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    Registered with the Department of Higher Education as a Private Higher Education Institution under the Higher Education Act, 1997.Registration Certificate No. 2000/HE07/008








    AUTHOR: Mrs .Kavita Behre

    EDITOR: Mr. Orsiley Denhere

    DEPARTMENT HEAD: Mr. Orsiley Denhere

    Copyright © 2012

    PC Training & Business College (Pty) Ltd

    Registration Number: 2000/000757/07

    All rights reserved; no part of this publication may be reproduced in any form

    or by any means, including photocopying machines, without the written

    permission of the Institution.

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    1. Welcome 3

    2. Title of Modules 4

    3. Purpose of Module  4

    4. Learning Outcomes 4

    5. Method of Study 4

    6. Lectures and Tutorials 5

    7.  Notices 5

    8. Prescribed & Recommended Material 5

    9. Assessment & Key Concepts in Assignments and Examinations 6-8

    10. Specimen Assignment Cover Sheet 9

    11. Work Readiness Programme 10

    12. Work Integrated Learning  11


     SEMESTER) 12-87

    1. Introduction to System Analysis and Design 15-32

    2.  Analyzing the business case 33-45

    3. Requirements Modeling 46-59

    4.  Data and Process Modeling 60-68

    5.  Object Modeling 69-72

    6.  Development Strategies 73-87

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    1. WELCOME

    Welcome to the Department of Media Information and Communication Technology at PCTraining & Business College. We trust you will find the contents and learning outcomesof this module both interesting and insightful as you begin your academic journey andeventually your career in the business world.

    This section of the study guide is intended to orientate you to the module before the

    commencement of formal lectures.

    Please note that this study guide covers the content of various academic programmes atdifferent levels of the NQF and HEQF. Your lecturers will provide further guidance andadditional study materials covering parts of the syllabi that may have been omitted from

    this study guide. Learners who are undertaking the Higher Certificate or DiplomaQualification may use the non-compulsory material supplied as additional reading. Thiswill however not be directly examinable.

    The following lectures will focus on the common study units described:


    Study unit 1: Orientation Programme

    Introducing academic staff to the learners by academic head.Introduction of institution policies.

    Lecture 1

    Study unit 2: Orientation of Learners to Library and Students


    Introducing learners to physical structures

    Lecture 2

    Study unit 3: Distribution and Orientation of Information

    Systems 201Learner Guides, Textbooks and Prescribed


    Lecture 3

    Study unit 4: Discussion on the Objectives and Outcomes of

    Information Systems 201Lecture 4

    Study unit 5: Orientation and guidelines to completing


    Review and Recap of Study units 1-4

    Lecture 5

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    1st SemesterBachelor Of Science In

    Information Technology


    Title Of Module: Code: NQF Level: Credits:

    Mode of Delivery:

    Information Systems 201INF 201




    3.1 INFORMATION SYSTEMSThe purpose of this module is to introduce learners to the main issues, concepts and toolsof System Analysis and Design.

    3.2 INFORMATION SYSTEMS 201 (1st Semester)

    This module provides learners with system analysis skills as part of systems developmentin the business.


    On completion of these modules the student will be able to:  Understand the role, function and skills of system analyst.

      Differentiate between System Development and Information Systems Developmentand discuss the perspective of each stakeholder group.

      Fundamental knowledge of the Systems Development Life Cycle andMethodology.

      Fundamental knowledge of the eight principles of System Development.

      Informed understanding of the role of CASE tools in Systems Development.

      Fundamental knowledge of the process of System Analysis in terms of the FAST

    methodology, phases and activities that need to be performed.  Ability to differentiate between logical and physical systems models.

      Understand the process modelling.

      Discuss data modelling and its benefits.

      Understand network modelling and its importance.

    5. METHOD OF STUDYThe sections that have to be studied are indicated under each topic. These form the basisfor tests, assignments and examination. To be able to do the activities and assignments for

    this module, and to achieve the learning outcomes and ultimately to be successful in thetests and examination, you will need an in-depth understanding of the content of these

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    sections in the learning guide and prescribed book.

    In order to master the learning material, you must accept responsibility for your ownstudies. Learning is not the same as memorising. You are expected to show that youunderstand and are able to apply the information. Use will also be made of lectures,

    tutorials, case studies and group discussions to present this module.

    6. LECTURES AND TUTORIALSLearners must refer to the notice boards on their respective campuses for details of thelecture and tutorial time tables. The lecturer assigned to the module will also inform youof the number of lecture periods and tutorials allocated to a particular module. Prior

     preparation is required for each lecture and tutorial. Learners are encouraged to actively participate in lectures and tutorials in order to ensure success in tests, assignments andexaminations.

    7. NOTICESAll information pertaining to this module such as tests dates, lecture and tutorial timetables, assignments, examinations etc will be displayed on the notice board located onyour campus. Learners must check the notice board on a daily basis. Should you requireany clarity, please consult your lecturer, or programme manager, or administrator on yourrespective campus.

    8. PRESCRIBED & RECOMMENDED MATERIAL8.1  Prescribed Materials: 

    8.1.1 L.D.Bentley, J.L.Whitten, K.C.Dittman,: (2004) System Analysis DesignMethods,7

    th Edition.

    8.1.2 J.W.Satzinger, R.B.Jackson, Shephen D. Burd, Thomson,(2007) System Analysis& Design, 4

    th Edition.

    The purchasing of prescribed books is for the learners own account and are compulsoryfor all learners. This guide will have limited value if not accompanied by the prescribed

    text books.

    8.2  Recommended Materials:8.2.1 Shelly GB, Vermaat ME: (2010) Discovering Computers 2010 Living in a

    Digital World. Course Technology

    8.2.2 Stair R, Reynolds G, Chesney T : (2008) Principles of Business InformationSystems. Course Technology

    8.2.3 Shelly Cashman : 2009 System Analysis and Design. Course Technology

    NB:  Learners please note that there will be a limited number of copies of therecommended texts and reference material that will be made available at your campus

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    library. Learners are advised to make copies or take notes of the relevant information, asthe content matter is examinable. 

    8.3  Independent Research:

    The student is encouraged to undertake independent research

    8.4  Library InfrastructureThe following services are available to you:8.4.1 Each campus keeps a limited quantity of the recommended reading titles and a

    larger variety of similar titles which you may borrow. Please note that learners arerequired to purchase the prescribed materials.

    8.4.2 Arrangements have been made with municipal, state and other libraries to stock ourrecommended reading and similar titles. You may use these on their premises or

     borrow them if available. It is your responsibility to safe keeps all library books.8.4.3 PCT&BC has also allocated one library period per week as to assist you with yourformal research under professional supervision.

    8.4.4 The computers laboratories, when not in use for academic purposes, may also beused for research purposes. Booking is essential for all electronic library usage.

    9.  ASSESSMENTFinal Assessment for this module will comprise two Continuous Assessment tests, anassignment and an examination. Your lecturer will inform you of the dates, times and thevenues for each of these. You may also refer to the notice board on your campus or theAcademic Calendar which is displayed in all lecture rooms.

    9.1  Continuous Assessment TestsThere are two compulsory tests for each module (in each semester).

    9.2  AssignmentThere is one compulsory assignment for each module in each semester. Your lecturer willinform you of the Assessment questions at the commencement of this module.

    9.3  ExaminationThere is one two hour examination for each module. Make sure that you diarize thecorrect date, time and venue. The examinations department will notify you of your resultsonce all administrative matters are cleared and fees are paid up.The examination may consist of multiple choice questions, short questions and essay typequestions. This requires you to be thoroughly prepared as all the content matter oflectures, tutorials, all references to the prescribed text and any other additionaldocumentation/reference materials is examinable in both your tests and the examinations.

    The examination department will make available to you the details of the examination(date, time and venue) in due course. You must be seated in the examination room 15minutes before the commencement of the examination. If you arrive late, you will not be

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    allowed any extra time. Your learner registration card must be in your possession at alltimes.

    9.4  Final Assessment The final assessment for this module will be weighted as follows:

    Continuous Assessment Test 1Continuous Assessment Test 2 40 %Assignment 1Total Continuous Assessment 40%Semester Examinations 60%Total 100%

    9.5  Key Concepts in Assignments and ExaminationsIn assignment and examination questions you will notice certain key concepts (i.e.

    words/verbs) which tell you what is expected of you. For example, you may be asked in aquestion to list, describe, illustrate, demonstrate, compare, construct, relate, criticize,recommend or design particular information / aspects / factors /situations. To help you toknow exactly what these key concepts or verbs mean so that you will know exactly whatis expected of you, we present the following taxonomy by Bloom, explaining the conceptsand stating the level of cognitive thinking that theses refer to.



    observation and recall of informationknowledge of dates, events, placesknowledge of major ideasmastery of subject matterQuestion

    Cues  list, define, tell, describe, identify, show, label, collect, examine,tabulate, quote, name, who, when, where, etc.


    understanding informationgrasp meaningtranslate knowledge into new contextinterpret facts, compare, contrast

    order, group, infer causes predict consequences


    Cues  summarize, describe, interpret, contrast, predict, associate,distinguish, estimate, differentiate, discuss, extend


    use informationuse methods, concepts, theories in new situationssolve problems using required skills or knowledge


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    apply, demonstrate, calculate, complete, illustrate, show, solve,examine, modify, relate, change, classify, experiment, discover


    seeing patternsorganization of partsrecognition of hidden meanings

    identification of componentsQuestion

    Cues  analyze, separate, order, explain, connect, classify, arrange,divide, compare, select, explain, infer


    use old ideas to create new onesgeneralize from given factsrelate knowledge from several areas

     predict, draw conclusions

    QuestionCues  combine, integrate, modify, rearrange, substitute, plan, create,design, invent, what if?, compose, formulate, prepare,generalize, rewrite


    compare and discriminate between ideasassess value of theories, presentationsmake choices based on reasoned argumentverify value of evidence recognize subjectivity


    Cues  assess, decide, rank, grade, test, measure, recommend, convince,select, judge, explain, discriminate, support, conclude, compare,summarize

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    PPCC TTrraaiinniinngg aanndd BBuussiinneessss CCoolllleeggee INF 201 (1st Semester)

    Assignment Cover Sheet

    (To be attached to all Assignments –  hand written or typed)

    Name of Learner:………………………… Student No: ………………………….. Module:…………………………………… Date: …………………………………. 

    ICAS Number ………………………… ID Number ………………………….. 

    The pur pose of an assignment i s to ensure that one is able to:

      Interpret, convert and evaluate text.

      Have sound understanding of key fields viz principles and theories, rules, concepts and awarenessof how to cognate areas.

      Solve unfamiliar problems using correct procedures and corrective actions.

      Investigate and critically analyze information and report thereof.

      Present information using Information Technology.  Present and communicate information reliably and coherently.

      Develop information retrieval skills.

      Use methods of enquiry and research in a disciplined field.


    (NB: The allocation of marks below may not apply to certain modules like EUC and Accounting)

    A. Content- Relevance.

    Question NumberMark
















    Sub Total 70 Marks

    B. Research (A minimum of “TEN SOURCES” is recommended) Library, EBSCO, Emerald Journals, Internet, Newspapers, Journals, Text Books, Harvard method ofreferencing

    Sub Total 15 Marks

    C. Presentation

    Introduction, Body, Conclusion, Paragraphs, Neatness, Integration, Grammar / Spelling, Margins onevery page, Page Numbering, Diagrams, Tables, Graphs, Bibliography 

    Sub Total 15 Marks

    Grand Total 100Marks

    NB: Al l Assignments are compulsory as it f orms part of continuous assessment that goes towards the

    final mark.

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    In order to prepare learners for the world of work, a series of interventions over and abovethe formal curriculum, are concurrently implemented to prepare learners.

    These include:

      Soft skills  Employment skills

      Life skills

      End – User Computing (if not included in your curriculum)

    The illustration below outlines some of the key concepts for Work Readiness that will beincluded in your timetable.

    It is in your interest to attend these workshops, complete the Work Readiness Log Bookand prepare for the Working World.



    SOFT SKILLS Time Management

     Working in Teams

     Problem Solving Skills

     Attitude & Goal Setting

     Etiquettes & Ethics

     Communication Skills

    LIFE SKILLS Manage Personal Finance

     Driving Skills

     Basic Life Support & First Aid

     Entrepreneurial skills

     Counselling skills


     Interview Skills

     Presentation Skills

     Employer / EmployeeRelationship

     End User Computing Email & E-Commerce Spread Sheets Data base Presentation Office Word

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    Work Integrated Learning forms a core component of the curriculum for the completionof this programme. All modules making of the Diploma in Business Administration will

     be assessed in an integrated manner towards the end of the programme or after

    completion of all other modules.

    Prerequisites for placement with employers will include:

      Completion of all tests & assignment

      Success in examination

      Payment of all arrear fees

      Return of library books, etc.

      Completion of the Work Readiness Programme.

    Learners will be fully inducted on the Work Integrated Learning Module, the Workbooks& assessment requirements before placement with employers.

    The partners in Work Readiness Programme (WRP) include:

    Good luck with your studies… 

    Mr Orsiley DenhereSenior Director: Department of Information and Communication Technology

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    Registered with the Department of Higher Education as a Private Higher Education Institution under the Higher Education Act, 1997.Registration Certificate No. 2000/HE07/008














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    1.1 The Impact Of Information Technology


    1.2 Information Systems Components

    1.3 Business Information Systems

    1.4 Organizational Structure

    1.5 Systems Development Techniques and Tools

    1.6 Joint Application Development and Rapid ApplicationDevelopment

    1.7 Systems Development Methods

    1.8 The System Development Life Cycle

    1.9 Systems Development Guidelines

    1.10 Information Technology Department

    Review Questions

    TOPIC 2 : ANALYZING THE BUSINESS CASE 2.1 Strategic planning


    2.2 Information Systems Projects

    2.3 Overview of Feasibility

    Review Questions

    TOPIC 3 : REQUIREMENT MODELING 3.1 Overview of systems analysis phase


    3.2 Joint Application Development3.3 Rapid Application Development

    3.4 Modeling Tools and Techniques 

    3.5 System Requirements Checklist

    3.6 Scalability And Total Cost Of Ownership

    3.7 Fact-Finding

    Review Questions

    TOPIC 4 : DATA AND PROCESS MODELING 4.1 Overview of Data and Process Modeling Tools


    4.2 Data Dictionary4.3 Modular Design

    4.4 Logical Versus Physical Models

    Review Questions

    TOPIC 5 : OBJECT MODELING 5.1 Object-Oriented Terms and Concepts


    5.2 Relationships among Objects and Classes

    5.3 Object Modeling with the Unified Modeling Language

    Review Questions

    TOPIC 6 : DEVELOPMENT STRATEGIES 6.1 Evaluating Software Alternatives Lecture34-386.2 Application Service Providers

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    6.3 Outsourcing

    6.4 User Applications

    6.5 Selecting a Software Alternative

    6.6 Completion Of Systems Analysis

    6.7 Transition To Systems Design

    6.8 The relationship between logical and physical design6.9 The Relationship between Analysis and Design

    6.10 Overview Of Systems Design

    Review Questions 

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    TOPIC 1


     _______________________________ _________________________________


    Af ter studying thi s topic you should be able to:

      Discuss the impact of information technology on business strategy and success.

      Define and information system and describe its components.

      Use profiles and models to understand business functions and operations.

      Explain how the Internet has affected business strategies and relationships.

      Identify various types of information systems and explain who uses them.

      Explain systems development tools, including modeling, prototyping and CASE tools.

      Distinguish between structured analysis and object-oriented methodology.

      Describe the systems development life cycle.  Discuss the role of the information technology department and the systems analysis

    who work there.


    Companies use information as a weapon in the battle to increase productivity, deliverquality products and services, maintain customer loyalty, and make sound decisions. In aglobal economy with intense competitions, information technology can mean the difference

     between success and failure.

    Introduce you to the role of information technology in today’s dynamic business environment. Youwill learn about the development of information systems, systems analysis and designconcepts, the systems development life cycle, and various systems development methods,tools, and techniques.


    Information technology (IT) refers to the combination of hardware and software productsand services that people use to manage access, communicate, and share information.Successful firms treat information as a vital asset that just be used effectively, updatedconstantly, and safeguard carefully.

    1.1.1 The Future of IT

    More than ever, business success depends on information technology. In are port titled DigitalEconomy 2003, the U.S. Department of Commerce stated that, “After two years ofretrenchment, IT producing industries now show signs of resuming the dynamic role they paidduring 1996-2000.” The report estimated that the IT sector accounted for almost 30

     percent of economic growth during 2003, and pointed out that IT has created a neweconomy, where advances in hardware, software, and connectivity provide unprecedented

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     benefits to business and individuals around the world. According to the report, anexplosion in Internet use is driving this growth. Although economic trends affect ITspending levels, most business give IT budgets are relatively priority, in good times or

     bad. The reason in simple-during periods of growth, companies cannot afford to lag behind the IT curve. Conversely, when the economy slows down, firms often use it reduce

    operating costs and improve efficiency.

    1.1.2 The Role of Systems Analysis and Design

    Systems analysis and design is a step-by-step process for developing high-qualityinformation systems. An information system combines information technology, people,and data to support business requirements. For example, information systems handle daily

     business transaction, improve company productivity, and help managers make sounddecisions. The IT department team includes systems analysts who plan, develop, andmaintain information systems. With increasing demand for talented people, employment

    experts predict a shortage of qualified applicants to fill IT positions.

    1.1.3 Who develops Information Systems?

    Traditionally, a company developed its own information systems, called in-houseapplications, or purchased systems called software packages from outside vendors.Today, the choice is much more complex. Options include Internet-based applicationservices, outsourcing, custom solutions from IT consultants, and enterprise-wide softwarestrategies. Regardless of the development method, launching a new information systeminvolves risks as well as benefits. The greatest risk occurs when a company tries to decidehow the system will be implemented before determining what the system is supposed todo. Instead of putting the cart before the horse, a company must begin by outlining its

     business needs and identifying possible IT solutions. Typically, this important work is performed by systems analysts and other IT professionals. A firm should not considerimplementation options until it has a clear set of objectives. Later on, as the system isdeveloped, a system analyst’s role will vary depending on the implementation option selected.


    A system is a set of related components that produces specific results. For example,specialized systems route Internet traffic, manufacture microchips, and control complex

    events like the Mars mission. A mission-critical system is one that is vital to a company’soperations. An order processing system, for example, is mission-critical because thecompany cannot do business without it. Every system requires input data. For example,your computer receives data when you press a key or click a menu command. In aninformation system, data consists of basic facts that are the system’s raw material.

    Information is data that has been transformed into output that is valuable to users. When asales representative enters data (customer number, product code, and quantity ordered),the system creates a customer order with all the necessary information. Large businesseswith thousands or millions of sales transaction require company-wide information

    systems and powerful servers. An information system has five key components:hardware, software, data, process, and people.

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    Hardware consists of everything in the physical layer of the information system. Forexample, hardware can include servers, workstations, networks, tele-communicationsequipment system, fiber-optic cables, handheld computers, scanners, digital capture devices,and other technology-based infrastructure. As new technologies emerge, manufacturers

    race to market the innovations and reap the rewards. Hardware purchasers today face awide array of technology choices and decisions. Almost 40 years ago, a concept calledMoore’s Law accurately predicted that computer processing power would double every

    18 to 24months. Fortunately, as hardware became more powerful, it also became lessexpensive.

    1.2.2SoftwareSoftware refers to the programs that control the hardware and produce the desiredinformation or results. Software consists of system software and application software.

    System software manages the hardware components, which can include a singleworkstation or a global network with many thousands of clients. Either the hardwaremanufacturer supplies the system software or a company purchases it from a vendor.Examples of system software include the operating system, security software that

     protects the computer from intrusion, device drivers that communicate with hardwaresuch as printers, and utility programs that handle specific tasks such as data backup anddisk management. System software also includes a network operating system (NOS),which controls the flow of data, provides data security, and manages network accounts.In today’s interconnected business world, network software is vitally important. Application software consists of programs that support day-to-day business functionsand provide users with the information they require. Application software can serve oneuser or thousands of users throughout the organization. Example of company-wideapplications, called enterprise applications, includes order processing systems, payrollsystems, and company communications network. On a smaller scale, individual usersincrease their productivity with tools such as spreadsheets, word processors, anddatabase management systems. Application software includes horizontal and verticalsystems; a horizontal system is a system, such as an inventory or payroll application,that can be adapted for use in many in many different types of companies. A verticalsystem is designed to meet the unique requirements of a specific business or industry,

    such as a Web-based retailer, a medical practice, or a video chain. Most companies use acombination of software that is acquired at various times. When planning an informationsystem, a company must consider how a new system will interface with older systems,which are called legacy systems. For example, a new human resources system mightneed to exchange data with an older payroll application.

    1.2.3DataData is the raw material that an information system transforms into useful information.An information system can store data in various locations, called table. By linking the

    tables, the system can extract specific information.

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    Processes describe the task and business functions that users, managers, and IT staffmembers perform to achieve specific results. Processes are the building blocks of aninformation system, because they represent actual day-to  – day business operations. To

     build a successful information system, analysis must understand business process and

    document them carefully.


    The primary purpose of an information system is to provide valuable information tousers. Users, sometimes called end users, are the people who interact with aninformation system, both inside and outside the company. Internal users includeadministrators, managers, technicians, sales staff, and corporate officers. External usersinclude customer’s system to plan their manufacturing schedules. The success or failure

    of a system usually depends on whether users are satisfied with the system’s output and

    operations. To serve users, successful information systems depend on skilled professional, such a systems analysts, programmers, network administrators, and otherIT staff members.

    1.3 Business Information SystemsA system analyst must understand a company’s business information systems needs. Forexample, the requirements of a Web-based music retailer are very different from thoseof a hotel chain or a truck manufacturer. An analyst builds a business profile byinvestigating a company’s mix of products and services and its ability to use the Internetto conduct business. The analyst also studies the interactivity among informationsystems, system boundaries, and specialized business information needs, as well as thecompany’s size and future growth projections.

    1.3.1 Categories of Companies

    Traditionally, companies have been identified as production-oriented or service-oriented. A new category includes companies that depend on the Internet as a primary

     business channel.Production-oriented  companies primarily manufacture and sell products, such as themicrochips. Motorola, Intel and Compaq are examples of production-oriented

    companies.Service-oriented  companies primarily offer information or services, or sell goods

     produced by others. AT & T, United Airlines, and Wall-Mart are examples of servicecompanies. Some companies offer a mix of products, services, information, andtechnical resources to customers. For example, IBM reported in a recent financialstatement that more that 58 percent of its total revenue was derived from the sale ofsoftware, services, and maintenance, compared with42 percent from hardware sales.Although IBM still manufactures and sells technology products, it also operates andinternational consulting division, a leasing unit, and a financial services branch. A new

    category of company is theInternet-dependent firm , which is often described as a dot-com (.com) company becauseit bases its primary business n a commercial Web site rather than using traditional

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     business channels. and are examples of dot-com companies. Atthe other end of the spectrum are traditional companies, sometimes called brick-and-mortarcompanies because they conduct business from a physical location instead of from aWeb site. In recent years, many Internet-based companies have enjoyed spectaculargrowth, and the value of their company stock has soared. Some observers are sceptical

    and wonder whether this momentum can continue, especially if a company lacks a solidrecord of profitability.

    1.3.2The Growth of E-Commerce

    One of the faster-growing business sectors is Internet-based commerce, commonlycalled e-commerce (electronic commerce) or I-commerce (Internet Commerce). E-commerce includes both B2C (Business-to-Commerce) and B2B (business-to-business).The demand for e-commerce systems will translate into career opportunities and newchallenges for systems developers, another name for systems analysts. The October 4,

    1999 issue of INFOWORLD magazine predicted that online retails sales would growfrom $7.8 billion in 1999 to staggering $108 billion in 2003. If that forecast is accurate,the trend will increase job opportunities for all IT professionals. Advances in technologyhave greatly expanded the role of e-commerce in business. Some business analysts

     believe that the Internet is changing consumer buying habits and reshaping the economy.Many large and small businesses alike are developing strategies to survive in this newenvironment. To succeed in Web-based marketing, a company must offer an attractiveuser interface that is reliable, powerful, and secure. E-commerce is changing traditional

     business models and creating new ones. For example, a common business model is aretail store that sells a product to a customer who physically visits the store. To carry outthat same transaction on the Internet, however, the company must develop a different

     business model and deal with a different set of marketing, advertising, and profitabilityissues. Another e-commerce example is a company that rakes well-established businessmodel, such as an auction, and extends it dramatically. Firms such as havetransformed a traditional marketing concept into a new, enormously popular andsuccessful method of buying goods and services. As more companies develop Web-

     based business models, new roles and opportunities for systems analyses will be created.The earliest e-commerce leaders were Internet start-up companies, such asAmazon.comand, but many traditional brick-and-mortar firms are beginning to capitalize on

    the Internet’s enormous potential. Although they got off to a slow start in the e-commercewars, many brick-and-mortar firms companies have substantial resources and worldwide

     bard recognition.

    1.3.3 Characteristics of Information Systems

    An analyst learns about an information system by asking questions about the system andhow it supports business operations. As a systems analyst, you might ask the followingquestions as you complete your work:1. Does this system interact with other system?

    The arrows in the figure show how data flows between the interactive systems. Forexamples, a purchasing system generates orders that become input for a productionsystem. Each system interacts with a finance system that monitors the company’s

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     profitability. A break down in any one system can affect companies rely ontelecommunications and the Internet for mission-critical systems.A company’s information system also can interface with a system operated by another

    firm, such as when a payment is made by one company’s accounts payable system toanother company’s accounts receivable system. This process, known as electronic data

    interchange (EDI), involves the computer-to-computer transfer of data betweencompanies. EDI has expanded rapidly as companies form closer working relationshipswith their suppliers and customers. In the past, EDI was used mainly for processingtransactions between two companies, such as purchasing or payments. Today, EDI canhelp a firm plan its production, adjust inventory levels, or stock up on raw materials usingdata that comes from another company’s information systems. 

    2. What are the system’s boundaries?

    A system boundary indicates where one system ends and another system begins. The

     boundary between two systems is not always clear-cut. For example, when are customer payments part of the accounts receivable system, and when are they included in thefinance system? If customer payments need to be adjusted, must the adjustments take

     place in both systems? Who makes the adjustments? What processes and files areinvolved? Complex systems have many interfaces with other systems; the system analystmust carefully plan and design theses systems to design their boundaries correctly.

    3. Will the system handle specialized business needs?

    Many firms require specialized systems for information management that is unique totheir company or industry. At a college, for example, specialized systems handle classregistration, classroom scheduling, and student grading. At a hospital, specialized systemsmanage patient admissions, room scheduling, and insurance billing. Firms in the banking,insurance, airlines, and telecommunications industries require complex systems to runtheir businesses. If a specialized system is available as a vertical software package, acompany can purchase and customize the package. Otherwise, a company must developspecialized in-house systems.

    4. What size are the company and what growth is forecast?

    Large and small companies in the same industry have different information systemsrequirements. For example, banks range in size from local operations with one or two

     branches to multinational banks with branches in many states and foreign countries. All banks handle loan processing and checking accounts. A multinational bank, however, hasa much higher volume of customers, transactions, and accounts. A large  bank’s systemsare more complex because they consolidate information from banking centers around theworld, handle currency exchange issues, and offer a wide array of products and services.

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    1.3.4 Types of Business Information Systems

    Large companies require many different types of information systems. In the past, ITmanagers divided systems into categories based on the audience they served. Traditionalcategories included office systems (used by administrative staff), operational systems(used by operational personnel), management information systems (used by lower-and

    middle-level managers), and executive information systems (used by top managers).Othercategories were decision support systems (used by primarily business planners) andexpert systems (used by employees to control complex process or diagnose

     problems).Today, the traditional labels no longer apply. For example, all employees,including top managers, use office systems; similarly, operational personnel often requireinformation support from what formerly were called management information systems.

     Now, it is more useful to identify a system by its functions and features, rather than by itsusers. On that basis, today’s systems include enterprise computing systems, transaction

     processing systems, business support systems, knowledge management systems, and user

     productivity systems. Enterprise Computing Systems

    Enterprise computing refers to information systems that support company-wide datamanagement requirements. Airline reservation ad credit card billing systems are examplesof enterprise computing systems. Enterprise computing also can improve data securityand reliability by imposing a company-wide framework for adapt access and storage, Inmany large companies, applications called enterprise resource planning (ERP) systems

     provide cost-effective data access for users and managers throughout the company. Forexample, a car rental company can use ERP to forecast customer demand for rental cars athundreds of locations. Many hardware and software vendors target the enterprisecomputing market and offer a wide array of products and services. Transaction Processing SystemsTransaction processing (TP) systems and online transaction processing (OLTP) Systemsare called operational systems because they process data generated by day-to-day

     business operations. Examples of TP systems include customer billing, accountsreceivable, and warranty claimprocessing.TP captures necessary data and triggers a set of

    updates when a specific transaction occurs, such as a sales order. TP systems typicallyinvolve every large amount of data. To increase efficiency, TP systems process a set oftransaction-related commands as a group rather than individually. TP systems also ensurethat if any one element of a transaction fails, the system cannot process the rest of thetransaction. This feature is known as data integrity. Most transaction processing systemsare mission-critical systems that cannot be interrupted without severe disruption to the

     business. Business Support SystemsBusiness support systems (BSS) provide job-related information support to users at all

    levels of a company. These systems can analyze transactional data, generate informationneeded to manage and control business process, and provide information that leads to

     better decision making. Early business computer systems were called management

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    information systems (MISs) primarily managers used them. Today, employees at alllevels need information to perform their jobs, and they rely on information systems forthat support.An information system must generate timely and accurate records. For example, when acompany sells merchandise to a customer, a transaction processing system records the

    sale, updates the customer’s balance, and makes a deduction from inventory. A related business support system can highlight slow-or-fast moving items, customers with past due balances, and inventory items that need reordering. Managers, buyers, and inventorycontrol specialists all use information to make better decisions. An important feature of a

     business support system is decision support capability to conduct a what-if analysis.Decision support helps users make decisions by creating a business model and applying aset of variables. For example, a truck fleet dispatcher might run a series of what-ifscenarios to determine the impact of increased demand or bad weather on the fleet’scapability of delivering goods on time. Alternatively, a retailer might use what-if analysis

    to determine the price it must charge to increase profits by10 percent assuming thatvolume and costs remain unchanged. Knowledge Management SystemsKnowledge management systems are sometimes called expert systems because theysimulate human reasoning by combining a knowledgebase and inference rules thatdetermine how the knowledge is applied. A knowledge base consisting of a large databaseallows users of find information by clicking menus, typing keywords, or entering textquestions in normal English phrases. In a knowledge management system, logical rulesnamed inference rules identify data patterns and relationships. For example, a datainquiry using the phrase data screen would produce different results than the phrasescreen data because of the word order. After a user enters a symptom, problem, orquestion, Novell’s knowledge management system searches for a solution. Knowledge management systems do not make decisions based on common sense orintuition ash humans do. Many knowledge management systems use an approach calledfuzzy logic that allows logical inferences to be drawn from imprecise relationships. Usingfuzzy logic, values need not be black and white, like binary logic, but can be many shadesof gray. For example, if you ask the Novell Knowledgebase to find information about user

     password administration, it will search the knowledge base for articles with those terms.

    Using fuzzy logic, the results will be displayed in priority order, with those that are presumably more relevant at the top of the list. User Productivity Systems

    User productivity systems provide employees at all organization all levels with a widearray of tools that can improve quality and job performance. Local and wide areanetworking, e-mail, voicemail, fax, videoconferencing, word processing, automatedcalendars, database management, spreadsheets, desktop publishing, presentation graphics,company intranets, and Internet access throughout the company enhance user

     productivity. When companies first installed word processing systems, managersexpected to reduce the number of employees as office efficiency increased. That did nothappen, primarily because the basic nature of clerical work changed. As the country

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    shifted from an industrial to a service economy, companies required a new class ofknowledge worker who needed constant access to information. This group grew rapidlyas company’s assigned more responsibility to employees at lower organizational levels.Relatively inexpensive hardware, powerful networks, corporate downsizing, and a movetoward employee empowerment also have contributed to this trend. Today administrative

    assistants and company presidents alike are networked, use their computer workstations,and share corporate data as they perform their jobs. Information Systems Integration

    Most large companies require systems that combine enterprise computing, transaction processing, business support, knowledge management, and user productivity features. Forexample, suppose an international customer has a problem with a product and makes awarranty claim. A customer service representative enters the claim into a transaction

     processing system. The transaction updates two other systems: a knowledge management

    system that has a history of product problems and warranty activity, and a quality controltracking system with decision support capabilities., A quality control engineer uses what-if analysis to determine if it would be less expensive to make certain design changes inthe product that would reduce warranty claim. In this example, a transaction processingsystem is integrated with a knowledge management system and a business support systemwith decision support features.


    Corporate organizational structure has changed in recent year. As part of downsizing and business process reengineering, many companies reduced the number of managementlevels and delegated responsibility to operational personnel. Although the organizationchart tends to be somewhat flatter, a traditional hierarchy still exists in most companies.In the typical organizational model, operational personnel report to lower- and middle-levelmanagers, who in turn report to top managers. In a corporate structure, the top managersreport to the board of directors that is elected by the company’s shareholders. Although titlesvary, distinct levels of responsibility exist. A systems analyst must understand the company’sorganizational model in order to recognize who is responsible for business processes anddecisions and, hence, to be aware of what information is required by whom.

    1.4.1Top ManagementTop mangers develop long-range plans, called strategic plans that define the company’soverall mission and goals. To carry out that task, top managers ask questions such as“How much should the company invest in information technology,” or “How much will Internet

    sales grow in the next five years,” or “Should the company build new factories or contractout the production functions?” Strategic planning focuses on issues that affect the company’sfuture survival and growth, including long-term IT plans. Top managers focus on the entire

     business enterprise and use information systems to set the company’s course and direction. Todevelop a strategic plan, top managers also need information from outside the company,

    such as economic forecasts, technology trends, competitive threats, governmental issues,and shareholder concerns.

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    1.4.2 Middle Management

    Middle managers focus their goals on a shorter time frame, usually ranging from onemonth to one year. They develop plans to achieve business objectives in a process calledtactical planning. Middle managers delegate authority and responsibility to team leadersor supervisor and then provide direction, necessary resources, and feedback on

     performance as tasks are completed. Middle managers need more detailed information thantop managers, but somewhat less information than team leaders and supervisors. Forexample, a middle manager might review a weekly sales summary for a geographicregion, whereas a sales team leader would need a daily report on customer activity.Middle managers also use business support systems, knowledge management systems,and user productivity systems to perform their jobs.

    1.4.3Lower Management

    Supervisors and team leaders oversee operational employees and carry out day-to-day

    operational plans. They coordinate operational tasks, make necessary decisions, andensure that the right tools, materials, and training are available. Like other managers, thisgroup often needs decision support information, consults knowledge managementsystems, and relies on user productivity systems to carry out their day-to-dayresponsibilities.

    1.4.4Operational Employees

    Operational employees primarily use TP systems to enter and receive data they need to perform their jobs. In many companies, operational employees also need information tohandle tasks and make decisions that were assigned previously to supervisors. This trend,called empowerment, gives employees more responsibility and accountability. Manycompanies’ find that empowerment leads to better employee motivation and increased

    customer satisfaction.


    In addition to understanding business operations, systems analysts must know how to usea variety of techniques, such as modeling, prototyping, and computer-aided systemsengineering (CASE) tools, to plan, design, and implement information systems. They

    must be able to work in team environments where input from users, managers, and ITstaff is synthesized into a design that will meet everyone’s needs. And they must be able to useother software tools to illustrate accurately their designs and ideas.


    Modeling produces a graphical representation of a concept or process that systemsdevelopers can analyze the, test, and modify. A system analyst can describe and simplifyan information system by using a set of business, data object, network, and processmodels. A business model, or requirements model, describes business functions that an

    information system must support. A data model describes data structures and design. Anobject model portrays the design and protocols of telecommunications links. A processmodel describes system logic and process that programmers use to develop necessary

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    code modules. Although the models might appear to overlap, they actually work togetherto describe the same environment from different points of view. Modeling involvesvarious techniques, such as data flow diagrams, entity-relationship diagrams, use cases,and unified modeling language.

    1.5.2PrototypingPrototyping involves the creation of an early working version of the information systemor its components. Just as an aircraft manufacturer tests a new design in a wind tunnel,systems analysts construct and review prototypes for a larger systems. Prototyping testssystem concepts and provides an opportunity to examine input, output, and user interfaces

     before final decisions are made. The prototype can serve as an initial model that is used asa benchmark to evaluate the completed system, or the prototype itself can develop into thefinal version of the system. Either way, prototyping speeds up the development processsignificantly. A possible disadvantage of prototyping is that important decisions might be

    made too early, before business or IT issues are thoroughly understood. If a prototype is based on careful fact-finding and modeling techniques, however, it can be an extremelyvaluable tool.

    1.5.3Computer-Aided Systems EngineeringComputer-aided system engineering (CASE) is a technique that uses powerful programs,called CASE tools, to help systems analysts develop and maintain information systems.CASE tools provided an overall framework for systems development and support a widevariety of design methodologies, including structured analysis and object-orientedanalysis. Traditionally, systems developers differentiated between two CASE categories:upper CASE tools and lower CASE tools.

    Upper CASE tools support the modeling process and produce a logical design of theinformation system.Lower CASE tools speed the development process by generating source code based onthe logical model. Today, many popular CASE tools combine upper and lower CASEfeatures into a single product. CASE tools can boost IT productivity and improve thequality of the finished product. For example, developers use CASE tools to maintaindesign integrity, manage a complex project, and generate code modules that speedup


    1.6 Joint Application Development and Rapid Application DevelopmentIn the past, the IT department typically developed information systems and contactedusers only when their input was desired or needed. Unfortunately that approach often leftlarge communication gaps between system developers and users. Over time, manycompanies discovered that systems development teams composed of IT staff, user, andmanagers could complete their work more rapidly and produce better results. Twomethodologies became popular:

      Joint application development (JAD)  Rapid application development (RAD).

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    Both approaches use teams composed of user, managers, and IT staff to complete projects. JAD involves team-based fact-finding techniques, while RAD is more like acondensed version of the entire development process.Other Systems Development Tools

    In addition to CASE tools, systems analyst use various productivity tools or organizes and

    structure the task of developing an information system. In addition to word processing,spreadsheets, graphics tools, and presentation software, analysts use special purposecharting tools.


    A popular, traditional method is called structured analysis, but a newer strategy calledobject-oriented analysis and design also is widely used. Each method offers manyvariations. Some organizations develop their own approaches or adopt methods offered bysoftware vendors or consultants. Most IT experts agree that no single, best system

    development strategy exists. Instead, a systems analysis should understand the alternativemethodologies and their strengths and weaknesses.

    1.7.1Structure AnalysisStructured analysis is a traditional systems development technique that is time-tested andeasy to understand. Structured analysis evolves in a1960s environment, where mostsystems were based on mainframe processing of individual data files. Because it describesthe processing that transforms data into useful information, structured analysis includesdata organization and structure, relational database design, and user interface issues.Structured analysis uses a series of phase, called the systems development life cycle(SDLC) to plan, analyze, design, implement, and support an information system.Structured analysis relies on a set of process models that graphically describe a system.Process modeling identifies the data flowing into a process, the business rules thattransform the data, and resulting output data flow. Structured analysis is developing into atechnique called information engineering. Information engineering, like enterprisecomputing, envisions the overall business enterprise and how corporate data and

     processes interact throughout the organization.

    1.7.2Object-Oriented Analysis

    Whereas structured analysis regards processes and data as separate components,Object-oriented (O-O) analysis combines data and the processes that act on the data intothing called objects. Systems analysts use O-O methods to model real-world business

     processes and operations. The result is a set of software objects that represent actual people, things, transactions, and events. Using an O-O programming language, a programmer then transforms the object it into reusable code and components. An object ismember of a class, which is collection of similar objects. Objects posses characteristicscalled properties, which it inherits from its class or possess on its own.One object can send information to another object by using a message. A message can

    request specific behaviour or information from the recipient. For example, if there if thereis no wind, a sailboat owner object might send a “start the motor” message to the sailboatobject. The owner object has the capability to send this message, and the sailboat object

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    knows what action to perform when it receives he message. O-O analysis uses objectmodels to represent data, behaviour, by what means objects affects other objects. Bydescribing an objects (data) and methods (processes) needed to support a businessoperation, a system developer can design reusable components that allow faster systemimplementation and decreased development cost. Many analysts believe that, compared

    with structured analysis, O-O method are more flexible, efficient, and realistic in today’s dynamic business environment. Also O-O analysis provides an easy transition to popularO-O programming languages, such as Java C++.


    Structured analysis uses a technique called the system development life cycle (SDCL) to plan and manage the system development process. Although it is primarily identified withstructured analysis, the SDCL describes activities and functions fit into a particular

    methodology. The SDCL model includes the following steps:   S y s t e m p l a n n i n g

      S y s t e m a n a l y s i s

      S y s t e m d e s i g n

      System implementat ion

      Sy st em op er at io n an d su pp or t traditionally,

    Figure 1.1 water fall model

    The SDCL is pictured as a waterfall model shown in Figure 1.1, where the result of each phase, often called an end product or deliverable, flows down into the next phase. Inreality, the system development process is dynamic and constant change in common.Figure 1.2 represents an alternative model, where planning, analysis, and design interact.This interactive model depicts real-world practice and the constant dialog among users,managers, and systems developers.

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    Figure 1.2Spiral model1.8.1 Systems Planning

    System planning usually begins with a format request to the IT department, calledSystem request that describes as problems or desired changes in an information systemor a business process. In many companies today, IT systems planning is an integral of

    overall business planning. When managers and users develop strategic, tactical, andoperational plans, they include IT requirements that subsequently generate systemsrequest. A systems request can come from a top manager, a planning team, a departmenthead or the IT department itself. The request can be very significant or relatively minor. Amajor request might involve a new information system or the replacement of existingsystems that cannot handle current requirements. In contrast, a minor request might askfor a new feature or a change to a user interface. The purpose of the planning phase is toidentify clearly the nature and scope of the business opportunity or problem by

     performing a preliminary investigation, often called a feasibility study. The preliminaryinvestigation is a critical step because the outcome will affect the entire development

     process. The end product, or deliverable, is a report that describes businessconsiderations, reviews anticipated benefits and cost, and recommends a course of action

     based on economic, technical, and operational factors. Suppose you’re a system analystand you receive a request for a system change or improvements. Your first step is todetermine whether it make sense to lunch a preliminary investigation at all. After aninvestigation, you might found that the system functions well, but that users need moretraining. In some situations, you might recommend a business process review, rather thanIT solutions. In other cases, you might conclude that a full-scale systems review isnecessary. If the development process continues, the next step is system analysis.

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    1.8.2 System Analysis

    The purpose of the system analysis phase is to understand business requirements and build a logical model of the new system. The first step is the requirements modeling,where you defined and described business process. Requirements modeling continue theinvestigation that began during systems planning and involve various fact-finding

    techniques, such as interviews, surveys, observation and sampling. During the next tasks,data modeling, process modeling, and object modeling, you develop a logical model of

     business processes the system might support. The model consists of various types ofdiagrams, depending on the methodology being used. The end product of the systemsanalysis phase is the system requirement document. The system requirements documentdescribes management and user requirement, alternative plans and costs and yourrecommendation.

    1.8.3 Systems Design

    The purpose of the systems design phase is to create a blue print that will satisfy alldocumented requirements for the system. At this stage, you design the user interface andidentify all necessary outputs, inputs, and processes. In addition, you design internal andexternal controls, including computer  –  based and manual features to guarantee that thesystem will be reliable, accurate, maintainable, and secure. During the systems design

     phase, you also determine to transform the logic design into program modules and code.The result of this phase is documented in the system design specification and presented tomanagement and users for review and approval. Management and user involvement iscritical to avoid any misunderstanding about what the new system will do, how it will doit, and how it will cost.

    1.8.4 System Implementation

    During the systems implementation phase, the new system is constructed. Whether thedevelopers used structured analysis or O-O methods, the procedure is the same  –  

     programs are written, tested, and documented, and the system is installed. If the systemwas purchased as a package, system analysts configure the software and perform any acompletely functioning and documented information system. At a conclusion of this

     phase, the system is ready for use. Final preparations include converting data to the newsystem’s f iles, training users, and performing the actual transition to the new system. The

    systems implementation phase also includes an assessment, called a systems evaluation,to determine whether the system operates properly and if it costs benefits are withinexpectations.

    1.8.5 Systems Operation, Support and Security

    During the systems operation, support, and security phase the I.T. staff maintains,enhances, and protects the system. Maintenance changes correct errors and adapt tochanges in the environment, such as new tax rates. Enhancements provide new featuresand benefits. The objective during this phase is to maximize return on the IT investment.

    Security controls safeguard the system from both external and internal threats. A well-designed system will be secure, reliable, maintainable, and scalable. A scalable design canexpand to meet new business requirements and volumes. Information systems

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    development is always a work in progress. Business processes change rapidly, and mostinformation systems need to be updated significantly or replaced after several years ofoperation.


    With experience as a systems analyst, you will develop your own style and techniques.Although each project is different, you should consider some basic guidelines as you

     build an information system.

      PlanningStick to an overall development plan. If you use the SDLC as a framework for systemsdevelopment, complete the phases in sequence. If you use an O-O methodology,follow a logical series of steps as you define the components.

      Involve the Users throughout the Development ProcessEnsure that users are involved in the development process, especially when identifying

    and modeling system requirements. Modeling and prototyping can help you user needsand develop a better system.

      Listening is very importantThe best system is the one that meets user needs most effectively. When you interact with

    users, you must put aside any preconceive notions and listen very closely to what they are

    saying to you.

      Create a Timetable with Major Milestones.Identify major milestones for project review and assessment. At those milestones,managers and systems developers must decide whether to proceed with the project,redo certain tasks, return to an earlier phase, or terminate the project entirely. TheSDLC model requires formal assessment of end products and deliverables. O-Oanalysis involves a continuous modeling process that also requires check points and

     project review.Identify Interim Checkpoints. Establish interim checkpoints between major milestonesto ensure that the project remains on schedule. Regardless of the developmentmethodology, the systems analyst must keep the project on track and avoid surprises.Create a reasonable number of checkpoints  –   too many can be burdensome, but toofew the completion of interviews conducted during a preliminary investigation.

      Remain FlexibleBe flexible within the framework of your plan. Systems development is a dynamic

     process, and overlap often exists between the phases of systems planning, analysis,design, and implementation. For example, when you investigate a systems request, you

     begin a fact-finding process that often carries over into the next phase. Similarly, youoften start building process models before fact-finding is complete. The ability tooverlap phases is especially important when you are working on a system that must bedeveloped rapidly.

      Develop Accurate Cost and Benefit Information

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    Provide accurate and reliable cost and benefit information. Managers need to know thecost of developing and operating a system. At the start of each phase, you must

     provide specific estimates.


    The information technology (IT) department develops and maintains a company’s informationsystem. The structure of the IT department varies among companies, as does its name and

     placement within the organization. In a small firm, one person might require many peoplewith specialized skills to provide information systems support.The IT group provides technical support, which includes six main functions: applicationdevelopment, systems support and security, user support, database administration,network administration and Web support. These functions overlap considerably and oftenhave different companies.

      Application DevelopmentTraditionally, IT departments had an application development group composed ofsystems analysts and programmers who handled information system design,development, and implementation. Today, many companies use development teamsconsisting of users, managers, and IT staff members for those same tasks. A popularmodel for information systems development is a project-oriented team using RAD orJAD, with IT professionals providing overall coordination, guidance, and technicalsupport.

      Systems Support and SecuritySystems support and security provides vital protection and maintenance services forsystem hardware and software, including enterprise computing systems, networks,transaction processing systems, corporate IT infrastructure. The systems support andsecurity group implements and monitors physical and electronic security hardware,software and procedures. This group also installs and supports operating systems,telecommunication software, and centralized database management systems. Inaddition, systems support and security technicians provide technical assistance to othergroups in the IT department.

      User SupportUser support provides users with technical information, training, and productivity

    support. The user support function usually is called a help desk or information center(IC). A help desk’s staffs train users and managers on application software such as e-mail, word processors, spreadsheet, and graphics packages. User support specialistsanswer questions, troubleshoot problems, and serve as a clearing house for user

     problems and solutions.In many companies, the user support team also installs and configures softwareapplications that are used within the organization. Although user support specialistscoordinates with other technical support areas, their primary focus is user productivityand support for business processes.

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      Database AdministrationDatabase administration involves database design, management, security backup, anduser access. In small- and medium-sized companies, and IT support person performsthose roles in addition to other duties. Regardless of company size, mission-criticaldatabase applications require continuous attention and technical support.

      Network AdministrationBusiness operations depend on telecommunication networks that enable company-wide information systems. Network administration includes hardware and softwaremaintenance, support, and security. In addition to controlling user access, networkadministrators install, configure, manage, monitor, and maintain network applications

      Web SupportWeb support is the newest technical support function. Web support specialists, oftencalled webmaster, support a company’s Internet and intranet operations. Web support

    involves design and construction of Web pages, monitoring traffic, managing

    hardware and software, and linking Web- based applications to the company’s existinginformation systems. Reliable, high-quality Web support is especially critical forcompanies engaged in e-commerce.

    Review Questions

    1.  What is information technology, and why is it important to a business?2.  Define business profiles, business models and business processes.3.  Identify the main components of an information system.4.  Explain the difference between vertical and horizontal system packages.5.  How do companies use EDI? What are some advantages of using XML?6.  Describe five types of information systems and give an example of each.7.  Describe four organizational levels of a typical business and their information

    requirements.8.  Describe the phases of the systems development life cycle, and compare the SDLC

    waterfall model to the spiral model.9.  Explain the use of models, prototypes, and CASE tools in the system development

     process. Also explain the pros and cons of predictive models and adaptive models.

    10. What is Object oriented analysis, and how does it differ from structured analysis?

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    TOPIC 2


     _______________________________ _________________________________


    Af ter studying thi s topic you should be able to:

      When you finish this chapter, you will be able to:

      Describe the strategic planning process, and why it is important IT managers

      Explain the purpose of a mission statement

      Explain the SDLC as a framework for systems development and business modeling

      Explain the reason for information systems projects and the factors that affect such projects

      Describe the initial review of systems request and the role of the systems review

    committee  Describe the internal and external factors that affect information systems projects

      Define operational feasibility, technical feasibility, and economic feasibility

      Describe the steps and end product of a preliminary investigation


    Systems’ planning is the first of five phases in the system development life cycle.During the systems planning phase, a systems analyst reviews systems project and gains

    an understanding of the company’s objectives, information requirements, and businessoperations.


    It is the process of identifying long-term organizational goals, strategic, strategies, andresources. Strategic planning looks beyond day-to-day activities and focuses on a horizonthat is 3, 5, 10, or 20 years in the future.During strategic planning, many companies ask a series of broadly worded question thatis called a SWOT analysis because it examines a company’s strengths (S), weakness (W),opportunity (O), and threats (T).Each question leads to an IT-related issue, which in turnrequires more review, analysis, and planning. For example:

      What are our major strengths, and how can we utilize them in the future? What mustwe do to strengthen our IT function, including our people and technologyinfrastructure?

      What are four major weaknesses, and how can we overcome them? How should weaddress weaknesses in IT resources and capability?

      What are our major opportunities, and how can we take full advantage of them? WhatIT plans do we have to support business opportunities?

      What major threats do we face, and what can we do about them? What can we do todeal with potential threats to IT success?

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    When a company performs a SWOT analysis, a long-term strategic plan emerges. The

     plan requires technical, financial, and human resources. Most important, the strategic plan

    requires information resources and technology that area supplied by IT professionals,

    including systems analysts.

    Figure 2.1 SWOT ANALYSIS

    2.1.1From the Strategic Plan to Business Results

    Figure2.2shows the strategic planning process. A company develops a mission statement based on the firm’s purpose, values, and vision for the  future. The mission statement isthe foundation for major goals, shorter-term objectives, and day-to-day businessoperations.

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    Figure 2.2 Strategic Planning process

    A mission statement describes the company for its stakeholder and briefly states thecompany’s overall purpose, products, services, and values. Stakeholders include anyone affected by the company’s performance, such as customers,

    employees, supplies, stockholders, and members of the community. The missionstatement is just the starting point. Next, the company identifies a set of goals that willaccomplish the mission. For example, the company might establish one-year, three-year,and five-year goals for expanding market share. To achieve those goals, goals thecompany develops a list of specific objectives, which have a shorter time frame. For

    example, if a goal is to increase Web-based orders by 30 percent next year, a companymight set quarterly objectives with monthly milestones. Objectives also might includetactical plan, such as creating a new Web site and training a special customer supportgroup to answer e-mail inquiries. Finally objectives are translated into day-to-dayoperations, using IT and other vital resources.The Future New industries, products, and services will require powerful informationsystems, and top managers will expect IT departments to support the business enterprise.E-commerce will continue to surge, and the business environment will be dynamic andchallenging. To some firms, intense change will be threatening; to others it will represent

    an opportunity. Today, top managers know the need powerful information systems tohandle both the problems and opportunities of constant change.

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    2.1.2The Role of IT Department

    In most successful companies, a close link exists between business operations and informationtechnology. Ten years ago, the IT department commonly handled all aspects of systemsdevelopment, and consulted uses only when and if the department required user input.

     New approaches, such a s joint application development (JAD) and rapid application

    development (RAD) are widely accepted, and today, you are more likely to see systemsdevelopment users, managers, and IT staff working together right from the start.Even where team-oriented development is the norm, some companies see the role of theIT department as gatekeeper, responsible for screening and evaluating systems requests.Should the IT department perform the initial evaluation, or should a cross-functional teamdo it? The answer depends on the company’s size and organization, and whether IT is

    tightly integrated into business operations. In smaller companies or firms where is onlyone person with IT skills, that person acts as a coordinator and consults closely with usersand managers to evaluate systems request.


    2.2.1 Reasons for Systems ProjectsThe starting point for a project called a systems request, which it is a formal way ofasking for IT supports. A systems request might propose enhancement for an existingsystem, the correction of problems, or the development of an entirely new informationsystem. The main reasons for system requests are improved service to customers, better

     performance, more information, stronger controls, and reduced cost.

    2.2.2 Factors Affecting Systems Project

    Every business decision that a company makes is affected by internal and external factors,and IT systems project are no exception.

    2.2.3 Evaluation of Systems RequestsIn most organizations, the IT department receives more systems requests than it canhandle. Many organizations assign responsibility for evaluating systems requests to agroup of key managers and users. Many companies call this group systems reviewcommittee or a computer resources committee. Regardless of the name, the objective is to

    use the combined judgment and experience of several managers to evaluate systems projects.

    2.2.4 System Reviews Committees

    In some companies, one person instead of a committee is responsible for evaluating systemsrequests. This often is the case in smaller companies of firms where only one person hasinformation technology skills. In that situation, the systems person must consult closelywith users and managers throughout the company to ensure that business and operationalneeds are considered carefully. In larger companies, instead of the company relying on a

    single person, a system review committee consists of the IT director and several managersfrom other departments. Even where there is a committee, the IT director must act as atechnical consultant to the committee to ensure that members are aware of crucial issues,

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     problems, and opportunities. With a broader viewpoint, a committee can establish priorities more effectively than an individual, and one  person’s  bias is less likely to affect acommittee’s decisions. On the other hand, action on requests must wait until the committeemeets. To avoid delay, committee members use memos, e-mail, and teleconferencing witheach other. Another potential disadvantage of a committee is that members could favor

     projects requested by their own departments, and internal political differences can delayimportant decisions.

    2.2.5 Evaluation of Projects

    The systems review committee must evaluate the requests and set priorities. Suppose thecommittee receives four requests: from the marketing group to analyze current customersspending habits and forecast future trends, a request from the technical support group fora cellular link so service representatives can download technical data instantly, a requestfrom the accounting department to redesign customers statements and allow access to

    them via the Internet, and a request from the production staff for an inventory controlsystem that can exchange data with major suppliers directly. With a limited staff, whichof those projects should the committee consider for further study? What criteria should beapplied? How should the committee decide the priorities? To answer those questions, thecommittee must assess the feasibility of each systems request.


    A systems request must meet several tests to see whether it is worthwhile to proceedfurther. This series of tests is called feasibility study and is a vital part of every systems

     project. A feasibility study uses three major yardsticks to measure, or predicts a system’s

    success: operational feasibility, technical feasibility, and economic feasibility.Sometimes a feasibility study is quite simple and can be done in a few hours. If therequest involves a new system or a major change, however, extensive fact-finding andinvestigation is required. Every systems request must pass an initial review to decidewhether it deserves further study. How much effort needs to go into that decision? Thatdepends on the request. For example, if a department wants an existing report sorted in adifferent order, the analyst can decide quickly whether the request is feasible. On theother hand, a proposal by the marketing department for a new market research system to

     predict sales trends requires more effort. In both cases, the systems analyst asks three

    important questions:

    1.  Is the proposal desirable in an operational sense? Is it practical approach that will solvea problem or take advantage of an opportunity to achieve company goals?

    2.  Is the proposal technically feasible? Are the necessary technical resources and peopleavailable for the project?

    3.  Is the proposal economically desirable? What are the projected savings and costs? Arethere other intangible factors, such as customer satisfaction or company image? Is the

     problem worth solving, and will the request result in a sound business investment?

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    2.3.1 Operational Feasibility

    A system that has operational feasibility is one that will be used effectively after it has been developed. If users have difficulty with a new system, it will not produce theexpected benefits. Operational feasibility depends on several vital issues, For example,consider the following questions:

      Does management support the project? Do users support the project? Is the currentsystem well liked and effectively used? Do users see the need for change?

      Will the new system result in workforce reduction? If so, what will happen to affected employees?

      Will the new system require training for user? If so, is the company prepared to provide the necessary resources for training current employees?

      Will users be involved in planning the new system right from the start?

      Will the new system place any new demands on users or require any operatingchanges? For example, will any information be less accessible or produced less

    frequently? Will performance decline in any way? If so, will an overall gain to theorganization outweigh individual losses?

      Will customers experience adverse effects in any way, either temporarily or permanently? Will any risk to the company’s image or goodwill result? 

      Is the schedule for development of the system reasonable?

      Do any legal or ethical issues need to be considered?

    2.3.2 Technical Feasibility

    A systems request has technical feasibility if the organization has the resources to develop

    or purchase, install, and operate the system. When assessing technical feasibility, ananalyst must consider the following points:

      Does the company have the necessary hardware, software, and network resources? Ifnot, can those resources be acquired without difficulty?

      Does the company have the needed technical expertise? If not, can it be expanded?

      Will the hardware and software environment be reliable? Will it integrate with othercompany information systems, both now and in the future? Will it interface withexternal systems operated by customers and suppliers?

      Will the combination of hardware and software supply adequate performance? Doclear expectations and performance specification exist?

      Will the system be able to handle future transaction volume and company?

    2.3.3 Economic Feasibility

    A systems request has economic feasibility if the projected benefit of the proposedsystem outweighs the estimated costs involved in acquiring, installing, and operating it.Costs can be one time or continuing, and can incur at various times during projectdevelopment and use. When assessing costs, companies usually considered the total cost

    of ownership (TCO), which includes ongoing support and maintenance costs, as well asacquisition costs. To determine TCO, the analyst needs to estimate costs in each of thefollowing areas:

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      People, including IT staff and users