Management Information Systems:

Managing the Digital Firm

Sixteenth Edition

Chapter 11
Building Information Systems

Copyright © 2020, 2018, 2016 Pearson Education, Inc. All Rights Reserved
Learning Objectives
11.1 How does building new systems produce organizational
change?
11.2 What are the core activities in the systems development
process?
11.3 What are the principal methodologies for modeling and
designing systems?
11.4 What are alternative methods for building information
systems?
11.5 What are new approaches for system building in the
digital firm era?
Cameron International Builds a New
System for Financial Reporting (1 of 2)
• Problem
– Antiquated legacy systems
– Inefficient manual processes
• Solutions
– Redesign financial reporting process
– Change reporting structure
– SAPERP and BPC
– Using plug-ins and custom changes
Cameron International Builds a New
System for Financial Reporting (2 of 2)
• New Planning and Consolidation System
• Demonstrates steps needed to design and build new
information systems
• Illustrates redesigning business processes as a part of
system building
Systems Development and
Organizational Change (1 of 2)
• IT-enabled organizational change
• Automation
– Increases efficiency
– Replaces manual tasks
• Rationalization of procedures
– Streamlines standard operating procedures
– Often found in programs for making continuous quality
improvements
 Total quality management (TQM)
 Six sigma
Systems Development and
Organizational Change (2 of 2)
• Business process redesign
– Analyze, simplify, and redesign business processes
– Reorganize workflow, combine steps, eliminate
repetition
• Paradigm shifts
– Rethink nature of business
– Define new business model
– Change nature of organization
Figure 11.1 Organizational Change
Carries Risks and Rewards
Interactive Session: Organizations:
Carter’s Redesigns Its Business
Processes
• Class discussion
– How did Carter’s previous business processes affect its business
performance?
– What management, organization, and technology factors
contributed to Carter’s problems with its business processes?
– Diagram Carter’s old and redesigned business process for paying
an invoice.
– Describe the role of technology in Carter’s business process
changes.
– How did Carter’s redesigned business processes change the way
the company worked? What was their business impact? Explain.
Business Process Redesign
• Business process management (BPM)
– Variety of tools, methodologies to analyze, design,
optimize processes
– Used by firms to manage business process redesign
• Steps in BPM
1. Identify processes for change
2. Analyze existing processes
3. Design the new process
4. Implement the new process
5. Continuous measurement
Figure 11.2 As-is Business Process
for Purchasing a Book from a
Physical Bookstore
Figure 11.3 Redesigned Process for
Purchasing a Book Online
Tools for Business Process
Management
• Identify and document existing processes
– Identify inefficiencies
• Create models of improved processes
• Capture and enforce business rules for performing, automating
processes
• Integrate existing systems to support process improvements
• Verify that new processes have improved
• Measure impact of process changes on key business
performance indicators
Systems Development
• Activities that go into producing an information system
solution to an organizational problem or opportunity
– Systems analysis
– Systems design
– Programming
– Testing
– Conversion
– Production and maintenance
Figure 11.4 The Systems
Development Process
Systems Analysis
• Analysis of problem to be solved by new system
– Defining the problem
– Identifying causes
– Specifying solutions
– Identifying information requirements
• Feasibility study
• Systems proposal report
• Information requirements
– Faulty requirements analysis is a leading cause of
systems failure and high systems development costs
Systems Design
• Describes system specifications that will deliver functions
identified during systems analysis
• Should address all managerial, organizational, and
technological components of system solution
• Role of end users
– User information requirements drive system building
– Users must have sufficient control over design process
to ensure system reflects their business priorities and
information needs
– Insufficient user involvement in design effort is major
cause of system failure
Table 11.1 System Design
Specifications (1 of 2)
Category Specifications

Output Medium, Content, Timing

Input Origins, Flow, Data entry
User Interface Simplicity, Efficiency, Logic, Feedback, Errors
Database Design Logical data model, Volume and speed requirements, File
organization and design, Record specifications
Processing Computations, Program modules, Required reports, Timing of
outputs
Manual Procedures What activities, Who performs them, When, How, Where
Controls Input controls (characters, limit, reasonableness), Processing
controls (consistency, record counts), Output controls (totals,
samples of output), Procedural controls (passwords, special
forms)
Table 11.1 System Design
Specifications (2 of 2)
Category Specifications

Security Access controls, Catastrophe plans, Audit trails

Documentation Operations documentation, Systems documents, User
documentation
Conversion Transfer files, Initiate new procedures, Select testing method
Cut over to new system
Training Select training techniques, Develop training modules, Identify
training facilities
Organizational Changes Task redesign, Job redesign, Process design, Organization
structure design, Reporting relationships
Completing the Systems
Development Process (1 of 3)
• Programming
– System specifications from design stage are translated
into software program code
• Testing
– Ensures system produces right results
– Unit testing: Tests each program in system separately
– System testing: Test functioning of system as a whole
– Acceptance testing: Makes sure system is ready to be
used in production setting
– Test plan: All preparations for series of tests
Figure 11.5 A Sample Test Plan to
Test a Record Change
Completing the Systems
Development Process (2 of 3)
• Conversion
– Process of changing from old system to new system
– Four main strategies
 Parallel strategy
 Direct cutover
 Pilot study
 Phased approach
– Requires end-user training
– Finalization of detailed documentation showing how
system works from technical and end-user standpoint
Completing the Systems
Development Process (3 of 3)
• Production and maintenance
– System reviewed to determine if revisions needed
– May include post-implementation audit document
– Maintenance
 Changes in hardware, software, documentation, or procedures
to a production system to correct errors, meet new
requirements, or improve processing efficiency
– 20 percent debugging, emergency work
– 20 percent changes to hardware, software, data, reporting
– 60 percent of work: user enhancements, improving
documentation, recoding for greater processing efficiency
Table 11.2 Systems Development
Core Activity Core Activity

Systems analysis Identify problem(s), Specify solutions, Establish information

requirements
Systems design Create design specifications
Programming Translate design specifications into program code
Testing Perform unit testing, Perform systems testing, Perform
acceptance testing
Conversion Plan conversion, Prepare documentation, Train users and
technical staff
Production and Operate the system, Evaluate the system, Modify the system
maintenance
Structured Methodologies (1 of 2)
• Structured: Techniques are step-by-step, progressive
• Process-oriented: Focusing on modeling processes or
actions that manipulate data
• Separate data from processes
• Data flow diagram (DFD)
– Represents system’s component processes and flow of
data between them
– Logical graphic model of information flow
Structured Methodologies (2 of 2)
• Data dictionary
– Defines contents of data flows and data stores
• Process specifications
– Describe transformation occurring within lowest level of
data flow diagrams
• Structure chart
– Top-down chart, showing each level of design,
relationship to other levels, and place in overall design
structure
Figure 11.6 Data Flow Diagram for
Mail-in University Registration
System
Figure 11.7 High-level Structure Chart
for a Payroll System
Object-Oriented Development (1 of 2)
• Object
– Basic unit of systems analysis and design
– Combines data and the processes that operate on those
data
– Data in object can be accessed only by operations
associated with that object
• Object-oriented modeling
– Based on concepts of class and inheritance
– Objects belong to a certain class and have features of that
class
– May inherit structures and behaviors of a more general,
ancestor class
Figure 11.8 Class and Inheritance
Object-Oriented Development (2 of 2)
• More iterative and incremental than traditional structured
development
– Systems analysis: Interactions between system and
users analyzed to identify objects
– Design phase: Describes how objects will behave and
interact; grouped into classes, subclasses, and
hierarchies
– Implementation: Some classes may be reused from
existing library of classes, others created or inherited
• Objects are reusable
– Object-oriented development can potentially reduce
time and cost of development
Computer-Aided Software
Engineering
• Software tools to automate development and reduce
repetitive work, including:
– Graphics facilities for producing charts and diagrams
– Screen and report generators, reporting facilities
– Analysis and checking tools
– Data dictionaries
– Code and documentation generators
• Support iterative design by automating revisions and
changes and providing prototyping facilities
• Require organizational discipline to be used effectively
Traditional Systems Life Cycle
• Oldest method for building information systems
• Phased approach
– Development divided into formal stages
– “Waterfall” approach: One stage finishes before next
stage begins
• Formal division of labor between end users and
information systems specialists
• Emphasizes formal specifications and paperwork
• Still used for building large complex systems
• Can be costly, time-consuming, and inflexible
Figure 11.9 The Traditional Systems
Development Life Cycle
Prototyping (1 of 2)
• Building experimental system rapidly and inexpensively for
end users to evaluate
• Prototype: Working but preliminary version of information
system
– Approved prototype serves as template for final system
• Steps in prototyping
– Identify user requirements
– Develop initial prototype
– Use prototype
– Revise and enhance prototype
Figure 11.10 The Prototyping Process
Prototyping (2 of 2)
• Advantages of prototyping
– Useful if some uncertainty in requirements or design
solutions
– Often used for end-user interface design
– More likely to fulfill end-user requirements
• Disadvantages
– May gloss over essential steps
– May not accommodate large quantities of data or large
number of users
 May not undergo full testing or documentation
End-User Development (1 of 2)
• Allows end users to develop simple information systems
with little or no help from technical specialists
• Reduces time and steps required to produce finished
application
• Tools include
– User friendly query languages and reporting
– PC software tools
End-User Development (2 of 2)
• Advantages
– More rapid completion of projects
– High level of user involvement and satisfaction
• Disadvantages
– Not designed for processing-intensive applications
– Inadequate management and control, testing,
documentation
– Loss of control over data
• Managing end-user development
– Require cost-justification of end-user system projects
– Establish hardware, software, and quality standards
Application Software Packages and
Cloud Software Services
• Application software packages and cloud software services
– Save time and money
– Many packages offer customization features
• Evaluation criteria for systems analysis include:
– Functions provided, flexibility, user friendliness, required
resources, database requirements, installation and maintenance
efforts, documentation, vendor quality, and cost
• Request for Proposal (RFP)
– Detailed list of questions submitted to packaged-software vendors
– Used to evaluate alternative software packages
Outsourcing (1 of 2)
• Several types
– Cloud and SaaS providers
 Subscribing companies use software and computer
hardware provided by vendors
– External vendors
 Hired to design, create software
 Domestic outsourcing
– Driven by firm’s need for additional skills,
resources, assets
 Offshore outsourcing
– Driven by cost-savings
Outsourcing (2 of 2)
• Advantages
– Allows organization flexibility in IT needs
• Disadvantages
– Hidden costs, for example:
 Identifying and selecting vendor
 Transitioning to vendor
– Opening up proprietary business processes to third
party
Figure 11.11 Total Cost of Offshore
Outsourcing
Rapid Application Development (RAD),
Agile Development, and DevOps
• Rapid application development (RAD)
– Process of creating workable systems in a very short period of
time
• Joint application design (JAD)
– Used to accelerate generation of information requirements and to
develop initial systems design
• Agile development
– Focuses on rapid delivery of working software by breaking large
project into several small subprojects
• DevOps
– Builds on Agile development principles as an organizational
strategy
Component-Based Development and
Web Services
• Component-based development
– Groups of objects that provide software for common
functions (e.g., online ordering) and can be combined to
create large-scale business applications
• Web services
– Reusable software components that use XML and open
Internet standards (platform independent)
– Enable applications to communicate with no custom
programming required to share data and services
– Can engage other web services for more complex
transactions
Mobile Application Development
• Mobile websites
• Mobile web apps
• Native apps
• Special requirements for mobile platform
– Smaller screens, keyboards, multitouch gestures,
saving resources (memory, processing)
• Responsive web design
– Websites programmed so that layouts change
automatically according to user’s computing device
Interactive Session: Technology:
Systems Development Is Different for
Mobile Apps
• Class discussion
– What management, organization, and technology
challenges need to be addressed when building a
mobile application?
– How does user requirement definition for mobile
applications differ from traditional systems analysis?
– Describe how Great-West’s invoice approvals process
changed after the mobile application was deployed.