SYSTEMS DEVELOPMENT

AND PROGRAM CHANG

E ACTIVITIES
PARTICIPANTS IN SYSTEMS DEVELOPMENT

SYSTEMS PROFE SYSTEMS PROFE

SSIONALS SSIONALS

SYSTEMS PROFE SYSTEMS PROFE

SYSTEMS PROFE
SSIONALS SSIONALS SSIONALS
Why are accountants involved with SDLC?

SECOND, accountants and SECOND, accountants and

auditors is with the nat auditors is with the nature
ure of the products that of the products that emerg
emerge from the SDLC. e from the SDLC.

SECOND, accountants and auditors is with the nature of th

e products that emerge from the SDLC.
HOW ARE ACCOUNTANTS INVOLVED WITH THE SDLC

Second, they
First, participate as Third, they are
accountants members of involved as auditors.
are users. development
team.
INFORMATION SYSTEMS ACQUISITION

COMMERCIAL
IN-HOUSE DEVELOPMENT
SYSTEMS

requires maintaining a
full-time systems staff of
analysts and puchased from software
programmers who vendors
identify user information
needs and satisfy their
needs with custom
systems
TYPES OF COMMERCIAL SYSTEMS

GENERAL
TUNKEY
ACCOUNTING
VENDOR-
BACKBONE
SUPPORTED
OFFICE
SPECIAL-
AUTOMATION
PURPOSE
THE SYSTEMS DEVELOPMENT CYCLE
SYSTEMS PLA
NNING
SYSTEMS ANA
LYSIS
Analysis Step

What is the purpose of

conducting a system analysis?
 System Analysis Report

The event that marks the conclusion of the system anal

ysis phase is the preparation of formal system analysis
report.
“ System Analysis Re
port may contain:
analysis, scope of the study, problems identified wit
h the current system, statement of user require
ments, resource implications, and recommenda
tions
CONCEPTUAL SYSTEMS DESIGN

▪
DI KO PA TO ALAM
 STRUCTURED DESIGN
APPROACH

DI KO PA ALAM
OBJECT ORIENTED APPROACH

Its purpose is to build information systems from r
eusable standard components or object.


The benefits of this approach include reduce time
and cost for development, maintenance, and testi
ng.
SYSTEM EVALUATION AND SELECTIO
N – PHASE IV
It is the procedure for selecting the one system
from the set of alternative conceptual design
that will go to detailed design phase.

2 steps involve:
1. Perform a detailed feasibility study
2. Perform cost-benefit analysis
PERFORM A DETAILED FE
ASIBILITY STUDY

1. Technical Feasibility
2. Economic Feasibility
3. Legal Feasibilty
4. Operational Feasibility
5. Schedule Feasibility
PERFORM A COST-BENEFIT ANALYSIS

3 STEPS:

IDENTIF IDENTIF COMPARE

Y COSTS Y COSTS AND
BENEFIT BENEFITS
S
2 categories in Identifying Costs:

1. One time costs

2. Recurring Costs

One time costs: Recurring costs:

Hardware Acquisition Hardware Maintencance

Site Preparation Software Maintenance
Software Acquisition Insurance
Systems Design Supplies
Data Conversion Personnel Costs
Training
Identifying Benefits

1.Tangible (Increase Revenue, Reduce Costs)

2.Intangible

Tangible Benefits: Intagible Benefits:

Expansion in other Increased customer

markets satisfaction
Labor Reduction Improved employee
satisfaction
Compare Costs and Benefits

The last step in the cost-benefit analysis is to compare the costs and benefits identifies in the first
two steps. The two most common methods used for evaluating information systems are net
present value and payback.

Prepare Systems Selection Report

The deliverable product of the systems selection process is the systems selection report. This
formal explanation of intangible benefits for each alternative design On the basis of this report,
the steering committee will select a single system that will go forward to the next phase of the
SDLC-detailed design.
The Auditor's Role in Evaluation and Selection

The primary concern for auditors is that the economic feasibility of the proposed system is
measured as accurately as possible. Specifically, the auditor should ensure five things:

1. Only escapable cost 1. Only escapable cost 1. Only escapable cost

s are used in calc s are used in calculatio s are used in calculatio
ulations of cost sa ns of cost savings bene ns of cost savings bene
vings benefits. fits. fits.

1. Only escapable cost 1. Only escapable cost

1. Only escapable cost
s are used in calculatio s are used in calculatio
s are used in calc
ns of cost savings bene ns of cost savings bene
ulations of cost sa
fits. fits.
vings benefits.
Detailed Design-Phase V

The purpose of the detailed design phase is to produce a detailed description of the proposed system
that both satisfies the system requirements identified during systems analysis and is in accordance with
the conceptual design. In this phase, all system components (user views, database tables, processes, and
controls) are neticulously specified. At the end of this phase, these components are presented formally
in a detailed design report. This report constitutes a set of blueprints that specify input screen formats,
output report layouts, database structures, and process logic. These completed plans then proceed to the
final phase in the SDLC-systems implementation-where the system is physically constructed.

Perform a System Design Walkthrough

After completing the detailed design, the development team usually performs a system design
walkthrough to ensure that the design is free from conceptual errors that could become programmed
into the final system. Many firms have formal, structured walkthroughs conducted by a quality assurance
group. This group is an independent one made up of programmers, analysts, users, and internal auditors.
The job of this group is to simulate the operation of the system to uncover errors, omissions, and ambigu-
ities in the design. Most system errors emanate from poor designs rather than programming mistakes.
Detecting and correcting errors in the design phase thus reduces costly reprogramming later.
Review System Documentation
The detailed design report documents and describes the system to this point. This report
includes the following:

• Designs for all screen inputs and source documents for the system.
• Designs of all screen outputs, reports, and operational documents.
• Normalized data for database tables, specifying all data cements.
• Database structures and diagrams Entity relationship (ER) diagrams describing the data
relations in the system, context diagrams for the overall system, low-level data flow diagrams
of specific system processes, structure diagrams for the program modules in the system-
including a pseudocode description of each module.
• An updated data dictionary describing each data element in the database.
• Processing logic (flow charts)
 Application Programming an
Program the Application
Software
d Testing--Phase V1
The next stage of the SDIC
is to select a programning Procedural Languages.
language from among the
various languages available A procedural language requires the programmer to
and suitable to the specify the precise order in which the program
application. These include logic is executed. Procedural languages are o
procedural languages like
COBOL event-driven
ften called third-generation languages (3GLs).
languages like Visual Basic, Examples of Gls include COBOL, FORTRAN,
or object-oriented C, and PL1
programming (OOP)
languages like Java or C++.
This section presents a brief Event-Driven Languages.
overview of various
programming approaches. Event-driven languages are no longer procedural. U
Systems professionals will nder this model, the program's code is not exe
make their decision based cuted in a predefined sequence. Instead, exte
on the in-house standards,
architecture, and user rnal actions or "events" that are initiated by th
needs. e user dictate the control flow of the program.
For example, when the user presses a key, or
"clicks" on an icon on the computer screen, th
e program automatically executes code associ
ated with that event.
Object-Oriented Languages

Central to achieving the benefits of the object oriented approach is developing software in an
object-oriented programming (OOP) language.

The most popular true OOP languages are Java and Smalltalk. However, the learning curve of OOP l
anguages is steep. The time and cost of retooling for OOP is the greatest impediment to the transition
process.

2
6
Programming the System
Regardless of the programming language used, modern programs should follow a modular approac
h. This technique produces small programs that perform narrowly defined tasks. The following three
benefits are associated with modular programming.

1. Programming efficiency. Modules can be coded

and tested independently, which vastly reduces
programming time. A firm can assign several
programmers to a single system. Working in
parallel, the programmers each design a few
modules. These are then assembled into the
completed system.
3. Control. By keeping modules small,
they are less likely to contain material
errors of fraudulent logic
Since each module is independent of
the others, errors are contained within
the module.

2. Maintenance efficiency. Small modules are easier

to analyze and change, which reduces the start-up
time during program maintenance. Extensive
changes can be parceled out to several
programmers simultaneously to shorten
2
maintenance time. 7
 Test the Application Software

All program modules must be thoroughly tested before they

are implemented. There are some proven concepts about
testing that should be followed by the system developers,
and considered by auditors in conducting audits.

Test the Application Software

The process itself has structured steps to follow. It shows a

program-testing procedure involving the creation of hypothetical
master files and transactions files that are processed by the
modules being tested. The results of the tests are then compared
against predetermined results to identify programming and logic
errors. 2
8
Testing Offline Before Deploying Online

The first point that is critical in testing is to never underestimate the

principle of testing offline before deploying a system online. Implementing
a system without
testing offline is an invitation to disaster.

Test Data

Creating meaningful test data is an extremely time-consuming aspect of

program testing.

2
9
System Implementation-Phase VII

In the system implementation phase of the systems development process, database

structures are created and populated with data, equipment is purchased and installed,
employees are trained, the system is documented, and the new system is installed. The
implementation process engages the efforts of designers, programmers, database
administrators, users, and accountants. The activities in this phase entail extensive costs
and will often consume more personnel-hours than all other preimplementation phases of
the SDLC combined.

3
0
Testing the Entire System

When all modules have been coded and tested, they must be brought together and tested
as a whole. User personnel should direct system-wide testing as a prelude to the forma
system implementation. The procedure involves processing hypothetical data through the
system. The outputs of the system are then reconciled with predetermined results and the
test is documented to provide evidence of the system's performance. Finally, when those
conducting the tests are satisfied with the results, they should then complete a formal
acceptance document.

3
1
Documenting the System

The system's documentation provides the auditor with essential information about how the
system
works. The documentation requirements of three groups-systems designers and
programmers, computer operators, and end users-are of particular importance. Designer
and Programmer Documentation Systems designers and programmers need
documentation to debug errors and perform maintenance on the system. This group is
involved with the system or a highly technical level, which requires both general and
detailed information. Some of this is provided through data flow diagrams, entity relation
(ER) diagrams, and structure diagrams.
In addition, system flowcharts, program flowcharts, and program code listings are
important forms
of documentation.

3
2
Documenting the System

Computer operators use documentation called a run manual, which describes how to run the system. The
typical contents of a run manual include:

•The name of the system, such as Purchases System

• The run schedule (daily, weekly, time of day, and so on)

• Required hardware devices (tapes, disks, printers, or special hardware)

•File requirements specifying all the transaction (input) files, master files, and output files used in the
system

• Run-time instructions describing the error messages that may appear, actions to be taken, and the
name and telephone number of the programmer on call, should the system fail

•A list of users who receive the output from the run

3
3
 Documenting the System

Users need documentation describing how to use the system. User tasks include such things as entering
input for transactions, making inquiries of account balances, updating accounts, and generating output
reports. The nature of user documentation will depend on the user's degree of sophistication with
computers and technology. Thus, before designing user documentation, the systems professional must
assess and classify the user's skill level.

•A reference manual of commands to run •Service and support information

the system

•A glossary of key terms

3
4
 Tutorials

Online tutorials can be used to train the novice or the occasional user. The success of this
technique is based on the tutorial's degree of realism. Tutorials should not restrict the user
from access to legitimate functions.

Help Features

Online help features range from simple to sophisticated. The help feature analyzes the
context of what the user is doing at the time of error and provides help with that specific
function.

3
5
 Converting the Databases

Database conversion is a critical step in the implementation phase. This is the transfer of data from
its current form to the format or medium required by the new system. The degree of conversion
depends on the technclogy leap from the old system to the new one. Some conversion activities
are very labor intense, requiring data to be entered into new databases manually.

3
6
 the following should be taken :

1. Validation. The old database must be validated before conversion. This requires
analyzing each class of data to determine whether it should be reproduced in the new
database.

2. Reconciliation. After the conversion action, the Gew database must be reconciled
against the original. Sometimes this must be done inanually, record by record and held by
field. la many instances, this process can be automated by writirg a program that will compare
the two sets of data.

3. Backup. Copies of the original files must be kept as backup against discrepancies in the
converted
data. If the current files are already in magnetic form, they can be conveniently backed up and
stored. However, paper documents can create storage problems. When the user feels confident
about the accuracy and completeness of the new databases, he or she may destroy the paper
documents. 3
7
 Converting to the New System

The process of converting from the old system to the new one is called the cutover. A
system cutover will usually follow one of three approaches: cold turkey, phased, or
parallel operation.

3
8
 Cold Turkey Cutover

Under the cold turkey cutover approach (also called the "Big Bang"approach), the firm switches
to the new system and simultaneously terminates the old system. When implementing simple
systems, this is often the easiest and least costly approach. With more complex systems, it is
the riskiest.

3
9
 Phased Cutover

Sometimes an entire system cannot, or need not be cut over at once. The phased
cutover begins operating the new system in modules.

4
0
 Parallel Operation Cutover

Parallel operation cutover involves running the old system and the
new systera simultaneously for a period of time. During the cutover period, the two systems
consume twice the resources of a single system. This includes twice the source documents,
twice the processing time, twice the databases, and twice the output production.

The advantage of parallel cutover is the reduction in risk. By running two systems, the user
can reconcile outputs to identify errors and debug errors before running the new system solo.
Parallel operation should usually extend for one business cycle, such as one month. This
allows the user to reconcile the two outputs at the end of the cycle as a final test of the
system's functionality.

4
1
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