Chapter
12
Developing Business/IT
Solutions
McGraw-Hill/Irwin
Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.
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, PayPal’s net total payment
volume for the fourth quarter 2007 was $14
billion, which represent almost 12 percent of
U.S. e-commerce, and almost 8 percent of
global e-commerce.
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 IT’s 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: Queen’s 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
today’s 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, it’s 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 Intuit’s “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?
– Intuit’s customer-driven development
process where hundreds of
employees and managers
are sent to consult with customer in
their homes or places of business, or
– Microsoft’s 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 Intuit’s 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
HP’s 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