Week 14 – Information System Development

Assignment changes Nov 26 12 Exam 2 Dec 3 13 Holiday Dec 10 14 Dec 17 15 Dec 24 16  Holiday? Jan 6 18 Final exam – 40% of grade Only 6 cases. No presentation. Grades will be 30% for 6 cases, 30% for 2 midterms, 40% for final exam.

Information Systems Development Information systems may be Created in-house (this is becoming rare) Created by a third party (Outsourced) Purchased and modified for local use Rented and hosted by a third party

Information Systems Development The traditional process for creating systems is the Systems Development Life Cycle It assumes 4 main steps: Analysis Development Implementation Maintenance It is called “life cycle” because like any product, it has a limited life. As your organization changes and technology changes, the system may become obsolete.

Result – Approve/ not approve further investigation Step 1- Analysis Investigation • What is the business process that the system is to support? • What business opportunity do you want the system to seize, what problems do you want it to solve, or what directive must you fulfill? (Who needs this system, and what good will it do for the organization?) Result – Approve/ not approve further investigation

Requirements Definition Step 1- Analysis Requirements Definition • What features do you want the system to have? • What interfaces will the system have with other systems, and how should the systems interface? (Usually requires several weeks as analysts review current work processes and current technology. Establishes scope of new system, but is prone to error.)

Technical Feasibility Study Step 1- Analysis Technical Feasibility Study Is technology available to create the system you want? Which of the available technologies should we use? Should we make it, or buy it, or rent it? (Requires not just a review of current technology, but current IT talent. Do you have the people who could create this system and keep it running? If you buy it, do you have the people who can update it?)

Economic Feasibility Study Step 1- Analysis Economic Feasibility Study Does the system make economic sense? Usual measures are payback period and Return on Investment Payback period – length of time it takes to recover the cost of the system through savings or increased income. Return on Investment – percentage return on investment in this system over some period of time

Step 1- Analysis Economic Feasibility Study Payback period is over 3 years ROI = 14000/50000 = 28% over 4 years, 7% per year Year 1 Year 2 Year 3 Year 4 System development costs 50000 Licensing fees 4000 Increased sales revenue 20000 Gain/loss (34000) (18000) (2000) 14000

Step 1- Analysis Economic Feasibility Weaknesses: Costs are usually underestimated. Revenue increases are unknown. No American company would approve this project. Year 1 Year 2 Year 4 System development costs 50000 Licensing fees 4000 Increased sales revenue 20000 Gain/loss (34000) (18000) (2000) 14000

Operational Feasibility Study Step 1- Analysis Operational Feasibility Study If created, will the system actually solve the problem? Can the people in our organization actually use a system like this? (Some purchased systems will do some – but not all – of the things you need. Also, some organizations are just not prepared to use advanced technology. This may be hard to admit.)

Step 1- Analysis Example – City Center Mall wonders whether it should create a data warehouse to track sales trends. How would they determine if such a system were feasible?

Step 2- Development Description of the System This is usually technical and involves the flow of information through the system. Typically data is tracked from input, through processing, to output. Analysts create a “picture” of how the system works.

Step 2- Development Make or Buy Once you know what your needs are and are sure the system is feasible, you decide if you will create the system yourself, or buy it, or rent it. Make – you will have all the features you want Buy – you will get most of the features you want, and can be sure of quality Rent – lower initial costs and may not require purchasing local servers for hosting. But - monthly fees can be steep and very good internet access is required.

Step 2- Development Description of the System For example, if a customer buys a product and it is scanned, where does that data go? What processes are conducted on it? Where does it end up? Data flow diagrams help developers understand the system. Decrease quantity in database Scan product Look up price Display price on screen

Step 2- Development Programming the System Programmers use a programming language to do what the diagrams say the system should do. This step is often outsourced. The programming languages used change over time, sometimes making it difficult for people to update and correct the programs years later.

Step 2- Development Testing the System Testing should be a formal process that checks the system on its own, but also checks to see how it works when in use with other programs on the same network (integration testing). It is very common for testing to be incomplete and rushed if a system project is running behind schedule.

Conversion to the new System All three approaches involve risks Step 3- Implementation Conversion to the new System The system can be brought into use in one of three methods: Parallel – the new systems runs at the same time as an older system Phased – parts of the system are brought in over a period of time, or it is implemented in parts of a large organization Cut-over (“big bang”) – all of the system is brought up for use and any old systems are discontinued All three approaches involve risks

Training on the new System Step 3- Implementation Training on the new System Users have to be taught how to use the new system, but training is often rushed and can be badly timed – too far in advance, or too late (and too little) to be helpful. It is also generally inadequately budgeted. Ideally, training would occur twice – just before implementation so users are ready for the new system, and then 4-6 months later when users know the system and are ready to learn advanced features.

Updating the new System Step 4- Maintenance Updating the new System An existing system will generally have to be changed – updated – for three reasons: Corrective – bugs were found Perfective – an improvement was identified Required – government regulations or industry standards changed If you build the system, you have to write the updates. If you buy the system, you have to install the updates. If you rent the system, updates are done for you.

Problems with the SDLC Can be very time consuming – by the time the system is complete, business conditions or technology may have changed Is dependent upon good initial analysis – something hard to do Depends on freezing “scope” so no changes are permitted during development, even if good ideas emerge

Alternative to the SDLC Agile programing Does the project in smaller pieces Shows prototypes to users so analysis is more accurate Gets small functioning systems to users faster BUT Makes cost calculations more difficult May lead to “scope creep”

Discussion Assume the ministry you work for wants to change an information system you frequently use. They put together a project committee to review the system and consider a new system. You are assigned to the committee. What might your committee do?