Project Manager

Ensures that the project is

completed on time and within
budget
Makes sure the system delivers the
expected value to the organization
Is a seasoned systems analyst
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 Career Paths for System
Developers
More common path
Change
Requirements
management
analyst
analyst

Entry-level Business
business function analyst
specialist

Project
manager

Systems
analyst

Entry-level
programmer/
analyst

Infrastructure Software
analyst architect
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 Systems Development Life Cycle
(SDLC)
SDLC consists of four phases:
Planning
Analysis
Design
Implementation
Each phase includes a set of steps
Each step uses techniques to produce deliverables
(specific documents and files)
Specific document and files provide understanding about
the project
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To Understand the SDLC:
Each phase consists of steps that lead to certain
deliverables
SDLC is a process of gradual refinement
Each phase refines and elaborates on the work done by
previous phase

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 Phase I: Planning
This phase is the fundamental process of
understanding why an information system should be built
determining how the project team will go about building
it
The Planning phase will also determine
how the project team will go about
building the information system.
The Planning phase is composed of two
steps
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 Two Steps in Planning
During project initiation, the systems business
value to the organization is identified (How will it
lower costs or increase revenues?)
System request presents business need and
explains how IS supporting those needs will create
business value
Feasibility analysis examines
Technical feasibility (can we build it?)
Economic feasibility (will it provide business value?)
Organizational feasibility (will it be used?)

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 Two Steps in Planning
During project management, the project
manager creates a work plan, staffs the
project, and puts techniques in place to
help the project team control and direct
the project through the entire SDLC
Project plan describes how project team
will go about developing the system

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 Phase II: Analysis
The analysis phase answers the questions
of
Who will use the system,
What the system will do,
Where and when it will be used
During this phase the project team
investigates any current system(s),
identifies improvement opportunities, and
develops a concept for the new system
The Analysis phase has three steps
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 Three Steps in Analysis
Analysis strategy: This is developed to guide the
projects teams efforts. This includes a study of the
current system and its problems, and envisioning ways
to design a new system.
Requirements gathering (through interviews,
questionnaires): The analysis of this information leads
to the development of a concept for a new system. This
concept is used to build a set of analysis models.
System proposal: The proposal is presented to the
project sponsor and other key individuals who decide
whether the project should continue to move forward.

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The system proposal is the initial
deliverable that describes what business
requirements the new system should
meet.
The deliverable from this phase is both an
analysis and a high-level initial design for
the new system.
So some argue a better name for the analysis phase
would be the analysis and initial design phase
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 Phase III: Design
This phase decides
How the system will operate in terms of the
hardware, software, and network infrastructure;
The user interface, forms, and reports that will be
used;
The specific programs, databases, and files that will
be needed
The Design phase has five steps
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 Five Design Steps
1. Design Strategy: This clarifies whether the system will
be developed by the company or outside the
company.
2. Architecture Design: This describes the hardware,
software, and network infrastructure that will be
used.
3. Interface Design: This specifies how users will move
through the system (e.g., menus) and forms and
reports that the system will use.
4. Database and File Specifications: These documents
define what and where the data will be stored.
5. Program Design: This defines what programs need to
be written and what they will do.
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 Phase IV: Implementation
During this phase, the system is either
developed or purchased (in the case of
packaged software) and installed.
This phase is usually the longest and
most expensive part of the process.
The Implementation phase has three
steps
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 Three Implementation Steps
System Construction: The system is built and
tested to make sure it performs as designed.
Installation: The process by which the old
system is turned off and the new one is turned
on.
Training plan teaches users how to use the new system and
helps manage the changes caused by the new system.
Support Plan: It usually includes a post-
implementation review as well as a systematic
way for identifying changes needed for the
system.
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 Project Identification and
Initiation
A project is identified when someone
in the organization identifies a business
need to build a system.
A need may surface when an
organization identifies unique and
competitive ways of using IT.
Many organizations eye emerging
technologies (e.g., RFID).
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 Business Process Management
(BPM)
Nowadays many new IS projects grow
out of BPM.
BPM is a methodology used by
organizations to continuously improve
end-to-end business processes.

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 BPM Process
1. Defining and mapping the steps in a
business process
2. Creating ways to improve on the steps in the
process that add value
3. Finding ways to eliminate or consolidate
steps in the process that do not add value
4. Creating and adjusting electronic workflows
to match the improved process maps

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 Business process automation (BPA) technology
components are used to complement or
substitute manual process (step 4 above).
Business process improvement (BPI) creating
new, re-designed processes to improve the
workflows, and/or utilizing new technologies
enabling new process structures (steps 2, 3, 4
above).
Business process reengineering (BPR) changing
the fundamental way in which the organization
operate.
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Both IT people and business people
should work together to find way for
technology to support business needs.
The project sponsor is a person (or
group) who has an interest in the
systems success.

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 Project Sponsor
The project sponsor will
work throughout the SDLC to make sure that the
project is moving in the right direction from the
perspective of the business.
serve as the primary point of contact for the system.
Size and scope of the project is
determined by the kind of sponsor that
is involved.
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Business need drives the high-level
business requirements for the system.
Business requirements are what
features and capabilities the
information system will have to
include.
e.g., ability to collect customer orders online

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 The project sponsor also should have an idea of
the business value to be gained from the system,
in both tangible and intangible ways.
The tangible value can be quantified and
measured easily (e.g., 2% reduction in operating
costs).
An intangible value results from an intuitive belief
that the system provides important, but hard-to-
measure benefits to the organization. (e.g.,
improved customer service).

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 System Request
The document that describes:
The business reasons for building a system;
The value that system is expected to provide
The project sponsor usually completes this
form as part of a formal system selection
process within the organization.
Most system requests include five
elements
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 The project sponsor
The business need presents reasons prompting the
project
The business requirements of the project refer to
the business capabilities that the system will need
to have.
The business value describes the benefits that the
organization should expect from the system.
Special issues are included on the document as a
catch-all category for other information that
should be considered in assessing the project (e.g.,
deadline, constraints).
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Elements
of the
Systems
Request

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 Systems
Request:
Tune
Source
Music
Download
System 1 - 39
 Estimating Business Value:
Tune Source System
Identify sources: increased sales;
decreased costs; reduced headcount;
lower turnover
Assign values as initial estimates

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The completed system request is
submitted to the approval committee for
consideration.
The committee reviews the system
request and makes an initial
determination, based on the information
provided, of whether to investigate the
proposed project or not.
If so, the next step is to conduct a
feasibility analysis.
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 Feasibility Analysis
Feasibility analysis guides the
organization in determining whether to
proceed with a project.
Feasibility analysis also identifies the
important risks associated with the
project that must be addressed if the
project is approved.
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 As with the system request, each organization
has its own process and format for the
feasibility analysis.
Most include techniques to assess three areas:
Technical feasibility
Economic feasibility
Organizational feasibility
The results of these three feasibilities are
combined into a feasibility study deliverable
that is given to the approval committee at the
end of the project initiation.
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 Technical Feasibility
Technical feasibility is the extent to which
the system can be successfully designed,
developed, and installed by the IT group.
Technical feasibility is essentially a
technical risk analysis that strives to
answer the question: Can we build it?
Risks can endanger the successful
completion of a project. In analyzing risks,
consider the following factors
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 Familiarity with the application: When analysts are
unfamiliar with the business app area, they have a
greater chance of misunderstanding users or missing
opportunities for improvement (e.g., Microsoft starting
a new Web dating service)
Familiarity with the technology: When a system will use
technology that has not be used before, there is a
greater chance that problems will occur
Project size (i.e., size of development team, number of
distinct features, development time): Larger projects
are more difficult to manage
Compatibility of the new system with the technology
that already exists
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 Economic Feasibility
Economic feasibility analysis is also
called a cost-benefit analysis, that
identifies the financial risk associated
with the project.
This attempts to answer the question,
Should we build the system?
Use cash flow analysis and measures to
attempt to answer this question
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Cash Flow Analysis and Measures
IT projects involve an initial investment
that produces a steam of benefits over
time, along with some on-going
support costs.
Cash flows, both inflows and outflows,
are estimated over some future period.

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 Simple Cash Flow projection

Row 3: net benefits are computed by subtracting

each years total costs from its total benefits
Row 4: cumulative total of net cash flows are
computed
Example: Year 2s Cumulative Net Cash Flow = -65,000 + 38,000
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=
-27,000
Common methods for evaluating a
projects worth
Return on Investment (ROI)
Break-Even Point (BEP)
Discounted Cash Flow Technique
Net Present Value (NPV)

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 Return on Investment (ROI)
The return on investment (ROI) is a calculation that
measures the average rate of return on the money
invested in the project.
ROI is a simple calculation that divides the projects net
benefits (total benefits total costs) by the total costs.
ROI=(Total Benefits Total Costs)/Total Costs
See Simple Cash Flow Method on slide #66
A high ROI suggests that the projects benefits far
outweigh the projects cost.
Although ROI is commonly used in practice, it suffers
from several important limitations and should not be
used as the only measure of a projects wealth.

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 Break-Even Point (BEP)
Break-even point is another common approach
to measuring a projects worth.
Break-even point is sometimes referred to as
the payback method.
The break-even point is defined as the number
of years it takes a firm to recover its original
investments in the project from net cash flows.
See Simple Cash Flow Method on slide #66
Year 4 is when cash flow becomes positive

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 Break-Even Point (BEP)

The break-even point is easy to calculate and understand and

does give an indication of a projects liquidity or the speed at
which the project will generate cash returns.
The break-even point does ignore cash flows that occur after
the break-even point has been reached and therefore is
biased against long-term projects.
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 Discounted cash flow technique
Discounted cash flows are used to compare the
present value of all cash inflows and outflows for
the project in the todays dollar terms.

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 Net Present Value (NPV)
Net present value (NPV) is used to compare
the PV of all cash inflows and outflows for
the project in todays dollar terms.
Net present value (NPV) is simply the
difference between the total PV of the
benefits and the total PV of the costs.
As long as the NPV is greater than zero, the
project is considered economically feasible.
See Net Present Value Method on slide
#68
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 Steps to conduct an economic
feasibility analysis
Cost-benefit analysis consists of six
steps

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Step 1: Identify Costs and Benefits
During this step, identify the kinds of costs
and benefits the system will have and list
them along the left-hand column of a
spreadsheet.
The costs and benefits are broken down
into four categories:
Development costs
Operational costs
Tangible benefits
Intangibles 1 - 56
 Development Costs
Development costs are those tangible
expenses that are incurred during the
creation of the system (i.e., non-
recurring), such as:
Salaries
HW and SW expenses
Consultant fees
Training
Office space and equipment 1 - 57
 Operational Costs
Operational costs are those tangible
costs that are required to operate the
system and are considered ongoing
cost (i.e., recurring), such as:
Salaries for operation staff
Software licensing fees
Equipment upgrades
Communications charges
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 Tangible Benefits
Tangible benefits include revenue that the
system enables the organization to
collect, such as
Increased sales
The system may enable the organization
to avoid certain costs, which may lead to
another type of tangible benefit, such as
Reduction in staff
Reduction in inventory
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 Intangible Benefits
Intangible benefits and costs are more
difficult to incorporate into the
economic feasibility analysis as they
are based on intuition and belief rather
than on hard numbers.
Increased brand recognition
Improved customer service
Better supplier relations
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Step 2: Assign Values to Costs and
Benefits
For tangible costs and benefits: Once the types of costs
and benefits have been identified, you will need to
assign specific dollar values to them.
The most effective strategy for estimating costs and
benefits is to rely on people who have the best
understanding of the them.
If predicting a specific value for a cost or benefit proves
difficult, it may be useful to estimate a range of values
for the cost or benefit (V1, V2, V3,)and then assign a
probability estimate (p1, p2, p3,) to each value, then
calculate an expected value EV:
EV=V1p1+V2p2+V3p3
p1+p2+p3=1

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For intangible costs and benefits:
Sometimes it is acceptable to list
intangible benefits, such as improved
customer service, without assigning a
dollar value.

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 Case: Tune Source Digital Music Download Project
Sales Projections for Individual Downloads category:

Expected sales from individual downloads =

(900,000 x 0.25)+(750,000 x 0.60)+(550,000 x 0.15)=757,500
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 Step 3: Determine Cash Flow
A formal cost-benefit analysis usually
contains costs and benefits over a
selected number or years to show cash
flow over time.
With this cash flow method,
the years are listed across the top of the spreadsheet
to represent the period for analysis, and
numeric values are entered in the appropriate cells
with the spreadsheets body for all years.
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Often, amounts are augmented by some
rate of growth to adjust for inflation or
business improvements (e.g., 6% added
for sales numbers).
Finally, totals are added to determine
what the overall benefits will be, and the
higher the overall total, the more
feasible the solution becomes in terms of
its economic feasibility.
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Simple Cash Flow Method

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Step 4: Assess Projects Economic
Value
The three areas included in Assess
Projects Economic Value are:
Determine Return on Investment (see slide #66)
Determine Break-Even Point (see slide #66)
Determine Net Present Value (see slide #68)

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Net Present Value Method

Discount rate=6%

Discount rate=6%

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 Organizational Feasibility
Organizational feasibility of the system is how well the
system ultimately will be accepted by its users and
incorporated into the ongoing operations of the
organization.
There are many organizational factors that can have an
impact on the project, and seasoned developers know
that organizational feasibility can be the most difficult
feasibility dimension to assess.
In essence, an organizational feasibility analysis is to
answer the question If we build it, will they come?
There are two ways to assess organizational feasibility

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Strategic alignment is the fit between
project and business strategy
How well goals of the project align with business
objectives
Stakeholder analysis is the fit between
project and interests of stakeholders

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 Stakeholder analysis
A stakeholder is a person, group, or
organization that can affect, or be
affected by, a new system
Different stakeholders:
Project champion: high-level executive and usually the
project sponsor who created the system request
Organizational management: whose support conveys
the belief that system is worthwhile
System users: who ultimately will use the system

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 Summary
The Systems Analyst is the key person in the development of
information systems. This individual helps to analyze the
business situation, identify opportunities for the
improvements, and design an information system that adds
value to the organization.
The Systems Development Lifecycle consists of four stages:
Planning, Analysis, Design, and Implementation.
Project Identification and Initiation allows recognition of a
business need that can be satisfied through the use of
information technology.
The business value for an information system is identified and
then described in a System Request.
A Feasibility Analysis is used to provide more detail about the
risks associated with the proposed system and includes,
technical, economic, and organizational feasibilities.
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