Chapter

12

Developing Business/IT
Solutions

McGraw-Hill/Irwin

Copyright 2009 by The McGraw-Hill Companies, Inc. All rights

Learning Objectives
Use the systems development process
outlined in this chapter and the model of
IS components from Chapter 1 as
problem-solving frameworks to help you
propose information systems solutions to
simple business problems
Describe and give examples to illustrate
how you might use each of the steps of
the information systems development
cycle to develop and implement a
business information system
12-2

Learning Objectives
Explain how prototyping can be used as an
effective technique to improve the process
of systems development for end users and
IS specialists
Understand the basics of project management
and their importance to a successful system
development effort
Identify the activities involved in the
implementation of new information systems

12-3

Learning Objectives

Compare and contrast the four

basic system conversation
strategies
Describe several evaluation factors
that should be considered in
evaluating the acquisition of
hardware, software, and IS services

12-4

IS Development

When the systems approach is

applied to the development of an
information systems solution to
business problems, it is called
information systems
development or application
development

12-5

Case 1: PayPal: Going Global All

Languages at a Time
How do you global companies keep their
consumer sites updated in the local language or
localizing the content without spending a lot of
time and money?
PayPal addressed this challenge by redesigning
their software to allow simultaneous refreshes for
15 locales ranging from France to Poland.
Because of this, PayPals net total payment
volume for the fourth quarter 2007 was $14 billion,
which represent almost 12 percent of U.S. ecommerce, and almost 8 percent of global ecommerce.
12-6

Case Study Questions

1. One of the challenges that PayPal faces now that they have
managed to overcome the polylingual obstacle is finding the
best way to put this functionality in the hands of the
business, so that they do not have to go through IT each
time. How do you balance this need for responsiveness and
flexibility versus ITs need to keep some degree of control to
make sure everything keeps working with everything else?
Provide some recommendations to managers who find
themselves in this situation.
2. PayPal opted to deviate from industry standards and build
their own custom technology that would better suit their
needs. When is it a good idea for companies to take this
alternative? What issues factor into that decision? Provide a
discussion and some examples.

12-7

Case Study Questions

3. Although the new system has been quite
successful, Pay-Pal has chosen not to license this
technology to others, forgoing a potentially
important revenue stream given the lack of good
solutions to this problem. Why do you think PayPal
chose not to sell this technology? Do you really
think this can be made into a strategic advantage
over their competitors? How easy would it be for
their competitors to imitate this accomplishment?

12-8

The Systems Approach

A problem solving technique that uses a systems
orientation to define problems and opportunities
and develop appropriate and feasible solutions
Analyzing a problem and formulating a solution
involves these interrelated activities:
Recognize and define a problem or opportunity
using systems thinking
Develop and evaluate alternative system solutions
Select the solution that best meets your
requirements
Design the selected system solution
Implement and evaluate the success of the system
12-9

What is Systems Thinking?

Seeing the forest and the trees in any
situation
Seeing interrelationships among systems
rather than linear cause-and-effect chains
Seeing processes of change among systems
rather than discrete snapshots of change

See the system in any situation

Find the input, processing, output, feedback
and control components
12-10

Systems Thinking Example

12-11

Systems Analysis and Design

SA&D is the overall process by

which information systems are
designed and implemented
Includes identification of business
problems

Two most common approaches

Object-oriented analysis and design
Life cycle
12-12

Systems Development Lifecycle (SDLC)

12-13

Systems Development Process

Systems Investigation
The first step in the systems development
process
May involve consideration of proposals
generated by a business/IT planning process
Also includes the preliminary feasibility study
of proposed information system solutions

12-14

Systems Development Process

Feasibility Studies: a preliminary study
to determine the
Information needs of prospective users
Resource requirements
Costs
Benefits
Feasibility

In some cases, a feasibility study is

unnecessary
12-15

Operational Feasibility

How well the proposed system will

Support the business priorities of the
organization
Solve the identified problem
Fit with the existing organizational
structure

12-16

Economic Feasibility

An assessment of
Cost savings
Increased revenue
Decreased investment requirements
Increased profits
Cost/benefit analysis

12-17

Technical Feasibility

Determine the following can meet

the needs of a proposed system
and can be acquired or developed
in the required time
Hardware
Software
Network

12-18

Human Factors Feasibility

Assess the acceptance level of

Employees
Customers
Suppliers
Management support

Determine the right people for the

various new or revised roles
12-19

Legal/Political Feasibility

Assess
Possible patent or copyright violations
Software licensing for developer side
only
Governmental restrictions
Changes to existing reporting
structure

12-20

Systems Analysis
An in-depth study of end user information needs
It produces the functional requirements used as the
basis for the design of an information system

It typically involves a detailed study of the

Information needs of a company and end users
Activities, resources, and products of one or more of
the information systems currently being used
Information system capabilities required to meet the
information needs of business stakeholders

12-21

Organizational Analysis

Study of the organization, including

Management structure
People
Business activities
Environmental systems
Current information systems
Input, processing, output, storage, and
control
12-22

Analysis of the Present System

Before designing a new system, it is
important to study the system to be
improved or replaced
Hardware and software
Network
People resources used to convert data
resources into information products
System activities of input, processing,
output, storage, and control

12-23

Logical Analysis

A logical model is a blueprint of the

current system
It displays what the current system
does, without regard to how it does it
It allows an analyst to understand the
processes, functions, and data
associated with a system without
getting bogged down with hardware
and software
12-24

Functional Requirements

This step of systems analysis is one

of the most difficult
Determine what type of information
each business activity requires
Try to determine the information
processing capabilities required for
each system activity
The goal is to identify what should be
done, not how to do it
12-25

Examples of Functional Requirements

User Interface: automatic entry of product
data and easy-to-use data entry screens for
Web customers
Processing: fast, automatic calculation of sales
totals and shipping costs
Storage: fast retrieval and update of data from
product, pricing, and customer databases
Control: signals for data entry errors and quick
e-mail confirmation for customers

12-26

Systems Design

Systems design focuses on three

areas

12-27

Prototyping
Prototyping is the rapid development and
testing of working models
An interactive, iterative process used during
the design phase
Makes development faster and easier,
especially when end user requirements are
hard to define
Has enlarged the role of business
stakeholders
12-28

Prototyping Life Cycle

12-29

User Interface Design

Focuses on supporting the interactions
between end users and their computerbased applications
Designers concentrate on the design of
attractive and efficient forms of user input
and output
Frequently a prototyping process
Produces detailed design specifications for
information products, such as display
screens
12-30

Checklist for Corporate Websites

Remember the customer

Aesthetics
Broadband content
Easy to navigate
Searchability
Incompatibilities
Registration forms
Dead links
12-31

System Specifications

Formalizing the design of

User interface methods and products
Database structures
Processing procedures
Control procedures

12-32

Examples of System Specifications

User interface
specifications

Use personalized screens that welcome repeat Web

customers and that make product recommendations

Database
specifications

Develop databases that use object/relational database

management software to organize access to all customer
and inventory data and to multimedia product information

Software
specifications

Acquire an e-commerce software engine to process all

e-commerce transactions with fast responses, i.e., retrieve
necessary product data and compute all sales amounts in
less than one second

Hardware
and network
specifications

Install redundant networked Web servers and sufficient

high-bandwidth telecommunications lines to host the
company e-commerce website

Personnel
specifications

Hire an e-commerce manager and specialists and a

webmaster and Web designer to plan, develop, and
manage e-commerce operations
12-33

End User Development

IS professionals play a consulting role,
while uses do their own application
development
A staff of user consultants may be available
to help with analysis, design, and installation

Other support
Application package training
Hardware and software advice
Help gaining access to organization
databases
12-34

Focus on IS Activities

End user development should focus

on the fundamental activities of an
information system
Input
Processing
Output
Storage
Control
12-35

Focus of End User Development

12-36

Doing End User Development

Application development capabilities built

into software packages make it easier for
end users to develop their own solutions

12-37

Encouraging End User Web Development

Look for tools that make sense
Some are more powerful or costly than
needed

Spur creativity
Consider a competition among departments

Set some limits

Limit what parts of a web page or site can
be changed and who can do it

Give managers responsibility

Make them personally responsible for
content
12-38

Encouraging End User Web Development

Make users comfortable

Training will make users more
confident
It can save the IT department the
trouble of fixing problems later on
It can limit the need for continuous
support

12-39

Implementing New Systems

The systems implementation stage
involves
Hardware and software acquisition
Software development
Testing of programs and procedures
Conversion of data resources
Conversion alternatives
Education/training of end users and
specialists who will operate the new system
12-40

Implementation Process

12-41

Case 2: Queens Medical Center, National

Public Radio, Worldspan, and Others
According to an annual survey by CIO Magazine, the
demand for IT is increasing and the requests for IT
projects are piling up.
The biggest challenge is that the budget to deal with
todays demand is not increasing.
For CIOs, managing this application backlog is the
number-one barrier to their job effectiveness, regardless
of industry or company size.
There are two types of backlog backlog of desire
(applications that users are yearning for) and a backlog
of commitment (projects that are approved but not
started). CIOs need to pay attention to both types of a
backlogs.
12-42

Case Study Questions

1. The case notes that a changing environment or
business priorities can render an ongoing project
obsolete even before it has been completed. What
alternatives do CIOs who find themselves in this
situation have with respect to dealing with the troubled
project? Would you go ahead and finish it, or scrap it
altogether? How would you justify either position?
2. Do you agree with the statement: Application backlog
is not a problem one solves, its a condition one lives
with? Why or why not? To the extent that it is true,
how can IT executives manage things differently to
make this situation more approachable? Provide some
specific suggestions.
12-43

Case Study Questions

3. Susan Powers at Worldspan says she
addresses the backlog problem by
positioning her IT organization as a
resource that should be used and
managed in the most effective manner,
like any other a company may have. What
do you think of this approach? Is IT really
like any other resource? In which way is IT
different than other areas of a company
like marketing or finance?
12-44

Project Management

The skills and knowledge

necessary to be a good project
manager will translate into virtually
any project environment
The people who have acquired them
are sought after by most organizations

12-45

What is a Project?
Every project has
A set of activities with a clear beginning and
end
Goals
Objectives
Tasks
Limitations or constraints
A series of steps or phases

Managing a project effectively requires

Process
Tools
Techniques

12-46

Sample Implementation Process

12-47

Phases of Project Management

There are five phases in most

projects
Initiating/Defining
Planning
Executing
Controlling
Closing
12-48

Initiating/Defining Phase

Example activities
State the problem(s) and/or goal(s)
Identify the objectives
Secure resources
Explore the costs/benefits in the
feasibility study

12-49

Planning Phase

Example activities
Identify and sequence activities
Identify the critical path
Estimate the time and resources
needed for project completion
Write a detailed project plan

12-50

Execution Phase

Example activities
Commit resources to specific tasks
Add additional resources and/or
personnel
if necessary
Initiate work on the project

12-51

Controlling Phase

Example activities
Establish reporting obligations
Create reporting tools
Compare actual progress with
baseline
Initiate control interventions, if
necessary

12-52

Closing Phase

Example activities
Install all deliverables
Finalize all obligations and
commitments
Meet with stakeholders
Release project resources
Document the project
Issue a final report
12-53

Evaluating Hardware, Software, Services

Establish minimum physical and performance
characteristics for all hardware and software
Formalize these requirements in an RFP/RFP

Send RFQ to appropriate vendors

Evaluate bids when received
All claims must be demonstrated
Obtain recommendations from other users
Search independent sources for evaluations
Benchmark test programs and test data

12-54

Hardware Evaluation Factors

Major evaluation factors

Performance
Cost
Reliability
Compatibility
Technology
Ergonomics
Connectivity
Scalability
Software
Support
12-55

Software Evaluation Factors

Hardware evaluation factors apply to
software, as do these

Quality
Efficiency
Flexibility
Security
Connectivity
Maintenance
Documentation
Hardware

Software that is slow,

hard to use, bug-filled,
or poorly documented
is not a good choice
at any price

12-56

Evaluating IS Services
Examples of IS services
Developing a company website
Installation or conversion of
hardware/software
Employee training
Hardware maintenance
System design and/or integration
Contract programming
Consulting services
12-57

IS Service Evaluation Factors

IS evaluation factors include

Performance
Systems development
Maintenance
Conversion
Training
Backup facilities and services
Accessibility to sales and support

Business position and financial strength

Hardware selection and compatibility
Software packages offered
12-58

Other Implementation Activities

The keys to successful

implementation of
a new business system
Testing
Data conversion
Documentation
Training

12-59

System Testing

System testing may involve

Testing and debugging software
Testing website performance
Testing new hardware
Review of prototypes

12-60

Data Conversion
Data conversion includes
Converting data elements from the old
database to the new database
Correcting data errors
Filtering out unwanted data
Consolidating data from several databases
Organizing data into new data subsets

Improperly organized and formatted data

is a major cause of implementation
failures
12-61

Documentation
User Documentation
Sample data entry screens, forms, reports
System operating instructions

Systems Documentation
Method of communication among those
developing, implementing, and maintaining
a computer-based system
Detailed record of the system design
Extremely important when diagnosing
problems and making system changes
12-62

Training
End users must be trained to operate a new
business system or its implementation will fail
May involve only activities, such as data entry,
or all aspects of system use
Managers and end users must understand how
the new technology impacts business operations

System training should be supplemented with

training related to
Hardware devices
Software packages

12-63

Major System Conversion Strategies

12-64

Direct Conversion
Direct conversion
The simplest conversion strategy
The most disruptive to the organization
Sometimes referred to as the slam dunk or
cold-turkey strategy
May be the only viable solution in cases of
emergency implementation or if the old and
new system cannot coexist
Has the highest risk of failure
Involves turning off the old system and
turning on the new one
12-65

Parallel Conversion
Old and new systems are run simultaneously
until everyone is satisfied that
The new system functions correctly
The old system is no longer needed

Conversion to new system can be single

cutover or phased cutover
Has the lowest risk, but the highest cost
Can cost 4 times more than using the old system

Best choice where an automated system is

replacing a manual one

12-66

Pilot Conversion
Scenarios best suited to a pilot
conversion
Multiple business locations
Geographically diverse locations

Advantages of single location conversion

Can select a location that best represents
the conditions across the organization
Less risky in terms of loss of time or delays
in processing
Can be evaluated and changed before
further installations
12-67

Phased Conversion
A phased or gradual conversion
Takes advantage of both the direct and
parallel approaches
Minimizes the risks involved
Allows the new system to be brought online
as logically ordered functional components

Disadvantages
Takes the most time
Created the most disruption to the
organization over time
12-68

Post-Implementation Activities

The single most costly activity

Correcting errors or faults in the system
Improving system performance
Adapting the system to changes in the
operating or business environment
Requires more programmers than does
application development
May exist for years
12-69

Systems Maintenance

There are four basic categories of

system maintenance
Corrective: fix bugs and logical errors
Adaptive: add new functionality
Perfective: improve performance
Preventive: reduce chances of failure

12-70

Post-Implementation Review

Ensures that the newly

implemented system meets the
established business objectives
Errors must be corrected by the
maintenance process
Includes a periodic review/audit of the
system
as well as continuous monitoring
12-71

Case 3: Intuit Inc.: Customer-Driven

Development
At Intuit, development of new product
ideas
are driven by a psychologist
Playing nice
Free-association sessions

Focus is always on the customer

Making pain points less painful

Capturing pencil-and-paper users
Follow-me-homes
Simplifying language
12-72

Case Study Questions

1. Should Intuits far-out thinking and
acceptance of failure as part of the
application software development
process be duplicated at large software
development companies like Microsoft?
Should it be duplicated at the thousands of
small independent software companies that
exist?

12-73

Case Study Questions

2. Which do you prefer?

Intuits customer-driven development
process where hundreds of
employees and managers
are sent to consult with customer in
their homes or places of business, or
Microsofts process of using
professional anthropologists to do
such research
12-74

Case Study Questions

3. Intuit developed the wildly successful
QuickBooks: Simple Start Edition, which
eliminated all accounting jargon
Could this idea be the foundation of a new
version of Intuits top-selling TurboTax
software, which removed all tax accounting
jargon from that product to reach the 20
million Americans who do not use tax
preparation software or a professional tax
preparer?
Would such a product be possible or
successful?
12-75

Case 4: Hewlett-Packard: Managing

Radical Change
HP is embarking on a makeover of its
internal tech systems
Replacing 85 loosely connected data centers
around the world with 6 cutting-edge facilities
Cutting thousands of smaller projects to
focus
on a few corporate-wide initiatives
Scrapping 784 databases for one data
warehouse
Laying off thousands of IT workers
Building its own fiber-optic network to
connect the six data centers
12-76

Case Study Questions

1. Will the initiatives being undertaken by
CIO Randy Mott to implement major
changes to the IT function at HP make IT
a more efficient and vital contributor to
HPs business success?
Defend your position on each of the major
initiatives he is implementing

2. Do you approve of the change

management job Mott is doing, including
his meetings with HP employees
throughout the world, and having coffee
talks with them?
12-77

Case Study Questions

3. Assume you have been hired as a

management consultant or coach
to CIO Mott
What are several suggestions you
might give him to help him
successfully implement his
ambitious plans for IT changes at
HP?

12-78