Perform a Cost-Benefit Analysis

- This technique is frequently used for estimating the expected financial value of business
investments.
- Employed because of its simplicity and the absence of a clearly better alternative.
- Useful tool for comparing competing systems designs.

Three steps in application of cost-benefit analysis

1. Identify costs
One-time cost: include initial investment to develop and implement the system

Recurring costs: include operating and maintenance costs that recur over the life
of the system

2. Identify benefits
Tangible costs: those that increase revenue and those that reduce costs

Intangible costs: they cannot be easily measured and quantified; overriding importance in
information system

3. Compare Costs and Benefits

NPV method: the present value of the costs is deducted from the present value of the
benefits over the life of the system*.

Payback method: is a variation of break-even analysis.

*projects with a positive net present value are economically feasible.

Prepare System Selection Report

- This formal document consists of a revised feasibility study, a cost-benefit analysis, and a list and
explanation of intangible benefits for each alternative design.

The AUDITOR’s ROLE IN EVALUATION and SELECTION

1. only escapable costs are used in calculations of cost saving benefits

2. reasonable interest rates are used in measuring present value of the cash flows.

3. one-time and recurring costs are completely and accurately reported.

4. realistic useful lives are used in comparing competing projects.

5. intangible benefits are assigned reasonable financial values.

DETAILED DESIGN- PHASE V

Detailed design phase

- To produce a detailed description of the proposed system that both satisfies the system
requirements identified during system analysis and is in accordance with conceptual design.
- Components are presented formally in a detailed design report
- Constitutes a set of blueprints that specify input screen formats, output reports layouts, data
structures, and process logic.

Perform a System Design Walkthrough

- To ensure that the design is free from conceptual errors that could become programmed into
the final system.
- Structured walkthroughs are conducted by a quality assurance group*.

* the job of this group is to simulate the operation of the system to uncover errors, omissions, and
ambiguities in the design.

Review System Documentation

- The detailed design report documents and describes the system to this point; and this report
includes the ff:
1. designs for all screen inputs and source documents for the system
2. designs of all screen outputs, reports, and operational documents.
3. normalized data for database tables, specifying all data elements.
4. database structures and diagrams.
5, updated data dictionary describing each data element in the database.
6. processing logic. (flowcharts)

APPLICATION PROGRAMMING AND TESTING- PHASE VI

Program the Application Software

- Selecting a programming language from among the various language available and suitable to
the application.
- Includes procedural language like COBOL*, event-driven languages like Visual Basic, or object-
oriented (OOP) languages like Java or C++.

Procedural Languages.

- Requires the programmer to specify the precise order in which the program logic is executed.
- Often called third-generation language (3GLs)
 - *COBOL was a dominant language, has great capability for performing highly detailed
operations on individual data records and handles large files very efficiently.

Exent-Driven Languages.

- Are no longer procedural

- The program’s code is not executed in a predefined sequence.
- (e.g) when the user presses a key, or “clicks” on an icon on the computer screen, the program
automatically executes code associated with that event.

*Microsoft Visual Basic

: is the most popular example of an event-driven language, the syntax of the language is simple yet
powerful.

: is used to create real-time and batch applications that can manipulate flat files or relational databases.

: it has a screen-painting feature that greatly facilitates he creation of sophisticated graphical user
interfaces (GUI).