System Development

• Project: a planned undertaking that has a beginning

and an end, and which produces a predetermined
result or product
• Information System development project: planned
undertaking that produces a system
• Basic activities in development of any new system:
– Analysis – to understand information needs
– Design – define the system architecture (based on needs)
– Implementation – the actual construction of the system

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 System Development Life Cycle (SDLC)

• The systems development life cycle (SDLC) is a

general term used to describe the method and
process of developing a new information system
• Without the structure and organization provided
by SDLC approach projects are at risk for missed
deadline, low quality etc.
• SDLC provides
– Structure
– Methods
– Controls
– Checklist
Needed for successful development
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 Phases in the SDLC
• Sets of related activities are organized into
“phases”:

(1) Project planning phase

(2) Analysis phase
(3) Design phase
(4) Implementation phase
(5) Support phase

In “classical” life cycle these phases are sequential,

but there are variations as we will see
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 The Planning Phase

• Define the problem (and its scope)

• Confirm project feasibility
• Produce the project schedule
• Staff the project
• Launch the project

After defining the scope and conducting feasibility study

the plan is reviewed and if it meets with approval, the project
is launched

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 The Analysis Phase

• Primary objective: to understand and document

the information needs and processing
requirements of the new system
– Gather information (e.g. interview, read, observe etc.)
– Define system requirements (reports, diagrams etc.)
– Build prototypes for discovery of requirements
– Prioritize requirements
– Generate and evaluate alternative solutions
– Review recommendations with management
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 Design Phase
• Objective: to design the solution (not to
implement it though)
• Activities
– Design and integrate the network
– Design the application network
– Design the user interfaces
– Design the system interfaces
– Design and integrate the database
– Prototype for design details
– Design and integrate the system controls
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 Implementation Phase

• Information system is built, tested and installed

(actual programming of the information system)
• Activities
– Construct software components
– Verify and test
– Develop prototypes for tuning
– Convert data
– Train and document
– Install the system
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 Support Phase

• Objective is to keep the information system

running after its installation
• Activities
– Provide support to end users
• Help desks
• Training programs
– Maintain and enhance the computer system
• Simple program error correction
• Comprehensive enhancements
• upgrades
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 Scheduling of Project Phases

• Traditional approach: “Waterfall method” – only

when one phase is finished does the project team
drop down (fall) to the next phase
– Fairly rigid approach
– Can’t easily go back to previous phases (each phase
would get “signed off”)
– Good for traditional type of projects, e.g. payroll
system or system with clearly definable requirements
– Not as good for many of the new types of interactive
and highly complex applications
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 Newer Approaches

• The waterfall approach is less used now

• The activities are still planning, analysis, design
and implementation
• However, many activities are done now in an
overlapping or concurrent manner
• Done for efficiency – when activities are not
dependent on the outcome of others they can also
be carried out (but dependency limits overlap)

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 The Project Team
• Like a “surgical team” – each member of the team
performs a specialized task critical to the whole
• Project team varies over duration of the project (as
does project leadership)
– During planning team consists of only a few members
(e.g. project manager and a couple of analysts)
– During analysis phase the team adds systems analysts,
business analysts
– During design other experts may come in with
technical expertise (e.g. database or network design)
– During implementation, programmers and quality
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control people are added
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 Project Management
• Project Manager – has primary responsibility for
the functioning of the team
• Project Management – organizing and directing of
other people to achieve a planned result within a
predetermined schedule and budget
• Good manager:
– Knows how to plan, execute the plan, anticipate
problems and adjust for variances
• Client – person or group who funds the project
• Oversight committee – reviews and direct the
project
• User – the person or group who will use the
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 Tasks of a Project Manager

• Planning and Organization

– Identify scope of the project
– Develop a plan, with detailed task list and schedule
• Directing
– Responsible for directing the execution of the project
– Responsible for monitoring the project - make sure that
milestones (key events in a project) are met
– Overall control of the project
• Plan and organize project
• Define milestones and deliverables
• Monitor progress
• Allocate resources and determine roles
• Define methodologies
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Anticipate problems and manage staff
 Project Initiation

• Projects may be initiated as part of the long-term

strategic plan (top-down)
– based on mission or objective statement come up with
some competitive business strategy- usually involves IT)
– E.G. Rocky Mountain Outfitters example – to be more
competitive wants to improve customer support – so moves
towards Internet based re-development of systems
• Projects may proceed bottom up
– To fill some immediate need that comes up
• Projects may also be initiated due to some outside
force
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– E.g. change in tax structure may affect billing system
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 The Project Planning Phase

1. Defining the Problem

• Review the business needs and benefits (a brief
paragraph)
• Identify the expected capabilities of the new system
(define the scope of the project)
• May involve developing a context diagram to explain
the scope of the project

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2. Confirming Project Feasibility
– Economic feasibility – cost-benefit analysis
– Organizational and cultural feasibility
• E.g. low level of computer literacy, fear of employment loss
– Technological feasibility
• Proposed technological requirements and available expertise
– Schedule feasibility
• How well can do in fixed time or deadline (e.g. Y2K projects)
– Resource feasibility
• Availability of team, computer resources, support staff

• Economic Feasibility
– The analysis to compare costs and benefits to see
whether the investment in the development of the system
will be more beneficial than than costly
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• Costs

– Development costs : salaries and wages, equipment and

installation, software and licenses, consulting fees and
payments to third parties, training, facilities, utilities
and tools, support staff, travel and miscellaneous

– Sources of Ongoing Costs of Operations: connectivity,

equipment maintenance, computer operations,
programming support, amortization of equipment,
training and ongoing assistance (help desk), supplies

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• Benefits
– Tangible benefits - examples
• Reducing staff (due to automation)
• Maintaining constant staff
• Decreasing operating expenses
• Reducing error rates (due to automation)
• Ensuring quicker processing and turnabout
• Capturing lost discounts
• Reducing bad accounts or bad credit losses
• Reducing inventory or merchandise loss
• Collecting accounts receivable more quickly
• Capturing income lost due to “stock outs”
• Reducing the cost of goods with volume discounts
• Reducing paperwork costs

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• Benefits
– Intangible benefits – examples
• Increased level of service (in ways that can’t measure)
• Increased customer satisfaction
• Survival
• The need to develop in-house expertise

Note - also can have intangible costs for a project

• reduced employee moral
• lost productivity
• lost customer or sales

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 Conducting the feasibility study

• Each category of cost is estimated

• Salaries and wages are calculated based on
staffing requirements
• Other costs such as equipment, software licenses,
training are also estimated
• A summary of development costs and annual
operating costs is created
• A summary of benefits is created
• Net present value (NPV) – present value of
benefits and costs, is calculated for e.g. 5 year
period
• Decision is made to proceed with project or not 27
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 Some Terminology (see text – Appendix B)
Net present value: The present value of dollar benefits and
costs for an investment such as a new system
– since $100 received one year in the future is worth only $94.34,
using a discount rate of .06, the discount rate is used the
calculation of Net present value (which equates future values to
current values)
Payback period, or breakeven point: The time period at
which the dollar benefits offset the dollar costs
Return on Investment (ROI): a measure of the percentage
gain received from an investment such as a new system
ROI=(estimated time period Benefits – estimated time period costs) /
estimated time period costs
Tangible benefits: Benefits that can be measured or
estimated in terms of dollars and that accrue
Intangible benefits: Benefits that accrue but that cannot be
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measured quantitatively or estimated accurately
 Developing a Project Schedule
1. Identify individual tasks for each activity
• Top-down or bottom-up approach
2. Estimate the size of each task (time and
resources) – optimistic, pessimistic and expected times
3. Determine the sequence for the tasks
4. Schedule the tasks
• Charting methods (Appendix C)
– PERT/CPM (Project Evaluation and Review
Technique/Critical Path Method) chart shows the
relationships based on tasks or activities
• Defines tasks that can be done concurrently or not and
critical path
– Gantt chart shows calendar information for each task
as a bar chart
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• Shows schedules well but not dependencies as well
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 PERT Chart

• Tasks represented by rectangles

• Tasks on parallel paths can be done concurrently
• Critical path – longest path of dependent tasks
– No allowable slack time on this path
– Other paths can have slack time (time that can slip
without affecting the schedule)

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 Gantt Chart

• Tasks represented by vertical bars

• Vertical tick marks are calendar days and weeks
• Shows calendar information in a way that is easy
• Bars may be colored or darkened to show
completed tasks
• Vertical line indicates today’s date

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 Further Preparations

• Staffing the Project

– Develop a resource plan
– Identify and request technical staff
– Identify and request specific user staff
– Organize the project team into work groups
– Conduct preliminary training and team-building

Launching the Project

– Oversight committee gives final go-ahead
– Funds are released and project is announced

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 Review of Development of Feasibility Study
(Cost-Benefit Analysis, Scheduling etc.)
• Checklist of questions for generating
documentation for feasibility study (during
project planning phase)

1. History of the project request

(a) Who requested it?
(b) When did they request it?
(c) What did they expect?
(d) Who were the client (i.e. person or group who funds the
project) representatives?
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2. Objectives and Scope
(a) What is this project to accomplish?
(b) What is involved?
- determine software requirements
- Determine hardware requirements
- What kind of performance criteria is expected

3. Current Situation
(a) What areas are you addressing?
(b) Why are you addressing these areas?
(c) What are the relevant procedures?
(d) Who are the relevant people?
(e) Problems with the current approach
(f) What needs to be changed?

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4. Solution Recommended
(a) How will the thing work? (just a rough overview at this
stage to show its feasible)
(b) Who will do what?
(c) How will they do it?
(d) What will no longer be necessary?

5. Equipment Used
(a) What equipment is to be used? (describe)
(b) How much of it is already installed?
(c) Where is the equipment installed?
(d) For what purpose?
(e) What else is needed?
(f) Where is it needed?
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6. Databases and Files Used
(a) What databases or files will be used?
(b) What databases will be created? (and what is involved?)
(c) What size will they be?
(d) What will they be available for?

7. Costs and benefits

(a) List benefits
- in business, “tangible” benefits are particularly sought (e.g. hard
$ savings)
- However, a project may result in “intangible” benefits
Example of tangible benefits: “Annual benefits of $2.0 million
identified from lower fuel costs” – this was caluculated out
(b) List costs
E.g. programming (69 day @ $370/day)
batch processing (1.6 hrs at $2450/hr)
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8. Schedules

9. Next step

Recommendation about whether to proceed to next phase (ie

Analysis phase) or scrap the project

NOTE – at this point the proposed project is reviewed

and if it receives go-ahead we move from the Planning
Phase to the Analysis Phase

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