Week #09

Chapter 13:
Building
Information Systems

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Chapter 13 Building Systems

LEARNING OBJECTIVES

• Demonstrate how building new systems produces

organizational change.

• Identify and describe the core activities in the

systems development process.

• Evaluate alternative methods for building information

systems.

• Compare alternative methodologies for modeling

systems.

• Identify and describe new approaches for system-

building in the digital firm era.
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A New Ordering System for Girl Scout Cookies

• Problem: Inefficient manual procedures, high error rate.

• Solutions: Eliminate manual procedures, design new
ordering process, and implement database building
software to batch and track orders automatically and
schedule order pickups.
• QuickBase for Corporate Workgroups software service
increased efficiency and reduced errors.
• Demonstrates IT’s role in updating traditional business
processes.
• Illustrates digital technology as the focus of designing
and building new information systems.

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Systems as Planned Organizational Change

• Systems development and organizational change

• Business process reengineering
• Steps in effective reengineering

• Process improvement: Business process

management, total quality management, and six sigma
• Business process management (BPM)
• Total quality management (TQM)
• Six sigma
• How information systems support quality improvements

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Systems development and organizational change

• Four kinds of structural organizational change that are

enabled by IT:
(i) Automation
(ii) Rationalization
(iii) Reengineering
(iv) Paradigm shifts

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Systems development and organizational change

(i) Automation, for example:

• Calculating paychecks & payroll registers
• Giving bank tellers instant access to customer
deposits records
• Developing a nationwide network of airline
reservation terminals for airline reservation agents
• Automation involved assisting employees with
performing their task more efficiently and effectively.

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(ii) Rationalization of procedures, for example:

• Managers redesign business processes, work
flows, and user interfaces to the fulfillment
software (Web services s/w).
• Rationalization of procedures: is a streamlining of
standard operating procedures (SOP).

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Systems development and organizational change

(iii) Business process reengineering:

• which business processes are analyzed, simplified,
and redesigned.
• Organization can rethink and streamline their business
processes to improve speed, service and quality.
• BPR reorganize work flows, combining steps to cut
waste and eliminating repetitive, paper-intensive tasks.

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Systems development and organizational change

(iv) Paradigm shifts:

• More radical form of business change
• Involve rethinking the nature of business and the
nature of the organization.
• New IS can ultimately affect the design of the entire
organization by transforming how the organization
carries out its business or even the nature of the
business.

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Systems as Planned Organizational Change

Organizational Change Carries Risks and Rewards

The most common forms of organizational change are automation and rationalization. These relatively slow-moving and slow-
Figure 13-1 changing strategies present modest returns but little risk. Faster and more comprehensive change—such as reengineering and
paradigm shifts—carries high rewards but offers substantial chances of failure.

13.10 © 2007 by Prentice Hall

 Figure 13-2 Redesigning Mortgage Processing in the U.S.

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 Figure 13-2 Redesigning Mortgage Processing in the U.S.

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Process Improvement

(i) Business Process Management:

• Enable organizations to manage incremental process changes
that are required simultaneously in many areas of the
business.
• It provides a methodology and tools for dealing with the
organization’s ongoing need to revise and ideally optimize- its
numerous internal business processes and processes shared
with other organizations.
• BPM include workflow management, business process
modeling, quality management, change management, tools for
recasting the firm’s business processes into a standardized
form.
13.13 • BPM include process monitoring & analytics. © 2007 by Prentice Hall
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Process Improvement

(ii) Total Quality Management :

• To make quality the responsibility of all people and functions
within an organization.
• TQM holds that the achievement of QC is an end in itself.
(iii) Six Sigma:
• Six Sigma : a specific measure of quality, representing 3.4
defects per million opportunities.
• Six Sigma uses statistical analysis tools to detect flaws in the
execution of an existing process and make minor adjustments.
• Quality improvements not only raise the level of product and
service quality, but they can also lower costs.
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Systems as Planned Organizational Change

• How information systems support quality improvements

• Simplify products or processes
• Make improvements based on customer demands
• Reduce cycle time
• Improve the quality and precision of design and products
• Benchmarking : consists of setting strict standards for products,
services, and other activities, and then measuring performance
against those standards.
• Companies may use external industry standards, standards set
by other companies, and internally developed high standards.

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Systems as Planned Organizational Change

Business Process Redesign at the Small Business

Administration
• Read the Interactive Session: Organizations, and then
discuss the following questions:
• What was wrong with the existing computer system (ALCS)
and why did SBA decide to replace it?
• What was the purpose of re-organizing the ODA and
centralizing IT in a single office, and centralizing other
functions like the call center in a single office?
• In what other ways could the agency use information systems
to improve the process of loan application, approval, and
maintenance?

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Overview of Systems Development

• Systems analysis
• Establishing information requirements

• Systems design
• The role of end users

• Completing the systems development process

• Programming
• Testing
• Conversion
• Production and Maintenance

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Overview of Systems Development

The Systems Development Process

Building a system can be broken down into six core activities.

Figure 13-3
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Systems Development: System Analysis

• Analysis of the problem that the organization will try

solve with an IS:
• Define the problem
• Identify its causes
• Specify the solution
• Identify the information requirements that must be
met by a system solution

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Systems Development: System Analysis

• System analyst:
• Create a road map of existing organization & systems
• Identify the primary owners and users of data along with
existing software and hardware.
• Details the problems of existing systems.
• Examine documents, work papers, and procedures
• Observing system operations.
• Interviewing key users of the systems

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Systems Development: System Analysis

• Feasibility study:
• Determine whether that solution was feasible, or achievable,
from a financial, technical and organization standpoint.
• A written systems proposal reports describes the costs and
benefits, advantages and disadvantages of each alternative.

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Systems Development: System Design

• System design:
• Describe what a system should do to meet information
requirements,
• Show how the system will fulfill the objective.
• A design of an IS is :
• the overall plan or model for that system
• Consists of all the specifications that give the system its
form and structure.
• Details of system specifications that will deliver the functions
identified during system analysis

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Table 13-1 Design Specifications

OUTPUT PROCESSING
Medium, Content, Timing Computations, Program modules,
Required reports, Timing of outputs

INPUT USER INTERFACE

Origin, Flow, Data Entry Simplicity, Efficiency, Logic, Feedback,
Errors

DATABASE DESIGN MANUAL PROCEDURES

Logical data model What activities
Volume & speed requirements Who performs them
File organization and design When
Record specifications How
There

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Table 13-1 Design Specifications (cont.)

CONTROLS SECURITY
Input controls (characters, limit, Access controls
reasonableness) Catastrophe plans
Processing controls (consistency, Audit trails
record counts)
Output controls (totals, samples of
output)
Procedural controls (passwords,
special forms)

DOCUMENTATION CONVERSION
Operations documentation Transfer files
System documents Initiate new procedures
User documentation Select testing method
Cut over to new system

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Table 13-1 Design Specifications (cont.)

TRAINING ORGANIZATIONAL CHANGES

Select training techniques Task redesign
Develop training modules Job design
Identify training facilities Process design
Organization structure design
Reporting relationships

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Systems Development: Programming, Testing

• Programming :
• System specifications that were prepared during the design
stage are translated into software program code.
• Testing :
• Unit testing (program testing)
• System testing
• Acceptance testing

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Systems Development: Testing

• Testing type :
• Unit testing (program testing)
• Consists of testing each program separately in system
• The purpose is to guarantee that programs are error ree,
• A means of locating errors in programs
• System testing
• Test the functioning of the information system as a whole
• Examine the performance time, capacity for file storage,
and handling peak loads, recovery and restart
capabilities, and manual procedures.
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Systems Development: Testing

• Testing type :
• Acceptance testing
• Provides the final certification that the system is ready to
be used in a production setting.
• System tests are evaluated by users and reviewed by
management.
• When all parties are satisfied that new system meet their
standards, the system is formally accepted for
installation.

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Figure 13-4 A Sample Test Plan to test a record change

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Systems Development: Conversion

• Conversion: process of changing from the old system to the new

system.
• Four main conversion strategies:
• Parallel strategy
• Direct cutover
• Pilot study
• Phased approach

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Systems Development: Conversion Strategies

• Parallel strategy
• Both old system and its potential replacement are run together for a
time until everyone is assured that the new one functions correctly.

• Direct cutover strategy

• Replaces the old system entirely with the new system on an
appointed day.

• Pilot study strategy

• Introduces the new system to only a limited area of the organization,
such as a single department or operating unit.

• Phased approach strategy

• Introduces the new system in stages, either by functions or by
organizational units.
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Systems Development: Production & Maintenance

• Production
• The system will be reviewed by both users and technical specialists
to determine how well it has met its original objectives and to decide
whether any revisions or modifications are in order.

• Maintenance
• Includes changes in hardware, software, documentation, or procedures
to a production system to correct errors, meet new requirements, or
improve processing efficiency.
• 20%  time for debugging or correcting emergency problems.
• 20%  time for changing in data, files, reports, hardware, or system
software.
• 60%  time for making user enhancements, improving documentation,
and recoding system components for greater processing efficiency.

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Table 13-2 Systems Development

Core Activity Description

System analysis Identify problems
Specify solutions
Establish information requirements
System design Create design specifications
Programming Translate design specifications into
program code
Testing Unit test
System test
Acceptance test
Conversion Plan conversion
Prepare documentation
Train users and technical staff
Production and maintenance Operate the system
Evaluate the system
Modify the system

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Overview of Systems Development

• Modeling and designing systems: Structured and

object-oriented methodologies
• Structured methodologies
• Object-oriented development
• Computer-aided software engineering

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Figure 13-5 DFD for Mall-In University Registration System

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Figure 13-6

High-Level Structure Chart for a Payroll System

This structure chart shows the highest or most abstract level of design for a payroll system, providing an overview of the entire system.

13.36 © 2007 by Prentice Hall

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Overview of Systems Development

Class and Inheritance

This figure illustrates how classes inherit the common features of their superclass.

Figure 13-7
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Alternative Systems-Building Approaches

• Traditional systems life cycle

• Prototyping
• Steps in prototyping

• Advantages and disadvantages of prototyping

• End-user development

• Application software packages and outsourcing

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Alternative Systems-Building Approaches

• Prototyping
• Is a working version of an I.S. or part of the system, but it is
meant to be only a preliminary model.

• Steps in prototyping

1. Identify the user’s basic requirements

2. Develop an initial prototype

3. Use the prototype

4. Revise and enhance the prototype

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Figure 13-8 The Prototyping Process

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Application Development for the Digital Firm

• Rapid application development (RAD)

• Describe process of creating workable systems in a very short
period of time.
• Include the use of visual programming and other tools for building
graphical user interfaces.

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Application Development for the Digital Firm

How to Get Outsourcing Right: Avoid Getting It Wrong

• Read the Interactive Session: Management, and then

discuss the following questions:
• What is the basis for vendor firms claiming they can provide
IT services more economically than a firm’s own IT staff?
• Why is it difficult to write iron-clad legal contracts specifying
in detail strategic alliance outsourcing relationships?
• Why do joint ventures and co-sourcing outsourcing
relationships have a better chance of success?

13.42 © 2007 by Prentice Hall