INTRODUCTION

This course work is about how crucial are the first two phases of information system
development. Information systems are purposive systems. They are established for reasons and
have objectives or goals, designed or established to achieve some stated end.
Information systems have become the backbone of most organizations. Banks could not process
payments, governments could not collect taxes, hospitals could not treat patients, and
supermarkets could not stock their shelves without the support of information systems. In almost
every sectoreducation, finance, government, health care, manufacturing, and businesses large
and smallinformation systems play a prominent role. Every day work, communication,
information gathering, and decision making all rely on information technology (IT).
DEFINITION OF KEY WORDS
System
It is a collection of interrelated components that works together towards a collective goal. Its
function is to receive inputs and transform them into outputs.
System Components
i)
ii)
iii)
iv)
v)

Input
Process
Output
Feedback
Control mechanism.

Information System
An organized combination of People, Hardware, Software, Communication networks, and Data
resources, that collects, transforms and disseminates information in an organization.
Functions of Information Systems: The information systems function represents:
i) It is a major functional area of a business as like accounting, finance, operations
management, marketing, marketing, and HRM.
ii) It is an important contributor to operational efficiency, employee productivity and morale,
and customer service and satisfaction.

iii) It is a major source of information and support needed to promote effective decision making
by managers.
iv) It is an important ingredient in developing competitive products and services that give an
organization a strategic advantage in the global marketplace.
v) It is a major part of the resources of an enterprise and its cost of doing business, thus posing a
major resource management challenge.
vi) A vital, dynamic, and challenging career opportunity for millions of men and women.
Management Information System (MIS)
Management Information System can be defined as a system that (a) provides information to
support managerial functions like planning, organizing, directing, controlling.(b) collects
information in a systematic and a routine manner which is in accordance with a well defined set
of rules.(c) includes files, hardware, software and operations research models of processing,
storing, retrieving and transmitting information to the users.
Objectives of MIS:
i) Facilitate the decisions-making process by furnishing information in the proper timeframe.
This helps the decision-maker to select the best course of action.
i) Provide requisite information at each level of management to carry out their functions.
ii) Help in highlighting the critical factors to the closely monitored for successful functioning of
the organization.
iii) Support decision-making in both structured and unstructured problem environments.
iv) Provide a system of people, computers, procedures, interactive query facilities, documents
for collecting, storing, retrieving and transmitting information to the users.
Components of MIS: As predicted by McLeod, in 1986, a typical MIS is based on four major
components. They are:
i) Data gathering - data required to the operations of the organization have to be gathered from
both internal and external sources.
ii) Data entry - stored in databases.
iii) Data transformation - in to useful information by means of computer programs and
judgments made by technical staff and other system users.
iv) Information utilization - applied to decision making process related to organizations
operation.

Functions of MIS:
i) Collect data - Internal data can be collected from company records or reports, marketing
data, financial data, production data, personnel data and information compiled by manager
themselves. External sources include trade publications, customers and consultants,
government data, technology data, social change data, Economic data etc.
ii) Store and process data - using computers.
iii) Present information to Managers - for their use.
Resources of MIS: People, hardware, software, data, and networks are the five basic resources of
information systems.
TYPES OF INFORMATION SYSTEMS
A. Operations Support Systems
Operations Support Systems are used to process data generated by, and used in, business
operations. The role of a business firm's operations support systems is to efficiently process
business transactions, control industrial processes, support enterprise communications and
collaboration, and update corporate databases.
1. Transaction Processing Systems
They record and process data resulting from business transactions. They process transactions in
two basic ways. In batch processing, transactions data are accumulated over a period of time, and
processed periodically. In real-time (or online) processing, data are processed immediately after
a transaction occurs. For example, point-of-sale (POS) systems at many retail stores use
electronic cash register terminals to electronically capture and transmit sales data over
telecommunications links to regional computer centers for immediate (real-time) ornightly
(batch) processing.
2. Process Control Systems: Process control systems monitor and control physical processes. For
example, a petroleum refinery uses electronic sensors linked to computers to continually monitor
chemical processes and make instant (real-time) adjustments that control the refinery process.
3. Enterprise Collaboration Systems: Enterprise collaboration systems enhance team and
workgroup communications and productivity, and are sometimes called office automation

systems. For example, knowledge workers in a project team may use electronic mail to send and
receive electronic messages, and videoconferencing to hold electronic meetings to coordinate
their activities.
B. Management Support Systems
When information system applications focus on providing information and support for effective
decision making by managers, they are called management support systems. Conceptually,
several major types of information systems support a variety of decision-making responsibilities:

Management information systems,

Decision support systems, and
Executive information systems

1. Management Information Systems

MIS provide information in the form of reports and displays to managers and many business
professionals. For example, sales managers may use their networked computers and Web
browsers to get instantaneous displays about the sales results of their products and to access their
corporate intranet for daily sales analysis reports that evaluate sales made by each salesperson.
2. Decision Support Systems
Decision support systems give direct computer support to managers during the decision-making
process. For example, advertising managers may use an electronic spreadsheet program to do
what-if analysis as they test the impact of alternative advertising budgets on the forecasted sales
of new products.
3. Executive Information Systems
EIS provide critical information from a wide variety of internal and external sources in easy-to
use displays to executives and managers. For example, top executives may use touch-screen
terminals to instantly view text and graphics displays that highlight key areas of organizational
and competitive performance.
Other Classifications of Information Systems
i) Expert systems can provide expert advice for operational chores like equipment diagnostics,
or managerial decisions such as loan portfolio management.

ii) Knowledge management systems are knowledge based information systems that support
the creation, organization, and dissemination of business knowledge to employees and
managers throughout a company. Information systems that focus on operational and
managerial applications in support of basic business functions such as accounting or
marketing are known as functional business systems.
THE 6 PHASES OF INFORMATION SYSTEMS
The System Development Life Cycle (SDLC) is composed of six phases. These phases are as
follows: preliminary investigation, system analysis, system design, system acquisition, system
implementation, and system maintenance. Each phase is important and builds up on the phase (s)
that happened previously. While these are generally the phases always used, they do not always
occur in the same order. The effects are still the same. The SDLC process consists of the
following phases. Below is an explanation of each of the six phases.
Phase 1: Preliminary Investigation
As the first step in the SDLC, preliminary investigation plays a large role in determining whether
or not a system or system modification would be worth making. The main point of doing a
preliminary investigation is to determine what problems need to be fixed and what is the best
way to go about solving those problems, if solutions do in fact exist. A feasibility report is the
product of the preliminary investigation in most cases. The feasibility report is essentially a
compatibility test between the current business/system and the new system/modifications. The
report will tell companies if they can afford the change, if it will work with the other systems and
technology already in their company, and if it will be beneficial to the company to make the
changes. If all these things come back positively from the systems analyst, then the system will
receive the "all clear" to head to the next step of the SDLC.
Phase 2: System Analysis
This second step, system analysis, is used to investigate the problem on a larger scale and fine
tune all the information a company has on the issue. Data collection and analysis are the two
main points of interest inside system analysis. Gathering information about the current system

and users allows analysts to develop an idea of what seems to be the real problem and how they
should go about fixing it through data analysis. The main outcome from this step is a grouping of
organized data about the current system and the new/modified systems improvements to come.
A Use Case diagram describe the behavior of the systems user
To illustrate systems that are based on the concept of objects, tools like use case diagrams and
class diagrams are used. Use case diagrams are used to describe the behavior of the target system
from an external point of view, while also illustrating the users who interact with the system. On
the other hand, class diagrams provide an overview of the target system by describing the objects
and classes, and their relationships, inside the system.

CPT-SystemLifeCycle
As mentioned above, system analysis is the phase of system development where the problem
area is fully studied in depth and the needs of system users are assessed. The tools that will help
accomplish this phase of collecting data and data analysis are entity-relationship diagrams
(ERDs), data flow diagrams (DFDs), decision tables and decision trees, business process
modeling notation (BPMN), and class diagrams and use case diagrams. To describe the use of
these tools in depth you will need to understand that any tools or processes used during this
phase will aid in understanding the problems or issues of the current systems and how to improve
them. So you will see several visual aids, charts, tables, diagrams, models, etc. All this is to help
clarify and make sense to all personnel involved how the current system may be improved.
Essentially, the new system requirements are defined and; in particular, the deficiencies in the

existing system must be addressed with specific proposals for improvement. Entity-relationship
diagrams and data flow diagrams are used to model the entities in a system and the flow of data
between the entities. So, these kinds of diagrams will create a visual for the logical interaction
between the individual entities that use the system. Business process modeling notation is a
graphical, standardized notation used to model a business process. This type of modeling is
similar to a flowchart and is meant to be understood by all users of the system.
Phase 3: System Design
When you're designing a system, you are essentially creating a blueprint with your collected data
which you build upon in later phases.
After all of the data has been analyzed, it is time to design a blueprint for the system that
specifies what it will look like and how it will work. First you have to develop the design by
using a few key tools. One important tool is the creation of a data dictionary, which describes
the characteristics of all data that is used in a system. Other important creations that the systems
analyst will use include different diagrams which help to better describe the proposed system. It
has been argued by some that the ever-increasing rate of developing technology has made it
impossible for the everyday systems analyst to do their job thoroughly. The economics of
industry are pushing in a way that doesn't favor design, only production. Whether this is truly the
case, system design leaves little room for error, as time is money.
In addition to a data dictionary, the systems analyst also has to create input designs to help
illustrate the input screens and other user interfaces that will be used to input data into the new
system. To ensure that the data is input accurately and secured against data loss, it is essential for
the system design to contain some form of a security feature. Also, an output design helps
identify the specific outputs required to meet the information requirements, select methods
required for presenting that information, and design reports, or other documents that carry the
information. Lastly, once the new system has finally been designed, a cost-benefit analysis is
performed to determine whether the expected benefits (tangible or intangible benefits) of the new
system are worth the expected cost. This analysis will then help determine if the design for the
new system is worth implementing.

Phase 4: System Acquisition

System Acquisition is a way of going down your shopping list and comparing prices to get the
best deals.
Once the design blueprint has been approved, it's off to the proverbial grocery store. The
organization needing a system will have a set budget and a list of components needed to make
their system work properly. With this budget comes a few courses of action. The first thing to
think about is whether the company should create their own software for their system or buy the
software from others. It is typically cheaper and less time consuming to buy preexisting software
but the customization options are limited. If the preexisting software doesn't offer the options
required of the system blueprint, then the company will likely have to make custom software to
meet their needs.
Assuming that it okay for the company to buy preexisting software, the next step is to choose
where to buy from. To help them choose, they can prepare an RFP, or request for proposal, which
asks vendors what software the company might need to consider buying. If they already know
what software they need and just want potential prices, the company can file an RFQ, or request
for quotation. After filing for the RFQ, the company must evaluate all of the bids from the
vendors offering different software. The company, in order to make the most profit, should
evaluate each bid and figure out which one has charged the lowest price while also reaching the
necessary criteria for the companys system. The Purchasing Department of a company usually
decides which vendor deserves to receive the quote. The decision is usually helped by the use of
a benchmark test. A benchmark test is a systematic process that evaluates both the hardware and
software of a system. Some determinants used for the test include examining for the amount of
workload that a system is capable of processing, the capability of solving complex scientific
problems using a range of computations, offering legitimate data for the system to process and
viewing the performance and scalability of the software, and many more. These benchmark tests
can be offered through third-party organizations where there sole purpose is to test the offered
systems. These tests allow for the company to immediately discard incapable systems offered by
vendors. Sometimes benchmarks are not capable of being performed due to a companys location

or accessibility, but for the most part they are a great way to assist in evaluating which bid is the
best. After all of the required software has been purchased it is time for the next step.
Phase 5: Implementation
This update manager shows all of the updates needed for a computer software, part of the
continuous system maintenance.
In this step, users get the old data ready to be moved, called data migration. Once that is
complete, they can begin installing new hardware and software. There are four ways of
converting data to new a system: direct conversion- the old system is deactivated and the new
one is implemented right away; parallel conversion- both systems are operated at the same time
until it is known that the new one is working, then the old one gets deactivated; pilot conversiononly one new system is installed within an organization and once it is known that it works then
the rest are implemented; and phased conversion- the new system is implemented by modules by
using direct or parallel conversion. There are some advantages and disadvantages of using each
method. For example, the easiest and fastest method is direct conversion. The final action in this
step is training the users with manuals, for example.
Phase 6: System Maintenance
Often the system maintenance is the ongoing process throughout the life of the system.
Maintenance can include updating software or updating what is already installed. Many of you
play an active role in this step already. For example, how many of you keep up with the newest
updates for your Apple applications? You are taking part in system maintenance.
Once a software has been fully implemented, it goes through a post-implementation review to
evaluate how the new system is running and whether or not it is completing its intended tasks.
System maintenance includes modifying existing software or adding completely new features to
the existing software, as well as fixing any glitches or bugs and checking security. System
updates are usually scheduled for off-peak hours, such as late at night to keep the system running
smoothly for users. Updates can be manually downloaded by the user or automatically
downloaded through the server. Automatic updates ensure that the user is constantly using the
most up-to-date version of the software. For many organizations, system maintenance costs more

than the production of the actual system itself. If the system is well designed it should be able to
be easily updated and maintained. Poor design makes it difficult to implement new features,
which could end the softwares life cycle early. Once a major change is determined to be the best
option for a software, an organization must go through the system development life cycle again
to replace the old system from scratch. This next version may be completely different than the
old version with completely new features, or just an updated version of the old features.
However the first two phases are considered to be the most crucial. This can be illustrated
with the following detailed examples.
PHASE 1.PRELIMINARY INVESTIGATION
The requirements phase is the first phase in the main life cycle. It involves collecting the various
requirements for the information system and assembling a coherent requirements specification.
In many cases, there is an existing information system that does not satisfy all requirements. It is
then wise to analyze thoroughly what the existing information system does for its environment.
The result of this analysis will inform which functionality of the existing information system
should be preserved in the new one. We can also obtain valuable insights by analyzing the
deficiencies of the existing information system and the reasons why a new information system is
being developed. After this analysis, we can formulate the requirements of the new information
system.
The first phase of the systems development life cycle is preliminary investigation. Due to limited
resources an organization can undertake only those projects that are critical to its mission, goals,
and objectives. Therefore, the goal of preliminary investigation is simply to identify and select a
project for development from among all the projects that are under consideration. Organizations
may differ in how they identify and select projects for development. Some organizations have a
formal planning process that is carried out by a steering committee or a task force made up of
senior managers. Such a committee or task force identifies and assesses possible computer
information systems projects that the organization should consider for development. Other
organizations operate in an ad hoc fashion to identify and select potential projects. Regardless of
the method used and after all potential projects have been identified, only those projects with the

greatest promise for the well-being of the organization, given available resources, are selected for
development.
The objective of the systems-investigation phase is to answer the following questions: What is
the business problem? Is it a problem or an opportunity? What are the major causes of the
problem? Can the problem be solved by improving the current information system? Is a new
information system needed? Is this a feasible information system solution to this problem?
The preliminary-investigation phase sets the stage for gathering information about the current
problem and the existing information system. This information is then used in studying the
feasibility of possible information systems solutions.
It is important to note that the source of the project has a great deal to do with its scope and
content. For example, a project that is proposed by top management usually has a broad strategic
focus. A steering committee proposal might have a focus that covers a cross-function of the
organization. Projects advanced by an individual, a group of individuals, or a department may
have a narrower focus.
A variety of criteria can be used within an organization for classifying and ranking potential
projects. For planning purposes, the systems analystwith the assistance of the stakeholders of
the proposed projectcollects information about the project. This information has a broad range
and focuses on understanding the project size, costs, and potential benefits. This information is
then analyzed and summarized in a document that is then used in conjunction with documents
about other projects in order to review and compare all possible projects. Each of these possible
projects is assessed using multiple criteria to determine feasibility.
Feasibility study
The feasibility study investigates the problem and the information needs of the stakeholders. It
seeks to determine the resources required to provide an information systems solution, the cost
and benefits of such a solution, and the feasibility of such a solution. The analyst conducting the
study gathers information using a variety of methods, the most popular of which are:

Interviewing users, employees, managers, and customers.

Developing and administering questionnaires to interested stakeholders, such as potential

users of the information system.

Observing or monitoring users of the current system to determine their needs as well as
their satisfaction and dissatisfaction with the current system.

Collecting, examining, and analyzing documents, reports, layouts, procedures, manuals,

and any other documentation relating to the operations of the current system.

Modeling, observing, and simulating the work activities of the current system.

The goal of the feasibility study is to consider alternative information systems solutions, evaluate
their feasibility, and propose the alternative most suitable to the organization. The feasibility of a
proposed solution is evaluated in terms of its components. These components are:
1. Economic feasibilitythe economic viability of the proposed system. The proposed project's
costs and benefits are evaluated. Tangible costs include fixed and variable costs, while
tangible benefits include cost savings, increased revenue, and increased profit. A project is
approved only if it covers its cost in a given period of time. However, a project may be
approved only on its intangible benefits such as those relating to government regulations, the
image of the organization, or similar considerations.
2. Technical feasibilitythe possibility that the organization has or can procure the necessary
resources. This is demonstrated if the needed hardware and software are available in the
marketplace or can be developed by the time of implementation.
3. Operational feasibilitythe ability, desire, and willingness of the stakeholders to use,
support, and operate the proposed computer information system. The stakeholders include
management, employees, customers, and suppliers. The stakeholders are interested in
systems that are easy to operate, make few, if any, errors, produce the desired information,
and fall within the objectives of the organization.

For Example, the requirements phase in the development of a new (simplified) ATM leads to the
following requirements. The ATM should allow its clients to query their current account balances
and to withdraw money. If clients want to withdraw money, then the ATM should offer them
several amounts, but it should also allow them to choose an amount of money. There are several
restrictions. For example, the amount of money clients withdraw should be less than a maximum
amount (e.g., 500 Euros for each day), and it should not lower the clients account balance below
a predefined lower bound. Furthermore, if clients just query their current account balance, then
their account balance should not change.
The requirements refer to the functionality of the new information system and also to other
(nonfunctional) aspects, such as costs, maintenance, and reliability. In the early requirements
phase, requirements are expressed in ordinary language. This is important, because key users
should be able to understand the requirements. Users typically express requirements in
cooperation with designers. In the late requirements phase, requirements are expressed by
specification languages and by models resulting in a domain model that captures the concepts of
the domain under study. The development of requirements specifications is known as
requirements engineering (Hull, Jackson, and
Dick 2004).
PHASE 2. SYSTEM ANALYSIS
This phase is an in-depth analysis of the stakeholders' information needs. This leads to defining
the requirements of the computer information system. These requirements are then incorporated
into the design phase. Many of the activities performed in the requirements definition phase are
an extension of those used in the preliminary investigation phase. The main goal of the analyst is
to identify what should be done, not how to do it. The following is a discussion of the activities
involved in requirements definition.

Information need of the stakeholders

Analysis of the information needs of the stakeholders is an important first step in determining the
requirements of the new system. It is essential that the analyst understands the environment in
which the new system will operate. Understanding the environment means knowing enough
about the management of the organization, its structure, its people, its business, and the current
information systems to ensure that the new system will be appropriate.
The current information system
A comprehensive and detailed analysis of the current system is essential to developing a quality,
new information system. The analyst should understand and document how the current system
uses hardware, software, and people to accept and manage input data and to convert such data
into information suitable for decision making. The documentation should be detailed and
complete. For example, the analyst should assess the quality of input and output activities that
form the user's interface. In addition, the volume and timing of such activities may be
documented.
The capabilities of the new computer information system
Functional requirements include the necessary hardware and software configurations along with
the appropriate human resources. Specific functional requirements often include the following:

User interface requirementsthe input and output needs of the user that must be
provided for by the new computer information system. These needs include layouts and
definitions of input and output, volume, frequency, origination of input, and destination
for reports.

Processing requirementsthe activities required for converting input into output,

including calculations, decision rules, database operations, and other processing
operations. In addition, requirements concerning capacity, throughput, turnaround time,
response time, and the system's availability time are established.

Storage requirementsthe organization, content, and size of databases, and types and
frequency of updates and inquiries. Furthermore, backup procedures and the length of
time and rationale for retention of backups are delineated.

Control requirementsthe accuracy, validity, security, and adaptability requirements for

the system's input, processing, output, and databases. Crash recovery and auditing
requirements of the organization are further specified in this stage.

The analysis team, at the end of this phase, produces a document containing the functional
requirements of the new computer information system. Additionally, the document contains
preliminary schedules and a budget for the next phase. The task force or committee responsible
for the project studies the document for the purpose of approving or not approving the work of
the analysis team. In addition, the analysis team provides the committee with a demonstration. In
essence, the analysis team walks the committee members, step by step, through the requirements
definition phase. If the committee approves this phase, then the analysis team is funded and
given the go-ahead to proceed to the next phase. However, if the committee does not approve
this phase, then either the project is canceled or, after appropriate modifications, the analysis
team resubmits a new document to the committee.
A walk-through starts with a description of the project. From this point, the analysts delineate a
set of well-defined goals, objectives, and benefits of the computer information system. Following
that, the budgets and staffing requirements are articulated and the plans are shared with the
committee. Specific, planned tasks are compared to actual accomplishments, and deviations, if
any, are noted and accounted for. The plans for asset protection and business control are
reviewed with the committee members. Finally, the analysts seek the committee's approval of the
objectives, plans, time table, and budget for the next phasesystems design.
In summary, systems analysis is an essential starting point in the development of computer
information systems projects. An organization generally follows a development pattern set up to
meet its needs. Regardless of which methodology an organization uses, the objective of systems
analysis is to fully understand the current environment and future requirements of a computer
information systems project.

Using the ATM example, we can specify a scenario of a client who first queries an account
balance and afterward withdraws 100 Euros. By using simulation, we can execute this scenario
on the model and check whether this model behaves as expected. Simulation also allows
performance analysis; for example, we could check whether the database system can retrieve the
current account balance within a certain time interval. It would be important to verify that clients
cannot crash the ATM.
BENEFITS OF DEVELOPMENT OF INFORMATION SYSTEMS
1. Increased customer satisfaction
Good management information system will speed up the process so that, the time required to
serve a customer can be faster.
2. Improved quantity and quality of information
Information is an important component of business today. Who controls the information would
act more responsive to changes and trends in the future.
Application of good information system will certainly generate reports compilation of data that is
managed by qualified and comprehensive database. This can be achieved for each of the
reporting process is executed automatically by computer machines.
3. Improved quality and quantity management decisions
It is inevitable that any decision-making relies heavily on information that supports the policy to
be taken. It can only be realized if information systems can provide information that is relevant,
accurate, current and can be retrieved at any time
4. Improved quality and responsiveness number of the competitors' condition
Aspects of business intelligence is very important since a long time with a variety of formats and
needs. To reach the point of rapid and appropriate response on the dynamics of the competition
will require information systems that can collect, analyze and compile the information needed by
decision makers in the company.
5. Improved operational efficiency and flexibility

All business owners would want these. The more efficient and flexibly an operational then this
indicates the low cost to run it. This can be achieved due to cut the bureaucracy in the company
after the implementation of good information systems.
6. Improved quality of internal and external communications
A good information system must be supported by electronic data communication network
systems that are reliable as well. With the application of good information systems, each party
both inside and outside the company can exchange information more effectively and efficiently.
7. Improved quality of planning
Planning is an essential process for businesses. However, any plan that will be made then of
course needed the support of adequate information into practice. If not then the plan may be
disoriented and did not reach its target because of mistake information into its base.
8. Improved quality control and supervision.
With the information system is built and maintained properly then any activity within the
business environment can be constantly monitored. Monitoring is certainly an impact on
improving control over every procedure and activities occurring within the company.
CHALLENGES/LIMITATIONS IN THE DEVELOPMENT OF INFORMATION
SYSTEMS
1. Low productivity has been recognized in the term software crisis, as indicated by the
development backlog and maintenance problems (cf. Brooks 1975, Boehm and Papaccio
1988, Jeffrey 1987). Simply, demands for building new or improved ISs have increased faster
than our ability to develop them. Some reasons are: the increasing cost of software
development (especially when compared to the decreasing cost of hardware), the limited
2.

supply of personnel and funding, and only moderate productivity improvements.

Second, IS development (ISD) efforts have resulted in a large number of outright failures
(cf. Lyytinen and Hirschheim 1987, Charette 1989). These failures are sometimes due to
economical mismatches, such as budget and schedule overruns, but surprisingly often due to
poor product quality and insufficient user satisfaction. For example, one survey (Gladden

1982) estimates that 75% of IS developments undertaken are never completed, or the
resulting system is never used. According to the Standish Group (1995) only 16% of all
projects are delivered on time and within their budget. This study, conducted as a survey
among 365 information technology managers, also reveals that 31% of ISD projects were
canceled prior to completion and the majority, 53%, are completed but over budget and offer
less functionality than originally specified. Unfortunately this area has not been studied in
enough detail to find general reasons for failures. As a result, we must mostly rely on cases
and reports on ISD failures (e.g. Oz 1994).
3. From the business point of view, there has been growing criticism of the poor alignment of
ISs and business needs (cf. Earl 1989). While an increasing part of organizations resources
are spent on recording, searching, refining and analyzing information, the link between ISs
and organizational performance and strategies has been shown to be dubious (Smith and
McKeen 1993). For example, most managers and users are still facing situations where they
cannot get information they need to run their units (Davenport et al. 1992, Rockart and
Hofman 1992). Hence, ISD is continually challenged by the dynamic nature of business
together with the ways that business activities are organized and supported by ISs.
4. All the above problems are further aggravated by the increasing complexity and size of
software products. Each generation has brought new application areas as well as extended
functionality leading to larger systems, which are harder to design, construct and maintain.
Moreover, because of a large number of new technical options and innovations available like client/server architectures, object-oriented approaches, and electronic commerce - novel
technical aspects are transforming the practice of ISD. All in all, it seems to be commonly
recognized that ISD is not satisfying organizations needs, whether they are technical,
economical, or behavioral. Consequently, companies world-wide are facing challenges in
developing new strategies for ISD as well as in finding supporting tools and ways of working
(Rockart and Hofman 1992, Benjamin and Blunt 1992).
5. Government rules and regulations change frequently and sometimes the whole structure of a
process may also change. For instance, a new circular may change the whole structure of
salary schemes for the employees. Because of the highly dynamic nature, the requirement
gathering was a difficult task and the system that should be developed also needed to be
flexible enough to adapt to any of these changes.

6. Risk is an event or condition which could happen and its appearance, if happens, has a
harmful influence on the project. The project risk represents a subjective assessment based on
the probability of non-realization of the set objective, within framework of the given time,
money and other resources. Of course, the project risk represents the probability of realizing
any loss during the project life cycle. The negative event of the project can be realized both at
the beginning, developmental, finishing phases and in the post finishing phases
(maintenance) of the project development.
7. Risk relating to the definition of the project size. Badly defined size can result in the wrong
direction of the project development which can cause different consequences as the time limit
excess, continual changes of the project size, cost increase, and so on.
8. System life cycle approach is ill-suited for developing decision oriented systems. Decision making may be
unstructured and fluid particularly for strategic and other non-programmed decisions. For such decisions,
information requirements change constantly and decisions have no well-defined models or procedures.
Lack of this specification may inhibit the system developers from exploring and discovering the problem
structure and they may not be able to proceed in right direction for system development.
9. System life cycle approach is quite rigid and inflexible. It allows for revision of the system to ensure that
information requirements are met. However, when information requirements are incorrect or an error is
encountered, the sequence of life cycle can be repeated but that generates volumes of additional documents,
thereby increasing development time and cost. Because of the time and cost to repeat the sequence of life
cycle activities, this approach encourages freezing of specifications early in the development process.
10. Life cycle approach is very resource intensive. Tremendous amount of time is required in gathering
information and preparing specifications. This involves very high cost. Sometimes, time taken in system
development is such that by the time the system becomes operational, information requirements change
necessitating a new system. This possibility is more for those organizations that operate in fluid
environment like financial services, consultancy, etc. In order to overcome the limitations of system life
cycle approach some other approaches have been in use for system development. These are prototyping,
rapid application development, and end-user development.

CONCLUSION
Information system is essential for business development. There are many benefits that can be

obtained from the business owner application of information systems. To be able to keep up with
stiff competition, there is requirement of good and reliable management information systems. As
discussed above, the first two phases of information system development are very crucial.
However, the rest of the phases are also important since the information system development is a
process, all phases are needed for a successful information system.

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